FRIDAY, JULY 1, 2016

Volume 2, Number 223

EIR Daily Alert Service

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

EDITORIAL

LaRouche: The Trans-Atlantic System Is Doomed

June 30 (EIRNS)—The current financial system is breaking down, and the system, as a system, cannot survive. The major financial institutions, including the central banks, are hopelessly, irreversibly bankrupt. While there is a terrible possibility of war, driven by the desperation of those circles whose power derives from the current financial system, much of the threats coming from the mouths of Barack Obama and some NATO officials are really all bluff. The threats they are issuing against Russia and China do not work.

Nevertheless, that meddling, both on the financial and war fronts, can lead to a serious collapse that mankind is not ready to deal with.

This week, both the International Monetary Fund and the Bank for International Settlements issued reports spelling out the systemic disintegration of the entire trans-Atlantic financial system. Lending by banks, throughout the advanced sector, has collapsed altogether. There is no capital flow into the real, productive economy, according to the data produced by the BIS. The IMF has issued a dire warning that Deutsche Bank is about to explode, and this alone could trigger a systemic crisis.

As NATO officials finalize plans for the July 8-9 heads of state and government summit in Warsaw, Poland, the frenzy against Russia is building up even further. On Wednesday, President Obama was in Ottawa for his final summit with his Canadian and Mexican counterparts. He used the occasion to launch into a tirade against Russia, practically begging Canada to dispatch a combat battalion to the Baltic states.

Counterpose this madness with the extraordinary Schiller Institute conference that took place last weekend in Berlin, where leaders from four continents came together, to take up the question of a new paradigm of thinking to get the world out of the present existential disaster.

As both Lyndon and Helga LaRouche emphasized during the weekend proceedings in Berlin, what is urgently needed is a revolutionary shift in thinking, focused on building a future of cooperation among sovereign nations and integrated regions of the world. China’s One Belt, One Road program is paradigmatic of the kind of new thinking that must be adopted by leading citizens of the world.

The current system is dead and cannot survive for very much longer.

THE NEW GLOBAL ECONOMIC ORDER

Guangming Daily Speaks to Helga Zepp-LaRouche on Role of Communist Party of China (CPC)

June 25 (EIRNS)— Guangming (Enlightenment) Daily published an article on June 26th based on an interview they did with Helga Zepp-LaRouche on the occasion of the 95th anniversary of the founding of the Chinese Communist Party, an event which has been the focus of a great deal of media attention in China during the last few days. Mrs. Zepp-LaRouche, identified as the founder of the Schiller Institute and one who always keeps her eye on China, having visited it many times, talks about her earlier history in visiting China in 1971 during the height of the Cultural Revolution and observed the “enormous transformation” that has occurred since, under the leadership of the CPC, having raised 600 million people out of poverty. “Certain circles in the West have criticized that China has a one-party system,” Zepp-LaRouche said. “But in my view, the reason that China has been so extraordinarily successful is due to exactly that fact.”

“Western countries or other Asian countries which have a parliamentary multi-party system have enormous problems, because narrow ‘party interests’ often block the ability to realize the common interest, making it easy for financial interests or lobby groups to manipulate the situation,” she said. Mrs. Zepp-LaRouche underlined in particular the importance of the One Belt, One Road initiative for the region, and for the world, regarding it as the type of relationship between China and Europe which Gottfried Leibniz tried to establish during the 17th century. In this manner China, in realizing its “China Dream” of the revival of the Chinese nation, also transforms it into a “World Dream,” she said.

Zepp-LaRouche also praised the policy of the Chinese Communist Party under President Xi Jinping in making science the basis of the “people’s welfare” and pushing the boundaries of science toward new breakthroughs, in the important areas of “the structure of matter, the evolution of the universe, the origin of life, and the nature of consciousness,” as President Xi himself had underlined. With breakthroughs in these fields, she stressed, China will define “a new paradigm in thinking and a new era in human history.”

Guangming Daily has traditionally been the forum for discussion and debate among the Chinese intellectuals.

China Upgrades Domestic Rail Development Plans

June 30 (EIRNS)—China’s State Council on June 29 released a comprehensive plan for further expanding the country’s rail network. Premier Li Keqiang, who introduced the program, said, “At present, it is still a pressing task for us to expand China’s railway network. It is the lifeline of the economy. When compared to developed countries similar in size, the length of China’s operating railways is still not long enough, and railway construction is important for stabilizing economic growth and structural reform especially in central and western China,” he said, reported Xinhua today.

The 2008 National Development and Reform Commission’s national railway plan called for more than 120,000 km of rail lines by the year 2020. The new plan increases that goal to 150,000 km, of which about 30,000 km are to be high-speed railway. Key measures include expanding the high-speed rail network to eight rail lines north to south, and eight lines east to west. Inter-city rails will also be gradually enhanced.

As of 2015, China had an operating rail length of 121,000 km, of which 19,000 km were high-speed rail.

The new plan also envisages boosting rail construction in central and western areas to achieve a more balanced development among regions, Xinhua adds.

Rodrigo Duterte Inaugurated as Philippine President, Declares Adherence to Lincoln and FDR

June 30 (EIRNS)—Rodrigo Duterte was inaugurated as President of the Philippines today, announcing in his inaugural speech that his overall policy would be guided by “two quotations from revered figures that shall serve as the foundation upon which this administration shall be built.” The two are Abraham Lincoln and Franklin D. Roosevelt.

The quotes, which he read are:

“The test of government is not whether we add more to the abundance of those who have much; it is whether we provide for those who have little,”—Franklin Delano Roosevelt

“You cannot strengthen the weak by weakening the strong; You cannot help the poor by discouraging the rich; You cannot help the wage earner by pulling down the wage payer; You cannot further the brotherhood by inciting class hatred among men.”—Abraham Lincoln

Duterte powerfully restated his absolute commitment to wipe out corruption, drugs, and criminality, as he famously did in Davao City, where he was the mayor for 22 years. As to the global human rights mafia campaign condemning him as a lawless killer, Duterte said:

“I know that there are those who do not approve of my methods of fighting criminality, the sale and use of illegal drugs, and corruption. They say that my methods are unorthodox and verge on the illegal. In response let me say this: I have seen how corruption bled the government of funds, which were allocated for the use in uplifting the poor from the mire that they are in. I have seen how illegal drugs destroyed individuals and ruined family relationships. I have seen how criminality, by means all foul, snatched from the innocent and the unsuspecting, the years and years of accumulated savings. Years of toil and then, suddenly, they are back to where they started…. The fight will be relentless and it will be sustained.”

He added that, “As a lawyer and a former prosecutor, I know the limits of the power and authority of the President. I know what is legal and what is not. My adherence to due process and the rule of law is uncompromising.”

He held his first Cabinet meeting following the inauguration. It is of note that both Duterte and his Defense Minister Delfin Lorenzana have stated explicitly that there will be no war with China or anyone other than the terrorists. Lorenzana told the international press this week that “the military would invest in more speed boats and helicopters to help flush out [the al Qaeda-linked Abu Sayyaf] rather than divert funds into maritime security regarding territorial claims with China in the South China Sea,” while Duterte called for China’s assistance in constructing railways, telling Filipino businessmen, “Can you match the offer? Because if you cannot match the offer, I will accept the goodwill of China.”

COLLAPSING WESTERN FINANCIAL SYSTEM

BIS: Bank Credit at Zero Growth Everywhere but Asia

June 30 (EIRNS)—A Bank for International Settlements quarterly report issued today shows that banks have ceased issuing new credit to business everywhere in the world except Asia, feeding the deflationary collapse underway throughout the trans-Atlantic countries and Japan.

“Bank credit” (loans plus bond purchases) to non-financial companies is contracting (as of the end of 2015) in the United States, the euro area, Latin America, “emerging [Eastern] Europe,” and worldwide, according to the BIS report and its charts. As to “credit to banks”—that is, interbank lending—it is rapidly shrinking in all of those regions, as well as worldwide.

The exception, shown in the BIS charts, is “emerging Asia,” where bank credit—dominated by China’s national “policy banks,” is still growing at approximately 5% annually.

The report is the BIS Quarterly Review for June 2016. Its other much-watched information concerns the global nominal value of derivatives contracts. This, according to BIS, has declined dramatically since its last peak in 2013, and over-the-counter derivatives volume has fallen to “only” $500 trillion, 30% less than three years earlier. This does cohere with the shrinkage of bank credit economic activity. The exception to this, as already mentioned, is Asia, and particularly China, which is not a banking system much given to derivatives exposure.

STRATEGIC WAR DANGER

One of Istanbul Terrorists Was from Chechnya

June 30 (EIRNS)—Turkish police have identified the suicide bombers from June 28 as members of the Islamic State from Chechnya and Dagestan in Russia, as well as Kyrgyzstan and Uzbekistan. It is well known that thousands of fighters from Chechnya and other Central Asian regions are now in Syria fighting against the Syrian government. These are the same networks responsible for terror attacks in Russia, Central Asia and China.

According to Turkish police, one of the suicide attackers in the bombing at Istanbul Atatürk International Airport was a Russian national from Chechnya named Osman Vadinov. He was one of eight terrorists involved in the attack and one of three who were killed.

Another Chechen terrorist, Ahmet Chatayev, is thought to have been the planner of the attack. Chatayev had been working for Dokko Umarov, founder of the Chechen Islamic Emirates, a terrorist jihadi group fighting Russian authorities. He joined IS/Daesh in 2013 after the death of Umarov. The three terrorists entered Turkey on May 25 and rented an apartment in Istanbul, where they allegedly planned the attack. They reached the airport by taxi.

According to Hurriyet Daily News, Turkish intelligence had put out a warning 20 days ago to all security authorities of possible terror attacks. The Istanbul Airport was on their list.

In the past year, more than 250 people have been killed in bombings by the Daesh and the Kurdistan Worker’s Party (PKK).

Turkish and Russian Foreign Ministers To Meet on Friday in Sochi

June 30 (EIRNS)—Both Turkish and Russian diplomatic sources confirmed that Turkish Foreign Minister Mevlüt Çavusoglu will meet with Russian Foreign Minister Sergey Lavrov on the sidelines of a meeting of the Black Sea Economic Cooperation Council of Ministers of Foreign Affairs on July 1 in Sochi, Russia. Bilateral relations and the Syrian conflict are at the top of the agenda.

It seems clear that Turkey will move ahead and comply with all of Russia’s demands for restoring relations after the Nov. 24, 2015 shooting down of the Russian warplane over Syria; these include an apology, which was made by the letter from Turkish President Tayyip Recep Erdogan to Russian President Vladimir Putin; the second demand was for compensation for the murder of the Russian pilot of the Russian warplane, Lt. Col. Oleg Peshkov, who had ejected from the jet and was killed from the ground inside Syria by a Turkish mercenary fighting with the Syrian terrorist opposition. According to the Turkish media, this is expected to be paid. The third demand was for the arrest and trial of the Turkish mercenary terrorist who murdered Colonel Peshkov.

Shortly after killing the pilot, Turkish terrorist mercenary Alparslan Celik, while still in Syria, claimed in a broadcast that he had killed the pilot. He repeated this boast several weeks later from Istanbul, and he implied he is able to freely cross into Syria, fight government forces there, and return to Turkey. Several weeks ago Celik was arrested in the Turkish city of Izmir for weapons possession and other charges. At the time, the prosecutors claimed there was not enough evidence to charge him for the murder of Colonel Peshkov, and Celik all of a sudden denied involvement in the crime.

Hurriyet Daily News reports that Celik will be held in jail for other crimes, until well into 2017. More importantly the prosecutor is now considering reopening the murder case because “new evidence” has surfaced.

U.S. POLITICAL AND ECONOMIC

Russia Expert Stephen Cohen: The War Party Is Doubling Down on NATO after the Brexit Vote

June 30 (EIRNS)—The war party’s response to the U.K. vote the leave the EU, or “Brexit,” has been to double down on NATO, Prof. Stephen Cohen said during his weekly appearance on the John Batchelor radio show on June 28. “The last thing Russia wants with this build-up on the borders is even more doubling down on NATO, which is a military threat to Russia,” he said. Much of the discussion focused on the impact of Brexit on the strategic situation in Europe, particularly debunking the idea that Russia was somehow responsible for the outcome of the Brexit vote, as well discussing the Russian-Turkish rapprochement.

Cohen was consistent in his war warning: “As for NATO, the last thing we want is for [the] EU and Washington and London to decide that the best response to Brexit is to double down on NATO against Russia. Because one more double down and it’s war,” he said. “We are building up a NATO military presence in the Baltics. They say the reason they have to do this is that Putin is threatening the three Baltic states and Poland,” he went on.

Cohen noted that Czech Army Gen. Petr Pavel, the chairman of the NATO Military Committee, admitted in an interview with Reuters on June 20 that, in fact, there is no such aggression on the part of Russia.

“He is chairman of the NATO Military Committee, so he’s got to be the number two guy in NATO. He’s just said there’s no Russian aggression in the Baltics. So what do we do? Here is NATO flirting with nuclear war with Russia because of a Russian threat that doesn’t exist, according to NATO itself. The misinformation that’s being poured upon us … it’s false information, but it’s existentially dangerous information because of where it’s taking us.”

SCIENCE AND INFRASTRUCTURE

Information Produced by Space Activities Must Become a ‘Public Good,’ Says Argentine Physicist

June 30 (EIRNS)—Dr. Conrado Varotto, executive director of Argentina’s National Space Activities Commission (Conae), spoke enthusiastically to the daily Perfil about the ambitious National Space Program—2016-2017 which Conae has just released, and emphasized that Ibero-America needs a regional space station to carry out many exciting projects that can only be done through regional cooperation.

One key focus of the new space program, he explained, is moving forward with the production of satellites, as part of the Saocom Mission, as well as continued tests on prototypes of the Tronador II rocket which, when ready, will be able to launch Argentine satellites into space.

Perfil’s June 26 report included Varotto’s explanation that “The goal of Conae’s space activities is to have an impact on the country’s socio-economic activities, using science and technology at the highest level, but oriented toward specific needs. Conae’s purpose isn’t to produce knowledge and hand it to someone who’ll pay for it, but rather develop the concept of this as a public good, as a service.”

Conae is building two satellites, Saocom 1A and Saocom 1B, to be launched in 2017 and 2018 respectively, and which will be integrated into SIASGE (the Italo-Argentine Satellite System for Management of Emergencies) with applications that will benefit agriculture, geology and climate, Perfil reported. According to the June 22 Infoespacial newsletter, Roberto Battiston, head of the Italian Space Agency (ASI) and Varotto signed a letter of intent May 18 aimed at strengthening the SIASGE system.

Varotto also discussed Conae’s “2MP” program—“2 million kids”—aimed at youth between 8 and 16 years of age, “helping them to learn how to use the information we generate from space in their daily lives.” He reported that children often ask him why Argentina isn’t going to Mars, and he replies that although Argentina isn’t prepared yet to go to the Moon, “we are thinking of much broader projects beyond Earth.” For that, he said, Latin America needs its own regional space agency, like Europe’s, and Argentina has been promoting this very aggressively. “Agreements have already been signed with several countries,” he said.

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