In order to get out this trap to oblivion the imperial process that created it needs to be scrapped and be replaced with a production and development oriented process focused onto the Principle of the General Welfare, the advancement of civilization and a higher standard of living for society as a whole. Of course, hell will freeze over before the ruling empires will allow their imperial looting processes on which their existence depends, to be scrapped, and be replaced by a process that is powered by the Principle of the General Welfare, the very opposite of what empires represent. And so the imperial operatives are doing everything in their power, by hook or by crook and clever stealing in widening circles, to assure that their dying system remains alive a bit longer. 

Ah, but it crashed anyway. When the dying imperial system reached a crisis point in 1929 a the big crash happened in which the financial markets simply disintegrated, and this so deeply that the entire economy stopped functioning. That's when the great depression set in. 

We had also reached a similar point in 1987. In order to avoid another huge depression as in the 1930s, the symptoms of the fast onrushing collapse were plastered over with band aid measures. However, the focus for the emergency measures was not on saving society from harm, but was on saving the imperial system. Actually the imperial system cannot really be saved by any devise known to mankind, because the imperial system is inherently defective as is shown in the diagram above. Applying band aid measures to an economic crisis typically solves nothing, but makes things a whole lot worse. Worst of all, the process of applying band aid measures in today's deepening crisis has so far kept the looting system alive. In fact, the looting system has thereby became globalized, and preventing a real recovery has deepened the physical and economic destruction of society.xxx

One of the band aid measures that were taken to save the imperial system, was to flood the system with a "wall of money" (new money) by turning on the printing presses. It was a desperate measure, and the results were horrendous. The money supply was driven up so sharply that it increased far more rapidly, as a band-aid measure, than the financial aggregates themselves increased that it was designed to protect. Naturally, as a consequence that physical economy collapsed evermore rapidly.

Another band-aid measure that was applied to save the now more rapidly collapsing financial system, was the utilization of terror and threats of war to force the world into keeping the imperial system alive at all costs. Some people might still remember how deeply the stock market had collapsed prior to September 11, 2001, when the Dow had dropped into 8000 range. This changed after 9/11. The whole world became encouraged to invest in America, the bastion of democracy. Under obvious 'pressures' (if you are not with us, you're against us) the world responded and poured its living evermore strongly into the sinkhole of the speculative imperial system (especially the American one).

Here, once again, a real recovery was avoided. Consequently the physical and economic collapse of the America and the world deepened. In the process of this deepening depression America is loosing all of its flagship industries, from farming to the steel industry, including the machine tool industry, the aircraft industry, and even the auto industry that was once deemed as American as apply pie. If this process continues much longer there won't be much of an industrial base left in America on which to stage a recovery. America is on the fast track of becoming a third world nation, but one armed with nuclear weapons, the big stick that it wields to bend the world to its will.

Nevertheless America and the world cannot avoid the collapse of the system that is doomed by the looting process that the imperial rulers cannot step away from without loosing the empire and with it everything they have. While China still has a considerable economic growth to report, it's golden facade has nothing of substance behind it. Its economic product is created by enslaving its people for the production of exports at prices far below what is required to operate a healthy and developing society. China is literally using its people up as an expendable commodity, rather than developing its people and their productive potential for uplifting the nation. In real terms, like we do in the West, China is avoiding the necessary steps for starting a real economic recovery. Thereby its collapse is assured. China is economically doomed by its marriage to the western imperial looting system that is inherently anti-economic in nature. For as long as this link exists, real progress is not possible and the corresponding problems increase by leaps and bounds. 

For example, China is beginning to develop a water shortage. As the urban centers grow that supply the slavery industries, the available water recourses are diverted away from farming, by which farming is being depressed. Can you imagine that, China suffering a water shortage? China has one of the longest and most voluminous rivers in the world, the Yangze River, and has numerous great lakes dotting its landscape. When a nation like China suffers from water shortage, the reason isn't a resource shortage, but a lack of sufficient water-management infrastructures.  This kind of lack is typical for any country dominated by, or hooked into, an imperial system. The imperial system never claims to be an economic system, but operates primarily a fascist system in which the human needs are not a factor.

A functioning economic system is primarily a renaissance system. It differs from the imperial system in the way money is used. In a real economic system society creates for itself financial credits that directly channelled to build the industries and infrastructures that it requires for its physical existence and for the improvements of its productive potential.

Initially a long-term investment cycle is required in order to upgrade the efficiency of the economic (physically productive) process. In this case, however, the investment is not channelled into financial speculation to extract financial profit from society, but is instead channelled directly into such areas that offer the greatest increase in the productive efficiency of society. And example of this type of large-scale, long-term, direct investment at virtually no cost to society, would be a financial credit system that enables the building of efficient power plants, steel plants, machine too plants, transportation systems, food supply systems, and the development of new technologies and new materials, and so forth that make the productive process as efficient as possible.. The goal is to raise the automation and the efficiency of the production cycle so dramatically that the wealth produced in physical production far outstrips the increase in money supply that keeps the production cycle growing. 

This kind of system is inherently non-inflationary, and wealth producing, while the imperial system (the modern feudal monetarist system) is inherently wealth destroying.

In the imperial monetarist system money is considered an estate that can be rented out for profit in the traditional feudal manner, or it can be soled or traded for profit. The focus is always on profit, on making profit instead of producing physical goods for the well-being of society. For example stocks are 'traded' for profit. And rich profits are made in this process. However, the process of trading certificates does not produce anything of terms of wealth for society that could be considered profit. In fact nothing is produced in this manner. Nevertheless profits are drawn, which indicates that the profits that are drawn are literally stolen from other investors. And so, society is induced to steal from one another. The sad fact is that high price is attached to this game, and it always society that pays that price in the end. 

The looting game is rarely a zero-sum game, in which there are as many losers as there are winners. Usually society looses in a big way, and the imperials loose also as their so-called wealth erodes into thin air. For example, in recent times enormously large funds have been pooled together that have enormous power to buy the controlling interest in many an industry, which is often utilized to asset-strip the industry for the funds' temporary profit, while the rest is left to slide into bankruptcy. Society becomes a triple looser in this process. The workers loose their employment and income, and often also their pensions, while society as a whole looses the productive potential of the industry that then no longer exists. It also looses the products that were once produced. That is where the western world is standing today. 

The great free-fall collapse

The western economy is now in a free-fall collapse as shown in the orange circle.

The free-fall collapse is exemplified by the wilful destruction of the US automobile industry in a private financier effort to destroy the USA as potential adversary to the imperial system of monetarist feudalism. From 1990-97 an incredible 65 million square feet of industrial capacity in the aerospace industry, a once vast reservoir of advanced machine tools was shut down and auctioned off, which usually brings in but pennies on the dollar. However, that was only the beginning.  In 2004 the entire (federal) national machine tool reserve that had been kept for emergency needs was auctioned off under the privatization mantra. Then the destruction process was applied to the U.S. automobile industry with a massive array of plant closures announced and in progress, with the auctioning off of the production machine tools. In the 2006-07 timeframe 65 major auto plants are slated to disappear with 80 million square feet of production capacity filled with versatile machine tools and likely several times of that in the supplier industries. The American economist and statesman, Lyndon LaRouche proposed a package of emergency legislation, The U.S. Economic Recovery Act of 2006, to prevent the final shutdown of America that would make an economic recovery very difficult, if not impossible. It is also designed to prevent the greatest economic and financial crisis in history gripping the entire world, threatening a now dark age.

Why are we facing a dark age crisis?

The answer is simple. It is determined by what determines the value of a nation's currency, which is the power of its productive economy. The sum total of a nation's money and similar financial aggregates reflect the value of what is produced in tangible wealth. If for example (hypothetically) there was nothing produced of tangible value, all the nation's money and financial paper would be worthless no matter how great their amounts would be. The western economic system is currently moving towards this stage.

The red line not only represents the decline of the physical economy, but it also represents the decline of the sum total of the nations' currencies and financial papers regardless of their nominated value. This collapse in real value in the state of the currently collapsing imperial system, the feudal monetarist system that is looting oriented rather than production oriented. The U.S. economy, if one can still call it that, spearheads this decline in value towards oblivion. In other words, the nominal value of the financial aggregates represented by the upper curves really represent the declining value of the physical economy represented by the lower curve. This awesome reality is what is beginning to assert itself, out of which a great crisis is developing.

For years it has been possible to keep the value of the U.S. dollar and financial papers artificially high, almost by degree, in order to hide the realty of their rapidly collapsing value. This forced deception is now rapidly coming to an end. In order to prevent the U.S. dollar and financial papers form collapsing to their real value an effort is now under way to work out an international agreement to devalue the U.S. currency and paper in a controlled fashion by 20% or even 30% to provide the illusion that a correction is being made. Lyndon LaRouche states emphatically that this won't work, nor would it be fair to countries like China and India who have kept the U.S. population supplied with imports for dollars. Since the dollar has been artificially globalized and thereby become the global reserve currency, devaluing the dollar would wreck to the global economy, including the economy of China, India, and Russia and cause a global dark-age collapse. Lyndon LaRouche points out that this global collapse chaos can only be avoided by massively redeveloping the U.S. economy by which the U.S. dollar and real obligations become fungible again at their currently nominated value. The same applies also to western Europe. Without it the dark age collapse cannot be avoided that for some nations has already begun. See: The Governments are Collapsing: The Cities of the Plain by Lyndon LaRouche.

The recovery process, built on universal humanist principles

The global recovery can only be achieved by the opposite process to private imperial monetarism. This process is the historically-proven process of the direct-investment credit-principle economy that was pioneered in the early years of the USA and became known around the world as the American System of Economy. In an economy built on the directed-credit principle, profit is not a factor, but efficient production is that supplies the nation's wealth as it multiplies the productive capacity of human labour. It is always the productive process, which creates the real wealth a society has. Land, water, metals, energy, and so forth are only auxiliary to the productive process and have no intrinsic value on their own. They derive their value from what society utilizes them for in the overall productive process that uplifts civilization. The productive process must therefore be protected since it is reflected in a richer civilization and a higher standard of living for all. Monetarism of any type can't get us to this higher stage. This includes every proposed monetarist solution to the present collapse-crisis. Monetarism takes us in the opposite direction and is unsuitable as a solution for the crisis that it creates in the first place. Any monetarist perception of wealth, especially that which entered on looting, is delusional. It always destroys a society in the long run. It must be guarded against, instead of being pursued at all cost as we have it today.

The historically successful American System of Economics, the system that became synonymous with American prosperity in this periods when it was implemented, incorporates both aspects: the direct-investment credit-principle, and the national protection principle. Both principles are efficient and assure fairness on the economic scene. The first aspect, the credit principle was historically applied through a national bank through which society provided for itself financial credits for its self-development. The credits built industries and infrastructures and whatever was needed for the common good. The second aspect, the national protection principle for society's industries, but also the protection of the population from poverty, was implemented in the early years of the USA primarily in the form of the protection of society against the imperial free-trade looting process. Since economic trading is productive only on a platform of universal fairness, the imperial processes have traditionally turned the trade platform upside down and imposed free-trade, or trade that is free of fairness. The first U.S. Treasury Secretary, Alexander Hamilton, had championed both of these principles, the directed-credit principle and the protection principle. And the basis of these to principles, the real principles of economics, America became the envy of the world and a thorn in the eye of every empire of the time and since. 

The empires saw saw their existence being undermined by the success of America, and rightfully so. America had developed a powerful economic system built on the most advanced economic principles developed in development of civilization itself, while the empires were bound by their own nature to an inherently self-destructive system, the looting system. Any looting system is naturally self-destructive.

Unfortunately, the empires, primarily the British Empire, won their struggle against America and thereby they survived. 

The British couldn't beat America on the battle field, where they lost the War of Independence. Nor could they beat America with the free-trade weapon. Alexander Hamilton had erected tariffs to protect America's industries. Likewise were they unsuccessful in breaking America apart by way of setting the country on fire with a brutal civil war for which the British Empire had activated its slaveholder assets in the U.S. South. 

After all of these losses the Empire changed its game and pursued its destructive game from within. This time the Empire did succeed in defeating America. It was done the synarchist way, by the force of coercion. The Empire had its victory on the day before Christmas in 1913 when the U.S. Congress gave the nation's currency and control over its credit creation into the hands of the private financial emporium. The act in Congress that caused this treachery is called the Federal Reserve Act. By this single act the private monetarist empire was given the power of the federal government, and thereby unlimited real power over the nation. America came out of this Christmas treachery as a defeated nation, and remained so to the present day, bound hand and foot to the imperial monetarist looting system. 

For a brief period America was rescued from its submission to this trap. The rescuing was achieved by President Franklin Delanor Roosevelt who had simply overruled the Federal Reserve System and reinstated the original American System of Economy pioneered by Alexander Hamilton. Franklin Roosevelt failed only on one point in this. He failed to overturn the Federal Reserve Act itself. Thus, from that day on that he died in 1945, the imperial system of private control of the nation and the looting monetarism that was its traditional fascist tool were reinstated. America has been dying ever since, and much of the world with it. 

The tragic outcome that still results from this defeat be synarchism is that America is fast losing everything that it ever had and stood for. It lost its credit system, its currency, its prosperity, and is now loosing nearly all of its key industries, farming, auto, aircraft, and of course the machine tool manufacturing industry that would be primary for any economic recovery.

Loosing the machine tool industry is a tragedy all by itself. Russia experienced this tragedy bitterly. Its biggest machine tool works that had supplied almost all of Russia's industries with machine tools, was privatized under western demands, stripped down, and dismantled. Now Russia is no longer able to build new industries and equip them, but is forced to woo foreign industries to set up shop in Russia, promising cheap labour and a raft of other concessions. The only exception to this rule was the recent purchase, by a Russian private company, of a complete automobile assembly plant that was auctioned off in America for pennies on the dollar of its replacement cost as part of America's deindustrialization process under the 'guidance' of the private financier empire.

The irony is that all the financial aggregates that have proliferated in recent years, and also the nations' currency, lost most of their value. A nation's currency and financial papers ultimately have no other value than the value that is inherent in the nation's economic product. A deindustrialized and bankrupt nation has nothing to offer to investors in terms of created value. By this definition the U.S.A. is a bankrupt nation. It carries a combined debt load of over $40 trillion, going on to $50 trillion, while its economic product is so small that it cannot even pay for its current expenses, but has to go deeper into debt each single day just to exist. This leaves nothing with which to pay off the huge mountains of debt and financial claims for financial aggregates that are pure sky castles without any relationships to reality other than that of a dream. The only reason why the dollar-facade still stands is that reality has been kept under wraps (so far) covered by lies and evermore tricks in the looting game that give a vague resemblance to profit.  Wars are waged once again to hide this reality. But ultimately no trick will suffice to prevent the emptiness of the current economic reality from asserting itself. Once this happens the shiny bubble of illusions will pop and burst into a fine spray of mist like a soap bubble pops in the flow of the wind. No one on earth will be able to put the droplets of the fine mist back together again. That is what we will see happening with all the assumed wealth in the financial aggregates and money accounts. That is the current destiny of the U.S. dollar.

If that were to happen to the dollar as some people want, what would happen to the dollar as the primary global reserve currency? Many nations own huge amounts of dollars, primarily those nations that have supported America for decades with imported goods, like China and Japan, that were paid for in dollars that have little real intrinsic value for which America has little of offer in return that is of value in real terms.

The only thing that could save society from total chaos is the long overdue reverting back to the real economic principle of directed credit investment in productive industries, which is the only economic principle there is. And that means shutting down all anti-economic imperial monetary looting processes. That also means putting the entire world-financial system, which is bankrupt, through a bankruptcy reorganization to save society and whatever is still of value and is still functioning.  No other option exists than this one option. Unfortunately there is no willingness on today's scene to even contemplate such a rescue of society. Nevertheless the imperial system that is the current world system will disintegrate, because there is nothing within it that can prevent this built-in doom. The only thing that can still be saved is society itself.

Should this 'miracle' happen that society deems itself worthy to safe itself from the trap that it has fallen into, a long drawn-out effort of rebuilding from the ground up is required, utilizing the most efficient technologies and materials that are available, together with the most efficient power resources. This means stepping up to the most advanced forms of nuclear power utilization as the most minimal first step, involving 4th generation reactors such as the thorium powered high temperature gas-cooled reactor. Another step up by an order of magnitude in quality and efficiency would involve the utilization of basalt for the construction of housing and in various other types of industrial production, including automobile manufacturing. It would also involve steps of stepping away from gasoline powered vehicles, to hydrogen powered fuel-cell-electric vehicles, and magnetically levitated high-speed trains. And on the financial scene it would involve the return to the directed-credit principle and the national-protection principle, and those would have to be expanded to a community of principle across a world of sovereign nations dedicated to the redevelopment of the world. It would of course involve a new Bretton Woods type agreement on fixed international currency exchange rates, determined not by speculators chasing profits, but by national governments dedicated to a richer civilization across the whole world. To get us there from the current mess a new value for the U.S. dollar would have to be established that would reflect not the current mess of a destroyed economy, but which would reflect a value of that economy when it becomes functional again. In other words, the value of the dollar would have to reflect the reasonably achievable future economic power of the U.S.A., it would reflect its economic potential, not its current state of a robbed economy. A near-zero-value dollar, that would reflect the current bankrupt state of the U.S. economy is of no nation's interest. It would destroy the world, rather than rebuild it.

All of these necessary steps would then involve a 50-year investment cycles towards the future potential that must be realized. Nothing less would do. The current world-economic system is so deeply wrecked that nothing less than a radical recovery to every nation's highest potential would be sufficient to get the world out of the trap it has fallen into. The world economy is presently comparable to a person drowning in quicksand. To rescue itself that person would have to learn to swim and to swim in sticky mud all at the same time. Nothing less will do in this case, than resorting to the principle of swimming, or in the economic sense, to the principle of economics. 

An economically drowning society has no option open to it, but to resort to the real principle of economics. That's the choice that all nations are facing today. Nothing less will help anyone. If we fail to reach this goal, a new dark age will overcome us us that already looms before us, which presently threatens to become far worse than the collapse of civilization in Europe that followed the financial and economic disintegration of 1345 in which a third to half of the population perished.

The choice before us is ours. Unfortunately, it won't be an easy choice to make, because the forces that would hold us back are immensely powerful and coercive and persuasive. But if we were to win, a bright future would unfold, brighter than any we have yet imagined. The answer, thus, is a question of love. Do we have enough love for our humanity to secure our future and the future of our children, or are we willing to let the whole world slide to hell in which we and our children have no hope at all? The time for this decision has came; a great moment in history has come; let us make sure therefore that the great moment does not once again meet but a little people as has been the case in history so many times before.

About LaRouche - the American economist and statesman that has become a legend in our time in the fight to advance civilization, protect mankind, and create a new renaissance: 

About the series:  Truth versus Guns,
 presented by Rolf A. F. Witzsche

About Rolf A. F. Witzsche