***Imagine That You Wake Up... And the Global Financial System is Gone!***

May 21, 2010 (LPAC)—That is just what could happen, since neither the U.S. Senate, nor the German Bundestag, nor the G20 countries have yet done anything to prevent it. On the contrary: The financial reform bill just passed by the U.S. Senate, which left the fattest loopholes for speculators, has increased the instability enormously. And the Bundestag's rubber-stamping of the EU750 billion "rescue package" for Greece has accelerated the dynamic of disintegration of the global financial system—whether by a chain-reaction domino effect, or by global hyperinflation.

A taste of what could happen at any time, on a much larger scale, was shown by the collapse of the Dow Jones on May 6, falling by 10% in 16 minutes, wiping out $700 billion, with the automatic trading systems apparently on autopilot. The quick and partial rebound that occurred then might not the next time, and the whole world financial system could actually disintegrate overnight. All it takes is a grave mistake once again, somewhere on the globe, and the world could plunge into chaos.

Only hours after the U.S. Senate passed the version of the financial reform bill demanded by the White House and top executives of Wall Street, a Newsweek blog compared the law to a doughnut, with a huge hole in the middle "that is so critical to the success or failure of the bill that it becomes the legislation's defining characteristic"!

Newsweek's comment refers particularly to the fact that the amendment on controlling derivatives trading that Sen. Maria Cantwell (D-Wash.) had tried to bring to a vote, was blocked by Senate Majority Leader Harry Reid, as was the amendment that would have reintroduced the Glass-Steagall standard. Newsweek quoted a source who said that, in Cantwell's view, "the bill is a joke," because "the clearing of derivatives and exchange trading is the heart of the whole bill." And that's precisely what is missing.

As the result of this vote, the derivatives trade, which the American people rightly blame for the crisis, is not only not restricted, but the U.S. Senate has destroyed its credibility in this matter once and for all. For in the preceding debate, many senators, such as Byron Dorgan (D-N.D.), Jeff Merkley (D-Ore.), Barbara Mikulski (D-Md.), Tom Harkin (D-Iowa), and others, gave fiery speeches promising to support the amendments of Senators Cantwell, McCain, and Feingold, for reintroduction of a split banking system,1 and Sen. Blanche Lincoln's (D-Ark.) for control of derivatives.

But the leading Wall Street banks' top lobbyists, who have decades of expertise in the manipulation of Congress, turned up just in time to ensure, together with the White House, that those senators turned out to be full of hot air, voting on the first ballot to end debate, and then voting for the bill without the amendments that would have made sure that the high-risk speculation would have been truly eliminated. Not even the watered-down "Volcker Rules" were voted up. Even the new senator from Massachusetts, Scott Brown (R), who was elected to office by the Tea Party movement, evidently had all the fight taken out of him. Washington sources report that there have never been such massive threats, manipulation, and money transfers, as in the days leading up to the vote.

What this means is that the credibility and influence of Lyndon LaRouche and his Political Action Committee have never been greater; they are seen as the only force that is not discredited, because before the vote, they launched a nationwide mobilization for restoring the Glass-Steagall Act and replacing the casino economy with a credit system. This mobilization will now continue, given the deplorable behavior of the Senate, and senators and congressmen, during the upcoming break, will face the very unpleasant task of explaining to their angry constituents why they capitulated to Wall Street, once again.

[link to larouchepac.com]