Fireside Chat with Dennis Small and Dennis Speed, host Thursday, October 14, 2021 DENNIS SPEED: Welcome to tonight’s Fireside Chat with Lyndon LaRouche, of The LaRouche Organization. We are involved, as I think people know, in a day of action today; this is worldwide. Our focus was specifically around Afghanistan and the releasing of the funds of the approximately $8-9 billion being withheld from the government of Afghanistan by primarily the Treasury Department of the United States, as well as the IMF and World Bank, and other related institutions in Europe. We have reason to believe that the State Department today has reiterated its policy to not release those funds. But we’ll hear more about that and other such matters when we get into our briefing. I’ll also just indicate that for those of you who might have been involved in that day of action today, I would ask you to get in the queue when we get to that part of the presentation to give us whatever report or reflections you have on what happened today.What we are going to do is go right to Dennis Small with a little preface from me. What’s been happening for the past week is that there’s a kind of comeuppance that reality is becoming to bonk the trans-Atlantic world with. It’s come out in various forms, for example, the Prime Minister of China made it clear that at this point, China is not intending to try to abide by the dictates—although they’re fantastic dictates—of this sort of Green New Deal mafia globally. They’re not going to try to fulfill the coal reduction requirements, CO₂ emissions reduction requirements related to coal. President Vladimir Putin is wondering whether he’s going to attend, I don’t think that means that we know the Russians are planning to not participate. But we also know that from the nation of India, which is the second-largest consumer of coal in the world, they have been clear for months that they have serious questions about the entire conception of the COP26 Glasgow, Scotland set of initiatives, if you want to call them that. Meanwhile, the royals and others are making statements which are almost Romanov-like in their detachment from reality, with Prince William talking today about how people should not be going into space, but there should be an Earth shot, not a Moon shot; trying to talk about how wonderful his father was, and how prescient he was—Prince Charles, that is; the weird and wacky Prince Charles. So, there’s a kind of comeuppance with reality. Some people in Britain noted that the British response to COVID, in which they had attempted to talk about herd immunity, was—they didn’t use the word “inhuman,” they simply said it was grossly wrong, and the talked about how the approaches coming out of China or what they called Asia and Southwest Asia were far superior to what happened out of the trans-Atlantic world. But with that said, it doesn’t mean that reality is going to prevail. You have a Malthusian outlook, and that Malthusian outlook is not merely toward other nations, it’s also something that has infected the trans-Atlantic world itself; the United States and various countries in Europe. Therefore, there’s a kind of detachment that is self-destructive and even suicidal. In order for that to be turned around, something new has to appear on the horizon. Now, that something new is something that has actually been written about by this organization and acted upon by this organization for well over 45 years. Sometimes that comes through candidacies, and I’ll note that 45 years ago, there was an election in 1976, and at that time we were running a third party—the U.S. Labor Party. We had candidates for Congress and Senate in Massachusetts, New York, New Jersey, Washington, Michigan, all over the country, wherever we were. We were doing that in tandem with Lyndon LaRouche. This was not a campaign for votes, this was a campaign to put forward what we called the International Development Bank. It was an idea of a complete alternative to what the institutions of the World Bank and International Monetary Fund were putting forward. And similar to the situation we see right now with Afghanistan and what is being asserted as what should be trans-Atlantic policy, that madness has to be directly opposed by a force which is vigorous, insightful, insouciant, irreverent, and happy about its role. There will be some other things we’ll reference; there was a statement that came out from the Schiller Institute which we’ll probably refer to during the course of things which exemplifies that, co-written by Guus Berkhout of the Netherlands, the initiator and cofounder of what’s called CLINTEL, or Climate Intelligence Group, and Helga Zepp-LaRouche, the founder and head of the Schiller Institute. So, there’s a lot going on. We want to get right into what that is. We’re going to begin with Dennis Small giving us a briefing, an international perspective. Then we’ll go into some reports and reflections on what has happened today. DENNIS SMALL: The topic that I want to address, because I think it goes to the heart of the explanation of the cause behind the other things happening in different areas, is the hyperinflation and depression which is now exploding around the planet. To look at its cause, and of course, its cure. I’m doing to do this by describing a couple of key situations. I’m sure you’ve all heard the reports in the press of how what really causes inflation is supply or demand effects. If the supply drops, or the demand increases, that supposedly will cause prices to increase, and so on and so forth. You can read about this in all the textbooks on economics. You can go to Harvard authors, and they’ll basically tell you that there are two kinds of inflation. There’s cost-push inflation, there’s demand-pull inflation; all of which is a bunch of poppycock. It’s simply absolutely not true. The situation we’re facing is a lot more stark than that. If you were to wake up tomorrow morning, or Monday morning of next week, and find that you could not get any money out of the ATM machine. And that when you thought that it was just a broken ATM machine on the corner, and you went to the bank, the doors of the bank were closed. And you went to another bank, and there policemen in front of it, and crowds gathering. When you went to the drugstore to buy your medicine you need for your urgent cardiac condition or high blood pressure medicine or what have you, the pharmacy is not open, or it has supplies which are being rationed out in tiny doses. Would that sort of a situation concern you? You may think that I’m exaggerating and that this is just sort of a hyperbolic situation, an exaggeration of what’s going on. But it is not, because this is exactly the barrel that we’re staring down at this moment. I think that after I finish reviewing a few situations, a half-dozen situations internationally, I think you will realize that this evaluation—which is Lyndon LaRouche’s evaluation as to the systemic nature of this crisis—is actually far more accurate than anything anyone else is saying, and that therefore it points us in the direction of a solution. If you look at 2021, and look at what’s been happening with certain prices, which are always explained away in the media as the result of supply and demand, the price of cotton has risen 47% over the course of this year. Is that because there has been a 50% increase in the demand for cotton? That many more people want shirts? Or, you have to get cotton for other purposes? The index price of fertilizers has risen to the point that it is double what it was one year ago; a 100% increase. Is that because all of a sudden nobody is producing any fertilizer, and therefore, the supply dropped and the price doubled in a year? Let’s look at the energy situation in the United States and in Europe. The cost of oil in the United States since the beginning of 2021 is 65% higher than it was. The price for Brent crude is about $83 now; the highest in years. But that’s only a 65% increase. The cost of natural gas in the United States has risen 112% this year. So, we’re talking about an increase of these basic energy inputs—oil and natural gas—of 1.5 to 2 times over the course of less than a year. Is that because OPEC stopped producing oil all of a sudden? That the 1% drop in oil production—I’m just making that number up, but it doesn’t make much difference. That that 1% drop in the supply of oil has led to a doubling of its price, a 100% increase of its price? We are told that we are rebounding so rapidly from the COVID pandemic and that production is just whizzing along in many parts of the world, and therefore, the cost of electricity has doubled? Do they really think we’re that foolish? Maybe they do. In Europe, the cost of a megawatt-hour of electricity—I’m switching units here, because these are just the sample numbers that we have, but I think you’ll get the idea. The cost of a megawatt-hour of electricity on average in Europe in December of last year was 43 euros. In March of this year, it had more than doubled to 100 euros; and as of today, October 2021, the average cost of a megawatt-hour of electricity in Europe is 389 euros. It has risen from 43 to 389 euros in less than a year; that’s a ten-fold increase. Has there been a ten-fold increase in the demand for electricity? Has there been a ten-fold collapse of the supply line of electricity? One starts to wonder, maybe this doesn’t have anything to do with supply and demand and other fairy tales. Citibank has issued a projection of where things are going to stand by the end of this year, in terms of the situation in Europe. They’re saying that the cost of millions of BTUs [British thermal units] will rise to a level of anywhere from $30-100 per million BTUs. I apologize for the switching around of units, but Citibank itself does a conversion of this. They say if $100 per 1 million BTUs is hit, that’s the equivalent of a barrel of oil costing $580 per barrel. It’s now breaking the roof at $83. This is a projection for what could be happening by the end of this year. Break it down into specific situations. Italy: the cost of people’s electricity bills is going to be increasing by as much as 900% by Christmas time, according to Italian accounts. Is that because people are going to be consuming 900% more electricity? Give me a break! In Spain, the megawatt-hour of electricity rose from 40 euros in 2020, to 200 euros now; a five-fold increase. India, which uses a large amount of coal, as Dennis was just reporting a moment ago, imports a large amount of their coal from Indonesia. The cost of a ton of coal imported from Indonesia has risen from $86 per ton in April of 2021—this year—until today it has gone from $86 per ton to $162 per ton. It has doubled in six months. Half of the coal plants in India have less than a 2-day supply of coal on hand. They may run out and stop producing electricity. In Lebanon, this is already happening. It’s lights out in Lebanon. The two major government electricity companies, which produce the majority of the electricity in the country, have been forced to shut down. The drop in electricity supplies has been so drastic that they are estimating that there is an immediate danger to the actual engineering integrity of the grid itself. This has everything to do with the IMF policies and banking policies imposed upon them. You might be beginning to get the idea that none of this is explained by all the reasons which are provided. It so happens that the cost of energy is not determined by supply and demand; not cost-push inflation or demand-pull inflation. The cost of energy is determined on the Amsterdam spot market; it’s a speculative spot market. When speculators jumped into it, and started speculating on the future price that they will be able to sell their barrel of oil, or their kilowatt of electricity, or what-have-you, then you know damn well that people are going to withhold the supply that they may have on hand, because they know that the price is going up, according to the speculative markets. So, if you have a speculative market which is fed by countless trillions and a quadrillion and some of dollars, this is going to drive the price of everything up as this speculative feeding frenzy goes ahead. Which is why you have a situation across all areas where you have these massive increases in prices. It has nothing to do with supply and demand, or rebounding from the pandemic—which isn’t happening—going on anywhere. That’s energy; one major sector. Let’s look at another major sector which affects everything everywhere else in the economy, as happens with energy. Let’s take the case of cargo; shipping things around the world. The basic unit for shipping is a container, which is known as a TEU, a 20-foot equivalent unit. The cost per TEU of shipping from the United States to China each one of these units, was about $2000 one year ago. Today, if you can find one of these things, the cost is $20,000. It’s a ten-fold increase in one year. Because there’s all of a sudden a shortage of TEUs? The cost of shipping from Chile in South America to the United States, the TEU unit to ship which was $1500 a year ago, is now $18,000; a 12-fold increase. Chips; 90% of the world’s supply of electronic chips—not potato chips, electronic chips—are produced by one company in Taiwan. There are reports in the technical media dealing with the chip industry, that there is documentation that substantially more supplies of chips are being shipped to companies than are being released in the products of those companies. More in than out. What does that tell you? People are hoarding. Why would hoarding be going on? Because there is speculation on the price of chips. An engineer colleague of ours in Mexico reported on a recent organizing phone call just like this one that we had with supporters of our movement in Mexico, he’s an expert in the field of plastics and petrochemical plastics. He was ashen-faced, reporting that the cost of PVC tubing has gone up from 28 pesos just a few months ago to 60 pesos; more than a doubling. He said the cost of aluminum is four-fold more than it was before. But it can’t be bought; there is no aluminum to be had, there is no steel to be had. The cost of shipping cargo from China to Mexico or back? Two times what it was; they can’t even import stuff from China for that reason. And, you may be interested to know that there is a spot market on cargo, just as there is on energy. It’s not a question of going to the corner or going to the 7-11 and saying I need 6000 TEUs. No, it’s bid on, on a speculative market, and there are three major shipping companies around the world that have the corner on this market. And it works exactly the way all raw materials markets work, which is not supply and demand, it’s a speculative spot market, a forward market. So, let’s say you have in your possession, or you have bid to have delivery in your possession 10,000 TEUs. There’s no way in the world you’re going to rent those out at a mere $20,000 today, when you have every reason to believe that three months down the line you can make a killing at $30,000. So, you’re going to withhold that from the market. So, you have an in-built speculative process going on here. This isn’t the cause of the crisis, because what’s happening is not price inflation. What I just described to you isn’t what’s going on. What’s going on is that there is a massive shock devaluation of the value and the worth of the U.S. dollar. That’s why, the dollar being the unit of measure internationally other than the places that have been driven out of it like China, or increasingly Russia or other countries—Iran and so forth. But with the dollar being the international reserve currency, when the dollar no longer can buy what it did before, this takes the form of drastic increases in prices—a two-fold increase, a four-fold increase, a ten-fold increase. What’s happening is, the dollar is being turned into the used toilet paper it has, in fact, been increasingly for the past 30-40 years; exactly as Lyndon LaRouche described. That’s why it’s very possible we will all wake up one morning, very possibly during the fourth quarter of this year, and find that you can’t buy anything for love or money; especially not money. Love might work, but the dollar is not going to be worth anything. You cannot find anything to buy. You will get runs on banks; you will get runs on ATMs. Paper money will disappear. It will go up in smoke. The $1.8 quadrillion in speculative assets will go up in smoke in the form of the equivalent of a financial nuclear chain reaction. A nuclear chain reaction does not go like dominoes falling down, one knocking the next, knocking the next, and so on. That’s not how it works. One blows out two; two blows out four; four blows out sixteen; etc., etc. It’s a chain reaction, and that’s what we are seeing signs of going on in the world today. The cause of this is not the speculation per se; the cause of this is systemic. The cause of this is explained by Lyndon LaRouche’s Triple Curve function, which I’m going to—of necessity—assume most of you are familiar with, since we don’t have a screen to show it on, or for you to look at. If you don’t know what is, look it up: LaRouche’s Triple Curve, or his typical collapse function, which describes the process of what happens in an economy as an inter-linked single function which includes on the one hand, monetary and financial aggregates and their rate of growth, which are increasing hyperbolically as we’ve seen. As against a physical economic process of the actual physical economic requirements of a society which is plunging. LaRouche repeatedly explained that the Triple Curve—he didn’t call it the Three Curves—it is a single function. It is a single, inter-related function which is not arithmetic, it’s not geometric, it’s not hyperbolic, because the physical economic process is a non-linear process either of growth—where you have technological leaps; where you have discontinuities because of advances in technology. Or, in the alternative, in a collapse it is also non-linear. That’s why, when you see a collapse beginning, like we’re seeing today, this is not a gradual slide. It happens by a ratchet-type plunge. And people look around and say, “Where the Hell did this come from?” The answer is, "If you’d been listening to Lyndon LaRouche, you wouldn’t be asking that question, because he warned of exactly this process that we’re now seeing and is underway. It is the systemic collapse that’s going on. On top of that, you have two other processes that are directly related to the systemic collapse and are pushing it in the direction of a complete collapse. But it’s because we have this systemic breakdown going on that these things have the effect they do. One is the Green Reset policy, which is inducing a situation of forced cutbacks in energy and industry, and everything that’s required to keep a society going. So, this is exacerbating the physical economic collapse at an accelerating rate. The other related process is the one of speculation which we were just describing, where you’ve got $1.7 or $1.8 quadrillion chasing around the world speculating. Therefore, it’s having the kind of effect that we’re seeing here today. Mark Carney, who is in favor of the Green Reset, has stated very clearly yet again earlier this week that the policy is straightforward. We have to change what he calls “the plumbing” of the international finance system to make sure that the plumbing takes the funds and the resources into a Green speculative bubble of $150 trillion—those are his numbers. And that makes sure as well, that plumbing does, that nothing goes to actual productive activity. That’s the policy, and the Federal Reserve is in the process of making a major policy shift as well, adapting to this hyperinflationary blow-out going on with a depression collapse. There’s no way they can adjust anything that’s going to actually function in any event. I want to conclude by reading a paragraph or two from Lyndon LaRouche from remarks he made on October 22, 2001. This is 20 years ago. I meant it when I said that people wouldn’t be asking silly questions if they’d been listening to LaRouche for the last 20 years. Almost exactly 20 years ago, LaRouche said the following: “The reason that I’ve been so successful in forecasting, is because I think systemically. Therefore, I understand how a systemic collapse unfolds, as opposed to a stock market prediction, which is what every idiot likes to talk about. I make forecasts, not predictions. Forecasts which are based on the systemic characteristics and the boundary conditions within which the system operates. That’s why I have always been right, and every one of my critics, whether inside the organization or outside—has always been wrong.” Then he turns to explain very succinctly 20 years ago, what’s going on: “So, you have a situation globally in the United States and outside, in which the total amount of debt service being extracted from the economies is increasing cancerously, and the debt service payment requirement accordingly. This is collapsing the actual productive power of nations and their populations precisely at the time that the amount of debt to be paid is increasing. So, there’s no possible way that the present international monetary financial system could be continued without collapsing civilization into a generalized and prolonged New Dark Age, out of which most nations will disappear and the human population will drop rapidly during the course of this century to below 1 billion. And the first drop-down will tend to be a big one. “So therefore, we’re in a situation in which anybody who doesn’t support my proposals on bankruptcy reorganization of the international monetary and financial system, does not support the measures which I’ve proposed for this purpose, has to be an idiot.” The good news, of course, is that the solutions are at hand, once this causal systemic process is recognized. Lyndon LaRouche’s solutions, which we can discuss in the period that follows, are readily available and can be implemented. In fact, the Russians, the Chinese, and others are already on board. We are in a situation where—well, I was going to say, “We can turn on a dime.” We’re not going to be able to turn on a dime; we’ll have to turn on a dollar, because of the deflation of the dollar’s value. But the change can be made, and it can be made quickly. And that’s precisely what we’re intent on bringing about.