Live Dialogue with Helga Zepp-LaRouche

War and Financial Collapse—Solutions Are Available!

The following is an edited transcript of the Schiller Institute Webcast with Helga Zepp-LaRouche, which aired on Wednesday, March 22, 2023. The video is available here .

Harley Schlanger: Hello and welcome to our weekly livestream dialogue with Helga Zepp-LaRouche, the founder and leader of the Schiller Institute. It’s March 22, 2023, and I’m Harley Schlanger, and I will be your host.

Helga, it’s been another week chock full of significant events on the strategic/diplomatic front and on the economic/financial front. Let’s begin with your assessment of where things stand now.

Helga Zepp-LaRouche: Well, today is the third day of the visit of President Xi Jinping in Moscow, and I would like to comment on that, because the Western media, at least in Germany, have been absolutely ridiculous in characterizing the meeting. From the standpoint of the bilateral relation between Russia and China, I think this was a very productive, very successful meeting. They agreed on two major documents, with many points of agreement, increased trade and investment, and having all kinds of security cooperation agreements. So I think from the standpoint of strengthening the economic relation between Russia and China, it is very fruitful. Many projects were discussed, various transport corridors, the long-term gas and oil pipeline. So if you just look at it from the bilateral standpoint, it was very productive.

Now this was played up high, because China has also made, in February already, a 12-point proposal for a peace settlement in Ukraine. And it was categorically rejected by the U.S., by the EU Commission, by all kinds of other people, making demands which from the beginning would mean that no settlement can take place. But I think the West should better listen to the Chinese proposal, if this horrible war is going to come to an end. The situation in Ukraine is getting really desperate—many, many casualties on both sides. There is talk about a “spring offensive,” maybe from Russia, maybe a counteroffensive from Ukraine. In any case, this does still have very much the potential of an escalation into a larger war, which worries many people around the world.

So, the Chinese proposal, which is really the most advanced proposal on the table so far, should be listened to, and it’s not impossible. Because even if the situation in Ukraine is what it is, in terms of influence of the United States and NATO and Britain and so forth, nevertheless, China also has a strategic partnership with Ukraine, not just with Russia; and President Zelenskyy has expressed interest to have a phone discussion with President Xi Jinping, which in all likelihood will take place once his Moscow visit is ended.

That is very important, because if there is any hope to get to an end quickly, it is really following the Chinese proposal. And I think it’s very important to understand that China and Russia are not identical. They have a strategic partnership, they have moved closer together—among other things, thanks to the sanctions against Russia—but the relationship between Russia and China is long one; it goes way back, and especially since President Xi Jinping has been in office for 10 years, he and Putin have met 40 times. Eight times Xi Jinping has traveled to Russia. So, this is not about Ukraine as such.

And it’s very important that the West understand exactly what China’s intention is: China has more interest in peace than anything else. China has not allowed itself to be drawn into the conflict; China is making a very strong and powerful move to reintegrate Russia into the international community, and find a solution to the crisis. But China is trying to move the world to a new paradigm, to a higher level of diplomacy: It’s open to economic cooperation, where the Belt and Road Initiative is still open for any country which wishes to, to cooperate. So, I think this is very important.

Now, China has just proven that it is capable of bridging seemingly impossible conflict, like recently because of the mediation by China—Wang Yi in particular—it was possible to get an agreement between Saudi Arabia and Iran. Now, President Raisi from Iran has been invited to Saudi Arabia, on a “brotherly” visit: That’s a huge breakthrough. And in the aftermath of that agreement, all kinds of things are falling into place. President Assad of Syria was in Moscow, and then after that he traveled to the United Arab Emirates. The relationship between Syria and the other Arab countries is getting better. Saudi Arabia and Yemen started to exchange prisoners. Between Iran and Iraq there has now been made an agreement to settle border difficulties.

So, one can see that once you put the direction on diplomacy and solutions and conflict solutions through negotiations, everything is possible! So I think that that momentum, coming from this really historic change in Southwest Asia, that momentum could carry over into Ukraine.

One has to see, obviously, in the West, including NATO, there are still people who absolutely continue to say “Ukraine must win”; now, Ukraine will never win, because Russia will never lose. You will never get a nuclear power, and in particular, the strongest nuclear power on the planet, to give up and capitulate. Rather, we will have World War III, and then, for sure, nobody wins. And I think that is something which has not yet registered in the heads of some Western leaders.

So, I can only say, it would be the wisest thing to quickly pick up on the Chinese proposal, and then move on. Because we have some other problems, the least of which is the unfinished financial crisis: We just barely avoided another chain-reaction collapse by the Federal Reserve moving in on the Silicon Valley Bank, and some other American banks. And then, tremendous pressure was applied to the Swiss Union Bank of Switzerland (UBS), to take over Credit Suisse.

Now, they first attempted to bail out Credit Suisse with $54 billion. That proved to not be enough. And then because of the systemic risk, pressure was applied, I would assume, on Switzerland to force UBS to take over Credit Suisse. What is the effect of that?

Switzerland has one, mega-super-monster bank, too big to fail? And what happens if that bank fails, the entire Swiss economy would be massively affected. I mean, this is a gamble with the livelihood of the Swiss people, and the Swiss economy, which I think is extremely risky. And now there have been interviews today by various experts from Lausanne University, who basically said nobody knows what the exposure of Credit Suisse was in respect to derivatives and swaps; and that because of the rapidity with which all of this has happened, Union Bank of Switzerland did not have time to make a proper investigation of what they were forced to take over, so they have basically bought the cat in the bag. Now, that can have some very unpleasant surprises in the short term.

So we are not out of the danger zone, and nothing has been fundamentally resolved in the financial system in the West, and therefore, I think the more quickly people come to the understanding that a continuation of this geopolitical confrontation can only lead to the demise of all of us. And the more quickly we come to the agreement that the entire world system needs a fundamental overhaul, which we have been calling for, in the form of a new security and development architecture, which I still insist must be put on the table, which takes into account, the interest of every single country on the planet.

I think these are the most pressing issues, and I think the relationship between Russia and China should not be regarded as a threat to the West: because it is not that, it is explicitly not that. And if you have a continuation whereby the West is forcing every country to take sides, to be part of the “democracies” in an alliance against the so-called “autocracies,” that would be very damaging and lead to World War III sooner or later. Because a bloc formation, whereby you have the United States, and then maybe Japan and one or two other countries in the Indo-Pacific building one bloc; and then the BRICS-Plus, which is by now the BRICS plus 24 countries that have applied for membership, the Shanghai Cooperation Organization countries, the Eurasian Economic Union countries, most of the African Union, ASEAN and the countries of the Global South, which by a large margin represent the majority of the human race. If these two blocs would be in a confrontational position against each other, it can only be to the detriment of humanity as a whole.

So, the sooner reasonable people and reasonable forces in the West agree that they should change their attitude and start to send out signals that they are willing to cooperate, the better. So this is really what I wanted to say in the beginning. And I didn’t want to make a too long speech, because I understand we have a lot of questions, and I wanted to give you the opportunity to ask as many as possible.

Is There Hope for the West?

Schlanger: Well, we do have a lot of questions, because a lot of people want to know what you think about these things, and they also want some guidance on what they can do to make these changes that you’re talking about. Let me start with one on the war situation, on the China-Russia negotiations. This is from an Ohio radio talk show host, who asks: What is the likelihood that the U.S. or NATO governments will respond positively to President Xi’s peace plan? Is there any way to put enough pressure on these governments, since they’ve already said they’re not going to? Is there any way to pressure them to change, so they’ll accept President Xi’s proposal?

Zepp-LaRouche: Yes. I think what we need is a real mass mobilization. Because it is very clear that many people are concerned about the war danger. That has expressed itself in the very large demonstration on Feb. 19 in Washington, and a subsequent demonstration on March 18, also in Washington. A big demonstration on Feb. 25 in Berlin. And if you look at Europe, there is a total disarray: France, in the aftermath of the dictatorial decision by Macron to implement the pension reform, there is violence in the streets. In Great Britain, in a practically endless strike wave. Strikes will erupt in Germany in the short term. Italy is in turmoil.

I think if all of these movements, even if they have a specific cause, like pensions or wages, would also demand peace, because it’s not enough to be against the war at this point: But we have to have a growing number of people who demand solutions, and the solutions have to be a cooperation in a new security and development architecture, a solution to the pending financial disintegration of the trans-Atlantic financial system. We have campaigned for that for a long time.

The Four Laws of Lyndon LaRouche are absolutely the way to go, the first step of which is a global Glass-Steagall banking separation. And that is back on the table in Switzerland: Several parliamentarians and others are now demanding the reintroduction of Glass-Steagall. In the United States, Sen. Maria Cantwell (D-WA) asked for it; Marcy Kaptur in Ohio, and others—this is just the beginning.

But in all of these cases, the idea that the West must respond to the peace plan of China for Ukraine should be added. And people should think, first of all, we have many forms—maybe we should write a new resolution with especially that; I will discuss that with my colleagues today. I think that if people would make statements—you have social media, you have ways of participating in all kinds of discussions, you can write letters to the editor; you can have resolutions. I think what we need is a lot of ferment, because if the war escalates, we all could be dead very quickly. But if there is a pressure, where people say, “look, this terrible killing and dying in Ukraine has to stop”—the first priority is a ceasefire, we have to find a solution through negotiations. That must be the first priority and there is a realistic proposal on the table by China, and the more people are giving support to that, the more chance we have. And governments have to consider, if they continuously make a policy which goes against the will of the majority of their population, they may be out of office sometime soon, because governments in so-called “democracies,” are not put there by God forever, but the voters have a right to express their will and the more powerfully this is done in the short term, the better.

Schlanger: Helga, I’d also like to mention that people should look at your Ten Principles for a New International Security and Development Architecture, which somewhat parallel what the Chinese propose. That’s available at the Schiller Institute website homepage.

There are a few more questions on the war threat and China, but there’s one from Stuart, who writes that he thinks the only way to stop war is to stop companies from making profits on arms production and trade. He said, “Politicians are bribed with funds from the manufacturers and the people have no say.” He asked, “What do you think? Is this a viable action?”

Zepp-LaRouche: Yes, but you need lawmakers who make laws that curb the power and influence of these military-industrial complex firms. I think it’s a correct idea, because from the standpoint of physical economy, the entire production of military equipment is a complete waste! If you think of how much real wealth, in terms of raw materials, labor power, physical production is wasted by producing all of these different weapons systems—if you would redirect all of this production into civilian production, factories, machine tools, building transport lines, building industrial complexes, beefing up agriculture in order to double food production, because we have, still, a gigantic starvation in the world of almost 2 billion people. I really think to retool the military-industrial complex will be a question we will not get around.

I know right now this is the biggest obstacle, because Wall Street, the City of London, and unfortunately some other places, which are also weapons producers, they’re all intertwined, what Ray McGovern calls the MICIMATT, the military-industrial-congressional-intelligence-media-academia-think tank complex, all of that hangs together. And the interest of the banking system and the interest of the war machine are identical. Obviously, this financial system is bankrupt, and we have argued since a very long time, that the real dynamic behind the war danger is the pending threatening collapse of the financial system, and vice versa, the rise of China, which is only from that standpoint a “danger” to the world.

So therefore, if you want to have a solution, we have to change this entire system! And for example, if you look at the United States, the United States is not in good shape! And frankly, you don’t need China to cause the demise of the West: If you allow drug legalization, if you increase the suicide rate, by people who have depression, young people who commit suicide who don’t see a hope for the future or are so dependent on dope that they don’t have a real mind any more, the United States is not investing in infrastructure, they’re not investing in their future generations, so why is there not a movement in the United States, other than the LaRouche movement—and more people joining the LaRouche movement—and demanding that the United States could go back to an American System of economics? China has 40,000 km—that’s 25,000 miles—of fast train systems. These trains go 350 km per hour (km/h), about 220 miles per hour (mph), they fly through the landscape. They’re smooth and clean. They are now working on a 600 km/h maglev train. And the United States has zero! Zero! There is not one line, there is a portion of the track somewhere between New York and Boston, where the train goes for about one hour at 120 km/h, which is ridiculous. So why is the United States not saying to connect the West Coast with the East Coast, the North with the South, through a system of fast trains? Build some new cities: Former President Trump said he wants to build some new cities—well, then, build a fast train system with it!

Revamp the entire military-industrial complex to rebuild the American economy, instead, and I think that would be welcomed by the whole world, and it would do the American people some good. But you need a movement of people who pick up on these proposals, which we have put forward since, actually, the recent such plan we presented, we published in 2014. That is my suggestion.

A Return to the ‘American System’

Schlanger: Helga, there’s a question related to that, somewhat redundant, but you can pick it up as you wish. It’s from Lex, who is asking about overcoming the effects of poverty. He says: “No one should starve in the world today.” He says, “We have similar problems with access to energy, housing, and so on. How do we make sure that no one will starve in today’s world?”

Zepp-LaRouche: It would be very easy to do. Because right now the farmers in Europe, for example, in Holland, Germany, and other countries are in the streets, because they fear that the present laws of the EU are designed to cut agricultural production by two-thirds! Two-thirds of farmers fear they could go bankrupt. By the same token you could make legislation to double food production, you could basically say, we have a starvation crisis, and we need to double food production. We need to have a plan where we both build up agriculture in the developing countries, but at the same time, increase production in those places where you have a developed agriculture in the United States and in Europe. And you can make legislation to make that possible, by giving credit, cheap credit, long-term credit, to the farmers, to do exactly that. You can make legislation to guarantee access to seed and other farm material.

It’s really a question of political will. I think at this point, the only people who really understand that are the farmers. They also understand that the food supply in the present situation is extremely precarious. But what we need is that other people than farmers join with the farmers—scientists, trade unionists, entrepreneurs. We have to get away from a situation where everybody only thinks about their own interests, because right now, we are sitting more in one boat, than people can imagine.

So, to take care of poverty, it would be very simple: We have developed as early as 2014, a plan which we called “The New Silk Road Becomes the World Land-Bridge,” which we published, and you can get it from our website. This is a blueprint.

Every industrial development always starts with basic infrastructure: you need a combination of preferably fast trains, waterways, highways; then you need energy production and distribution; you need to increase the condition, the environment for entrepreneurs to invest, that’s why we have developed this conception of “development corridors,” where, according to certain geographical preconditions, your development corridors integrate railways, waterways, highways, as a venue for industrial production. That can be done in Africa; it can be done in Latin America, in Asia. Actually, the Belt and Road Initiative is following such plans. And all you have to do is to get international cooperation.

If there would be the political will, let’s say you have an international conference on the new development and security architecture, and you would have agreement among most governments to go in this direction. And they would start revamping the financial system towards production, rather than speculation. They would give cheap credit: They would basically give credit only for directed purposes, concrete development projects—you could start to eliminate poverty—I don’t want to make too many guesses, but in a year you could eliminate world hunger. In five years you could have a flourishing economy, where the most serious poverty would be alleviated. Maybe within 10 years you could eliminate the worst poverty and you could really get into the idea where you build economies for human beings to live. You need a global health system, which means a modern health system in every single country. A country which doesn’t have a functioning national health system is not equipped to deal with pandemics or other diseases.

So, all of this is not a mystery! We have written a program for how to create 1.5 billion new, productive jobs. We have written the World Land-Bridge report. We have written concrete development plans for Africa, for Latin America, for Asia, for Europe, for the United States. So to restart the economy in a serious way by ending the casino economy, it would be a piece of cake, if the political will would be there.

Who Are the Real War Criminals?

Schlanger: Here’s a question, Helga, that I think a number of people have: “What are your thoughts on the International Criminal Court indictment of Russian President Putin, and the possibly pending indictment of former President Trump? Do you see any relationship between the two?”

Zepp-LaRouche: Yes. I think it’s basically the same apparatus to put President Putin, to accuse him or want an arrest warrant—I mean, it’s really chutzpah I would say. Because what is the International Criminal Court (ICC)? Does it have a reputation for honoring justice? Well! Its reputation, so far, is only going after leaders in Africa, and then from former Yugoslavia. But what about the people who made the war against Iraq based on lies? What about Afghanistan, what about the war on Syria, the war on Libya? We have now the 20th anniversary of the war on Iraq, and many very interesting people have written things about it, which I can only advise you to read: such people as Scott Ritter, Ray McGovern, Joe Lauria and some others; and I can only advise you, go to the Schiller Institute website or EIR, and read the speeches which were made at a conference of the Schiller Institute on the very day the Iraq War started in 2003. This was in Bad Schwalbach, Germany, and my late husband Lyndon LaRouche gave an extremely powerful speech. I gave a speech—because we were so shocked, because we knew that there were no weapons of mass destruction! It was commonly known among anybody who was interested in it. And I said, these people are idiots, because if they think the Nemesis will not come down on them (referring to the famous poem by Friedrich Schiller, “The Cranes of Ibykus”) and I said, why is the ICC not going after the people who are committing this?

Nancy Pelosi and the ICC, they did not pursue Bush and Cheney; Biden, for that matter, who was very much involved in the decision-making for that war. Now, Nancy Pelosi has admitted publicly, in the meantime, that not only she but also everybody else knew that there were no weapons of mass destruction, that there was no connection to al-Qaeda, and the whole thing was a blatant lie. Nevertheless, they made this war, which killed—I don’t know how many thousands and thousands of innocent people, and where was the ICC then? So the ICC is a corrupt institution, that’s very, very obvious.

And the people who are now going after President Trump, you know, I don’t know the exactly legal battles Trump is involved in: But first of all, the U.S. has not signed onto ICC; Russia has not signed onto it; many other countries haven’t done so. And then, for authorities inside the United States to go after Trump, I think reflects the same idea, that you eliminate any force or any voice that could be a potential opponent to this war machine of the neoliberal system. I think this is a very bad sign, and most countries in the world completely reject the authority of the ICC, and I think the majority of the people of the United States reject this prosecution of President Trump as well.

Schlanger: There are comments from around the world about the ICC case, asking, how is it a war crime for President Putin to have orphans and children at risk removed from a war zone to safety in Russia? So, there’s another aspect to that.

What Happens Next with the Banks?

Let’s move to the economy, quickly, and try to lump several questions together, because we have a number of questions. One is from Salt Lake City, Utah: “If the banks are bailed out, then what happens to depositors’ funds?” And a second question is, “How likely is an actual run on the banks or a collapse of the dollar?” So why don’t you see if you can take those two together.

Zepp-LaRouche: The big danger, as we have warned again and again, and especially Lyndon LaRouche has warned over the decades, repeatedly, in the starkest terms: The danger is that these speculators, the people who are making the profits of the billionaires more profitable, they’re gambling with the livelihood of the normal people. A very useful lesson is what happened in Germany in 1923, when the Reichsbank had to pay both the World War I war debt, but then also the war reparations, and they did that for several years—from 1919 to 1923—and nothing was visible. The Reichsbank was printing money, printing money, and it all seemed fine. But when the French then occupied the Rhineland, and production came to a standstill, then within a few months from the summer of 1923 to November, you had an explosion into hyperinflation, such that, in the end people were running to the baker with wheelbarrows full of money to be there by noon, before the price rose again by trillions more reichsmarks for a loaf of bread. And then eventually it was over, because it became absurd.

Now that is not exactly what will happen now, but we are on that way! Because if the central banks are continuously printing money for takeovers, to keep the banks which supposedly are “too big to fail,” keep bailing them out at the expense of production, there could come a point where you have a hyperinflationary explosion, which will devalue the life savings of people. Everybody who is part of that system is threatened with that phase.

But you could also have—and I mentioned that in the call for an international emergency conference which I issued; you could have a situation where the uncontrolled collapse could be triggered by a whole bunch of mines which could blow up, what Bill Gross, formerly from PIMCO, had called a “supernova,” where you have a very shiny, bright star, which all of a sudden evaporates. And that could be a chain-reaction like a thermonuclear explosion of the entire financial system.

So we are between a rock and a hard place between these two options, hyperinflation or a chain-reaction collapse, a Scylla and Charybdis, where the only way how you will get out of that, is to have an orderly reorganization, you have to basically put the banking system through bankruptcy reorganization: You put the commercial banks under state protection, because they are the ones that issue credit to the real economy; we have to protect the deposits, the savings, the pensions and other categories of wealth which need to be saved. And then you have to separate it from the investment banks, and you have to tell these banks, “OK, you have to bring your books into order on your own. You will not get taxpayer bailouts any more, and if you are bankrupt, then you have to declare bankruptcy and go out of business.” We don’t need investment banking.

What we need is a system of credit, credit which is given to real production in industry, in agriculture, in transport, in other goods of the common good, and that has to be protected. And that is why you need not only a Glass-Steagall banking separation, but you also need a system of National Banks, because the power of credit generation has to go back to being under the control of sovereign governments.

Right now, it is in the hands of private bankers: The central banks are private banking interests, and they are not devoted to the common good! And ever since the so-called “regime change,” which was talked about and agreed upon at the Jackson Hole central bankers conference in August 2019, whereby the central banks have more power than the governments! And that is a completely upside-down relationship. We have to reinstall the sovereignty of the government to control what is done with the credit and under what conditions the credit should be issued.

So this is coming upon us, whether people like it or not, and I think it’s quite symptomatic that the discussion about Glass-Steagall has re-erupted, but I think at this point, 15 years after the financial crisis of 2008, a simple Glass-Steagall is not enough. You need to address the problem as a whole, and that is what is in my “Ten Principles for a New International Security and Development Architecture”—which I really urge you to read and endorse, and help us to put pressure on institutions, so the more quickly we can have such a conference to reorganize the entire system, the better.

Schlanger: Helga, we’re running out of time. I’ll give you one more question, from Steve from Nova Scotia. It’s a somewhat philosophical question of what we were just talking about. He asks: “When will we have an economy that doesn’t see money as an end in itself? Instead we need to plan seven generations ahead to ensure a net benefit for those who come after us.” Do you want to comment on that?

Zepp-LaRouche: Yes! “Money is an idiot”—that’s what my late husband always used to say. Money is just a means, it’s not a value in itself. And a society in which money is the golden calf, around which everybody is dancing, that was already a discussion in the Bible, that is a society which is doomed to go under. So, what we have to move away from is the idea that money has a value in itself, and instead we need to measure things in terms of the physical economy, which was developed by Lyndon LaRouche: Which is the idea that you have to have a standard to measure creativity, to measure productivity, and the measurement is, whether an investment increases the productivity of the economy, and therefore leads to an increase in the relative potential population-density of an economy. Now, that is a measurement which is absolutely provable, it’s transparent, and it is also associated with the idea that a continuous increase in that population-density is necessary; it’s a law of the universe. And it has to do with the fact that, naturally, at every level of technology, theoretically, you come to a point of exhaustion, because either the raw material is becoming scarce, or it’s becoming too expensive to produce; and then you have to apply a new physical principle based on scientific and technological breakthroughs, and that increases the level of productivity, and therefore redefines the entire economy on a new economic platform.

Now, that has been the reason why humanity came from the Stone Age to presently 8 billion people. If you would apply all existing technologies, everybody could have a decent life on this planet. But, you know, we are only on the planet Earth, and we have to think about the fact that we are sitting in a very complex universe, with probably 2 trillion galaxies, at least. And in the long term, since we want to have a human species as the immortal species, in other words in 2 billion years, when our Sun is becoming a problem for us on Earth, we do not want to be stuck only on Earth, but we have to really think of how to create the conditions for the long-term survivability of our species in the universe.

Now, most people don’t think this way! Because politicians want to be reelected for the next term, so they don’t bother about these longer-term questions, but the scientists and the people who are thinking should be concerned. And if you are thinking that way, then you are not thinking in terms of money, but you’re thinking in terms of how to create the conditions for the human species to do well, the wellbeing of mankind. And then money becomes a means of—electronic money or whatever—it’s a tool, it’s a servant. It should be a device, but it should not be glorified as anything more.

But I think there are some countries that are moving in that direction, between Russia, China and some other countries among the BRICS, they’re moving in the direction of a new currency based on commodities and gold—gold is a commodity, but other raw materials, as well—and that is a step in this direction already. And I think the paper of my late husband, “On a Basket of Hard Commodities: Trade without Currency” which I advise you to read and study, is probably an influence on these new discussions, and there is hope that mankind will become more reasonable.

Schlanger: Well, Helga, we’re out of time. Let me thank you for taking the time and taking these questions. We’ll be doing this every week. And in the meantime, let me add that we will be having the next Schiller Institute conference on April 15, an international conference to take up these questions.