The battle for the survival of the United States now centers around two distinctly different New York City images: The New York City of our first Treasury Secretary Alexander Hamilton, who forged the Federal Constitutional Republic around the principle of national credit and national banking, versus Wall Street’s treason, from Hamilton’s assassin Aaron Burr to today’s Jamie Dimon and the rest of the too-big-to-fail pirates who have stolen the nation’s future if allowed to continue.
On Saturday, January 17, the battle intensifies with the convening of the latest in a series of Schiller Institute Manhattan conferences, which aims to draw together citizen-patriots who are fed up with Wall Street and the City of London and are ready to fight.
In discussions on Thursday, Jan. 14, with colleagues, Lyndon LaRouche observed that we are entering into a period in which the revolt against Wall Street can erupt into a force for revolutionary policy change. LaRouche emphasized,
“We are on the edge of that kind of sudden, revolutionary shift.”
Evidence of the growing anti-Wall Street ferment is all around. This week, Rep. Marcy Kaptur (D-Oh.) reintroduced legislation—HR 381—to reinstate Glass Steagall, the FDR-era bill that broke up the too-big-to-fail banks of the Great Depression era into totally separated commercial banks, under FDIC insurance protection, and the investment banks with no protection for their gambling. The bill has an initial 16 co-sponsors. A similar bill was introduced into the US Senate last session, by Elizabeth Warren (D-Mass.), Maria Cantwell (D-Wa.), John McCain (R-Ariz.), and Angus King (I-Vt.) and must be again filed immediately.
In Western Europe, where the banks are on the verge of collapse, the Swiss National Bank decoupled from the euro, and immediately went up by 40 percent in value against the euro before slightly falling back. The Swiss know that the euro is doomed in the coming days, with the anticipated European Central Bank announcement next Thursday of a typhoon-like ‘quantitative easing’ program and the upcoming Greek elections that could signal the end of the euro system altogether.
The instability of the bankrupt trans-Atlantic banking system has Wall Street in a state of desperation. Jamie Dimon told analysts and financial reporters on Wednesday that “the banks are under assault.” The reality is, that the hatred of the American people for Wall Street is welling up—and everything that Citibank, JPMorgan Chase, Bank of America, Goldman Sachs, Morgan Stanley and Wells Fargo are doing is making things worse for them. The flagrant buying off of Congress to wipe out the pathetically small restrictions left in Dodd-Frank has fueled the backlash.
There is no recourse but to reinstate Glass-Steagall as Step One of the Hamiltonian revival that is the only viable solution. By returning to the American System, the United States would be naturally aligned with the BRICS countries that have embarked on a new system of international cooperation among sovereign nation-states joined together to pursue the common aims of mankind.
The alternative is the war drive coming out of the same desperate London and Wall Street circles. In Europe, there are frightening signs of a re-emergence of neo-Nazi ideas, spreading from the Right Sector and related forces in Ukraine into Germany and other parts of Europe. LaRouche told colleagues today that the fear of such a neo-fascist revival has German politicians, especially Angela Merkel, terrified. He added, in disgust, that Merkel’s failure to officially rebuke Ukrainian Prime Minister Yatsenyuk’s disgusting public comments in Berlin about the Soviet invasions of Ukraine and Germany in World War II, was “unbelievable in today’s Germany.”
LaRouche contrasted this capitulation and fear to the brave stance taken by the French in reaction to last week’s terrorist attacks in Paris. Hollande and France were targeted because they are breaking from the British-led war drive against Russia, and are being joined by other more sane Europeans who are pushing for a revival of cooperation with Russia that is the only war-avoidance option and the only way to solve some of the most pressing problems in the world today—including the menace of terrorism and asymmetric warfare coming from the Anglo-Saudi monarchies.
It is in this context that the Saturday afternoon Manhattan event is of historic importance.
Thursday’s issue of the Russian weekly Zavtra features an article under the byline of EIR’s Paul Gallagher, headlined “Wall Street Cannibals: Financial Speculation Lays the Pathway to War.” The article is illustrated by EIR‘s updated chart of derivatives aggregates surpassing $2 quadrillion in 2014, and is introduced with the following editorial note:
The article itself combines a recent LaRouche PAC release on the bankruptcy of Wall Street and the City of London as the driver behind the war danger, material from Gallagher’s Jan. 2 EIR article “Oil Prices, Derivatives Light Fuse on Wall Street Time Bomb,” and several subsequent EIR shorts publicized via LaRouche PAC. It concludes with a restatement of LaRouche’s June 2014 “Four New Laws to Save the USA Now.” Together with Zavtra’s year-end front-page feature, “LaRouche Says What Russia Should Do,” outlining the need for exchange controls, followed by full-fledged Hamiltonian economics, this article has triggered a flood of repostings and discussion in Russian social media, as well as an upturn in visits to the LaRouche movement’s Russian-language website, larouchepub.com/russian.
SEE “LaRouche’s Four Laws”
The Swiss National Bank (SNB) sent shock waves through financial markets Thursday, by suddenly removing its “peg” to the euro — at 1 euro = 1.20 CHF or higher — which it had maintained for three-and-a-half years, and lowering its discount rate to a truly extraordinary minus 0.75%. Stock markets plunged, foreign-exchange traders lost billions in minutes, ATMs refused to give euros, as the Swiss franc immediately leaped 30% above parity with the euro. It then slightly adjusted back to about 1 euro = 1.035 CHF. The Swiss stock market particularly plunged, due to fears of export drops as consequence of the new parity.
SNB chairman of the governing board Thomas Jordan, in a press conference, stated that the reasons for the decision were not domestic but international. He did not say more. But the Swiss daily Tagesanzeiger indicates that they are: 1) The coming QE from the European Central Bank; 2) The Greek elections.
Due to the desperation of the bankrupt and sinking Eurozone banks, the European Central Bank (ECB) has now made clear, in a statement Jan. 11 by French ECB board member Benoit Coeuré, that the ECB will announce, at its Jan. 22 meeting, “quantitative easing” by buying Eurozone government bonds from those banks. The surprise Swiss central bank move (Switzerland is not in the Eurozone) can be taken as a clear sign that the ECB bank-bailout-bondbuying coming next week will be very large, and will drive the euro into the cellar. Wall Street wants the ECB to buy 4.5 trillion euros of government bonds from the banks.
The Swiss measure was inevitable, as the 1.20 parity was unsustainable in the longer term. It cost an unbalanced reserve basket at the SNB, which, through the constant purchases of euros, had reached the equivalent of $500 billion in euros. These reserves will accordingly lose value; some estimates are that the SNB itself lost $50 billion today.
However, the decision to drop the parity now, as hinted by Jordan, shows that the Swiss are leaving the sinking ship. Keeping parity with the euro means to follow the same monetary policy as the ECB, which the SNB has done so far, but the coming QE is too much. Furthermore, “Greek elections” means a feared fatal tsunami for the euro.
Rep. Marcy Kaptur (D-Ohio), a lead sponsor of the bill to restore Glass-Steagall in the last Congress, filed a bill into the new Congress on January 14th, with 16 co-sponsors, to restore the Glass Steagall Act. Titled “To repeal certain provisions of the Gramm-Leach-Bliley Act and revive the separation between commercial banking and the securities business, in the manner provided in the Banking Act of 1933, the so-called ‘Glass-Steagall Act’, and for other purposes,” it has been assigned number H.R. 381.
The co-sponsors — all of whom were among the 83 co-sponsors of Kaptur’s bill in the previous Congress to restore Glass Steagall — are Earl Blumenauer (D-Ore), Michael Capuano (D-Mass.), Elijah Cummings (D-Md.), John Garamendi (D-Cal.), Gene Green (D-Tex.), Eddie Bernice Johnson (D-Tex.), Walter Jones (R-N.C.), Alan Lowenthal (D-Cal,), Stephen Lynch (D-Mass.), James McGovern (D-Mass.), Eleanor Holmes Norton (D-D.C.), Charles Rangel (D-N.Y.), Louise Slaughter (D-N.Y.), Paul Tonko (D-N.Y.), Niki Tsongas (D-Mass.), and Peter Welch (D-Vt.)
Wall Street appears to be bracing for another financial shock to the system very soon, and the fear of the growing hatred for the too-big-to-fail banks is showing. The New York Times and Bloomberg yesterday reported that Jamie Dimon, CEO of JPMorgan Chase, held a conference call with analysts and financial reporters when the fourth quarter earnings report was issued—and showed signs of real paranoia. Dimon charged that“banks are under assault” by over-bearing Federal regulators, and there is growing pressure for JPMC to be busted up into smaller entities. Dimon went to great lengths to tell the participants that super-banks are good for the world economy, and that the problem is over-regulation.
JPMC posted smaller earnings in the fourth quarter, due to its exposure in the oil futures market and the fact that it set aside another $1 billion in anticipated legal fees and fines around the continuing probe into the bank’s foreign exchange trading desk. For 2014 as a whole, however, the bank posted a $21.8 billion profit—an increase of 21 percent over 2013.
The growing rage at Wall Street is palpable, and a number of news outlets have let out some evidence of the shifting mood. Jesse Eisinger wrote in yesterday’s New York Times that the failure of Dodd-Frank to rein in Wall Street demonstrates that the only way to take on the bankers’ lobby and its grip on Congress is to “go big.” He referred to Dodd-Frank as the “Clement Atlee of legislation,” and blasted the Rubin-Summers wing of the Democratic Party that has systematically taken over the party on behalf of Wall Street over the past several decades. He notably included the Wall Street effort, led by Democrats, to beat back momentum to reinstate Glass-Steagall in recent years. Eisinger noted that there is an emerging battle inside the Democratic Party by progressives, to take the party back, adding that President Obama has been fully on Wall Street’s side from the day he entered the White House. He noted that some Republicans, including McCain, Vitter, and Corker, could side with progressive Democrats and fight for genuine curbing of Wall Street’s out-sized power.
TIME magazine published a similar story yesterday, under the title, “How Elizabeth Warren is Yanking Hillary Clinton to the Left.” The authors cited Hillary’s recent meeting with Joe Stiglitz as a sign of the leftward tilt, since he became a harsh Summers-Geithner critic.
A website, PRWatch.org, touted the battle against Wall Street inside the new Congress, citing the call by Rep. Chris Van Hollen (D-Md.) for a transaction tax on Wall Street gambling, to fund a middle class tax break. Of course this is twenty years after Lyndon LaRouche called for a transaction tax to shut down Wall Street’s derivatives gambling, but the mood shift is clear.
The article also cited the recent killing of the Antonio Weiss nomination by Obama for a top Treasury post as further evidence of the restive mood. He quoted former Lazard Freres chairman Steve Rattner, who ominously warned, “It’s not about Weiss. It is part of a much broader narrative of the fight for the soul of the Democratic Party and whether so-called progressives are going to capture that or whether more mainstream Democrats… are going to retain it.”