WEDNESDAY, FEBRUARY 17, 2016

Volume 2, Number 126

EIR Daily Alert Service

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

EDITORIAL

Obama Has Been Weakened by Putin—Americans Must Remove Him or Face World War

Feb. 16 (EIRNS)—The flanking operation by Vladimir Putin in Syria, which has exposed the British/Saudi axis behind the terrorist networks across the region, has so weakened the British puppet Obama that only the fear and cowardice of the American people, and of their political leadership, is allowing him to remain in office for even another day. Putin’s air power and cooperation with the legitimate Syrian government forces is now on the verge of crushing the terrorist insurgency in Syria.

But Putin’s brilliant strategic move into Syria was not simply local to the Mideast. Together with China, Putin has demonstrated the failure of the entire trans-Atlantic system. That trans-Atlantic banking system is now teetering on the brink, with trillions of dollars of fake speculative values being wiped off the books of the leading Western banks over the past few weeks. Every insane effort to prop up the bankrupt banking system has now been exposed as a failure: quantitative easing; zero interest rates for eight years, followed now by negative interest rates; bail-outs and now bail-ins; and deadly austerity conditions. All this has destroyed nearly all actually productive capacity in the U.S. and much of Europe, but failed utterly to save the degenerate banking system. Nothing short of a Glass-Steagall reform, wiping out the illegitimate portion of the debt, can stop the disaster now being played out.

As a demonstration of Putin’s leading role internationally, the UN Security Council today, in a meeting called by Russia, acted upon a call from the Syrian government of Bashar al-Assad to condemn the government of Turkey for criminally shelling areas in northern Syria over the past four days. The Turkish government of President Erdogan, Obama’s closest friend in the region, is desperate to stop the offensive by the Syrian government and Syrian Kurdish forces to close off the border, a move which will end Turkey’s ability to arm the terrorist networks in Syria on behalf of Obama and the British/Saudi axis.

“All members of the Security Council … agreed to ask for Turkey to comply with international law,” announced Venezuelan Ambassador Rafael Ramírez, the Security Council’s current chair, after the meeting. Even the U.S. and the British had to agree!

What Russia and China are doing across Eurasia through the BRICS, the AIIB, and other development initiatives, can and must be brought to the United States as well, as President Xi Jinping has proposed, and as the LaRouche movement has demanded.

In India today, Prime Minister Narendra Modi instructed his ministries to prepare applications to the AIIB, which will begin lending in the coming months, to help fund his plans for nearly 30 million new homes in rural areas; new high-speed rail lines across the nation, and a new irrigation system to control the monsoons and droughts. God knows the U.S. needs the same vision.

Obama will do none of this, nor would any of the incompetents running for President from either party. The election has become a “reality show” farce, diverting the population from the dire crisis and the urgent solutions, which are well known to readers of this report.

Obama, in the meantime, summoned the leaders of the ten ASEAN nations to California, where he lectured them on the dangers of China. He will get nothing from most of them, since they recognize China as a nation of vision, of development, of space exploration, of science, and of hope, while the U.S. has become a feared, evil force for war and depression. Obama must be removed.

STRATEGIC WAR DANGER

At Russia’s Agenda Request: UN Security Council Tells Turkey To ‘Comply with International Law,’ Stop Shelling Syria

Feb. 16 (EIRNS)—Today the UN Security Council (UNSC) took up Turkey’s shelling of Syrian territory, at the request of Russia, and the Council unanimously urged Turkey to stop its attacks. At the closed-door session, Council members received a briefing on Turkey’s violations of Syrian sovereignty. Afterward, UNSC Chairman, Venezuelan Ambassador Rafael Ramírez told reporters, as cited by TASS: “All members of the Security Council … agreed to ask for Turkey to comply with international law.” The Council affirmed its commitment to the Munich agreement.

Ramírez said, “UN Security Council members are concerned with the Turkish attacks on a number of Syrian regions….” He spoke specifically against attacks on the Kurds: “One of the issues expressed by some countries, including Venezuela, is that the Kurdish people have to be included in the discussion. … Something that is important—the Kurds are fighting against the terrorist groups on the ground, and this is an important factor for everybody….”

Russian leadership in defending sovereignty and international law is evident in the UNSC process. Last week, the Syrian government sent letters to the Council, reporting Turkey’s attacks on Kurdish militia forces inside Syria, and charging that Turkey was violating Syria’s sovereignty. Yesterday, Russia made the request for this matter to be put on the Council’s agenda.

The Russian Foreign Ministry released a statement Feb. 15, saying that Russia sees the Turkish action “as direct support for international terrorism, in violation of corresponding UN Security Council resolutions and the commitments that Turkey assumed as a member of the International Syria Support Group in Vienna, New York and Munich.” Therefore, “Russia will support the initiative to put this issue on the agenda of the UN Security Council, which should provide an unambiguous assessment of Turkey’s provocative policy that is threatening peace and security in the Middle East and beyond it.”

Turkish Opposition Leader Slams Government for Sending Arms to Jihadists

Feb. 16 (EIRNS)—The leader of the main Turkish opposition, Republican People’s Party (CHP) head Kemal Kiliçdaroglu, accused the Ankara government of sending weapons to jihadist groups in Syria. “Turkey should not lend armed support to jihadist groups in Syria,” such as ISIS, Kiliçdaroglu said during his Feb. 16 address to the CHP parliamentary group. He said the government “built a training camp in Turkey. Tombs and mosques have been bombed. They said, ‘Blood can pour in Syria but Assad should go,’ ” he asserted. “But their real problem is not al-Assad. You are disgracing Turkey.”

Kiliçdaroglu said the government’s foreign policy was “not national,” but part of the ruling Justice and Development Party’s (AKP) policy “to bring Wahhabism to 21st-century Turkey,” referring to the fundamentalist ideology that Saudi Arabia seeks to make dominant in Islam. He also charged that the al-Qaeda-affiliated Al Nusra Front, which the Turkish government covertly supports, beheaded a Turkish soldier in Turkey’s Yayladagi district recently. “Who will pay the account for this? Not the government? Even mere tribal heads are now challenging Turkey,” he demanded to know.

The CHP on Feb. 15 demanded that the government immediately brief Parliament on the Turkish army’s recent shelling of the military wing of the Kurdish Democratic Union Party (PYD) in northern Syria, CHP officials told private broadcaster CNN Türk. “We are worried about Turkey’s involvement in the Syrian quagmire. We don’t want Turkey to be a direct part of the Syrian civil war,” they said, and affirming that Turkey has the right to self-defense, they also said they are “closely following developments in the region.”

Meanwhile, a former AKP minister has spoken out against the government’s policy. Ertugrul Gunay, former Tourism Minister, told Russian news agency RIA Novosti, “Tourism plays an extremely important role in our country…. But at the moment there are tensions within Turkey; relations with Syria are very bad; because of this our relations with Russia and Iran have also been marred….Today we have problems with all of our neighbors. Foreign tourists will not come to such a country.”

Chinese General Calls for War Preparedness over Korean Crisis

Feb. 16 (EIRNS)—In a very sobering article in the Chinese-language edition of Global Times, Gen. Wang Haiyan, a senior consultant at the China Society for International Strategy, a think tank headed by Sun Jianguo, Deputy Chief of the Joint Staff of the Central Military Commission, warns of the danger of war on the Korean Peninsula. General Wang warns that, given this contingency, China must be prepared and should immediately take measures to that effect, including increasing troops on the border, as well as deploying an increased fleet presence in the region. China should also give consideration to dealing with any possible radioactive fall-out stemming from a nuclear exchange on the peninsula, and for dealing with the possible stream of refugees, including North Korean soldiers fleeing the battlefield.

Laying out the situation, on the one hand, General Wang blames the crisis on the actions of the North Korean government, with its recent nuclear test and with its rocket launch. This has provided the pretext for Japan and the U.S. to increase their military posture on the peninsula, which is also a further step in their attempt to contain China, he says. He calls for some clear talk with the North Korean leadership to warn them that any attempts to push for a military conflict will bring them great harm. He also says that it should be made clear that China is not prepared to make the sacrifices it made during the Korean War, indicating that a war provoked by the North would not be supported by China, which would react to defend its own national interests.

General Wang also expresses concern over the increased Western military deployments in the region, and rumors circulating that an attack on the North may be in the works come the end of the month. He says pressure should be exerted on the “voices of reason” in the Western countries to prevent them from starting a war on the peninsula. He also appeals to the United Nations to give no support toany nation intent on embarking on a war in the peninsula, and to call for a reconstitution of the Six Party Talks. He appeals to Russia, as a permanent member of the UN Security Council, to also play its role in making this happen.

The general reiterates the call on the United States earlier this week by Foreign Affairs Vice Minister Fu Ying that the United States must do more diplomatically to bring the North Korean issue back to the negotiating table, including a willingness to begin talks leading to a permanent peace agreement with North Korea.

South Korean President Park Further Capitulates to Obama’s War Plans

Feb. 16 (EIRNS)—South Korean President Park Geun-hye, who has deserted her previous careful balancing between the U.S. on the one hand, and China and Russia on the other, has further undermined South Korea by openly threatening regime change in North Korea—Obama and fellow his neo-cons’ dream for sparking a war with China. Park is in a self-destruct mode over North Korea’s test of a hybrid hydrogen bomb in January and a successful space launch this month, which Obama falsely calls a ballistic missile test in a new expression of technological apartheid.

In addition to agreeing to THAAD missile stationing in her country—a serious strategic threat to China and Russia—she also shut down the jointly developed Kaesong industrial complex in the North last week, closing the operations of 124 South Korean companies there, which is hitting the South Korean economy at a dangerous moment of collapsing trade and investment.

Speaking today in a nationally televised parliamentary address defending her decision to shut down Kaesong, against strong objections from the opposition party and from within her own party, Park said: “From now on, the government will implement a series of powerful and effective measures to make the North Korean regime realize that nuclear development will not assure survival, but only bring forward the system’s destruction,” according to the Korean Herald. Referring to “regime change” in this way has been a taboo in Seoul, since U.S. regime change intentions are precisely North Korea’s justification for building a nuclear capacity.

Park is clearly worried that her actions are dividing her country; AP quotes her, “Aiming the point of a sword back to us and splitting us up are something that must not take place.”

The danger of the situation was also demonstrated when the floor leader in the National Assembly from Park’s ruling party on Feb. 15 openly called for South Korea to develop nuclear weapons. Rep. Won Yoo-chul said: “Considering North Korea’s nuclear [and missile capabilities], we need to think about our own survival strategy, and countermeasures that include peaceful [sic] nuclear and missile programs for the sake of self-defense.”

Massive U.S. Strategic Force Deployment to South Korea

Feb. 16 (EIRNS)— Seoul news agency Yonhap reports today that the United States will send four F-22 Raptor stealth fighter jets to South Korea, according to defense officials, describing the plane as “a core U.S. strategic weapon.” The Pentagon dispatched a B-25 bomber to Korea shortly after the North’s nuclear test last month. Recently, theUSS North Carolina attack submarine arrived in South Korea for joint training, and the nuclear-powered aircraft carrier USS John C. Stennisis scheduled to join the annual South Korea-U.S. defense drills which begin in March.

The South Korean Defense Ministry, meanwhile, reiterated that it would give priority to “military effectiveness” in choosing a site for the stationing of the U.S. THAAD missile defense battery, said Yonhap. The THAAD X-Band radar system will give the U.S. radar cover over nearly all of China and much of the Russian Far East, along with the THAAD missile capacity intended to take out China’s counter-strike force.

COLLAPSING WESTERN FINANCIAL SYSTEM

Italian Deputies Vote Up Watered-Down Motion To Review EU Bail-In Rule

Feb. 16 (EIRNS)—The Italian Chamber of Deputies has approved several motions filed by members of the government majority, calling for an early review of the EU bank bail-in rules. This was a “soft” action, to evade the tough opposition motions, which called for suspending or cancelling the bail-in rules. Moreover, the Chamber’s political majority also managed to change the schedule for the vote, in order to avoid the planned presence of delegations of bail-in victims in the visitors’ gallery.

Tough criticism of the “soft,” evasive vote, was given by M5S spokesman Dep. Alessio Villarosa, who reminded the Chamber that before the Glass-Steagall regulations were lifted, there was no need for bail-outs or bail-ins.

“Who paid before 1993? Which banks failed? Was there a systemic crisis? Mr. Chairman, lawmakers here do not know legislation, because before 1993 banks did not fail, because they protected deposits, used our deposits and issued credit; they mediated credit; did not purchase the junk with which they created a crisis in 2008, which has lasted until today. Separate investment banks from commercial banks, it is very simple. It is very simple!”

Additionally, the motions which were passed by the Deputies today, call for allowing bank bailouts through deposit guarantee funds (currently considered state aid by the EU, and therefore forbidden) and for a quick approval of an EU-wide, single Deposit Guarantee Fund.

The referenced motion, filed by the Democratic Party, mandates the government, “to promote at European level an in-depth analysis of the issues connected to the implementation of EU Guideline 2014/59 aimed at proposing, within the first half of 2018, by June 1, changes that would be appropriate, on the basis of what is prescribed by Art. 129 of the said Guideline.”

Art. 129 says that a review of the bail-in rules shall be performed within 2018. Thus, the motion does not add anything new formally, except manifesting the intention of the Italian Parliament (government) to start an early review.

TARP Chief Says Big Banks Will Be Bailed Out Again

Feb. 16 (EIRNS)—Neil Kashkari, who ran the TARP Wall Street bailout for U.S. Treasury Secretaries Hank Paulson and Tim Geithner and is now Minneapolis Federal Reserve President, told a Brookings Institution audience Feb. 15 that big Wall Street banks will be bailed out again in a crisis, the Dodd-Frank Act’s claims notwithstanding.

Kashkari’s statements align with those of FDIC Vice-Chairman Thomas Hoenig, who has been warning for the past three years that for a crisis with multiple large Wall Street banks in trouble, no workable alternative to bailing Wall Street out with taxpayer money, has yet been created by Congress.

The Minneapolis Federal Reserve Bank first put the term “too big to fail” into wide circulation with a 2004 book of that name by two of its economists. That book, just six years after Glass-Steagall’s repeal, said that “no-bailout” pledges made by elected officials at that time, were meaningless when dealing with the rapidly growing Wall Street megabanks.

Kashkari said that the Minneapolis Fed is now embarked on a year-long project to produce an alternative to Dodd-Frank, and listed the following options:

“Breaking up large banks into smaller, less connected, less important entities.” (Kashkari did not mention Glass-Steagall or the Congressional bills to restore it.)

“Turning large banks into public utilities by forcing them to hold so much capital that they virtually can’t fail” (with regulation akin to that of a nuclear power plant).

“Taxing leverage throughout the financial system to reduce systemic risks wherever they lie.”

As for the bank panic, Kashkari’s assessment is blunt: “Given the massive externalities on Main Street of large bank failures in terms of lost jobs, lost income, and lost wealth, no rational policymaker would risk restructuring large firms and forcing losses on creditors and counterparties using the new tools in a risky environment, let alone in a crisis environment like we experienced in 2008.”

Congress take note: Mr. TARP, like Mr. Hoenig, says you will soon see a new TARP, bigger and worse—unless you break the Wall Street banks up or nationalize them.

Glass-Steagall, to break them up and shut down Wall Street speculative operations, is the only workable action, despite Wall Street’s ferocious hostility to it.

Anglo American Plc Mega-Mining Firm Falls to Junk Status, Plans To Shed Coal, Iron Ore Operations

Feb. 16 (EIRNS)—This week, the mega-mining firm, Anglo American Plc, reported losses in 2015 of $5.6 billion; was downgraded to junk status (Ba3) by Moody’s rating agency, and has announced an intended down-scaling of operations out of coal, iron ore, and other industrial commodities. Marc Cutifani, CEO of the London-headquartered firm, owner of DeBeers, said in an interview today on CNBC, that the firm would endeavor to restructure “leaner and meaner,” by sticking to “consumer-based commodities,” meaning diamonds, platinum and copper. The company plans to dispose of its entire coal operations in South Africa, Colombia, and Australia. It is also evaluating the merits of discontinuing its 70% stake in Kumba Iron Ore, the biggest iron miner in Africa.

Already in December 2015, Cutifani said that mass job cuts were planned, in the range of 85,000 people. Anglo American thus ranks as the latest “headline event” in the down-spiral of physical economic activity, while the Wall Street/City of London system is allowed to continue.

On oil, a rearguard pact to prop up oil prices, was agreed to today in Qatar, by Saudi Arabia, Russia, Venezuela and Qatar, to not increase crude-oil production above the level in January, on condition that other major oil producers concur.

U.S. POLITICAL AND ECONOMIC

Obama’s Swan Song for ASEAN—Worse than a Lame Duck

Feb. 16 (EIRNS)—Obama brought leaders of the ten members of the Association of Southeast Asian Nations (ASEAN) to Sunnylands, California, for a two-day summit starting Feb. 15. The build-up for the event hyped the urgency that ASEAN speak with a common voice against China’s “bullying” and “aggression” in the South China Sea. As China’s Global Times editorial today says: “Washington has reiterated that the summit is not targeted at China. It is perhaps not because it does not want to, but because it dares not, for it knows if it does so, many Southeast Asian leaders would not attend at all.”

Nonetheless, Obama’s National Security Advisor Susan Rice told reporters Monday: “We will be continuing to work with our ASEAN partners on a potential statement that we might issue together.”

Obama is also pushing for more members of the anti-China, self-destructive TPP, and some countries are considering it. On this, theGlobal Times editorial says: “The TPP is considered to be partly aimed at China. But if more ASEAN countries join the TPP, it will not help the TPP isolate China, but it will only complicate the issue. China has long been ASEAN’s largest trading partner.”

China trade with ASEAN was $480 billion in 2014—more than twice ASEAN trade with the U.S. The 21st Century Maritime Silk Road and the AIIB are offering both additional development and stability to the region.

Obama’s offer to ASEAN is pathetic. He will announce a plan to set up “innovation” centers within the U.S. Embassies in Thailand, Singapore and Indonesia—part of his ASEAN-U.S. Connect program. Ben Rhodes, Obama’s Deputy National Security Advisor, told theStraits Times: “That’s what the U.S. has to offer. I went to Laos in October. We are never going to invest as much in infrastructure in Laos as China or Japan, but we can bring a quality of investment and capacity building.”

Obama did manage to get in a round of golf at Sunnylands Monday morning “with three high school friends.” It was not reported whether or not they also got high, just like the good old days in Hawaii.

TVA Puts Its Plans To Build Two New Alabama Nuclear Plants on Ice

Feb. 16 (EIRNS)—Citing the lack of growth in demand for electricity consumption forecast for the foreseeable future, the Tennessee Valley’s Board of Directors decided on Feb. 13 not to proceed with development of two nuclear reactors at the TVA’s Bellefonte, Alabama site. TVA chairman Bill Johnson said that there “is no plan to restart construction” on the two reactors, which were partially complete when the anti-nuclear sabotage of the 1980s took hold. However, he said, the utility is not giving up on Bellefonte. The TVA has kept the half-dozen reactors that were never completed in the 1980s “in mothballs,” and this year, will restart Watts Bar Unit 2, the only U.S. nuclear plant to come online in the 21st century. Watts Bar Unit 1 was the last nuclear plant to come online in the U.S. in 1996.

For Watts Bar Unit 2, TVA basically rebuilt the nearly complete reactor that was there. For Bellefonte Units I and II, (88% and 55% completed, respectively, when halted), TVA considered ordering new, more advanced Westinghouse reactors, and starting from scratch. Four Westinghouse AP1000 units are being built in the South, and four are under construction in China.

NEW WORLD ECONOMIC ORDER

India Looks for Funds from China-Led AIIB, for Large-Scale Irrigation, Millions More Homes, and Rail Corridors

Feb. 16 (EIRNS)—India’s Prime Minister Narendra Modi is calling on his development ministries to apply for funds from the newly opened Asian Infrastructure Investment Bank. Particularly targetted are:

  • The Prime Minister’s Agricultural Irrigation Scheme, or PMKSY, aimed at extending the coverage of irrigation, which has been approved for implementation across the country with an outlay of $7.3 billion over the next five years.
  • The construction of 29.5 million houses in rural areas over a period of seven years with the cost-sharing pattern between the central and state government being 60:40. The estimated financing requirement at the Center is $26.7 billion, with a funding gap of about $16 billion.
  • The proposed East-West Corridor and East Coast Corridor railways.

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