The European Banking Authority released the latest stress tests on the Euro banks at 10:00 PM Friday night, hoping to be able to calm nerves over the weekend, but the effort failed as bank stocks tumbled Monday. The enormous scale of the bankruptcy of the entire banking system is increasingly obvious to all but the blind. The stress tests were in fact a complete fraud — the EBA dropped its previous policy of giving passing or failing marks, and did not even consider the astronomical derivative exposure of the major banks. Nevertheless it was clear that there is hardly a sound bank standing.
The fact that one (and only one) bank was bailed out — Italy’s Banca Monte dei Paschi di Siena (the world’s oldest bank) — simply demonstrated that the “bail-in” rules in the U.S. and Europe which were supposed to save taxpayers from further bail-outs (by stealing depositors’ money), as in the Dodd-Frank legislation, were a fraud from the beginning.
The most hysterical response issued from Deutsche Bank’s Chief Risk Officer, Stuart Lewis, who was asked by the Frankfurter Allgemeine Zeitung about the IMF’s report that Deutsche Bank was the “most dangerous bank in the world.” Lewis responded: “No, not at all. Only one IMF report has recently muddled up the situation. We are not dangerous. We are very relevant. Deutsche Bank is interwoven with the entire financial sector. We are one of the largest universal banks in the world. But to make it clear: Our house is stable. The balance sheet is healthy.”
So much for truth in today’s Casino Mondial.
The only way out is that proposed by Lyndon and Helga LaRouche (see: “Deutsche Bank Must Be Saved For the Sake of World Peace,”): to recapitalize Deutsche Bank while restoring the policies of Alfred Herrhausen, the head of Deutsche Bank who was assassinated just weeks after the fall of the Berlin Wall in 1989, to restore his policies of cooperation with the then-Soviet bloc and the developing nations, for global development.
Madmen in the Obama camp are promoting war with China and Russia. A report released on July 28 by the RAND Corporation, funded by the U.S. Government and the Army, is titled “War with China — Thinking the Unthinkable,” and argues that if there were a war between the U.S. and China: “Chinese military losses would significantly exceed U.S. losses during a war. However, the unrelenting improvement of Chinese anti-access capabilities could increase U.S. losses and, as U.S. strike capabilities are depleted, reduce Chinese losses.” Better now than later, is the unstated message. Showing what LaRouche described as an incredible level of “make believe,” the report says that Russia would have “no significant bearing on the fighting,” and advises us to rest easy, since the authors “regard nuclear war as highly unlikely.” Several scenarios are presented which could unleash such an existential threat to mankind, all blamed on China’s “aggression,” or “misjudging” the U.S. willingness to go to war over disputed islands in the East China Sea or the South China Sea.
The American “boiling point” has been reached, as demonstrated by the chaotic breakdown of both political parties. At such a moment in history, people can be driven to madness; to fascist forms of racism and war hysteria. But it is also in such moments of history as this, that human beings become able to reach inside themselves to find that quality of mind which defines their true nature as creative beings, to shape the future for the benefit of all mankind.
Percy Shelley said of such times as these: “At such periods there is an accumulation of the power of communicating and receiving intense and impassioned conceptions respecting man and nature,” when people who choose to do so may reach into “that power which is seated on the throne of their own soul.” That is the choice for each of us.