(EIRNS)—Sébastien Périmony of France’s Schiller Institute gave an interview to China’s CGTN Francais “Le Journal” today on the financial collapse in the United States. What follows is a draft translation from the French original, titled “CGTN : Un nouveau Krach comme en 1929?” (“CGTN: A New Crash as in 1929?”) (https://www.youtube.com/watch?v=m_Y5AybgzgU )
CGTN : This is not the first time that the United States is facing the risk of defaulting on its debt, and in your opinion, will this time it end up with the national debt ceiling being raised again ?
Sébastien Périmony : First of all, as Helga Zepp-Larouche, the president of the Schiller Institute, of which I am a member, has repeatedly said, the Western financial and monetary system is bankrupt and cannot be saved. It is a systemic crisis, linked to the very nature of the system that has been in place since August 15, 1971, with the destruction of the so-called Bretton Wood system. A financial and speculative economy has replaced a directed and productive economy. Some figures show this situation: the manufacturing industry, which still amounted to nearly 30% of the national wealth in the early 1970s, today represents only about 10%. We have $2 quadrillions in financial derivatives, that is, purely speculative financial assets.
So, yes, the result today is that the debt is only increasing, and production is only decreasing. The debt is increasing by 1300 billion per year and we can always raise the debt ceiling or bail out the banks, maybe this will happen again, but this only accelerates the problem and the fall of the whole system!
So it’s true that we are in a situation in the United States very similar to what happened with the 1929 crisis and that would obviously be, as Yellen herself said, a tragedy for the world with millions of jobs lost in the United States, not to mention the social chaos that it could cause.
This is why we need to rethink the whole system, and our Institute is fighting for a new development architecture, a new Bretton Woods, that is to say, to return to a regulated and productive economy and to put an end to the financial and speculative excesses that have taken place over the last 40 years.
And, by the way, I learned this morning that China has created a new National Financial Regulatory Administration with Li Yunze appointed as its head, to counter these systemic risks - which are external to China. And as it says in the communiqué to favor the real economy over the purely financial economy. I think it’s time for the United States to go back to that model.