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Lyndon LaRouche Address To Private Meeting, January 21, 2009:

We Should Now Have a Spirit of Optimism —
Yet Be Mindful That There Are No Guarantees

Jeffrey Steinberg: I want to welcome everybody to this latest in a series of off-the-record diplomatic dialogues with Lyndon LaRouche. My name is Jeff Steinberg, I’m a senior Editor with Executive Intelligence Review magazine....

EIRNS/Stuart Lewis
Lyndon LaRouche

Lyndon LaRouche: Well, I think we can be a bit optimistic about the world situation with a change in the Presidency of the United States. I am not prepared to guarantee any good results, but there are many good elements in the situation, with the elimination of the Bush Administration, and also with our problems, the world’s problems.

The general situation, is that the entire international monetary-financial system of the world entirely, is in the process of disintegration. That the world today is dominated by a mass of so-called financial derivatives, or similar kinds of claimed assets which run in order of magnitude, at best estimate, about $1.4 quadrillion dollars estimated value. Now, and this mass of financial derivatives is growing. The toxic waste funding and all these kinds of phenomena are actually an increase of the mass of the waste.

At the same time, as you know, in most countries, the physical output per capita of each of these countries is collapsing. There’s a chain-reaction collapse which is systemic throughout the planet. It’s not one nation at a time—it’s the entire planet. The shocking case, of course, is China: That the collapse of production in China and the collapse of employment in China, which is the nation which is most dependent upon the world market, typifies the world situation. India, for example, which has less foreign-export dependency, is less immediately shocked than China, but India’s also threatened.

So therefore, you’re dealing with a situation, in which there is not a depression: There is a global collapse of the entire world monetary-financial system. And this will not be cured within the framework of the existing system. It’s not possible. Because, only by eliminating the present monetary system, which is hopelessly diseased, —you can not sustain a debt obligation in the order of magnitude of $1.4 quadrillion dollars valuation against the present economy. There’s no way you can do it: You have to put the entire system through bankruptcy reorganization, and create an absolutely new system.

That can be done.

What I’ve proposed essentially, is that we need a group of nations which actually block the British Empire from its present policies. As long as the British Empire continues its present policies, there’s no chance—if it’s allowed to do so—for this world to escape the worst crash, since the 14th century in Europe. However, if the United States is able to come to an agreement with China, with Russia, and India, and with other countries which join that bloc, we have the ability to organize a power bloc for reform of the international monetary-financial system, to replace it with a credit system. The United States, because of its Constitution, is key in doing that. If we do that, and if we go back, away from globalization, toward a restoration of national sovereignties, we can then mobilize, particularly, high-density kinds of infrastructure programs which will enable the world to survive this crisis, and to actually begin to grow.

Now, in the case of the current U.S. administration, I have an optimistic view of the Obama Administration, without going into any sensitive matters, discussing those in that connection. But I think we can tend to be optimistic about the Obama Administration. That does not mean that it has the policies which are needed to solve the problem. But it is a government which will be open to considering policies that will solve the problem. Its tendency, of course, in the area of diplomacy, will be much friendlier, human friendlier, than you will have had under the previous administration or under the British government.

What is happening in Southwest Asia—the efforts, which largely, of course, Hillary Clinton,— we presume she will be confirmed as Secretary of State,— will be operating in that area, and we have some clear ideas about what is needed to minimize the crisis in that area, and to bring cooperation among various forces.

But what we need, essentially, is a new system. And I’ll just indicate what the new system has to be: We have to eliminate, entirely, the present world monetary system, and all monetary systems of the same type. We have to replace these monetary systems, which are inherently bankrupt, and hopelessly bankrupt, by a credit system, a credit system modelled upon what the U.S. Constitution provides.

For example, under the U.S. Constitution, you can not utter money, except by an Act of the Congress, allowing the Presidency, the Federal government, to utter credit in the form that it can be monetized. In Europe, under monetary systems, you have an international monetary system, which makes agreements with governments and among governments. This is what you can not save! There is no agreement among monetary systems, or within existing monetary systems, which can deal with this crisis. Therefore, you need a credit system.

Now, there are two features of the U.S. Constitution which are very important, in this connection: In the United States, you can not utter money without the consent of Congress, and except by the action of the Presidency of the United States, with the consent of Congress. This also applies to all diplomatic treaties, under the U.S. Constitution. Under the U.S. Constitution, a proposed treaty agreement, which is the responsibility, ultimately, of the Presidency, must be first approved by the Congress. The Presidency will propose the agreement, but the Congress has the ability to negotiate this, and to decide whether it’s going to approve it or not. So therefore, the utterance of money in the form of a credit system, and treaty agreements among nations with the United States, have the same Constitutional structure inside the United States.

Therefore, if this Presidency decides to conduct that kind of reform, of going back to our Constitution, and entering into a treaty agreement with Russia, China, India and other countries, for this purpose, we can organize a reform which can allow for a recovery of the world economy. Without such a reform, under the present conditions, any attempt to maintain the present monetary system, will mean an absolute catastrophe for all humanity. If that catastrophe occurs, it will be a global Dark Age for all humanity.

By Dark Age, I mean, presently we estimate the world population at 6.5 billion people: Under these conditions, the population of the planet will collapse rapidly to 1 billion people, with entire cultures disappearing from the planet.

We’ve had Dark Ages in the remote past of humanity. We had them in the 14th century in Europe. We have never had a true Dark Age, since the emergence of modern Europe in the 15th century. So, but this is the situation.

Now, in terms of the U.S. government: Some of the advisors, teams of advisors, who have been collated to assist the current President, the newly incumbent President, are intelligent people, but often they’re stubbornly mistaken. But it’s better to have to fight policy with stubbornly intelligent people, than it is to fight policy with stupid people, or corrupt people. And therefore, these people will be well-meaning, in the sense that they will feel responsible to advise the President on actions which will be remedies for the world’s problem—and we can not be concerned just with the United States’ problem, we have to be concerned with the world’s problem. Because we’re not going to get out of this mess, without long-term international agreements among nations.

These people will be stubborn. They’ve been badly trained in economics. As a matter of fact, in my opinion, every economic profession of every nation in the world, from my experience, is incompetent. That is, its theory is incompetent, its doctrine is incompetent. And the reason we’re in a mess today, is because we’ve accepted incompetent monetarist theories, to run monetary economies. We have to go back to a credit system, as opposed to a monetary system. But under those conditions, we can create cooperation among nation-states, to prevent this thing from becoming a permanent collapse, and to start immediately on the road toward recovery.

I believe that the intention of the President, as I have been able to determine it, the new President, will be good, in that direction. Whether his ideas on all subjects are correct or not, I can not assure you. I think in some areas, yes, and some areas I don’t know. But we’re going to have to fight that out inside the United States and with others, to make sure we get to the right policies.

But we should approach this situation with optimism, in the sense that if we decide as nations to unite to find a solution, recognizing that it is the monetary system that must be replaced, without which there’s no solution to this world crisis, I think we can succeed. And I think that the United States government, under Obama, as it stands now, is the indispensable instrument by which this can be brought about. So therefore, I have qualified optimism. We have a new situation, in which we can talk to one another, as we could not for some years. And this is a good situation.

Whether we’re going to succeed, I don’t know: But that’s the way life is. Humanity is never given guarantees. Humanity must find its way to its own solutions, but I think now, where I would have said some time ago, the world is not going to come to any solution, I say, now, we’re at a point where solutions are possible. And we should approach this with optimism, but not with a sense of any guarantees; but with a spirit of optimism, and a willingness to compromise and to build a planet, based on the solid determination of respect for the absolute sovereignty of nations. On that basis, I think we have an opportunity to save humanity from the worst crisis in all modern history.

Thank you.

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