Question: (from Argentina) My question is perhaps a little bit technical, respecting the first part of your talk. When you talk about reorganizing the IMF, and later you talk about a process of receivership--how can we implement that, this year?

LaRouche: The problem here, the difficulty arises from European sources into South America: the idea of the existence of a government coexisting with an independent central banking system. There's where the problem lies.

Now, what is an independent central banking system? Go back to about 12 centuries ago. Go back to the time that Otto III was becoming the Emperor of the Holy Roman Empire, in which Otto III sort of turned Venice loose from the previous war of the Ottonian Emperors. And Venice then went on to subvert, and ultimately conquer and destroy Byzantium, as in the Fourth Crusade, which was a purely criminal, swindling act organized by Venice. Venice then dominated Europe, increasingly from about 800 AD into about the late part of the 17th Century. It was an imperial-maritime-financier power. The power resided in an oligarchy, a financier oligarchy, which were the leading families of Venice, who were, in their financial aspect, called fondi, or funds.

Europe was dominated under the power of the Normans. The Norman conquest of England was actually a consolidation of a certain power which became known later as Plantagenet, or Anjou influences, and this close association of this military order, associated with the Normans in Europe, became the predatory factor which became the characteristic of a so-called feudalism, into modern times. This was pure evil,

Now, there was an effort, several efforts, including the 15th-Century Renaissance, to establish a true nation-state, based on the concept of the general welfare and so forth. We had the first such states: Louis XI's France and Henry VII's England. We know that both of them later degenerated significantly, in the course of the 16th Century, under the influence of the religious wars and similar things, orchestrated by Venice, from about 1511 to 1648. And this is what destroyed Spain. Spain was destroyed by this Venetian takeover of Spanish policy, from 1492, essentially, on. And that's what happened to Spain in the middle of the 17th Century.

So, in this process, there was an effort to create a true republic, going beyond what had been accomplished by Louis XI and by Henry VII of England, into establishing a true republic. And they selected as the target of this, in the 17th Century, selected English-speaking North America, but they selected particularly English-speaking North America around a young man with a youth movement: Benjamin Franklin. The leading minds of Europe contributed their efforts, and influence and ideas, to the development of this youth movement around Benjamin Franklin. That's a whole history in itself.

So therefore, we established in the United States, as of 1789, prior to the storming of the Bastille, we established the United States as the first true republic in modern history. The viability of the U.S. Constitutional system is based on the fact that the Constitution as a whole is based on the principles set forth in the Preamble. That is, every other part of the Constitution is subject to revision, except the Preamble. And every part of the Constitution, every law passed, every amendment, is subject to interpretation and revision according to the principles of the Preamble. Only the Preamble is, in a sense, sacred. Everything else is subject to interpretation. Every other institution. A careful interpretation, but nonetheless so.

Because of this characteristic of the U.S. Constitution, the Preamble, the United States has so far survived. The first time it was threatened seriously, was with the Confederate insurrection organized from London. The second time was actually the attack, now, from the so-called Synarchist effort to take over the United States. That's the situation.

Now, at that point, at precisely the time that the American model of a republic, was threatening to "infect” Europe with reforms--for example, the Bailly-Lafayette reform of the [French] Constitution, the constitutional reform

 under Louis XVI, the one that was aborted, and aborted chiefly by the storming of the Bastille--that this reform was aborted. So therefore, except for an effort around Charles de Gaulle and the Fifth Republic, there has never been a significant effort toward actually establishing a true republic in Europe. Instead, what has happened, is we have had so-called more or less democratic reforms of pre-existing feudal institutions, in the form of a monarchy or a Presidency modeled upon a monarchy, and a parliamentary system modeled upon a democratization of the feudal parliament.

But all through this period, these governments, reform governments, in modern history of the 18th Century, the 19th Century, and 20th Century, have been based on a veto control over government, and control of the money system, by Venetian-modelled private banking institutions of the type of the fondi. A central banking system, a so-called independent central banking system, is a parasite, a Venetian-style parasite, representing specific family interests who are looting and sucking the blood of the country which they occupy. That's the problem.

Now, what is required, therefore, is, as the U.S. Constitution prescribes--despite the Federal Reserve System, and despite the criminal thing that President Jackson did under the influence of his owner, Martin Van Buren--despite these corruptions of the U.S., the U.S. system is based on the Constitutional provision that there is no authority to issue or to regulate money on behalf of the United States, except for the U.S. government, specifically, the authority of the Executive branch of the government, with the consent of the Legislative branch, the Congress.

This is not true in any other nation, generally, in the world today. There's a special case in China, but generally it's not true in any other nation. Therefore, when people talk about reforms of international institutions, they accept the silly idea that money has a value, independent of the determination of government. Now, the only institution in the world today, in modern civilization, which assumes that role, is the central banking system, as a consortium, or part of a consortium of independent central banking systems,

 which are controlled, in turn, by private financier interests, like the Federal Reserve System.

So therefore, the problem we have today is this parasite, the financier system, typified by the central banking system, now, as with the case of Hitler, moves to establish a dictatorship, to prevent the state, that is, government, from using the lawful authority of government to put a corrupt and decadent financial system back under government control. That's what the issue is. We've come to the point that the amount of debt in the world, financial debt, far exceeds any possible payment, without genocide against the human race. Therefore, this system is hopelessly bankrupt.

Therefore, the only agency which can decide is either these bankers--like Robert Mundell's friends now meeting in Siena, Italy, these bunch of fascists--or governments. The government must therefore act to save humanity, by putting the central banking systems into receivership. That is, the government takes them over.  It doesn't privatize every bank. It takes over the central banking system and takes over the ordering, the organization, and regulation of the money system and the banking systems.

Each government does it on the basis of its own sovereignty. However, since we need an international financial-monetary system, we go back to the lesson we should have learned from the immediate postwar period, with the initial form of the IMF. We need a concert of agreements, among sovereign governments, to regulate international financial and monetary relations among states, of the type that was successful, in, say, the 1950s, at least in many parts of the world. We go back to that example, and say, now we go to what is called national banking. That does not mean that the banks in a country are all nationalized, in the sense of being public property. On the contrary: It means that a central bank, a government central bank, as an auxiliary extension of control of the Treasury of that country, the Executive branch, with the consent of the Legislature, sets up rules for banking under which the financial system and the banking system in general, particularly, will operate from that point on. And that's what we have to do.

If we don't do that, good-bye, humanity. Good-bye, civilization. We've come to a point of irony and paradox in history. We must eliminate, now, the feudal power, the feudal tradition of central banking systems, of independent central banking systems, and restore a system of national banking, under which private banks within a nation, will function according to rules set by national banking, under the direction of the authority of the Executive branch, and under the provisions of law provided by Legislatures. We must, at the same time, establish a reasonable, good order, in agreements among sovereign nation-states, to create a world monetary system which can sustain long-term loans--we're talking 25 to 50 year loans--at 1-2% simple interest rate, chiefly for the purpose, immediately, of great infrastructure projects, in water management, in transportation, in power generation and distribution, in public health, in education, and so forth--that is, the public sector, these kinds of things, and use this as the driver for world economic recovery.

We're talking about a world in which 50%, approximately, of the total capital formation of nations will be in the public sector, by governments, and the public sector will be the driver on which the private sector depends for the stimulation of employment and progress. Additionally, of course, government must take responsibility for sponsoring, initiating, promoting scientific and technological progress for the benefit of the economy as a whole.

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