Jacques Cheminade

Transcript:

The trans-Atlantic financial system in which we are living— based on appropriating money— leads to chaos or war, or more precisely and more tragically, to a combination of both. The preceding speakers have shown that the current world is more dangerous than it ever was at the height of the Cold War. The system, by its very nature, is criminal. Justice has become a cash-convertible commodity while fraudsters operate in packs, committing frauds with systemic effects which have turned our stock markets into gigantic crime scenes.

Too big to fail, too big to manage, too big to jail: an industry of unpunished corruption has become the norm and the heads of our central banks have become counterfeiters. The mere fines that financial criminals are hit with give them in effect the right to perpetuate their fraud and trafficking, while the fines are paid with the bank’s reserves, to the detriment of employees, depositors and even shareholders.

Today, these megabanks bluntly admit, as JPMorgan Chase did in its analysis published on May 28, 2013, “The Euro Area Adjustment: About Halfway There”: their intention is to dissolve democratic systems in order to enforce increasingly ferocious austerity measures on people.

Lyndon LaRouche’s forecast, made back in the 1970s, of would happen, is now being echoed, after it did happen, by all those who are preoccupied with the future of mankind, as the criminals operate in broad daylight while fictitious capital comprised of debts and financial securities is growing, at the expense of the creation of wealth in the real economy.

However, contrary to analysts that enjoy doom and gloom or practice selective indignation, LaRouche, from the start, reacted against this state of affairs by outlining alternative policies. He didn’t just denounce policies that were becoming increasingly intolerable and leading to war by their inner logic of looting and seeking, once again, “Lebensraum” to the East, but he proposed one after the other win-win projects on a world scale: a “productive triangle” among Paris, Berlin and Vienna after the fall of the Berlin Wall, a “Eurasian landbridge,” together with his wife Helga, a “new silk road,” and a “world landbridge” for peace and mutual development. LaRouche, without hesitation, said “NO” and then defined another frontier.

LaRouche’s Approach

When I first became aware of his ideas, over forty years ago, three things struck me immediately. First, the fact that his concept of economics was not derived from statistics and currencies, but from the creative powers of the human mind. As in Edgar Allen Poe’s “Purloined Letter,” this fact eludes us, although its reality is blinding. As the heir of the American revolutionary tradition and as a critical reader of Marx, LaRouche revolted against the Malthusian vision of the Club of Rome, the latter sharing with financial capitalism the method of linear extrapolation of existing resources, without taking into account those that the human mind is capable of discovering.

LaRouche is unique in that his initial reaction of rejection also contains the foundation of the required alternative. To criticize without proposing, he often argues, only leads to pessimism, or even worse to destructive violence. To criticize the dominant order without presenting an alternative only leads to hateful nihilism, which led to terrible ravages in the 20th Century or again today in Europe, which is becoming xenophobic and communitarianist.

LaRouche’s approach is above deduction and induction; based on the unwavering determination to change the social environment to make it worthy of mankind, and to do so with what I call, in French, a universal empathy that leads him to always say aloud what he conceives. He defines himself and acts as a human being living in the future, and is inspired by those in the past, who have shown us the way out of dead ends by their capacity to discover realities beyond the egoistical sphere of sense perception—that is, by the quality of agape which distinguishes human beings from all other species known so far.

The second thing which struck me in his thinking is that he understood how “liberal” ideology has by definition no directionality, and therefore allows all transgressions. LaRouche immediately understood that the moral deregulation, produced by Woodstock and May 68, would lead one decade later to financial deregulation, and to the mutually assured greed that generates crime.

He also demonstrated the destructive consequences of the August 1971 decoupling of gold from the dollar, an agreement that offered the world like a chicken coop without protection to the foxes of finance, and of Margaret Thatcher’s October 27 1986 “Big Bang,” which opened the City of London to the wildest types of financial speculation by the entire world’s financial entities.

Then, in 1999, LaRouche denounced the scrapping of Franklin Roosevelt’s Glass-Steagall Act, because this was not a technical measure, but rather a licence to loot given to the major financial institutions in the jungle they had created in this way, which rendered entire nations impotent to defend their people.

At the same time, and this is a supplementary proof of his originality, LaRouche warned that unbridled economic liberalism, akin to the sort that went rampant during the 1930s, leads to fascist takeovers, as now openly admitted in JPMorgan Chase’s report. I remember LaRouche telling us that economic liberals and financial libertarians are like drunkards: they fill themselves up with financial assets, have a hangover on the weekend and wake up as fascists on Monday morning. On December 2, 1971, during a debate with leading Keynesian economist Abba Lerner at Queen’s College New York, LaRouche brought Lerner to say that if the world had supported the policies of Hjalmar Schacht, “Hitler would not have been necessary.” Schacht was Hitler’s Finance Minister; he was the “financial wizard” who organized his rise to power and imposed austerity and financial manipulations, with the full backing of the City and Wall Street.

In 1971, Lerner promoted this “liberal authoritarian” policy for the Brazilian military dictatorship, a policy adopted two years later by Pinochet and the Argentine generals, which led to their atrocities. Since then, since 1971, U.S. journalists have been ordered to stop mentioning LaRouche, and if ever they are obliged to do so, to slander him and pervert his message. This only comes as a surprise for those who have never consulted the United States and British press between 1930 and 1938.

In 1989, after a sham political trial, recognized as a total frame-up by those who looked into the matter, including by Gaullists of the French Resistance, LaRouche was sentenced to a long prison term. When he left that prison, he was even more determined to fight.

The Becoming

The third thing which struck me is LaRouche’s capacity to see the world as one whole, in a permanent state of becoming. As an American patriot, he always sought, “as far as in China” as the Muslims would say, what other patriots have contributed to the world, while fighting for a dialogue of cultures and civilizations.

The creative capacities of human beings have their roots in the works of classical culture, “classical” in the sense that it attempts to awaken in each human being the best he or she has, to inspire his spirit of discovery, with art and science advancing at the same pace. Hence, the importance, as LaRouche stresses, of Einstein, who starts from what he calls a Gedankenexperiment, a thought experiment in the physical universe, which he nourished by his daily practice of playing the violin, in the company of Mozart and Beethoven.

On the opposite end stands Bertrand Russell, who starts from mathematical principles in a universe composed of axioms and postulates from which he derives subsequently, in the smallest possible number, the logical properties. Einstein said “Although I am a typical loner in my daily life, my awareness of belonging to the invisible community of those who strive for truth, beauty, and justice prevents me from feelings of isolation.”

That same awareness is what always inspired LaRouche, who never become discouraged, even in prison, because of his personal commitment. This awareness also led him to fight Russell’s ideology, a destructive stamp our society still bears, the ideology of an Empire managing the logic of a finite world that excludes progress and demands that “the less prolific races will have to defend themselves against the more prolific by methods which are disgusting even if they are necessary.” (Russell, 1923).

Consider everything LaRouche is fighting against today, from the now criminal provocations of NATO to depopulation policies. We are faced with the implacable coherence of a culture of death and we must defeat its logic if the world is to have a future.

At the basis of evil, there is this conception of a finite world, created once and forever, and where the technology deployed by human beings does not serve to improve the living conditions for all, but to oppress them and, in the end, to destroy them.

Thus, LaRouche’s method of physical economy should first and foremost be seen as in opposition to a universe that is “running down,” incapable of producing the necessary resources to allow a world population the conditions for a future. So-called “realists” and “reasonable people,” who follow the rules of the game of the system, in reality contribute to its collapse by the very fact that they operate within it without fighting it.

Now we have arrived at a point in history where a change of system, a just concept of economy and man are necessary for the survival of all. Money has no intrinsic value; it is only an instrument and only acquires value through what it promotes. So what is the goal to be reached? LaRouche stipulates that the goal of an economic policy worthy of the name is to create the most favorable conditions possible for the development of the creative powers of individuals, in a society that fosters that: health, education, R&D, etc. The key economic criterion is not to buy cheap and sell expensive or to acquire rare goods which others do not have, but to increase what LaRouche calls the relative potential population density of society, i.e., its carrying capacity made possible by the constant introduction of new technologies applying the discoveries of new physical principles. The late Russian scientist and space expert Pobisk Kuznetsov called this fundamental criterion the “La,” La for LaRouche.

Hence, physical economy, in contrast to the monetarist economy which makes money a value in itself, aims to increase this transformational power as a function of the potential physical development of society, per capita, per surface unit and per household. The idea is not to “push to the limit” a given technology at a given time, since that produces a progressive decrease of energy, but to overcome that loss by the introduction of new modes of production. That means more “free energy” compared to the amount of energy used. Both in terms of energy and technology, the challenge is to increase the energy-flux density produced per capita, per unit surface and per gram of material used.

Past versus Future Economy

This defines, for example, the relative superiority of nuclear power over other modes of energy production, but also its inferiority, if one remains at the level of nuclear fission obtained from Pressured Water Reactors (PWRs) such as those designed by Westinghouse in the 1960s. Progress is defined by the transition to ever more productive modes of producing fission—fourth generation nuclear fission—and from there, to thermonuclear fusion. Thus, nuclear energy is not a technical method at a given moment, but a dynamic sustained and enhanced by human creation. The physical constraint that will force nuclear energy beyond the current methods is the challenge of space travel, which will require fusion power and probably, much later, matter/anti-matter reactions.

Are we daydreaming? No, because these things exist in a universe which is being constantly created, and because the increasing mastery of its principles can only be based on cooperation to achieve a common aim brining together the different components of humanity. In short, that means peace through mutual economic development, not so much because of the goal to be reached, as because of the mobilization required to reach it and the quality of development of those who are part of it.

Lyndon LaRouche has always insisted on the quality of cooperative work needed to implement his method, although “method” is a word I don’t like, and which in French is associated with the formal and even formalin. I prefer to speak of the “spirit of discovery,” which makes economics the most beautiful of all sciences, since it demands constant discovery.

Just imagine children and adolescents rediscovering new physical principles and experimenting with them, as some of you have done. In this case, contrary to the Bertrand Russell method—and in this case it’s definitely a method, just as Descartes’ Discourse on Method is—the children do not learn and regurgitate formulas, but they discover, as little Einsteins, constructions in the physical economy. It is among these children and adolescents that physical economy, as envisioned by LaRouche, begins in service of that which is human in human beings.

What is the source that will nourish this economy? For LaRouche, this cannot come from financial returns or taxes, that are based on what already exists in monetary terms, but rather on the future creation of wealth made possible by productive credit. While the Anglo-Dutch system defines itself, as we said, by the possession and the issue of money, and by the control over states by a financial oligarchy of central bankers, the “American System” of LaRouche is characterized by productive public credit, that is, by the power given to a country to issue credit for great projects aimed at increasing the potential relative population-density, and both the energy and the technologyflux density.

That was the conception of Alexander Hamilton, the founder of the American System of political economy, which is little known in Europe. Hamilton introduced Article 1, Section 8 into the U.S. Constitution, which gives power to the U.S. Congress to issue letters of credit on the Federal government in favor of the Public Treasury, which in turn calls on the National Bank to coordinate the allocation of these credits. This concept of public credit redefines the very nature of debt: It reflects the intention of the government to pursue an action it deems necessary and to incur debt to achieve it. There is a “debt” incurred, but with no money circulating in the process, as the credit- money is just the means by which state credit is transferred and is not “liquidity.”

Hence, this system of public credit defines “value” as a means to increase the productive powers of labor (again, per capita, per unit of surface area, and per unit of materials employed). We have a physical economy in the service of man, in which the physical production of tangible goods resulting from the income generated by the project itself will supply the means to pay back the debt. Money only has a value if it is linked to the issuance of credit. Therefore, it can be called an “antiusury” system.

Abraham Lincoln said, “Man is not the only animal who labors, but he is the only one who improves his workmanship.” It is on such improvement, in contrast to monetary speculation or hopes of financial profit, that the entire Hamiltonian system is based, a system expanded and further developed by Lyndon LaRouche.

This approach is totally contrary to what has prevailed in the United States and Europe since the suppression of national banks and the public credit system. In the United States, it is by perverting the Constitution that the system was handed over to the megabanks and Wall Street. In Europe, it was the destructive development of the European Union which forced the nations to depend on credit from the same megabanks. The result is what we have defined at the beginning of this presentation: financial looting and a world, just as in the 1930s, headed straight toward war if nothing is done to stop it.

The World to Come

LaRouche’s approach has been partly taken up in the agreement of the Eurasian Economic Union and the Chinese “One Belt, One Road” project of the New Silk Road, with their credit institutions, such as the BRICS New Development Bank which has recently doubled its capital and intends to sign contracts in the currencies of the member states rather than in dollars or in euros. Therein lies a hope, and not in our transatlantic world that is running into a wall.

Therefore, let us leave behind the world of before, and fight for the world to come. Let us imagine teams of scientists, engineers, qualified technicians and workers, combining their skills and know-how on the scale of Eurasia and the world, and given the resources needed to use and permanently expand them.

Imagine how they will spark a new spirit of co-development and win-win partnership, and Lyndon LaRouche’s method of physical economy. Imagine the United States and us Europeans rediscovering our sense of mission and our constitutional principles. Is that not what the Ode to Joy, although it has become banal, really expresses? We must take Europe back from those counterfeiters of the European Union, in order to build a real Europe of projects and fatherlands and beyond, an entente, détente and cooperation among the countries of the entire world. It is with such a project, and what it inspires, that we will find in ourselves the selfrespect needed to to finish off the dominant predatory system.

LaRouche’s challenge is to muster in the 21st Century all means of a physical economy devoted to mankind to build peace through mutual development, exactly those means which were mobilized for war during a 20th Century which was financially imperial and ideologically Russellite.

Physical economy can become the most beautiful of all sciences since it will produce and transmit the good. It is the science of the human mind. LaRouche shows us the road to hope, which will not be made of roses but of combat.

Hence, such is our conviction, man can and must become the artist of the universe by exploring domains yet unknown to us but which we can master, since the principle of creation is innate in us.

Audio (mp3):

Leonidas Chrysantopoulos

Transcript:

Allow me at the outset to congratulate the Schiller Institute and its Director, Helga Zepp-LaRouche, for trying to make the world better for humanity. I wish us all success in this important conference and hope that the outcome will be beneficial for us all.

The theme of our conference is very appropriate and comes at a moment when humanity is not only facing its worst economic crisis since the depression of 1928, but also the worst refugee crisis since the Second World War, due to the aggressive policies of the United States in the last decade, that have destroyed Afghanistan, Iraq, Libya, and Syria. The EU is continuing to gradually collapse, as it destroys its member states, forcing some to consider leaving, while its democratic deficit is increasing and far-right parties are closing in on power.

The world economy cannot get out of a vicious circle that it has been in since the outset of the crisis in 2008. We are witnessing global demonstrations against austerity measures that enhance poverty instead of growth, and against greedy financial systems that lead to extreme social inequality. The demonstrations in France are a good example. Until now, nobody has been listening to the people. It is due time that decisions be taken on priorities beneficial to the interests of human beings. We should no longer ask the question of what the markets are saying, but what our people are saying.

The EU not only has become an incompetent organization, but is also in disarray as more and more is being heard every day about political parties with rightwing programs, and exiting the EU. The UK referendum of Thursday demonstrates the case.

In Greece the situation is deteriorating. After the legislation adopted by Parliament on May 22, Greece has ceased to exist as a state, having given the economic management of the country to the lenders and to the EU for the next 100 years. It is the first time in history that a country has dissolved itself. Parliament will no longer have any role to play in this area. In May 2010, the Greek government was forced to sign the Loan Agreement so that it could, through austerity measures, reduce the public debt which in 2009 was 129% of GNP or 299 billion euro in absolute numbers. After three memoranda and the mistaken policies of the EU, the IMF, and the Greek governments, not only was the public debt not reduced, but it has increased to 180% of GNP.

The Syriza government was elected on an anti-austerity program, yet betrayed the Greek people by doing exactly the opposite. It did not even take into account a referendum in which 62% of the people voted against the austerity measures. In spite of the fact that they had acknowledged their mistakes, the EU, the European Central Bank, and the IMF continue to insist on the implementation of the same ineffective policies that are destroying a member-state of the EU and its people. Unemployment is up to 25% from 9% in 2010, Greeks looking into garbage bins for food is a common sight, overtaxation has paralyzed the economy, and the health system has collapsed, while more than 5,000 people have committed suicide.

But it is not only that the measures are erroneous, they have also violated the Lisbon Treaty as well as the human rights of the Greek people, something that is also mentioned in the report dated February 29 of the UN independent expert, Juan Pablo Bohoslavski, to the UN Human Rights Council:

The U.S.-provoked war in Syria with the participation of some EU states has created the biggest refugee crisis since World War II. Almost 5 million refugees have left Syria to ask asylum mainly in the EU. Germany has 484,000, Sweden 108.000 and more in other Member States. Turkey is currently hosting 2,748,000, Lebanon 1,500,000 and Jordan 1,265,000.The EU, once the champion of humanitarian assistance, was incapable of managing the refugee flow. Greece, a country that had no participation in the Syrian war, was inundated with an increased number of refugees while many of its Central European members refused to accept them. Though the movements into Greece were gradually reduced after the shaky EU-Turkey Agreement of March the EU has still to live up to its previous decisions, according to which 60,000 refugees from Greece and Italy would be resettled in EU member-states. Today, Greece has 56,000 refugees, all of whom want to depart North. It is, however a shame that the US has accepted only 4,000 refugees. 

Another threat facing humanity is the U.S. animosity towards Russia, as if we were still in the cold war period. A missile system is being set up to encircle Russia and, of course, Moscow is preparing a defense shield to counter it. The EU embargo on Russia after the Ukrainian crisis is not at all helping the situation. Also, threats have been recently made by Obama against China with references to the need to restrict her economic power.

With a collapsing EU and a United States looking for confrontation with Russia and China, a solution for humanity can be the BRICS’ initiative. This is an initiative of Brazil, Russia, India, China, and South Africa to pursue a policy of economic development for the benefit of humanity. They created their own Development Bank to invest in necessary development projects. China has also established the Asian Infrastructure Investment Bank, joined by over 20 Asian nations as founding members, and has set up a Silk Road Development Fund. Within the BRICS, China has proposed the creation of a Free Trade Area of Asia and the Pacific. The Chinese proposal was quickly rejected by Obama, who created his own free trade organization. The incorporation of the Shanghai Cooperation Agreement to the BRICS could create a formidable power, which—if remaining out of the control of the bankers—could be decisive so that humanity reaches global peace and ends poverty through economic development.

From what was previously mentioned, we can see that there is a crisis of civilization that is impeding humanity’s progress. I totally agree with the Schiller Institute’s viewpoint that we need a renaissance of Classical culture, as we see measures being taken to prevent it from happening. Not only is the educational system in Greece doing everything possible to make Classical culture disappear,— it seems to be following steps taken in the United States and in other EU countries. It seems that Classical culture, which also encompasses humanism, philosophy, the sciences, and art, creates fear among the ruling classes who do not want to see the people thinking again. We should resist any such tendencies.

As for the dialogue of cultures,— yes by all means this should take place, and perhaps we could get on board the UN dialogue of civilizations and make it even better. Both dialogues are useful efforts to enhance efforts for a permanent global peace.

In conclusion, and after having criticized the EU and the United States, allow me to propose some solutions that would be beneficial for humanity.

Greece

For Greece it is imperative to denounce the Loan Facility Agreement of May 2010, on the basis of Articles 8-52 of the Vienna Convention concerning the Law of Treaties. These articles anticipate the invalidity of a treaty, if there was error, fraud, or coercion of a representative of a state. The cessation of payments with the denunciation of the Loan Agreement and the nationalization of the Bank of Greece, will allow Greece to repair the damage done and instigate true development. Adoption of a national currency will follow. The Unified Popular Front (EPAM), a political party not in parliament yet, supports such a policy.

The EU

There must be a transformation of the EU into an efficient organization, having as its sole priority the safeguarding of the interests of its people. A new charter is necessary, drafted by movements of citizens of member-states who will submit their proposals to a European Assembly composed of representatives of these movements. The existing EU must be dissolved.

The United States

It must stop its policy of destroying nations, and Obama must return to the Nobel Committee the Peace Prize that was awarded to him, since he did nothing to deserve it.(The same applies to the EU, which also received the Peace Prize.) The United States must adopt a more friendly policy towards Russia and the rest of the world, for the benefit of humanity.

Humanity

The deletion of the global debt, which is about $600 trillion, will allow humanity to restart on a new and healthy basis. In history, we have examples of debt deletion, from the ancient Greek Sisahthia to the Jubilee of ancient Hebrew communities, where every 50 years all debts were cancelled. Even during the 1970s, the developed countries of the West deleted the debt of the Non-Aligned Movement, thus allowing the economic boom of Yugoslavia. The BRICS’ movement can promote this while the decision must be taken by the G-8. Humanity as a whole will benefit, because it will be able to restart on sound and healthy principles.

In order to implement the previously mentioned proposals, it is necessary to have politicians with imagination, vision, and courage—politicians who care about the progress of humanity and who can control the greed of multinational companies by restricting their power. Such politicians do not exist today. So we have to create them.

Audio (mp3):

Daisuke Kotegawa

Japan’s outlook concerning Eurasian cooperation

Thank you, my name is Daisuke Kotegawa, and I’d like to divide my presentation into four parts. The first one is very short, about myself, why I’m here. The second part is about Japanese economy, with specific focus upon three points which were actually asked by Helga. And the third part is my observation about the world economy, from my own personal perspective. And the fourth point is, just inspired by Mr. LaRouche’s point, I would like to explain, a very, very important new invention which my company created, very recently which would complete change this world.

First, about myself: I worked in the Ministry of Finance of the Japanese government for 35 years, and fortunately, or unfortunately, I was in charge of the settlement of the financial crisis in the late 1990s in Japan. I lost some friends of mine and my staff, as well as my friends, Japanese bankers who were arrested and put in jail, or they committed suicide and died. But I survived.

At that time, I had to liquidate major Japanese investment banks, two companies, Yamaichi Securities and another, and also I had to partially nationalize two major banks in Japan. And also in I think 2007, I went to the IMF and I was involved in the liquidation of Lehman Brothers in 2008. Just last week, I had a chance to meet my former colleague, Mr. Dominique Strauss-Kahn, in St. Petersburg at the Economic Forum. That’s my background.

My second point is about the Japanese economy, but my first focus is upon the relationship between Japan and Russia. Last month, May 2, I celebrated my birthday; this is a joint birthday party with my friend who is a very famous Russian conductor, Valery Gergiev, because his birthday is May 2nd, and mine is May 3rd. So for the last seven years, we celebrate our birthdays together somewhere in the world.

And he told me that he would perform on the next day in Kazan, and in a city named Yekaterinburg on May 4th. But he didn’t say anything further. And on May 5th, I was sitting in a lounge of the Moscow Airport, and suddenly I saw his face, performing in Syria at Aleppo! That was a big surprise, but that was a fantastic performance. And at that birthday party of about 40 people, I had my friend, who is my very good friend, and who is the best speaker of the Russian language — he is our ambassador in Moscow. Early in the morning the next day, he flew to Sochi to support our Prime Minister Mr. Abe in his meeting with Mr. Putin. That meeting took place on May 6th. On May 7th, I

received an email from my friend. He said three things — Oh, I cannot say anything specific to you. Number 2, meeting went very well. Number 3, Prime Minister went back to Japan with full satisfaction. So, that was a very simple message.

As you know, in 2018, in Russia they have their Presidential election, and also in China they have this kind of election next year; usually one year before that kind of election, nothing moves, because people are more concerned about where they’re going to work, or something. So we had thought that next year, it is not likely that we will have a final agreement with Russia. But this meeting on May 6, changed everything.

Now, we expect that our Prime Minister, Mr. Abe, is likely to accept the invitation of Mr. Putin, and attend the economic forum in Vladivostok on Sept. 2-3, and I am quite hopeful that within this year, Mr. Putin will come to Japan.And if that happens, it is highly likely that we would come to the final agreement with Russia sometime next year. Now, I think I’m very optimistic about it. So that part is now going very well.

My second point is what is now going on in Japan with regard to the nuclear power plants. As you know, we shut down all nuclear power plants after the incident of Fukushima in 2011. Last year, finally, we reactivated two of them. And that was followed by one. And two weeks ago, our Ministry of Economy made public the report, which had the prospect for the future energy combination in Japan; the target year is 2030, and in that report, we expect that we will build 24 new nuclear power plants in Japan.

The third point I would like to mention is, actually, the Japanese economy is actually now in a kind of bubble which is not shown in figures. Instead, I’d like to just tell the incredible incidents now in Tokyo: We relaxed some visa requirements for people from Southeast Asia. Of course, we didn’t relax visa requirements for the Chinese, because we are afraid that if that would happen, several hundred million Chinese might come to Tokyo.

But last year, we received 5 million Chinese tourists. That was a 100% increase over two years ago. And the average purchase volume of each Chinese tourist is now something like $3,000. And now we have a shortfall in hotels. After big earthquake and tsunami in 2011, hotels in Tokyo had vacancy rates of about 90% — miserable. But these days, everything is full, especially starting last year, Chinese people started to come to Japan, at the end of March and early April, just in order to enjoy the cherry blossoms in Tokyo! So now, all cherry blossoms, those parks which are very famous for their cherry blossoms in Tokyo are completely occupied by Chinese tourists.

And because of the shortfall in hotels, what is going on is, starting last year, also, in local

cities, the population is something like Frankfurt am Main, and the other is something like Wiesbaden, they started to receive huge numbers of Chinese tourists. So they set up a fleet from Shanghai to those cities, and last year a ship with 2,000 Chinese tourists came in, followed by the other ship, with 3,000 Chinese tourists. And this year, in a very small city, something like Wiesbaden, they received a very big ship with the capacity of 8,000 tourists!

And as you can imagine, you need to have at least one bus for 100 tourists. In the first case, we had 20 buses and 30 buses; this year they had to arrange for 80 buses for those people. And they stayed on the ship! So thanks to those foreign tourists, our economy is now very good.

Actually, Mr. LaRouche talked about infrastructure, and I’m very thankful for that comment, because I was in charge of the budget examiner, in charge of the budget of Japanese economic assistance to China. And in 1989, we agreed upon the Japanese economic assistance to China of the amount of $10 billion each year, for over six years. So those loans were made to build, for example, an airport in Beijing, an airport in Shanghai, an airport in Guangzhou, and seven ports and seven railroads, and seven fertilizer factories, seven dams, and seven power plants. And also the phone network in Shanghai as well as the phone network in Beijing, and the subway system in Beijing were built, with these loans, were carried on 0.5% interest.

Thanks to that infrastructure, Japanese companies started to make investments in China, and now, we are actually getting the fruits in the form of a huge numbers of Chinese tourists.

So I’m very sure that if we just make investments in the right way, we can actually redouble the volume of demand which is completely missing in this world. As I completely agree with Mr. Zanni’s opinion, because we don’t care about investment bankers. They do care only about rich people. And they are interested in only gambling and we don’t need them. But we do need commercial banks, because they are the settlement bankers and they take care of deposits. And in order to stop investment bankers’ gambling, as he said, it is very important to look at the asset side. Even if we were to allow bankers to keep a huge amount of money under the name of equity, it does not stop gamblers from gambling.

So we have to separate these two, and we have to take all banks back to our own life. And he mentioned it, but of course, this a little bit difficult to understand, but there is a concept of “notional amount” for derivatives. When they gamble, they need some kind of base figure, which is not real. But it is said, the amount of notional amount of

derivatives held by Deutsche Bank, is EU300 trillion! That is five times larger than the GNP of Germany! So you’ll be really frightened. But don’t worry: There’s a way to set it. Those investment bankers, they just gamble with each other; maybe the counterpart might be Goldman Sachs or Morgan Stanley, something like that. So, they should just net out everything. Then, suddenly, the amount would become almost zero; so, here again, we don’t have to worry about it. And we should focus more upon manufacturing.

And so, now’s the time to disclose our invention: this is a small cooking machine. The size is the same as an electric range. There’s a small boiler inside, and using the hydrogen water, we’ll make heated steam, and we can control the temperature between 150 degrees and 600 degrees. And when we put this steam into the cooking machine, of course, air will be pushed out. But with this heat anything, vegetables, meat and fish can easily be cooked. And the most important thing, since air is pushed out, everything is cooked without oxygen, so they are not oxidized.

As you know, non-oxidized food is very good for your health; and, so, number 1, everything becomes very tasty. Everything is very tasty, so we don’t have any waste, so this is very good for your environment. And number 2, as I said, it’s not oxidized, so even seven days after cooking fish, the cells of the fish are still alive; so they are very juicy and very soft. And number 3. This can of course wash out all chemical additives out of vegetables. And number 4, because they are not oxidized, they don’t have any bad smell. The bad smell comes out when foods are oxidized. And number 5, it is very, very easy to cook. In the case of sliced meat, you put sliced meat into this machine, and only after two minutes everything is fine, everything is perfect.

So we started to sell this big one to the Japanese largest supermarket chain, and for the first time in our history, they started to produce lunch boxes completely free of chemical additives. And they can actually stay fresh for a long time.

Why did we start with these restaurants or other companies? Because we are afraid that if we first sell these machines to the consumers, since everything would become so tasty, nobody would go to a restaurant! So, I hope within one year, this machine will I think come to the market. And we don’t want to become rich; we want more, than all people on this Earth can have healthy food and can live long. And the expected price range I think will be between $1,500 and $2,000. Thank you very much.

Audio (mp3):

Marco Zanni

The collapse of the European financial system and the failure of the Banking Union

Good afternoon everyone, and many thanks to the Schiller Institute for the opportunity to speak on the situation of the European Union and of the European financial system.

Briefly, before assessing the status of the European economy and financial system, let me say a couple of words about what happened on Friday, the surprising result of the UK referendum on its membership in the European Union. As I say, the result was “surprising” and a very strong message of democracy to the European Union and to the European institution. The European Union ignored the will of peoples and citizens, in forcing a political integration that is not the right way for Europe to cooperate. I remember referenda in 2005 that rejected the European Constitution, in France and the Netherlands, and I remember in 2008, the referendum in Ireland on the Lisbon Treaty. The European institution decided to ignore the voice of the citizens and Brexit is the result of this lack of a political view for a united Europe with cooperation among European countries.

I think that this is a huge opportunity for European countries to sit together around the table, to assess and declare the failure of this project of the European Union, and try to set up together a new project, an alternative project for Europe; because Europe is different from the European Union, and I am a strong supporter of Europe and of European citizens. And as I was saying, to try to create an alternative project for Europe that will restore economic growth in Europe, that will respect the differences that European countries have, and in a framework of real cooperation. So, a Europe focussed on the real needs of the real economy, of small and medium enterprises, and not a Europe based on the needs of speculation, of finance and of big banks, as this European Union is doing.

I received very good news just an hour ago: The European Commissioner responsible for financial regulation, former lobbyist in Brussels for the financial system, Mr. Jonathan Hill [Commissioner for Financial Stability, Financial Services, and Capital Markets Union] has resigned as a result of the Brexit. So this is good news; let’s resolve that we can all work better on economic and monetary affairs inside the European Parliament.

I will try to assess and present the status of the European financial system. As the title of this panel points out very well: “The European financial system is collapsing.” It is collapsing because of wrong policies brought about by European governments and by the European Union. After the financial crisis in 2008, the European Union decided to focus on the wrong problems. So they tried to set up financial regulations focussed on trying to overcome the consequences of a crisis.

In my view, this is not the right way to restore, and to guarantee the stability of the financial system. If we want a banking system, a financial system that is safe, if we want financial stability, we should focus regulations on preventing financial crises. Working and regulating the liability and equity side of banks is not the right way; we have to focus on the asset side, on the exposure of the financial system to certain types of financial assets. In this way and in this task the European Union failed, and the project of the banking union failed.

Let me talk about the first pillar of the banking union, that is, the single supervisory mechanism for all of the participating member states of the banking union, for the banking systems of the member states. The approach to single supervision delivered by the European Central Bank (ECB), or by a branch of the ECB, is completely wrong, and the evidence of this is in the stress tests presented by the ECB after November 2014.

The mistake in the analysis and approach of the ECB is that it assesses only major risks contained in the balance sheets of the European banking system. It completely failed in assessing the exposure to problematic, speculative financial assets that are contained in the balance sheets of the system. I am talking about what the regulation calls “Level 3 assets.” Level 3 assets are financial assets that are illiquid, so that the price and the figure that is posted on the balance sheet on the assets side of a bank is decided by an internal model prepared by the same banks, whose interest is to set a certain figure for the value of these assets. The single supervisory mechanism decided not to assess and not to consider the risk related to Level 3 derivatives exposure of the European banking system, and this is a huge mistake that is threatening the stability of the system.

According to the stress tests and analysis of the ECB, a bank like Intesa San Paolo, one of the most important Italian banks, has problems. I know that Intesa San Paolo has problems on the nonperforming loans (NPL) side, on the credit risk side. But 80% of Intesa San Paolo’s assets related to credit, are related to the real economy, and just 20% of its exposure is related to speculative financial instruments, to trading and so on. According to the ECB, this bank is riskier than Deutsche Bank or the BNP Paribas bank, for example. But looking at the balance sheets of Deutsche Bank and BNP Paribas, the proportion on the asset side is completely the opposite: They have exposure of 80% of their assets to Level 3 assets, to derivatives, to speculative instruments, to trading assets, and just 20% of the assets are dedicated to the real economy.

I think a system that considers Intesa San Paolo riskier than Deutsche Bank or BNP Paribas is completely wrong, and is threatening the stability of the European Union, of European countries, and of the European financial system. The single supervisory mechanism is unfair, because it fails to assess the market risk, and also the level risk on the balance sheets of banks. All of those too-big-to-fail banks, all those speculative banks, are facing legal actions in the billions due to their behavior in the financial markets: They manipulated the exchange rate markets, they manipulated the interest rate markets, and they are facing billions in fines that could threaten the stability of bank balance sheets. And the ECB is not assessing this risk, deliberately. This is a political decision.

By looking at what is happening in the Italian banking system, we see the evidence of the inequity of this approach. Italian banks have problems related to the exposure to NPLs, but it is, I say usually, an “error-induced crisis,” because if your economy shrinks, if your small and medium-sized enterprises go into bankruptcy, if your homeowners cannot pay their mortgages, borrowers cannot pay mortgages, clearly the banking system will suffer a huge exposure to NPLs. If your economy is not performing well, you will experience problems in the credit market and problems related to the NPLs.

Now, as I say, this crisis, these problems, are related to the euro in my view, because the single currency is creating huge macroeconomic imbalances between European countries. The Eurozone is an optimized currency area, and I think that due to political constraints and due to huge differences between Eurozone countries, we cannot fix this currency union. So this is the problem related to the euro.

What about the policies that the European Union is trying to set up to make the financial system safer, more stable? It’s all related to more financialization of the system. Just one example: On a policy proposed by the former commissioner for financial regulation, they think that if we need to restore growth in the European Union, we have to revive securitization. So the proposal that now is on the table in the European Union, in the European Parliament, is a framework for a simple, transparent, and standardized securitization. That is meaningless. Because, looking at the proposal, there is nothing simple, nothing transparent, and nothing standardized about securitization. If you use synthetic securitization, if you use derivatives, collateralized debt obligations (CDOs), there is no simple securitization. And securitization is not the means to restore funding for the real economy.

We have proposals in the European Parliament to restore growth and the stability of the financial system — clearly a first step. We have proposed one bill in the Italian Parliament and one in the European Parliament, in the framework of the banking structural reform, for restoring banking separation. We think that we have to set up a sort of modern, European Glass-Steagall that will simplify the regulation of the banking system, and will make separation between the core part of a bank and a speculative bank, in order to create a banking system that is no more focussed on speculation in the financial system, but on the needs of the real economy, on the needs of people. And this is the first step.

The second step is a proposal related to one of the most troubled banks in the European Union, that is, Monte dei Paschi di Siena. I think you all know the situation of the third Italian bank, the oldest bank in Europe. Monte dei Paschi di Siena was founded in the 15th century and operated throughout the centuries to support the real economy.

Now the Italian government has the opportunity to take over this bank that is really in trouble, and make it an example of what could be a banking system focussed on the real economy. So we are proposing to nationalize Monte dei Paschi di Siena. The Italian Treasury is already the main shareholder, with a 4% stake. We are proposing to set up a clear mission for Monte dei Paschi di Siena, in order to have the bank focus clearly on the needs of the real economy. We will not allow it to operate in trading business, to operate in the derivatives business. Its mission will be just to operate as a public service for credit, in order to support the real economy.

I think that this proposal could be a benchmark for Europe, for the European banking system. We have to do more in the European Parliament, and I hope that after Mr. Hill, we will be able to talk again about the banking structural reform and the European Glass-Steagall that this lobbyist blocked, after being elected commissioner, and then go on with a project for Europe, a project that will overcome this failure of the European Union and will bring Europe again to the center of the global scenario as a connection between the United States and Asia. I think that this is a good way for Europe to restore growth, to restore democracy, and to take the role that European citizens and European people should have in the global scenario.

Audio (mp3):