German official to U.S.: Clean up your banking act or we’ll crash

German official to U.S.: Clean up your banking act or we’ll crash
Effects on Industry
Effects on Industry

Warning that a U.S.-British-Dutch financial cartel threatens to topple a teetering European Union, a German official is urging Washington to reinstate the Glass-Steagall Act and rein in big banks, including the Federal Reserve.

Dorothea Schleifenbaum, an elected representative of Germany’s ruling Christian Democratic Union, was on Capitol Hill last week to push for re-enactment of Glass-Steagall, which was repealed 14 years ago.

“Germany is expecting a crash,” said Schleifenbaum, who related how she was shocked to learn how German commercial banks had begun buying bonds from Greece, Italy and Spain – three of the sick sisters of Europe.

Such risky investments, she said, follow the U.S.-British-Dutch pattern of putting commercial bank deposits into speculative pools.

“These bonds are not secure. They are toxic,” Schleifenbaum told this reporter in an interview.

Schleifenbaum and Paul Goldman, an economic expert with the Washington-based LaRouchePAC, headed by former presidential candidate Lyndon LaRouche, said the Fed is making matters worse for Europe.

Contending that some $1.5 trillion in Fed “excess reserves” are spread across the continent, Schleifenbaum asserted that the money “is going to terrorists,” drug runners and foreign adventures in Syria, Afghanistan and Egypt, adding:

This investment bank money does not reach the people. It’s making war with U.S. dollars. It’s creating divisions and instability in society.

A group of mayors and elected officials from Germany and France raised similar concerns last August. In the “Arzviller Declaration,” the officials, including 350 French mayors, stated:

We are scandalized by the new banking laws in Europe, which allow unbridled speculation, while imposing ever more criminal austerity policies.

London’s banking barons have a different view.

Nancy Spannaus, writing in the Executive Intelligence Review, related:

It was not simply rhetoric, when a British official told a U.S. economist in 2010 that his government would consider the re-establishment of Glass-Steagall a ‘hostile act.’

Though Germany boasts the EU’s largest national economy, Schleifenbaum acknowledged:

We’re not as sovereign as we should be. I’m convinced that the U.S. must make the first move.

The real interests of the American people are different than Wall Street’s. If they were aware, they would support Glass-Steagall. It would be good for Germany and the rest of the world.

Speaking of national sovereignty, Spannaus concluded that “Glass-Steagall would reduce Wall Street to the bankrupt husk that it is, and restore the sovereignty of the U.S. government over its economy and finances.”

Glass-Steagall – which was enacted in 1933 and repealed in 1999, prior to the Wall Street meltdown that triggered a series of multibillion-dollar bank bailouts – is gaining support, despite stiff opposition from investment bankers.

Sens. Elizabeth Warren, D-Mass.; Bernie Sanders, I-Vt.; and John McCain, R-Ariz., have co-sponsored “21st Century” Glass-Steagall legislation to protect Main Street depositors from Wall Street speculators.

A similar House measure – co-authored by Reps. Marcy Kaptur, D-Ohio, and Walter Jones, R-N.C. — has 78 sponsors, while more than a dozen state legislatures have bills calling for Glass-Steagall’s return.


Kenric Ward

Kenric Ward

Kenric Ward is a national correspondent and writes for the Texas Bureau of Watchdog.org. Formerly a reporter and editor at two Pulitzer Prize-winning newspapers, Kenric has won dozens of state and national news awards for investigative articles. His most recent book is “Saints in Babylon: Mormons and Las Vegas.”

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