There Can Be No Military Solution to the Economic Crisis

“We have a 1930’s style deflationary depression, which is what happens if we keep raising interest rates. Or, a Weimar Germany kind of hyperinflation, which is what happens if we try to inflate our way out of our current debt problems. And that’s it. This is not something on the distant horizon anymore. It’s something right here staring us in the face.”

This quote does not come from the late Lyndon LaRouche – as some subscribers might guess – but from financial analyst John Rubino. It does not date from years back, but from Feb. 11, 2023.

Last week, we wrote that “monetary tightening has opened deep cracks in the bankrupt financial system“. As if on cue, Credit Suisse, the second largest Swiss bank and a “systemically relevant” institution, reported a CHF7.3 billion loss in 2022 and especially, CHF111 billion pulled out by investors in Q4. Without a capital injection, CS, whose stock value has plunged 90% since 2008, will go bust soon.

Credit Suisse is not alone. Also “Barclays (U.K.), Deutsche Bank (Germany) and Citigroup (U.S.) have lost the bulk of their market value since January 1, 2007 — or prior to the financial crisis of 2008. And all of these banks are also G-SIBs [Global Systemically Important Banks] and interconnected to one another through derivatives, loan relationships and the like,” Pam and Russ Martens wrote in Wall Street On Parade.

What LaRouche had additionally forecast, is that Western liberal elites would implement Schachtian economic measures, including rearmament and war, in the attempt to save the bankrupt system. The following is the assessment of another financial analyst given to EIR last week: behind the talk of “postwar reconstruction“ in Ukraine lurks the idea of wartime reflation. They don’t really intend to end the war, but to continue it. The war spending should pump money into certain sectors of the economy, which should create some jobs and give governments some funds to do certain things. But it would be combined with the Green bubble and a new quantitative easing once inflation has supposedly been ended, in order to cover the unpayable debt owed by insolvent corporations.

But, according to this analyst, there’s no way they can cover $2 quadrillion worth of derivative contracts, or the corporate debt or government debt. The U.S. has hit a debt ceiling, Ukraine is essentially bankrupt, and there are about 40 other countries that are incapable of paying their existing level of debt service. The only option other than spending for war that they have, he warned, is massive austerity, including cutting so-called “entitlements” such as Social Security, Medicare and Medicaid in the United States. In Great Britain, the National Health Service is already in a nosedive.

We would add to that that without LaRouche’s complete policy, the wars will continue and spread. And even if they don’t cross the nuclear threshold, depopulation will occur as a result of the economic policies.