April 15—The brilliant analysis of the burning issue of a new international reserve currency, written nearly 25 years ago by Lyndon LaRouche, can be presented to any official or citizen as an authoritative “guide” to the steps that must be taken now by the BRICS nations and others, to avoid international economic collapse and thus prevent nuclear war.
Recently republished in EIR, LaRouche’s “On a Basket of Hard Commodities: Trade without Currency” was a touchstone for Helga Zepp-LaRouche and other speakers in the April 15 panels of the Schiller Institute’s “No Peace without Development of All Nations” conference; it will be a major focus of the April 15 keynote by Dennis Small; it should be debated and studied everywhere.
LaRouche’s opening paragraphs written in July 2000, even excerpted for this short editorial, give an idea:
“Excepting the usual rogues and economics illiterates, influential circles around much of the world are reporting, with ever lessening hesitation, that the presently rotten-overripe, world monetary and financial system, is doomed to an early chain-reaction collapse. Increasingly, among relevant circles outside the U.S.A., worldwide, the most notable questions include, how to replace the present global system, and with exactly what?
“Consequently, increasingly bold steps in search for a replacement have been taken, in East and South Asia, trends in progress since Malaysia, under the leadership of Prime Minister Mahathir bin Mohamad, has persisted in the clearly successful use of capital and exchange controls. Recent weeks of persisting, desperate, and provocative actions, from U.S. Treasury Secretary Larry Summers and perennial Federal Reserve Chairman Alan Greenspan, have provoked similar discussions currently in progress outside of Asia. These steps point, increasingly, toward the emergence of regional systems of economic cooperation. Such regional efforts, if combined, could serve as building-blocks of the new world monetary and financial system, once the present International Monetary Fund (IMF) is either sent, mercifully, into bankruptcy-reorganization, or simply disintegrates, soon, of its own accord.
“Among those studying the prospect of regional alternatives to the imminently bankrupt IMF, some leading economists have proposed that the precedent, of the former role of the 1945-1966 U.S. gold-reserve dollar in creating a system of fixed exchange rates, might be superseded now by revival of a new system of relatively fixed exchange-rates, which is based upon regional and other”baskets of currencies," instead of the former gold-reserve-based dollar. The presently most publicized proposals in that direction, are those which have come from among the “ASEAN Plus Three” group of nations in Asia, and, secondly, among important circles within continental western Europe. Similar discussions are in progress among the Organization of the Islamic Conference countries….
“Thus, in light of the monstrous degree of degeneration in both U.S. credibility and policy-shaping since October 1998, a feasible reform, if it is to occur at all, were almost certain to come in two successive, regional and global phases.
“The first stage, as typified by the ongoing discussion among representatives of the ASEAN Plus Three association, is typified by the revival of the 1997 proposal, by Japan’s E. Sakakibara, for an Asian Monetary Fund. Such a facility is intended, not only as a measure of defense against financial-warfare attacks by hedge funds and similar speculators. It is also aimed to promote urgently needed measures of hard-commodity forms of combined trade and long-term capital improvements among those Asian nations. In this first stage, we might foresee regional, somewhat overlapping, groupings of similar outlook appearing, and cooperating among one another, in various regions of the planet.
“The second stage, would be the re-establishment of an effectively global monetary organization, featuring a return to fixed exchange-rates, to supersede the presently bankrupt IMF system. This second stage, would be a new monetary system, one assembled on the included initiative of participating regional groups of nations.
“Therefore, examine the issue of”a basket of currencies" in light of the fact, that the two-phased approach to reform is, presently, the only visible prospect, if the world still has any favorable prospect of any kind, during the medium-term decades ahead."
