Monday 12 August 2002

Financial Armaggedon Is Unfolding in South America

The IMF has a lot to feel responsible for, I think we should arrest anyone who claims to believe in the "Washington Consensus" and make 'em all move to the surface of the moon!

And it's by design
by Gretchen Small

The decision was made on July 23-24 by the U.S. Federal Reserve, reliable European sources report, that any and all measures would be taken to keep the U.S. stock markets from melting down before the November 2002 mid-term elections. At stake was far more than the Republican Party's election prospects, or U.S. stocks. With J.P. Morgan-Chase executives forced to call a teleconference July 24 to dispel swelling rumors that they were facing insolvency, urgent action was required. The rumors of insolvency also included Citigroup, second only to J.P. Morgan-Chase as the top holder of derivatives in the United States. Were even one big U.S. bank to go under, it would trigger "financial Armaggedon" for the already terminal global system.

The "whatever necessary" decision led to the greatest stock market intervention ever by the U.S. Federal Reserve, supported by other G-7 central banks. It succeeded in halting the meltdown ... at least for a week.

But, while the financial establishment was riveted on the chaos on Wall Street, another part of their global speculative bubble was bursting: Brazil, and with it, the entire South American financial system.

Fools are running around calling this "contagion." It is, rather, a systemic blowout. Speaking on June 13 in São Paulo, Brazil, at a luncheon hosted by that city's Commercial Association, Lyndon LaRouche prophetically warned Brazilians of what has since happened, the explosion of their system under them. "Governments must act to put the system into bankruptcy reorganization. If you do not do it, you have the worst possible result," he told them. "Brazil, like every other nation on this planet, including Japan, is the victim of an Anglo-American dictate to try to perpetuate that bankrupt system. If we continue, this will blow up, and this could probably happen in the next two to three months. What is happening in Argentina is a warning."

Full story...