EDITORIAL
In These Days of Fateful Decision
Feb. 11 (EIRNS)—The great strategists, like the William Shakespeare about whom Lyndon LaRouche did seminal studies in January 2014, understood that the new breakthrough required for human survival required striking out on pathways where no man had ever gone before; indeed, pathways whose very existence had never been suspected before. This was what Douglas MacArthur did in the Pacific in World War II: he conceived a totally new dimension of action, never before imagined, never before possible, which allowed his inferior forces to continually defeat superior forces.
This changed history for all time, but it was only one of several such breakthroughs made by Gen. Douglas MacArthur. The same is true of Lyndon LaRouche.
In every case, the decisions they made were not just for a day or a year, but for all future time. In this respect, all of them echoed Prometheus’s fateful decision, taken once and for all long before our recorded history, that he would shield mankind from the fate of extermination which Zeus had decreed for our species. Like President John F. Kennedy’s decision announced to a Joint Session of Congress on May 25, 1961, that “I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the Moon and returning him safely to the Earth.”
Another decision must be taken today, the one led by LaRouchePAC leader Kesha Rogers of Houston, Texas.
In his Feb. 8 webcast with the LaRouchePAC Policy Committee, LaRouche compared the mental outlook of the United States today, with the decline and fall of the Roman Empire, citing the intrusion of the British Empire from the very inception of the U.S.: “It happened immediately with the beginning of the United States as a nation. The destruction was massive: most of the Presidents of the United States were actually enemies of the United States; most of them were! And that’s why the problem keeps coming back. And still does: This is the Roman Empire, the Roman Empire model.
“And what you’ve got, you’ve got the Eurasian model now, the resuscitation of China; what Putin has done on his part…. And Putin has managed to be a factor in bringing about a strengthening, of both China and Russia, to save Russia.
“And what we’re seeing is that this area, this Eurasian area contains within it, elements which are the basis of creating or recreating a new system for mankind. And what the result will be, the characteristic built into this thing, the characteristic is, the space program.
“What do we mean by the space program? Well, not the space program the way the idiot thinks about the space program, but the space program is a reflection that mankind is getting wise, with the new Moon operation, mankind is getting wise to the reality that mankind on Earth is not the power that rules Earth; but rather, there is a force beyond that, which controls the achievement of space, and what that means is that mankind is a creature, that lives in space. And it’s in that area, that domain, and the activities and development in that domain, which is the future for mankind.
“The important thing here is, you have to just take a little, short trip and think about it. What does this mean? And the Moon thing, right now, the new Moon project, this is probably the key, to bringing this idea not only into what’s happening in China right now, but for the entire human species. But we’re going for a change in the species characteristics, from what had been traditional and what is going to emerge, now, from the new change.”
In other discussions over recent days, LaRouche has pointed to his controversial 2014 Shakespeare studies referenced above, making the point, among others, that the almost-universally held conception of human history is a fraud. That history is actually composed by the sorts of bold, unprecedented discoveries discussed above. These discoveries comprise the nature of man. Look at the brilliant and radical invention of physical space-time in an arc from Kepler, to Leibniz, through Gauss, and then Planck and Einstein.
LaRouche’s Feb. 8 webcast contained several different, convergent trains of thought along these lines of urgent action. This was the conclusion of one of them:
“So the question of creativity means that the whole system, of the Solar System and beyond, is essentially dominated by these events, the same events which are the events which are characterized by the system, as a whole. It’s there! The question is, what do you want to do? You want to create people who are creative. You want to be able to create babies, who are themselves creative in an original way. And you see that: Einstein was, for example, a good example of this thing. If you take what we know of his history, that human creativity is a unique matter, it is what really should dominate and control the history of mankind.”
COLLAPSING WESTERN FINANCIAL SYSTEM
Terror Stalks the City of London over Financial Crash
Feb. 11 (EIRNS)—Hysteria is spreading in the City of London. Allister Heath, deputy editor of Daily Telegraph, sounds the alarm bells as fear of the destruction of capitalism itself stalks the streets of the City of London.
“The world can’t afford another financial crash—it could destroy capitalism as we know it,” Heath writes. “A new economic crisis would trigger a political backlash in Britain, Europe and the United States which could drag us all down into poverty.”
“They bounce back after terrorist attacks, pick themselves up after earthquakes and cope with pandemics such as Zika. They can even handle years of economic uncertainty, stagnant wages and sky-high unemployment. But no developed nation today could possibly tolerate another wholesale banking crisis and proper, blood and guts recession.
“We are too fragile, fiscally as well as psychologically. Our economies, cultures and polities are still paying a heavy price for the Great Recession; another collapse, especially were it to be accompanied by a fresh banking bailout by the taxpayer, would trigger a cataclysmic, uncontrollable backlash.
“The public, whose faith in elites and the private sector was rattled after 2007-09, would simply not wear it. Its anger would be so explosive, so all-encompassing that it would threaten the very survival of free trade, of globalization and of the market-based economy. There would be calls for wage and price controls, punitive, ultra-progressive taxes, a war on the City and arbitrary jail sentences.”
He writes that the ’30s crash led to populism in America, but doesn’t say what he means by that—Franklin Roosevelt.
But he seems fully resigned to the fate of a crisis: “The sorry truth is that there is very little that governments can do at this stage, apart from battening down the hatches and hoping that central banks succeed in kicking our problems even further down the road.”
Fortunately, FDR didn’t agree with him.
Plunge Protection Team To Prop Up Deutsche Bank
Feb. 11 (EIRNS)—As more trouble is reported for Deutsche Bank, several agents have been deployed to “talk the markets up.” Former Morgan Stanley CEO John Mack announced that the German government will never allow Deutsche Bank to sink, and the European Central Bank did not deny rumors spread by a trading platform, that the ECB is ready to buy bank shares as part of the Quantitative Easing (QE) program.
Deutsche Bank shares plunged again today, after leaks by insiders that internally, Deutsche Bank has reduced the value of its retail unit Postbank from its nominal €4.5 billion to €2.8 billion. Postbank is to be sold, but it has proven very difficult to find any investor who would purchase it at the price set by Deutsche Bank.
Furthermore, analysts at Morgan Stanley have forecast another €3.9 billion of charges in 2016 and 2017. “It is also possible the litigation may not be resolved until 2017, leaving uncertainty on the stock,” the analysts said.
Defying reality, John Mack said in an interview with Bloomberg that investors should be confident that Deutsche Bank will make its interest payments on debt (meaning CoCos, or contingent convertible bonds, in particular). “There’s no question in my mind, it is absolutely good for every penny. This idea that I heard yesterday, the possibility of not making their interest payments, it’s just absurd. The government will not let that happen.”
In a related development, a trading platform called LiveSquawk has reported that the ECB would be ready to purchase bank shares as part of the QE program. While the ECB would neither confirm nor deny it, it is noteworthy that such a strategy shift is being rumored when the core of the German banking system is under such stress.
Doomsday Talk about China’s Economy Is Wrong, Expert Says
Feb. 11 (EIRNS)—Stephen Roach, now a senior fellow at Yale University’s Jackson Institute of Global Affairs after years as chief economist at Morgan Stanley Asia, and one of the most knowledgeable people about China’s economy, said Feb. 10 that the doomsday talk about the real Chinese economy, based on the turbulence in the stock market, is simply wrong. “I think the Chinese economy is performing much, much better than your average market participant would want to conclude right now,” Roach said, speaking at a debate at the Brookings Institution, yesterday reported in China Daily today. Roach cited urban job growth as a strong indicator, with an average of 11 million new jobs created per year over the last three years, compared with the Chinese government target of 10 million jobs. He said the answer to the job growth under a slowing economy is the shift to labor-intensive services. Services in China generated about 30% more jobs each year.
“I think the transformative process in China, where mix of GDP is far more important than the overall GDP, is really the key to the puzzle,” Roach said. He added that the transformation is intact and that the economy is not on the brink of a “hard landing.”
Italian Parliament To Discuss Postponing Bail-In Regulations
Feb. 11 (EIRNS)—On Monday, Feb. 15, the Italian Chamber of Deputies will discuss a motion, filed by deputies from the Five Star Movement (M5S) party, that calls for postponing the implementation of the infamous EU rules on bail-in. The motion was drafted by Dep. Alessio Villarosa, who has also pushed for Glass-Steagall.
The motion recalls Bank of Italy director of supervision Carmelo Barbagallo’s testimony before a Parliamentary committee Dec. 9. He had requested a postponement “in order to allow the substitution of … bonds issued” after the establishment of the new bail-in rules.
The motion then stresses the illegality of the partial bail-in implemented for the four minor banks last December, as there was no bail-in regulation in effect; the contradiction between the latter procedure and the procedure used for another savings bank, Tercas, which was bailed out without a bail-in; and that the new rules “have generated a real fear among the public of losing their savings.”
Finally, it states that “the bail-in discipline … is constitutionally illegitimate as it contradicts Art. 47 of the Constitution (‘The Republic encourages and protects saving in all its forms; disciplines, coordinates and controls the exercise of credit’).”
A majority of parliamentary factions voted in favor of discussing the M5S motion, which is unusual; however, the fight will be uphill. The government just broke its promises to reimburse individual investors, by failing to approve a bill to this effect last night. A bill on the EU-backed Bad Bank scheme was approved, but the promised reimbursement bill was postponed.
STRATEGIC WAR DANGER
South Korea Being Destroyed by Capitulation to Obama’s War on China
Feb. 11 (EIRNS)—South Korea’s President Park Geun-hye has capitulated to President Obama’s massive pressure to end her collaboration with China and Russia (“Korea’s Eurasian Vision” she called it), and under the guise of joining Obama’s belligerence toward North Korea, in fact joined Obama’s war plans against China. This comes at the same time that the Korean economy is in a precipitous decline, battered by the global crisis and trade collapse.
President Park Wednesday announced that she was suspending all work at the Kaesong Industrial Complex in North Korea, set up in 2004 as a step toward cooperation between North and South. About 124 South Korean companies have factories in the Complex, hiring about 54,000 North Korean workers at relatively low wages. There are more than 5,000 South Korean suppliers that sell intermediary materials and parts to the 124 companies in Kaesong, according to the Korea Federation of SMEs (small and medium enterprises).
Park’s government absurdly charged that the wages to these workers, a total of $560 million in 11 years, were being used to build nuclear weapons and missiles. Pyongyang responded by demanding all South Koreans out of Kaesong within 24 hours, seizing all properties, and placing the area under military occupation.
North Korea’s successful satellite launch on Feb. 7, following a test of a hydrogen-type nuclear weapon in January, has provided Obama with the excuse to massively build up strategic forces in South Korea and in the region, expanding its military “ring around China,” the so-called “pivot to Asia.”
Until this week, the Park government has strongly opposed Obama’s demand that the U.S. be allowed to set up a Terminal High Altitude Area Defense (THAAD) missile system, based on the obvious fact that such missiles and radar are not needed against nearby North Korea, but are only intended to target China and the Russian Far East. Now she has capitulated, announcing that formal talks with the U.S. on the THAAD system have begun.
South Korean firms are concerned that China may retaliate against the THAAD deployment by reducing business ties. About 26% of South Korea’s exports go to China, and the large firms like Samsung and LG have huge investments in China. The first “Silk Road” train which reached Kaluga, Russia last week from Dalian, China carried mostly Samsung goods produced in China, as we reported in Monday’s Daily Alert. Korea Times reported that “Officials in the tourism, technology, retail and automotive industries said Wednesday that the companies are closely monitoring how the escalating political tension in Northeast Asia will affect their businesses in China—the most crucial market for all of them.”
United Kingdom Joins NATO Military Buildup in the Baltics
Feb. 11 (EIRNS)—As the NATO defense ministers’ meeting was approving NATO’s military buildup in eastern Europe, yesterday, the British government was announcing that it would be committing forces to the Baltics.
“Increasing our NATO deployments sends a strong message to our enemies that we are ready to respond to any threat, and defend our allies,” Defense Secretary Michael Fallon said yesterday in a statement released by the Ministry of Defense. The HMS Iron Duke, a Type 23 Frigate, was deployed to the Baltic Sea in January as part of NATO’s Standing Maritime Group 1 and will be followed by a yet-to-be-named Type 45 destroyer in October.
As for the NATO ground deployment, the plan to station, on a rotational basis, up to 1,000 NATO troops in each of six countries in Eastern Europe, could include hundreds of British troops, along with U.S. and German troops, “to make clear to Russia” that any Ukraine-style “intervention” will trigger a strong response from the Western NATO powers, reports the Telegraph. The units are likely to include highly mobile special forces units armed with surface-to-air missiles, backed up by ground-attack airplanes and helicopters. This is supposed to prevent a “hybrid” attack by Russia on these countries.
Russia, of course, will respond to this latest military build-up. “Russia will continue to strengthen its defensive potential, to improve the deterrent potential of nuclear weapons,” Evgeny Serebrennikov, a member of the State Duma, told Sputnik.
In Syria, Insurgents Being Squeezed towards Turkish Border
Feb. 11 (EIRNS)—Russian Defense Ministry spokesman Gen. Igor Konashenkov reported this morning, that over the period Feb. 4-11, Russian planes in Syria flew 510 sorties, during which they destroyed nearly 1,900 terrorist targets in the provinces of Aleppo, Latakia, Hama, Deir ez-Zor, Deraa, Homs, Hasakah, and Raqqa. Two of the targets they destroyed were top terrorist commanders, Konashenkov said, adding that there have been “massive” desertions among the terrorists in Aleppo. “The terrorists put down their weapons and try to dissolve in the crowd—they know that Russian warplanes and the Syrian Army would never strike civilians,” Konashenkov said. He also reported that there are opposition groups now working with the Russians.
The latest battle reports, coming from the Russian Ministry of Defense, Al Masdar, and other sources, indicate that the Syrian army, along with its allied forces, and the Kurdish YPG, are still putting heavy pressure on opposition forces, particularly between Aleppo city and the Turkish border, which Damascus aims to seal.
According to a report on Al Masdar News, Syrian army units imposed full control over the village of Kafr Naya after a 72-hour-long battle with the Islamist rebel groups. The Kurdish YPG, meanwhile, has reportedly completed the capture of the Menagh military airport and is now in a position to strike out at Azaz, on the Turkish border. In Latakia, army units “are at the doorsteps” of Kinsibba, on the border with Idlib. Al Masdar’s battlefield reporter writes that Syrian Armed Forces are five hilltop villages away from clearing the entire Kinsibba region of Jabal Al-Akrad, which would leave the Islamist rebels with their backs against the wall near the Turkish and Idlib borders with northern Latakia.
U.S. POLITICAL AND ECONOMIC
Neocons Embrace Obama’s Effort To Turn ASEAN against China
Feb. 11 (EIRNS)—The neocon Center for a New American Security’s (CNAS) Asia-Pacific Security program director Patrick Cronin and Indonesia Initiative director Derwin Pereira, warmly embraced President Obama’s effort to turn Southeast Asia against China. Obama will bring all ten ASEAN leaders to Sunnylands, California, next Monday, Feb. 15, for a two-day summit. The CNAS crew issued a commentary called “High Stakes at the Sunnylands Summit,” making clear that Obama is their pal, and China the enemy and the target of their cooperation.
“President Obama’s pivot to Asia was a declaration of American will and power to prevent the Indo-Pacific from coming under the exclusive sway of an expansionist power,” the commentary reads. “How [Southeast Asia] tilts—or does not tilt toward the United States will help determine the degree of American leverage vis-à-vis China.”
The authors continue, “Sunnylands will tell China that America takes international freedom of navigation and the rule of law seriously, even though the United States is not a claimant state in the maritime dispute. Beijing cannot deal with Southeast Asia without factoring in the American response.”
Also, on the economy: “Sunnylands will provide President Obama an opportunity to showcase the Trans-Pacific Partnership’s benefits to other Southeast Asian nations. Indeed, Indonesia, the Philippines, and Thailand have expressed interest in joining it. The American outreach will be important especially because China has moved quickly to expand its own economic sphere. This is through the creation of the Asian Infrastructure Investment Bank (AIIB), which is seen as a rival to a U.S.-dominated system embodied by the World Bank and the Asian Development Bank. In spite of American pressure on countries to not join the China-led bank, all ASEAN members have done so.”
Therefore, they conclude: “The United States must make ASEAN a centerpiece of its efforts to regain the global economic initiative from China.”
SCIENCE & INFRASTRUCTURE
New Evidence on Zika-Microcephaly Link, as Virus Spreads Rapidly Across the Americas
Feb. 11 (EIRNS)—In testimony yesterday before a joint hearing of two subcommittees of the House Foreign Affairs Committee, addressing “the Global Zika Epidemic,” Dr. Tom Frieden, director of the Centers for Disease Control and Prevention (CDC), reported that the CDC had discovered the “strongest evidence to date” that the Zika virus is the cause of microcephaly in newborns.
The CDC identified the Zika virus in the tissue of two babies who died in Brazil from microcephaly, a birth defect in which the cranium is abnormally small and causes brain damage. Other researchers are finding similar results.
Dr. Frieden told the hearing that while the new evidence is very strong, more tests will be required to conclusively prove the Zika link to microcephaly. Dr. Michael Osterholm, director of the Center for Infectious Disease Research and Policy (CIDRAP) at the University of Minnesota, challenged that assessment, telling Canada’s CTVNews that “these findings are just more evidence of the fact that the Zika virus is causing microcephaly…. What has been unfortunate, is this debate for the last month of whether the link is proven or unproven. We had clear evidence for public health officials to take action a month ago.”
Meanwhile, the spread of the Zika virus is accelerating across the Americas and Caribbean. Dr. Frieden warned that a large number of cases is expected in Puerto Rico, and that an urgent response is required. Concern is also focused on the large number of cases in Colombia and Venezuela, numbering tens of thousands across the two countries, where a porous border facilitates the spread, the Wall Street Journal reported Feb. 10. There are 27,000 Zika cases in Colombia, the largest after Brazil, but government authorities estimate there may be as many as 100,000, given that many cases are undiagnosed. The collapse of Venezuela’s health-care system is exacerbating the situation in that country, where there is an acute shortage of both medicine and supplies, as well as crumbling medical infrastructure.
Today, Brazilian Health Minister Marcelo Castro announced that his government had signed an agreement with the University of Texas Medical Branch to work jointly on developing a vaccine.
