Anglo-American Attempts to Save the System Could Include Dangerous Provocations
As usual, Lyndon LaRouche’s “typical collapse function” helps explain developments of last week. Western elites are operating within the constraints of the collapsing financial system, constraints that force them to both escalate global tensions and de-industrialize their own economies. Tensions escalated as French President Emmanuel Macron and British Foreign Minister Cameron raised the possibility of sending (NATO member country) troops to Ukraine. The Kremlin responded by reminding everyone that Russia is a nuclear power, and announcing tactical nuclear maneuvers near the border with Ukraine.
Reflecting the higher curve of LaRouche’s function, the U.S. Treasury and Federal Reserve are trying to manage the unmanageable government debt, which this year will increase by a net amount of 2.5 trillion dollars – more than the entire government debt of Germany, the third largest economy in the world in GDP terms. In the attempt to contain the increase, the Treasury announced a buy-back program of bonds, which is based on the assumption that the newly issued debt will cost less than the old one. In other words, on the assumption that the Fed will cut rates. This, in turn, means that the financial casino, driven by the new liquidity, will again be in expansion mode, i.e. the gap between the curve of financial aggregates and the real economy (de facto flat) is going to grow.
In a world in which every political proposition contains the word “sustainable”, it is astonishing that financial authorities and decision makers don’t see that the financial system is unsustainable. Instead of taking the bold decision to shut down Wall Street and its derivative gambling casino through a Glass-Steagall banking reform, they are digging a deeper hole, pushing Green de-industrialization, and fueling confrontation with Russia, China, the BRICS and the Global South in the illusionary hope of stopping their growth while maintaining their own hegemony.
One flank, however, is showing large cracks. A growing section of American society is backing the student protests against the atrocities in Palestine, amplified by Washington’s recent decision to supply more weapons to an Israeli government accused by most nations in the world of committing genocide (cf. below). President Joe Biden’s most liberal backer, Sen. Bernie Sanders, warned last week that Biden may become “another LBJ”, forced from running for a second term by his war policy.
This won’t go smoothly. The transatlantic establishment is ready to create a “Reichstag Fire” type of incident, to justify a state of emergency and an even greater crackdown on the opposition. This is how one should read the May 5 report in the Financial Times warning of “Kremlin agents preparing covert bombings, arson and attacks on infrastructure” in NATO countries. Similar warnings are coming from Chatham House and the Royal United Service Institute, both specialists in fabricating narratives useful for British imperial geopolitics.
