PRESS RELEASE
Bankrupt Banks Are Panicked;
LaRouche Says, `This Is 1923 Germany' Hyperinflation
Dec. 12, 2007 (EIRNS)—Economist Lyndon LaRouche's statement in a July 25 webcast that the U.S. and European banking systems were bankrupt and "blown out," has been repeatedly denied by financial circles, media, and government officials. Today, the banks' panic is on full display, as the world's leading central banks have been forced to scramble to create new money-pumping bail-out mechanisms — admitting that none of their rate-cutting and liquidity-pumping measures to date have done anything to unfreeze credit markets or stop the onrushing financial collapse. The Federal Reserve, whose latest rate cut was "rejected" by panicked international banks yesterday, is hooking up with the European Central Bank and the central banks of Britain, Canada, and Switzerland, to create a new "temporary auction facility" from which banks can borrow in any of their currencies. One financial consulted quoted by the BBC says that the Fed and the other central banks are "providing a ton of liquidity to the market by year-end."
"This is 1923 Germany, July or August 1923," LaRouche said this morning of the central bankers' desperate moves, referring to the notorious hyperinflation caused by 1923 Germany's Reichsbank's attempts to print all the money the banks demanded in the credit collapse of that nation. "I said publicly on July 25, the banking system is blown out. There's one remedy, and I've given it. By their actions, these banks are admitting that they're bankrupt, and must be put into bankruptcy and reorganized. Because that hasn't been done, there is worse yet to come."
Other news of the banks' panic today confirms another of LaRouche's warnings, made on Oct. 31, against the raid on the U.S. Federal Home Loan Bank (FHLB) being carried out by the collapsing mortgage-lender Countrywide Financial Corp. and other predators. The Financial Times reports today that the FHLB is continuing to pump hundreds of billions of dollars into the hands of banks and mortgage lenders. The amount of funds handed out by the FHLB vastly exceeds the amount of direct lending to banks by the Federal Reserve. The Financial Times suggests that this is the only thing which has prevented runs on U.S. banks, like the one which hit Britain's Northern Rock Bank.
In late November, Sen. Charles Schumer (D-N.Y.) protested these hand-outs in a letter to the head of the FHLB, accusing Countrywide of using the FHLB system as a "personal ATM." With everybody now feeding at the trough along with Countrywide, we wonder what Schumer is saying or doing now.
