EIR Daily Alert Service

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MONDAY, MAY 1, 2017

Volume 4, Number 85

EIR Daily Alert Service

P.O. Box 17390, Washington, DC 20041-0390

EDITORIAL

Are You Only an Observer? Do You Have Another Solar System To Run to, if This Blows Up?

April 30 (EIRNS)—Many friends of EIR and the LaRouche movement are experiencing “cynicism” about President Donald Trump supposedly in the wake of his April 6 rocket attack against Syria after alleging that the Syrian government had used chemical weapons against its own people. But EIR Founding Editor Lyndon LaRouche was absolutely right about that occurrence—that the British Empire had set up President Trump as part of a coup attempt against him. There can be no capitulation on that issue. Conceding even an inch, abandoning the truth to the lying British, means crossing over to the enemy’s camp, the British Empire’s camp.

This is critically important because the role of the LaRouche organization at precisely this moment is absolutely crucial. Without the LaRouche movement’s maximum intellectual-moral effort right now, President Trump will be unable to fulfill his promises and will be overthrown, as the world plunges into nuclear war. The needed path forward is that marked out by statesman LaRouche’s “Four New Laws” of June 2014, including the U.S. joining the New Silk Road led by China’s President Xi Jinping, whom President Trump calls “a man that I’ve gotten to like and respect.”

As one LaRouche organizer explained it earlier today in characterizing her polemic to some of the 10,000 of the President’s supporters who came out to greet him at a Harrisburg, Pennsylvania rally last night: “President Trump can’t succeed if you don’t understand what he’s up against.” Were it not for LaRouche, Trump’s supporters have only the know-it-alls of the populist radio talk shows who focus on single, hot-button issues but have no understanding of the depth of the financial and strategic crisis faced by the U.S. and the world or the solution required to end it. And how many of those 10,000 “deplorables”—as Hillary Clinton called them—would already have taken their own lives if she had won the election on Nov. 8 instead of Donald Trump? And taken their own lives with her encouragement?

Do we really need any more advice from the British Empire?

STRATEGIC WAR DANGER

Secretary of State Tillerson Calls for New Approach to North Korea

April 28 (EIRNS)—In an address to the UN Security Council (UNSC) today, U.S. Secretary of State Rex Tillerson issued a call for a new approach to North Korea, an approach that increases diplomatic and economic pressure on Pyongyang but that still holds out the possibility of an improvement in conditions in North Korea.

“For too long, the international community has been reactive in addressing North Korea. Those days must come to an end,” Tillerson said. “Failing to act now on the most pressing security issue in the world may bring catastrophic consequences.” He argued that, because of the progress North Korea has made in its nuclear program, there is no more time to act and therefore additional pressure must be applied now.

“Our goal is not regime change. Nor do we desire to threaten the North Korean people or destabilize the Asia Pacific region,” Tillerson went on. He noted that over the years the U.S. has withdrawn its own nuclear weapons from the Korean Peninsula, and, “since 1995, the United States has provided over $1.3 billion dollars in aid to North Korea, and we look forward to resuming our contributions once the D.P.R.K. begins to dismantle its nuclear weapons and missile technology programs…. North Korea must take concrete steps to reduce the threat that its illegal weapons programs pose to the United States and our allies before we can even consider talks.”

Prior to speaking at the UNSC, Tillerson elaborated on the same issue in an interview with National Public Radio. “We don’t have any red lines,” he stressed. “You know, if you listen to the North Koreans and the regime of Pyongyang, their reason for having nuclear weapons is, they believe it is their only pathway to secure the ongoing existence of their regime. What we hope to convince them is: You do not need these weapons to secure the existence of your regime.” U.S. objectives are very clear, but so is what U.S. objectives are not. “[W]e do not seek regime change, we do not seek a collapse of the regime, we do not seek an accelerated reunification of the peninsula,” he said. “We seek a denuclearized Korean Peninsula—and again that is entirely consistent with the objectives of others in the region as well.”

Addressing the UNSC, Tillerson called on United Nations member states to take three actions, beginning today. First, that UN resolutions concerning North Korea’s nuclear program be fully implemented. Secondly, the U.S. is calling on other countries to downgrade or suspend their diplomatic relations with Pyongyang, as a way of constraining the resources the government able to obtain for its nuclear program. Thirdly, North Korea’s financial isolation must be increased by additional sanctions that target entities and individuals that support North Korea’s nuclear and weapons programs. China is particularly important in this because of the “unique” economic leverage it has over the North, Tillerson said.

“The U.S. and China have held very productive exchanges on this issue, and we look forward to further actions that build on what China has already done,” Tillerson emphasized.

At UNSC, China and Russia Urge Diplomatic Solution to the North Korea Crisis

April 29 (EIRNS)—In addition to Secretary Tillerson’s remarks, above, the UN Security Council discussion on the Korean crisis universally castigated North Korea for its violations of UN resolutions, but there were also multiple warnings of the danger of the crisis escalating into war, coming from the governments of China and Russia, and others.

Chinese Foreign Minister Wang Yi warned that “If the issue of the Peninsula fails to be put under effective control and in the case of unexpected events, the situation is highly likely to take a drastic turn for the worse and spiral out of control…. We must stay committed to the path of dialogue and negotiation. The use of force does not resolve differences, and will only lead to bigger disasters.”

Russian Deputy Foreign Minister Gennady Gatilov stated that “North Korea has been acting inappropriately” by violating UN resolutions, etc. “At the same time,” he said, “the use of military force is absolutely unacceptable, as it is fraught with disastrous consequences for the Korean Peninsula and the entire Northeast Asia.” If a diplomatic solution is not found, it could lead “to the most terrible consequences.” Gatilov said that “bellicose rhetoric paired with an unreasonable show of muscle makes everyone in the world ask themselves if there is going to be a war. It is no secret that in the midst of tensions, any thoughtless step may result in terrible consequences.”

After the UN Security Council session, North Korea’s Deputy Foreign Minister Kim In Ryong told AP that the idea of using sanctions and threats to get Pyongyang to give up its nuclear weapons, is “a wild dream.” The D.P.R.K., he said, would never negotiate their nuclear weapons as part of “political bargains and economic deals.” He then repeated the D.P.R.K.’s standing policy, that once the U.S. stops its hostile activities, “every solution will be possible.”

Beijing, Moscow Urge South Korea and U.S. To Revise Decision on Deploying THAAD

April 29 (EIRNS)—Both Russia and China are urging the United States and South Korea to revise a decision on deploying the THAAD anti-missile system, which is an “additional destabilizing factor in the region,” Russian Deputy Foreign Minister Gennady Gatilov said at yesterday’s UN Security Council session. “It is not only we who perceived this step very negatively. We are once again urging both the United States and the Republic of Korea to reconsider its expediency and other regional states not to yield to the temptation of joining such destabilizing efforts,” he said.  “We are urging the North Korean authorities to halt their banned programs and return to the Nuclear Non-Proliferation Treaty [NPT] and the IAEA’s [International Atomic Energy Agency] control,” the Russian diplomat said.

At the same time, Gatilov urged members of the Security Council to be aware that North Korea “will hardly give up nuclear weapons as long as it feels a direct threat to its security.”

“This is precisely how North Koreans qualify regular large-scale maneuvers and drills by the United States and its allies in the region, and also the dispatch to that region of a U.S. naval armada as we witnessed this month,” Gatilov said.

The spokesman for China’s Foreign Ministry Geng Shuang on April 26 responded to the rush deployment of the Terminal High Altitude Area Defense in South Korea in the harshest of terms: “Cancel the deployment of THAAD. Otherwise China will decisively take necessary measures,” Geng warned. The next day, South Korea’s Ministry of National Defense reported that, after the biannual meeting of the Integrated Defense Dialogue in Washington on April 27, the U.S. and South Korea had agreed to institute “measures available in all aspects, including the regular deployment of U.S. strategic assets.” Sputnik noted that “these assets include the U.S. B-52, B-2 and B-1B bombers; F-35 fighter jets; and aircraft carriers usually housed at American bases in South Korea, Japan or Guam.”

Many experts agree that were war to break out, the THAAD would be useless in defending Seoul from North Korean artillery. According to experts consulted by Associated Press, its location 125 miles south of Seoul means THAAD wouldn’t even be able to defend that city against missile attacks. According to Theodore Postol, a professor at MIT, the THAAD is actually very easy to defeat with countermeasures. “The THAAD interceptor is very easily defeated by either causing a missile to tumble end over end, or by intentionally fragmenting a rocket into pieces,” he said. THAAD’s capabilities as a defense system “can be expected to be very low, probably zero or close to that.”

U.S. ECONOMIC & POLITICAL

President Trump Handles the Liars at ‘Deface the Nation’

April 30 (EIRNS)—U.S. President Donald Trump was interviewed April 29 by John Dickerson for the CBS “Face the Nation” show, during which he effectively made his case on several issues that were intended to put him on the defensive, beginning with North Korea. Trump derailed this by not attacking the North Korean leader Kim Jong-un, and by asserting that he was working closely with Chinese President Xi Jinping to resolve the conflict. Trump said that he would not be happy if North Korea carried out another nuclear test, and that “the President of China, who is a very respected man, will not be happy either.” The President again reported that he has developed a special relationship with China’s President, “something different than we have ever had,” and that China does not want to see North Korea destabilized. We’ll see if “President Xi is able to effect change.”

President Trump indicated he didn’t know if Kim Jong-un were sane, but pointed out that Kim is a “smart cookie” for having come to power at the young age of 27, and was then able to hold his own, dealing with tough people, including generals, “A lot of people, … tried to take that power away.”

When asked if he were overlooking trade and human rights issues with China in exchange for its cooperation on North Korea, Trump emphasized that the alternative is massive warfare which would kill millions of people.

Dickerson asked, “What do you know now on Day 100 that you wish you knew on Day 1 of the Presidency?” to which President Trump responded, “Well, one of the things that I’ve learned is how dishonest the media is, really.” He continued that fake news, which “we call the mainstream media, which sometimes, I must say, is you.”

Dickerson on the defensive, asked, “You mean me personally or?”

President Trump replied: “Well, your show. I love your show. I call it ‘Deface the Nation.’ But, you know, your show is sometimes not exactly correct….”

His biggest disappointment since becoming President, he said, was the dishonest media.

On the interview’s final topic, Russia, Trump said that “The concept of Russia with respect to us is a total phony story.” He hammered the following points:

  • In 2015 when former Defense Intelligence Agency head Lt. Gen. Michael Flynn (ret.) “went to Russia, he had top security clearance from the Obama Administration, which was reported two days ago. Why wasn’t this reported months ago?”
  • Of Hillary Clinton operative John Podesta, one of Trump’s main accusers: “I understand has a company with his brother in Russia.”
  • Bill Clinton, “Hillary’s husband makes speeches in Russia”; and
  • “Hillary did a uranium deal with Russia.”

But, the President continued, on the reason it’s not talked about is “because the FBI was not allowed by Podesta to go in and check all of the records on their servers and everything else that you would normally have to check. … And by the way, why didn’t the FBI complain about it?”

At that point, Dickerson informed President Trump, “I think we’re going to have to end it there.”

Secretary Tillerson Praises China’s Economic Progress

April 29 (EIRNS)—In a long interview with National Public Radio (NPR), yesterday Secretary of State Rex Tillerson praised the success of China’s economic policies:

“Well, I think we need to understand one another much better, and understand that China is on a pathway of continuing to emerge with their own people, in terms of providing a quality of life to their own population. You know, they’ve made enormous progress over the last 10 to 15 years…. 500 million Chinese have moved out of poverty into middle-class status … but there’s still a large country with a lot of people that are still living in poverty. So they are still on this pathway to prosperity.

“Our understanding of them … and I think they need to have an understanding of us … is that we do not seek to constrain their need to continue their economic growth and to continue to help their people enjoy a better quality of life. As they are pursuing that, though, they have to do that in a way that supports stability around the rest of the world as well.”

“Q: Does that mean they need to constrain their ambitions or that you need to constrain them?

Tillerson: “Not their economic ambitions.”

COLLAPSING WESTERN FINANCIAL SYSTEM

Debt Bubble Is Made More Dangerous by Zero Economic Growth

April 28 (EIRNS)—With a stock market levitating on $14 trillion in increasingly unpayable U.S. corporate debt, the Commerce Department today again reported virtually no growth—and certainly no productive growth—in the U.S. economy. The 0.7% first quarter “growth,” made of oil exports, continued the trend of no-growth President Obama into President Trump’s first year. And now the briefly-risen oil price is falling again, along with every real measure of the American productive economy.

With “quantitative easing” and zero-interest money- printing and -lending by Trilateral central banks now in its tenth year—and still printing money at the annual rate of $1.7 trillion—a huge bubble of debt has expanded, dominated by $14 trillion in U.S. corporate debt alone, up 75% from $8 trillion in 2008, with now nearly $9 trillion in commercial mortgage-backed securities (CMBS). Now rising defaults, and suddenly curtailed credit for commercial, industrial, and auto loans, indicate the bubble is heading towards a collapse.

A new report on corporate debt defaults by Standard & Poor’s (covering only companies with credit ratings) finds:

“Despite oil prices rising for most of the year, the energy and natural resources sector had increased default activity over an already elevated 2015, and the sector accounted for over 50% of all defaults in 2016. This helped push the corporate default count up to 162—the second consecutive year since 2009 with over 100 defaults…. These 162 defaulted issuers accounted for $239.8 billion in debt, which is more than double the $110.3 billion total for 2015.”

That 2015 rate was already equal to that of 2007; 2016’s rate was the highest since the collapse of 2009. S&P’s report is global; but 68% of all the debt originated in U.S.-based banks.

Suddenly this week, the largest non-bank mortgage lender in Canada’s superheated real estate market has collapsed, with its stock plunging by 65% on April 25 and bailout talks going on. A “shadow bank” which might be called the Countrywide Financial of Canada, Home Capital/Home Trust, has a $20 billion mortgage book. Though this is small compared to the $1.35 trillion Canadian mortgage bubble, which in turn is dwarfed by the $11 trillion U.S. mortgage bubble of 2007, it could start a series of triggers due to the participation of Wall Street’s “Big Six” in that mortgage bubble.

“Home Capital contagion has spread to the entire mortgage market, particularly alternative mortgage lenders,” a National Bank of Canada analyst wrote April 27 when downgrading other shadow banks.

President Putin: It’s ‘Critical To Undermine the Economic Basis of Drug Trafficking’

April 29 (EIRNS)—Russian President Vladimir Putin chaired an April 28 meeting of Russia’s Security Council, which focused on the combatting illegal drugs. Putin said that, official numbers aside, opinion polls indicate that in Russia “about 7.5 million people take drugs, including 2 million regular drug users.” He reported that, although the officially-registered drug-dependent users has remained constant over the past five years, “the number of underage drug addicts has soared by 60%.” He then made two key policy points: 1) you have to hit drug finances; and 2) legalization must be combatted.

“It is critical to undermine the economic basis of drug trafficking, which is a source of financial support for terrorist and extremist groups, as is known…. [It is important to] also make the international public aware of our position that it is unacceptable to liberalize the international legal regime for drugs.”

NEW GLOBAL ECONOMIC ORDER

Zepp-LaRouche To Keynote Ibero-American Videoconference on the New Silk Road on May 4

April 28 (EIRNS)—Helga Zepp-LaRouche will keynote an international videoconference involving more than a half-dozen linked meetings across Ibero-America on Thursday, May 4, on the theme, “The Future of Ibero-America Lies in the New Silk Road.” Jointly sponsored by the Schiller Institute and EIR, the event—held just before the May 14-15 Belt and Road Forum in Beijing—is the spearhead of the LaRouche movement’s organizing drive to get the nations of Ibero-America to join the Belt and Road Initiative, which is rapidly replacing the bankrupt British Empire as the dominant paradigm on the planet.

In addition to Zepp-LaRouche’s keynote—which will be in the form of a pre-recorded video presentation, due to the time zone differences between Europe and Ibero-America—there will be presentations by Justo Vargas of the Association of Economists of Peru, speaking from Pucallpa, Peru, on the bioceanic railroad project involving Peru, Brazil and China; and by prominent Mexican engineer Javier Jiménez Espriú, speaking from Mexico City on the engineering platform for Mexico’s role in the New Silk Road.

The live event will involve linked meetings that have been organized in Pucallpa, Peru, and Mexico City, as well as Lima and Tarapoto, Peru; Hermosillo and Querétaro, Mexico; and Guatemala City. The entire event will be broadcast live on Google Hangouts on Air, beginning at 7 p.m. Eastern Time (13:00 UTC) on Thursday May 4, and can be accessed via the Spanish-language EIR webpage.

Belt and Road Trade Booms While U.S. ‘Growth’ Disappears

April 28 (EIRNS)—China’s Commerce Ministry is preparing a report on Belt and Road economic activity for the May 14-15 Belt and Road Forum in Beijing, and Xinhua reported today that results are impressive.

America’s Commerce Department also reported today: A dismal 0.7% annual rate of GDP growth in the first quarter.

Xinhua said, “Goods trade between China and Belt and Road countries surged 26.2%” in the first quarter of 2017 from a year earlier, “to more than 1.65 trillion yuan (about $240 billion) … according to Sun Jiwen, spokesperson of the Ministry of Commerce. Chinese exports to Belt and Road countries totaled 937.6 billion yuan in the three months, up 15.8% from the same period last year, while imports from those countries jumped 42.9% to 717.7 billion yuan, Sun told a press briefing.” Belt and Road countries number about 60.

This dramatically contrasts not only with the relative lack of trade volumes of the Central Asian countries, in particular, in the past; but also with the zero-growth condition of overall world trade in real terms.

Xinhua reported, “781 new companies with investment from Belt and Road countries were set up in China with a total investment of 8.45 billion yuan, said Sun. Chinese enterprises signed 952 project contracts in 61 countries along the Belt and Road worth $22.27 billion in the January-March period.” Sun cited far-flung ongoing overseas infrastructure projects such as the China-Belarus Industrial Park outside of Minsk, and the Nairobi-Mombasa Railway in Kenya.

Meanwhile the Asian Infrastructure Investment Bank (AIIB) and World Bank, which have co-financed five projects, signed a new cooperation agreement during the IMF/World Bank annual spring meetings April 23. Having built power generation in Pakistan, a natural gas pipeline in Azerbaijan, and slum upgrading, dams, and regional infrastructure development in Indonesia, they are now planning 2017-18 projects.

AIIB’s likely next project is a new airport in Lodz, central Poland, with surrounding rail transport and power infrastructure. This is a Polish government priority; Prime Minister Beata Szydlo is going to the Beijing Belt and Road Forum intending to sign it.

SCIENCE & INFRASTRUCTURE

South Korea Plans Its Next Steps To Demonstrate Commercial Fusion

April 28 (EIRNS)—South Korea’s Ministry of Science, Information & Communications Technology, & Future Planning has released its third five-year plan for Korea’s fusion program. In 2006, the government made the decision to create five-year plans for thermonuclear fusion research, each plan with ambitious goals, which need time to be realized.

Under the first plan in 2006, the KSTAR superconducting tokamak was built. During the second plan, new experimental results were obtained on KSTAR, along with South Korea’s contributions to work on International Thermonuclear Experimental Reactor (ITER) in France. For the third five-year plan, the focus will be on a technological roadmap for a demonstration fusion reactor. A demonstration reactor, DEMO, will produce steady-state fusion power and put electricity on the grid. To take this step, entirely new materials and technologies will be needed, and a roadmap to guide the work will be developed in the third five-year plan.

The roadmap will then be used in the fourth plan, to develop new technologies, with construction of the plant to be initiated in 2030. A council for academic and industrial cooperation will be organized to participate in the process. The budget will be increased, and a new R&D lab will be established next year to work on technology.

By contrast, the umpteenth review of the U.S. magnetic fusion program is soon to get underway, carried out by the National Academy of Science, authorized by the U.S. Department of Energy. The review was requested prior to President Donald Trump’s inauguration, but an incoming administration typically orders such a review. While the committee will get an updated picture of progress, the U.S. does not need review groups to invent how to go forward—that has not changed for years; what it does need is the funding that has been denied by the Bush and Obama administrations.

First Graders in China Are Learning about Rockets and Space Science

April 28 (EIRNS)—On the heels of China’s second national Space Day on April 24, the Ministry of Education, under its policy to improve scientific literacy, is requiring all primary schools to start teaching science classes in the first grade, starting with the fall semester. A course about the basic knowledge of rockets has been offered already to all first graders at Beijing Xicheng Foreign Languages School, and science popularization classes are being held at most of the public schools in Beijing. The students are being taught about the history and theory of rockets, the history of China’s space industry, and the launch of the new Long March 7 rocket, which put the Tianzhou-1 cargo carrier into orbit. In addition to classroom learning, there are field trips and hands-on experiments planned, along with model rockets that will be launched in school playgrounds, CCTV News reports.

OTHER

Cheminade Tells RT in Interview: Time of Troubles Lies Ahead for France

April 28 (EIRNS)—RT twice this week interviewed former French Presidential candidate Jacques Cheminade, founder of Solidarité et Progrès party, to get Cheminade’s take on how the second round of the elections would shape up between the bankers’ boy Emmanuel Macron and the xenophobic Marine Le Pen on May 7. RT’s English language TV station interviewed Cheminade for five minutes on April 24 and also posted an interview with him in French on April 26, together with a short written summary of his remarks under the headline, “We Are Entering Troubled Times.”

Cheminade, the oldest of the 11 candidates, first ran for President in 1995, and is well known as a close friend of American statesman and economist Lyndon LaRouche and his wife German political figure Helga Zepp-LaRouche.

Cheminade began by saying that the first round amounted to a “victory for the stock exchange and the megabanks,” as shown in the 4% rise in the Paris stock exchange the next day. But it is only “a temporary victory,” because the system remains in place and we are moving into “a time of troubles.” On the one hand, you have a dangerous nationalism, “which is the specialty of the Le Pen family,” and on the other, “you have the financial empire that sponsored Emmanuel Macron,” while the traditional political parties (the Republicans and the Socialists) were rejected.

“But we’ll see what happens with the legislative elections,” Cheminade cautioned, which are scheduled for June 11 and 18. What is clear is that the new President will not have a majority in the Parliament.

When asked whether the right and the left wings could form alliances, Cheminade answered that “that’s their problem, not mine. My mission is to be a catalyst to organize a vast alliance in France against the world of money. Internationally, France needs to ally with the BRICS, and with the vision that President Xi Jinping has, and which is shared by Vladimir Putin, of a win-win system in the world. However, I do think that the countries in that system should not support one or the other candidate in France.”

Asked whether either Le Pen or Macron would actually form an alliance with the BRICS or would be able to change the direction of French foreign policy, Cheminade said maybe Marine Le Pen would do so, “but she does not have the political base in France to do so, whereas Macron has the base, but will not do it.”

French citizens are against the closed political caste that has ruled up to now, Cheminade explained. But the two candidates they chose are not really anti-system, they come out of the system. French interests cannot be served by geopolitics, but by mutual economic development. For that reason, “I support the lifting of sanctions against Russia and for Russia to lift its sanctions against us, and to buy our meat and dairy products.” We need “economic trade, not geopolitics.”

Finally, Cheminade said he would call on those who voted for him to “vote their conscience” in the runoff. “I don’t own my voters. I personally cannot vote for Marine Le Pen, and in the current circumstances, I cannot vote for Emmanuel Macron either. To those who voted for me, I say: ‘Think of what is to come, so that we have a heart capable of reestablishing the destiny of our country.’ ”

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