Chamber of Deputies calling on the Italian government towork to bring about an international conference for the reorganization of the global financial system.
In February of 2007, LaRouche was invited to speak at theprestigious Sala del Cenacolo inside the Chamber of Deputies, by Hon. Andrea Ricci, an economist who has written abook about Bretton Woods, in which he cited LaRouche’sproposals. That conference was sponsored by EIR and the Rifondazione Comunista political party, a leftist party whose
younger generation is eager to demonstrate that it is not antiAmerican, but rather against the policies of the current U.S.
Administration.
While the February event was supported and attended bymembers of numerous political parties, the June 6 event took
the discussion to a higher level, due in particular, to the participation of Tremonti, a leading figure in the center-right coalition, who has occupied high-level positions such as “Superminister” of Economics and Vice-Prime Minister in thegovernments of former Prime Minister Silvio Berlusconi.
Tremonti is somewhat of an anomaly, as much—but not all—of his own party and coalition present themselves as economic liberals. And while Tremonti does publicly campaign fortax cuts, and boasts of expanding private pensions, he is widely recognized as a champion of infrastructure projects, andsmall and medium-sized enterprises, the backbone of Northern and Central Italy’s productive wealth.
Tremonti has also been at the center of some of the mostinteresting political fights in Europe in recent years. In 2003,
when Italy held the rotating presidency of the European
Union, he proposed an expanded version of the original Delors Plan for European-wide infrastructure projects, to be financed with bonds issued by the EU. Despite ostensibly having the support of two of the largest EU countries, France andGermany, the plan was shot down quickly, as it threatened tobreak the monetarist stranglehold the financial and banking
oligarchy holds over economic policy.
Tremonti presented a somewhat similar plan for infrastructure projects in Italy, called Infrastrutture Spa, a statesponsored, but privately owned financing agency, which was
an attempt at getting around the budget restrictions imposedby Maastricht. He also launched a frontal attack on the Bankof Italy—and implicitly on the European Central Banking
system itself—for its failure to curb the type of speculative
practices which have led to financial disasters, such as thebankruptcy of the Parmalat Group at the end of 2003. For daring to take on this sacred cow, he lost his job as Economics
Minister.
One year later, however, he was back in the government,
and had even been promoted, assuming the post of Vice Prime
Minister. And although he is now in the opposition, he is active in various associations and institutes which play a leadingrole in making policy. The fact that he has decided to openly
associate with LaRouche, is one indicator of the potential fora sea-change in Italian, and international economic policy.
42 International

LaRouche in Rome: Free
Market or New Deal?
Here are Lyndon LaRouche’s remarks to the Rome forum onJune 6, organized by EIR, on “The Future of the Economy:
Market Radicalism or New Deal?” He was joined at theroundtable, by Italy’s Deputy Finance Minister Alfonso­Gianni, and Giulio Tremonti, former Finance Minister andcurrently vice chairman of the Italian Chamber of Deputies.
The hour-long audio of the three speeches, without the opendiscussion, can be downloaded from Radio Radicale.it at
http://download-2.radioradicale.it/cache/MP443717.mp3.
Since we have a crowded agenda, I shall limit myself to threeessential points, and some comment on that, to conclude thestatement of the points.
First of all, the world system, in its present form, is hopelessly bankrupt. There will never be a recovery of the presentworld, international monetary-financial system: It will neveroccur. Only a new system could survive. And only with a newsystem, could Europe or the United States, or the world as awhole, survive.
It’s never possible to give a precise mathematical projection of the date of an inevitable financial collapse, because
there are various acts of free will which can change the courseof history, to make a bad situation worse, as a way of preventing a collapse. That is, if you want to stop a collapse which is
intrinsically inevitable, the best way to do it, is to do something that makes the system worse, as has been done since
1987, when we had, in effect, a 1929 collapse.
For example, the United States is internally ungovernable
at the present time. By the same standard, every government
in Western and Central Europe is also ungovernable at thistime. They’re ungovernable, because the dominant force inthe world today is typified by hedge funds. As long as you allow the hedge fund operation, which is largely a British operation, run through places like the Cayman Islands, you can
not actually determine the destiny of any nation, in terms ofthis collapse.
You have a situation comparable to that of Europe in themiddle of the 14th Century, when the House of Bardi collapsed in a hopeless bankruptcy. The only solution is to establish a new monetary system.
Now, it happens that all European systems are monetarysystems, and they really don’t function in a case like this. The
attempt to establish any form of economy based on a money
system, where money is independent of government, is impossible. Since 1971-72, the world has been run by money,
not the world of money by governments. In the case of theEIR June 15, 2007

tend to get long-term, secular inflation. And
when you have inflation, the value of moneyand everything else goes to Hell. Because,
when you loan money, if you loan it at a fixed
rate that people can afford to pay, or that’s
profitable to the economy, you’ve got to prevent inflation from raising the cost of the debt;
otherwise, you are putting a constriction on thegrowth of the economy. In the case of the United States, particularly, we found out that you
have to have a fixed-exchange-rate monetarysystem; otherwise, you can not avoid the badeffects of fluctuations in international trade.
There were many errors made after thedeath of Roosevelt, in the way the monetarysystem of the U.S. was run. Briefly, the purpose of Roosevelt had been to take what theUnited States had developed, as the world’s
greatest monetary system and greatest economic system the world had ever known; but
EIRNS/Flavio Tabanelliduring wartime conditions, this system was
In his speech to the forum in Rome, LaRouche (center) declared that, “only with a newsystem, could Europe or the United States, or the world as a whole, survive.” With
used to build a war machine which was necesLaRouche, are members of the Movimento Solidarietà, (left) Andrew Spannaus andsary to defeat Hitler. But a war economy is not(right) Claudio Celani.
a good economy; it does not produce net value
in terms of what you spend for. But what weUnited States, we have a solution for this in our history: The
did in the United States, as part of everything Roosevelt did up
United States does not constitutionally have a monetary systhrough the end of the war, was to build the greatest productivetem, not in the sense of European monetary systems. Themachine the world had ever seen. What Roosevelt had intended,
United States system is a credit system, not a monetary syswas to use the war machine, its productivity, to convert it to intem. The lawful constitutional utterance of money in the Unitternational as well as national uses, to rebuild a shattered world.
ed States, is by an Act of Congress. Then, this issue of money
When Roosevelt died, Truman, who was a stooge for theis used as a form of credit, which can then be used to support
British, started a conflict with the Soviet Union. This resulted
a banking system. This was essentially the approach thatin a war-economy situation again, which taxed the world, andFranklin Roosevelt took in March of 1933, when he came intocreated many other problems. At the same time, out of London,
office, after the U.S. economy had collapsed by one-third as a
we developed an actual fascist movement inside the Unitedresult of the Hoover Depression, which had actually been theStates, which Eisenhower called the “military-industrial comresult of the entire policy of the 1920s.
plex.” Despite these problems, and the errors that caused them,up until the assassination of Kennedy, over the entire period
Government Credit To Promote Developmentfrom the end of the war until Kennedy’s death, the U.S. econoUnder Roosevelt, as earlier under similar Presidents who
my and the U.S. system worked. Since the death of Kennedy,
had operated in this way, the chief function of government
with the beginning of the long Indo-China War, which ruined
credit, that is, in the form of government debt used as credit,
us, the United States and the world system began to decay, unhad been to promote both large-scale investment in long-term
der the related impact of the war and the rise of the “68ers.”
infrastructure development, and certain categories of investAnd with the decision of Nixon, and more specifically, George
ment in the private sector. The other essential part about theShultz, in 1971-72, in creating the floating-exchange-rate sysU.S. economy, to make it work and make money work, is totem, the world economy as a whole has gone to Hell.
have a regulated economy. You do not allow the floating ofIn October 1987, we went through the equivalent of amoney in free circulation to determine value. You use various
1929 Crash in the stock markets. The decision was made, informs of regulation, including customs systems and so forth,which Greenspan was typical, to go to a wildly speculative
to keep the currency within a rational values relationship inmonetary system, which has ruined the world economy, andthe economy as a whole.
has brought us from a depression situation which existed in
One of the things that’s obvious, is, you can not run a na’87, into a breakdown crisis of the entire world system, which
tional economy if the prime rate of lending by governments oris the state of affairs right now. Over the entire period, taking
other institutions, runs up over 1.5 to 2%. Otherwise you will
into account the effect of the Vietnam War spending, over theJune 15, 2007

EIRInternational43

entire period from 1971-72, under the floating-exchange-ratemonetary system, we’ve had also a political process identified
with the 68er phenomenon, which is actually the shift from a
productive economy, to a purely speculative economy. The
productive powers of labor, physically, per capita and persquare kilometer, have been crashing, and the infrastructure
has been crashing around much of the world.
Despite what has happened in China and what has happened to some degree in India, India and China are actually
long-term failures. These are Asian-model societies, in which
the lower 80% of the population is treated almost as animals.
In both cases, you have an increase within the upper 20% offamily-income brackets, and including a super-rich stratum
within that, but the lower 80% has been falling in value, evenrelative to the so-called improvements and advantages ofthese economies on the international market.

There Is a Way Out
So, there are two things now, which I point now, as solutions or partial solutions for the present state of affairs: First ofall, I have proposed that the United States government, Russia,China, and India, form an initiating bloc to agree to establish anew, international monetary system. And I recommend this, because these three partners—I listed Russia, China, and India—
are the only three nations which are powerful enough in termsof their independence, which were likely to actually support
such an initiative. No government of Western and Central Europe would even consider supporting such a measure. However, if these four powers agree to initiate such a proposal, it willwork. And that proposal, I’ve made clear both to people in theUnited States, and to the relevant other three governments.
Now, we made a second step, which was part of my recent
trip to Moscow. Some years ago, my wife, Helga, in expanding the definition of the Eurasian Land-Bridge development,
as a system of transport and development tracks, had a discussion with a friend in Japan with the Mitsubishi operation; welooked at their specifications on the Eurasian Land-Bridge,
the tunnel-bridge system from Siberia to Alaska, which wouldbecome the basis for a worldwide transit system, which I
would aim at essentially getting to a magnetic levitation system, rather than a friction-rail system, in some short order.
Now this is necessary, when you think of the condition of
the populations of China, India, and other Asian countries.
These countries are now inherently unstable, despite the surface appearance of success. The mass of poor in these countries is a political-economic time-bomb. Without some largescale development programs, you can’t do much for them. We
have, in the northern part of Asia, vast resources underneaththe soil: Under a high-technology environment, which requires a transportation system, you can, with technologies weknow and skills we have now, we can develop these areas into
sources of raw materials which will address this problem.
Helga and I have, over a period of years, made several approaches to Russia, on supporting such a policy—that is, the44 International

Siberian development policy. There was recently a conference in Russia, which I addressed by message, which adopted
this policy, with very specific predicates. The intention is, toestablish a rail-type connection, which runs from Eurasia, intothe Americas, down through the Americas, and of course
would run on a different track into Africa, to create a world
system of transportation which is a transportation net forworld development. The government of President Vladimir
Putin has recently indicated its support for this proposal, andis making approaches to the United States on this issue. It isreported to me, though I’ve not yet confirmed it otherwise,that Putin will be making this point, or this representation, at
the G8 conference now going on.
This is the kind of world we live in. We can put the world
monetary-financial system under reorganization, provided wehave specific motivating proposals which will make it work.
Otherwise, the prospect for the planet, without such proposals, would be a very early arrival of a dark age.

LaRouche’s Ties toItaly Are Longstanding
Lyndon LaRouche has been invited to Italy many times
over the past decades, visiting Rome, Florence, Milan,Vicenza, Ascoli-Piceno, and other cities, where he hasaddressed meetings and conferences, large and small,with political, business, and media figures. Among thehighlights from the past ten years:
April 1997: In Rome, LaRouche calls for a New
Bretton Woods Conference.
April 1998: Again in Rome, LaRouche addresses
members of Parliament on the New Bretton Woods,
and meets with “cold fusion” scientists.
October 2000: On a visit to Ascoli-Piceno,­LaRouche offers an alternative to globalization.
June 2002: LaRouche speaks on the New Bretton
Woods at the Cenacolo Hall of the Chamber of Deputies.
July 2001: LaRouche tours Milan and Vicenza inItaly’s northern industrial region.
March 2002: LaRouche is back in Milan, where hemeets with entrepreneurs and legislators.
April 2003: In Rome, LaRouche outlines an exit
strategy from war.
May 2003: On a tour of Vicenza and Milan,­LaRouche launches a Youth Movement in Italy.
October 2003: LaRouche advises Vicenza businessmen, “Start by ignoring money.”
February 2007: Back in Rome, LaRouche briefs
members of Parliament on the new U.S. Congress.

EIR June 15, 2007