MONDAY, FEBRUARY 8, 2016
Volume 2, Number 119
EIR Daily Alert Service
P.O. Box 17390, Washington, DC 20041-0390
There Is No Practical Solution
Feb. 7 (EIRNS)—Even Jaime Caruana, the General Manager of the Bank for International Settlements (BIS), the Central Bank for Central Banks in the western financial system, is now admitting what Lyndon LaRouche has been saying for years—the entire trans-Atlantic banking system is hopelessly bankrupt, and nothing short of eliminating the debt can stop a cataclysmic breakdown. There are no “pragmatic” measures to fix the system – the system itself is irreparably broken. As the former chief economist to the BIS, William White, said at Davos: “It will become obvious in the next recession that many of these debts will never be serviced or repaid…. The only question is whether we are able to look reality in the eye and face what is coming in an orderly fashion, or whether it will be disorderly. Debt jubilees have been going on for 5,000 years, as far back as the Sumerians.”
“Shut down Wall Street,” as LaRouche has argued, is no longer viewed as unworkable, but increasingly seen as the only hope to save the legitimate banking system and the legitimate debt from the cancer of the quadrillions of dollars of worthless derivative paper, with no real value. And to make the point clear to those who hope for a partial, pragmatic solution, if Barack Obama remains in the White House for even a few more months, preventing a Glass-Steagall elimination of the worthless paper, and proceeding with his rapidly escalating plans for war with Russia and China to stop the new paradigm they are implementing internationally, then thermonuclear war will almost certainly occur before the November presidential election in the U.S.
Look at those candidates—not one, Republican or Democrat, has uttered a word about the rush to global thermonuclear war. Hillary Clinton, in fact, chose to use the last debate before the New Hampshire primary to praise Obama and his equally insane Defense Secretary Ash Carter for quadrupling the troops and advanced military hardware being deployed on Russia’s border, claiming this was necessary for “defense,” precisely as Hitler argued as he prepared his suicidal invasion of Russia.
Obama’s rush to war was equally evident in Asia, where North Korea’s successful launch of a satellite is being used to justify a further build-up of advanced war fighting capacity in a ring around China and the Russian Far East.
Yet it is precisely China and Russia which are collaborating on the New Silk Road development process for Eurasia, while intervening in the Middle East—the “cockpit for war”—to stop that war and to prevent it from becoming a world war. Russia is demonstrating that the terrorists can in fact be crushed, by militarily cutting off their supply lines to Turkey and Saudi Arabia (Obama’s closest allies), while China extends the Silk Road process into the region, just a Helga Zepp-LaRouche had proposed (see https://worldlandbridge.com and https://larouchepac.com/world-landbridge).
Americans and Europeans must learn from China and Russia, rediscover their own roots in the Hamiltonian system, which is now being implemented in China and Russia, while the U.S. crumbles into British “free trade” destruction, replete with unrestrained speculation, permanent warfare, and even a new British Opium War against the United States and the world.
STRATEGIC WAR DANGER
Armed Opposition Groups in Aleppo Dominated by Jihadis
Feb. 7 (EIRNS)—So just who are the fighting groups that the U.S., Turkey and the Saudis are trying to protect with a cease fire in Syria that has so far failed to come into existence? The Long War Journal website Saturday documented that a substantial portion of them are jihadi groups, starting with the al-Qaeda-allied Al Nusra, which sent a 100-vehicle convoy of reinforcements into the city in January.
Next is the Nur al-Din al-Zanki Movement which, though not itself al Qaeda, not only tolerates Al Nusra, but, with the exception of a recent disagreement for which it later apologized, fights alongside it. Zanki has also received American-made TOW anti-tank weapons.
Another Islamist organization in Aleppo is Faylaq al Sham (Sham Legion), which fought as part of the Jaysh al Fateh coalition in Idlib, but they have also since relocated to Aleppo.
So while there may be non-jihadi groups also fighting in Aleppo, the jihadists seem to be making their final stand there, as the Syrian Army with Russian air support are closing in to crush the terrorist forces.
Foreign-Sponsored Rebels Losing in Syria: White House Freaks Out, But Kerry Blames ‘Opposition’
Feb. 6 (EIRNS)—Yesterday, White House spokesman Josh Earnest raved against the Syrian-Russian offensive against terrorist and rebel groups occupying Aleppo, saying Friday that “Our principal concern about Aleppo right now is there’s the possibility that government forces backed by the Russians would encircle that city and essentially lay siege to that city.”
Both Moscow and Damascus said that they aren’t going to stop the offensive, no matter how much the West whines about it. Vitaly Churkin, Russia’s ambassador to the UN, called the accusations that Russian bombers are killing civilians “in bad taste” and said that “They’d better put the blame on those who back terrorists.” One of his deputies, Alexei Borodavkin, said that there is an uncomfortable question now circulating as a result of the opposition demand that the Syrian army halt its advance into Aleppo, because Jabhat al Nusra is one of the groups occupying rebel-held portions of the city. “This inevitably raises a question about whom our Western colleagues and partners support [in Syria]. What is it: ignorance or a deliberate action?” Borodavkin asked.
Secretary of State John Kerry, while stating officially that the Syrian government and their Russian supporters are not implementing a ceasefire, also pointedly said that the fighting will not stop “by walking away from the table or not engaging,” referring to the fact that the Saudi-linked opposition forces walked out of the peace negotiations.
According to a report today in Middle East Eye, Kerry was confronted by two Syria aid workers (not identified) after the collapse of the peace talks who complained that the U.S. wasn’t doing enough to protect Syrian civilians. “He said that basically, it was the opposition that didn’t want to negotiate and didn’t want a ceasefire, and they walked away,” one of the aid workers said. Kerry reportedly added: “What do you want me to do? Go to war with Russia? Is that what you want?”
Syrian Foreign Minister Walid al-Moallem issued a withering blast at the so-called opposition and its foreign backers in Damascus Saturday, pointing out that UN Security Council resolution 2254 calls for a Syrian-Syrian dialogue, but that the Riyadh-sponsored opposition is following orders from the Saudis, who arrived making all sorts of demands for preconditions before they would even talk. He warned, reports the state’s Syrian Arab News Agency, SANA, that “Everyone should realize, above all [UN envoy] de Mistura, that Syria is going for a Syrian-Syrian dialogue without any preconditions and will not comply with any precondition set by any party whatsoever.”
As for the Saudi announcement that they would be happy to send troops to Syria to “fight” ISIS, al-Moallem said, in effect: don’t you dare. “Any ground intervention in the Syrian territories without the government’s approval would be an act of aggression that has to be confronted, and in that case confrontation will be every Syrian’s duty,” al-Moallem said, and added, “Any aggressor will be sent back to their country in wooden boxes.”
Ash Carter Welcomes Saudi Offer To Send Ground Troops to Syria, While Syrian Forces Push for Victory
Feb. 5 (EIRNS)—The Saudis announced Feb. 4 that they are willing to send ground troops into Syria if the anti-ISIS coalition launches a ground offensive and agrees to their participation.
U.S. Secretary of Defense Ash Carter, on a visit to Nellis Air Force Base, Nevada, said: “That kind of news is very welcome.” Carter said he looked forward to discussing the offer of ground troops with the Saudi Defense Minister in Brussels next week.
Meanwhile, the worst nightmare of the Turks and the Saudis might be coming true: a merging of Syrian army and Kurdish YPG (which gets military support from the U.S.) efforts to close off rebel supply lines from Turkey to Aleppo. Even the Washington Post headlines its Feb. 5 coverage: “Syrian Rebels Are Losing Aleppo and Perhaps Also the War.” As Syrian troops have moved to take total control of the road that leads north out of Aleppo to Turkey, elements of the YPG have taken towns from rebel groups to the east including from Al Nusra.
No one is saying that the Syrian army and the YPG are coordinating their actions, but Turkey views both of them as its enemies, anyway. Might that be the target of a prospective Turkish-Saudi incursion into Syria?
U.S. POLITICAL AND ECONOMIC
With Colombia Deal, Obama Moves from Legalizing Pot to Legalizing Cocaine
Feb. 5 (EIRNS)—Barack Obama yesterday gave his seal of approval, accompanied by promises of U.S. money and support, for a “peace plan” with the world’s largest cocaine cartel in Colombia, South America, which was cooked up by the British Empire as a giant step towards global legalization of every mind-destroying narcotic known and yet-to-be-concocted on the face of the Earth.
The facts are these:
Colombian President Juan Manuel Santos came to Washington, D.C., this week, to coordinate the final stage of his “peace” plan with the murderous Revolutionary Armed Forces of Colombia (FARC) cartel, which he seeks to sign by March 23. In the White House reception which followed their Feb. 4 meeting, Santos thanked Obama for his “full and enthusiastic support” for the plan, reporting that Obama was one of the first persons to whom he had “confided” his intentions.
Santos had made public beforehand, in a Jan. 28 interview with Associated Press, that he was coming to ask the Obama administration to suspend U.S. drug warrants against the commanders of the FARC cartel. In other words, the FARC deal hangs on withdrawing the 2006 indictment by U.S. prosecutors of 50 FARC commanders for supplying half of the world’s cocaine!
There’s more. In 2014, the FARC leadership, which controls extensive marijuana, coca, and poppy plantations in the Colombian countryside, proposed at the negotiating table, that the government agree that the state identify possible industrial and artisan uses of these narcotics, and then “regulate the production and market for coca leaf, poppy, and marijuana.”
Last December, Santos took the first steps towards that, signing a decree legalizing the cultivation, processing, R&D and export of “medical” marijuana. The plan is to turn marijuana exports into as big an “industry” as flowers or food, Colombia’s Health Minister told Bloomberg in January. On Feb. 3, PharmaCielo—a Canadian company run by former executives of Britain’s notorious Philip Morris company and speculator James Rogers, co-founder of George Soros’s Quantum Fund—filed their application to start farming and producing marijuana in Colombia.
The operation, like drug-legalizer Obama, who is the godfather of the whole deal, is 100% British. Santos is a protégé of former British Prime Minister Tony Blair, with whom Santos has consulted closely since he won the Presidency in 2010. George Soros held a “very long meeting” with Santos in 2012 to coordinate the operation. The London School of Economics (LSE), Santos’s alma mater, is advising Santos on his “new” drug policies; on Jan. 28, the heads of its “International Drug Policy Project” presented “a new international strategic framework for drug policies” at a major forum organized by Santos’s “Good Government Foundation.” The LSE authors say they intend to use their plan for “new models of legal regulation,” as being implemented now in Colombia, to shape the outcome of the UN General Assembly Special Session on Drugs in April 2016, which the British intend to have restore global free trade in the Empire’s mind-destroying narcotics, as in the glory days of their murderous Opium Wars against China.
Obama Again Openly Threatens China on Trade
Feb. 5 (EIRNS)—The 12 Trans-Pacific Partnership (TPP) member countries signed the TPP agreement on Feb. 3 in New Zealand, which means that now the 12 nations can begin the process of getting their governments to approve it—which is far from certain.
Obama, never missing a chance to declare his Nerobama psychosis, issued a statement calling for the TPP to be ratified this year, boasting, “TPP allows America—and not countries like China—to write the rules of the road in the 21st century, which is especially important in a region as dynamic as the Asia-Pacific.”
China’s response, published in the Global Times, notes first that this is simply not true—that “the TPP is far from enough to secure U.S. domination in the world economy,” and that even the member nations of the TPP “will not pick sides between Beijing and Washington.”
More to the point, it notes: “It is not the first time that Obama has publicly talked about China like this, which shows his narrow-mindedness as a leader of a world power.”
Senate Majority Leader Mitch McConnell (KY) has made clear that the TPP will not be brought up this election year. Most Democrats and some Republicans oppose part or all of the imperial deal, which further strips nations of their sovereignty, on behalf of international banking cartels.
Obama: Snow Is Black
Feb. 6 (EIRNS)—As the death rattle of the U.S. real economy drives the population into despair, President Obama yesterday gleefully proclaimed that snow is black. “The United States of America right now has the strongest, most durable economy in the world. I know that’s still inconvenient for Republican stump speeches as their doom and despair tour plays in New Hampshire. I guess you cannot please everybody.”
Asked about polls that show that two-thirds of Americans feel that the country is on the wrong track and that the labor participation rate remains at record lows, Obama could only mumble that “there’s still anxiety and concern about the general direction of the economy.”
Hillary Backs Confrontation with Russia in Europe
Feb. 5 (EIRNS)—Hillary Clinton let it all out in the Feb. 4 debate with Bernie Sanders, pushing military confrontation with Russia. Asked about Defense Secretary Ashton Carter’s plan to massively build up advanced nuclear military forces on Russia’s borders, Hillary said: “What Secretary Carter is looking at is the constant pressure that Russia’s putting on our European allies. The way that Russia is trying to move the boundaries of the post-World War II Europe. The way that he [Putin] is trying to set European countries against one another, seizing territory, holding it in Crimea. Beginning to explore whether they could make some inroads in the Baltics.
“We know that they are deeply engaged in supporting Assad because they want to have a place in the Middle East…. I think what Secretary Carter is seeing, and I’m glad he is, is that we got to get NATO back working for the common defense. We’ve got to do more to support our partners in NATO, and we have to send a very clear message to Putin that this kind of belligerence, that this kind of testing of boundaries will have to be responded to. The best way to do that is to put more armor in, put more money from the Europeans in so they’re actually contributing more to their own defense.”
Of course, Clinton made no mention of the eastward expansion of NATO, in clear violation of policies that had been agreed upon at the time of German reunification in NATO, or the U.S. unilateral deployment of missile defense systems along Russia’s southern border, or the “color revolution” in Ukraine, all of which preceded the Russian military buildup. Clinton’s campaign rhetoric Thursday night fit perfectly with the escalating British and Obama provocations against Russia.
Obama Administration Calls Russia a ‘Mortal’ Danger
Feb. 5 (EIRNS)—The Obama Administration is escalating its anti-Russia propaganda, showing clearly that Obama’s agenda is global thermonuclear war. In the last two days, Obama’s Director of National Intelligence James Clapper has been broadcast over and over on TV and radio, including Washington’s all-news radio station WTOP, saying: “ISIL is not a mortal enemy of the United States. It causes harm and can kill our people. But it can’t inflict mortal damage to the United States. Russia can.” He stressed the nuclear capability “that could render great harm to this country,” and warned that Russia is “on a very impressive campaign to modernize its military in all its dimensions.”
Taking note of Obama’s expansion of the provocations against Russia, the Wall Street Journal on Feb. 3 ran an editorial, “A NATO Message for Mr. Putin,” that says, “So, we’re glad to see the Obama Administration finally doing more to secure NATO’s eastern front against Russia.” It praises the quadrupling of the U.S. contribution to the European Reassurance Initiative (ERI) budget (from $789 million in 2014 to $3.4 billion in the 2017 FY budget), which pays for troops and weaponry along Russia’s borders. The Journal is also ecstatic about a new combat “brigade-size force that will rotate positions across NATO’s front line, including in Poland and the Baltics.” This is a “substantial improvement” over the 150 U.S. soldiers that rotated in those two countries for joint training.
Obama Proposes $10/Barrel Tax on Oil, for Anti-Carbon Destruction of the Economy, and Sham Infrastructure Funding
Feb. 5 (EIRNS)—Obama’s budget announcement next week is to contain an insane proposal, for a $10-per-barrel of oil fee, to be paid by oil companies, as part of funding for his new “21st Century Clean Transportation System,” even while the collapsed oil price is threatening to bring down the oil companies and the entire banking system, which is knee-deep in high-risk funding of the oil shale boom.
Presumably passed on to motorists, the fee would amount to around $.25 a gallon of gas. White House aides told reporters this week that Obama wants funding on a level of $300 billion over 10 years, for mass transit, self-driving cars, some rail improvements, and other things to reduce congestion and carbon emissions, and to suppress carbon fuels in line with Obama’s legacy to mitigate global warming (read: mitigate civilization).
Internationally, such “carbon pricing” schemes are part of the British imperial campaign for the world to be “carbon neutral” by 2050. Called the “Breakthrough Energy Coalition,” the drive was initiated by Bill Gates, with other celebrity billionaires joining in, including Richard Branson, Mark Zuckerberg, Saudi Arabian Prince Alwaleed bin Talal.
The White House memorandum out on Obama’s oil tax proposal states that by hiking fossil fuel prices, the effect will be “a clear incentive for private-sector innovation to reduce our reliance on oil and invest in clean-energy technologies that will power our future.” The Obama regime is already in the final stages of killing off coal in the United States.
COLLAPSING WESTERN FINANCIAL SYSTEM
Bank for International Settlements Warns of Imminent Debt Blowout
Feb. 6 (EIRNS)—The Basel-based Bank for International Settlements (BIS), commonly referred to as the central banks’ central bank, is warning that the international financial system is about to blow apart.
BIS general manager Jaime Caruana, speaking at a recent forum at the London School of Economics, warned that the ongoing oil price collapse could prick the entire global debt bubble. Daily Telegraph International Business Editor Ambrose Evans-Pritchard wrote on Jan. 5: “Mr. Caruana said an ‘illusion of sustainability’ has blinded borrowers and debtors, lulling them into a false security when credit was easy and asset prices were rising. This illusion can die in the blink of an eye. ‘The turning of the financial cycle can be quite abrupt,’ he said.”
Oil producers have responded to the price collapse by producing more oil, not less, and the oil industry is now scrambling to figure out how to service $3 trillion in debt, a tripling over less than a decade, Caruana warned. Risk spreads on high-yield energy bonds have jumped from 330 basis points to 1,600 over the past 18 months.
Caruana also sounded the alarm about the carry trade, fueled by massive global quantitative easing (QE) since the 2008 crisis, which has now sharply shifted into reverse flows. Evans-Pritchard colorfully remarked that “what looked like a one-way bet has proved to be a Faustian Pact, now that the Fed is turning off the spigot…. We may be approaching the eye of the storm.”
Caruana then warned against precisely the policy that Wall Street and London have desperately resorted to over the last 6-8 weeks: more QE, and a stampede to negative interest rates. “The temptation may be to try to keep the financial boom going, or to give them a new lease of life, but this will be just a palliative unless the stock of debt is adjusted,” Caruana said. Evans-Pritchard concluded: “The BIS seems to be telling us that reckoning can still be orderly if we face up to reality, or end in a chaotic wave of defaults if we do not. Either way, the debt must clear.”
Investors Are Pulling Out of Sinking Deutsche Bank
Feb. 5 (EIRNS)—Frankfurter Allgemeine Zeitung wrote today that BlackRock and Qatar, the two largest shareholders of Deutsche Bank, might pull out if things get worse. The Qatari ruling family has already lost almost €1.3 billion. Other institutional investors have long sold their shares.
According to the scenarieconomici.it website, Brussels and Berlin want to hide “the real European problem: a giant financial black hole being created in Germany.” Deutsche Bank shares have fallen 35% from the beginning of 2016. The bank has a €64 trillion in notional value of derivative investments, five times the GDP of the 19-country Eurozone, and a leverage ratio of 3.5% (as against 4.9% for Unicredit and 6.9% for Banca Intesa, the two largest Italian banks).
THE NEW GLOBAL ECONOMIC ORDER
First Chinese ‘New Silk Road’ Train Arrives in Russia
Feb. 7 (EIRNS)—The first Chinese train on a major branch of the new Silk Road transportation routes between Russia and China arrived Friday from the Chinese East Coast port of Dalian at its Russian terminal, Kaluga, near Moscow. The train is part of the plan to expand the trade volume between the two countries.
Sputnik reports: “On Feb. 5, the first freight train arrived to the Kaluga Region under the framework of the international project New Silk Road.” The train was carrying 100 standard containers packed with goods produced by Samsung Electronics in South Korea, destined South Korea’s Samsung company based in Kaluga.
SCIENCE AND INFRASTRUCTURE
China’s EAST Tokamak Moves Closer To Reaching Fusion
Feb. 5 (EIRNS)—Taking an important step toward the production of energy from a sustained thermonuclear reaction, scientists at China’s Institute of Plasma Physics (IPP) in Hefei reported on Feb. 3 that experiments on their EAST superconducting tokamak had successfully created a sustained hydrogen plasma for a record 102 seconds. The experiment, according to the IPP, required that the team solve a number of scientific and engineering problems, such as the precise alignment of the magnets, and keeping the plasma particles and heat from escaping from the tokamak. Instabilities in the plasma and the “leaking” of the ionized gas have plagued all fusion researchers, and prevented the long-lived confinement of the plasma. The scientists worked “day and night,” the institute says, to achieve their results.
The plasma measured a temperature of 50 million degrees, which is about half of what will be required for deuterium-tritium fusion, which the researchers say will still take some time for EAST to achieve. Although plasma temperatures higher than 50 millions degrees have been achieved before (for example, by Princeton, in the late 1970s), containment of the plasma has been in only the tens of seconds. The goal of EAST is to reach 100 million degrees in the plasma and operate for 1,000 seconds, towards an eventual steady-state operation, which will be required for commercial power production.
These recent experimental results and all of the progress on EAST will be applied to the international ITER project. The Chinese scientists also work closely with fusion researchers at General Atomics, and their DIII-D tokamak, in California.