Europe on the Edge of Total Financial Blowout
Europe is facing three triggers for a blowout of the trans-Atlantic financial system, any one of which could detonate at any moment. And these are by no means the only sources of collapse of the trans-Atlantic, London/Wall Street-led system.
First, the Italian banks are on the verge of collapse. It is officially admitted that the leading Italian banks are carrying 360 billion euros in non-performing debt—and unofficial estimates put that number much higher. As Italian Prime Minister Renzi correctly warned, however, the crisis surrounding Deutsche Bank is “a hundred times worse.” DB is sitting on $72.8 trillion in current derivatives contracts and is carrying a mountain of non-performing debt. On Sunday, DB chief economist David Folkerts-Landau called for an immediate, emergency 150- billion-euro bailout of the big European banks—starting with his own DB . Under European Union laws, in effect since Jan. 1, banks must be put through bail-in before any bailout, and this, itself, is a certain trigger for a systemic blowout.
As of Monday, major London real estate funds were facing an investors' run, in the wake of the Brexit vote, and the prospect of an imminent blowout of the entire British real estate bubble is very real. In a clear panic over the accelerating disintegration, the ruling Conservative Party strong-armed one of the two remaining candidates for party chair to quit the race, so that Theresa May could be installed as Prime Minister on Wednesday—to have a government in place to deal with the onrushing crisis.
This imminent, systemic crash cannot be separated from the growing danger of nuclear war, following the Warsaw NATO heads-of-state summit last week.
It is precisely because of this combined danger of a collapse into chaos and potential war of annihilation that Lyndon LaRouche has called for a one-time bailout of the German banks, to staunch the bleeding long enough to launch a genuine policy change, based on his own Four Laws for how to revive the world economy, through credits directed at improving the productive powers of labor, through investment in infrastructure, frontier scientific research, led by a massive expansion of the space program and similar actions. LaRouche warned colleagues on July 10 that if Germany plunges into chaos, war is imminent. Germany holds the key to a new European policy towards Russia, based on strategic and economic cooperation, and if this relationship is wrecked, the consequences are catastrophic.
It's time to face the reality of the current crisis, LaRouche demanded, and to act on the emergency basis that it demands.