THE CAUSES OF RAMPANT INFLATION

Lyncon La Rouche, a knowledgeable guy who always knows where the bones are buried in the graveyard, recently gave a speech where he laid bare the financial mechanism behind the hyperinflation in oil, gold and
other commodity prices - which is not merely oil company price manipulation as some elected officials in Washington claim. LaRouche has warned that this Weimar-style hyperinflation signals a systemic collapse
of the world economy by September 2006.

He said, "We have a speculative system. Integral to this operation is the getting of money back into these bankrupt banks. The bankers are doing it through bundling of Fannie Mae-type and Freddie Mac-type mortgages. So this system was going to blow! This is a bubble, this is a classical John Law-style bubble, as John Law from the early 18th Century. You had one in England, you had one in France. South Seas Island bubble, and the Mississippi bubble. Same kind of thing. It's a
ponzi scheme. It's a pyramid club scheme—same kind of thing. .

"...Anyone knows this, who knows the system: When you build up this kind
of bubble, a super-John Law bubble, layer upon layer—this thing is going
to pop. Then, if you're a smart banker, what're you doing? How are you
going to get out of the bubble, which you are going to cause to pop? Why
aren't you going to go down with the bubble? You have to find a landing
place outside the system. What is that landing place? Gold, silver,
iron, zinc, copper, petroleum!

"These are physical assets, so-called natural materials, these are
assets which will be marketable in the future. So what you do, is, you
corner the market in possession of these materials. You raise the price
to the sky, because you're bidding against each other to grab these
materials, and trade them back and forth, day after day. It's all done
by this bunch of financiers. That's where you get that curve! So, when
you look at the curve of inflation, don't look at the groceries—you will
get grocery inflation very rapidly; you're already getting it, as many
of you know. It's going to get serious, like housing inflation has been.
Hmm? But this inflation, is where the powers of the future intend to be:
They will control these assets; they will control the real estate; they
will control the water systems; they will control the water. They will
control the food. They will own you, and decide which of you lives and
which dies."

LaRouche also presented the solutions, modelled on the actions taken by
Franklin Roosevelt in the midst of another systemic breakdown. Read the
transcript, including the discussion period, on the website and watch
the audio-video file of the webcast at
http://www.larouchepac.com/pages/audio_video_files/2006/060427_webcast.
html .