PRESS RELEASE
Plans Against Pound Sterling
`A Strategic Issue,' Says LaRouche
Jan. 5, 2007 (EIRNS)—The real financial issue for Britain "is a collapse of Sterling," not of real estate, said a leading City of London analysts in a discussion with EIR today. "This is correct; this is the issue," Lyndon LaRouche responded. This is a strategic issue, and the "real aim of a collapse of the pound would be to pull down the American dollar." This has been done before by the British, LaRouche said. This was the policy in 1963, when the British began devaluing the pound to bring down the dollar. The way of doing this is to pull down the biggest financial element outside of the U.S. dollar, which was the pound sterling and the British financial empire, and then target the dollar itself.
The London source pointed out that central banks outside of Britain have been accumulating sterling, as an "alternative" to the dollar as the reserve currency. If the dollar continues to fall, and bottoms out, these central banks could pull out of sterling, and buy up dollars "cheap." Sterling is vulnerable, since it has been sold to other central banks at a rate of $5 billion per quarter for the last several years; Britain's net foreign and gold reserves are only about $20 billion at most.
He also said that China is supporting the dollar, which is sustaining the dollar's value at this time. The Chinese know that the value of their huge reserves would be destroyed if the dollar crashes, and that if it goes down, "everyone else" would use this as an opportunity to get out of the dollar, making the crisis worse. This, the Chinese will try to prevent by continuing their trade surplus with the U.S. and buying dollar assets.
LaRouche traced the history of British operations against the American dollar, in the 1960s, starting with the Wilson government and ending with the devaluation of the dollar in 1968—the year of the '68ers. LaRouche stressed that there is no alternative to the dollar; it is the international currency. He emphasized that this is a strategic issue, and that our enemies are going to try to pull something along these lines against the dollar system, to destroy the entire financial system, fast. We have about three months to get the new Democratic Congress up and running, and it is in this interval that the British will try to pull this dollar collapse.
