EDITORIAL

Either Mankind Creates a New Paradigm, or Mankind Is Doomed

July 6 (EIRNS)—On the eve of the foreboding NATO summit in Poland on July 8-9, which could well prove to be the tripwire for global thermonuclear war, the entire trans-Atlantic financial system is also coming apart. The post-Brexit pound sterling has plunged to its lowest level in 30 years; a half dozen London real estate hedge funds allegedly “worth” $20 billion have terminated trading to stop panic withdrawals; and banks across Europe—not just in Italy—are facing imminent bankruptcy and are desperately demanding unlimited additional liquidity just to stay afloat.

The Bank of England, along with all the trans-Atlantic central banks, have hit the panic button and are announcing new ways they will pump an unending stream of worthless funds into the system, while loosening the terms on which banks can take on ever-larger trillions of derivatives exposure—the exact opposite of the Glass-Steagall solution that is required.

Lyndon LaRouche today slammed this insanity as a total “policy disaster, which will not lead to anything except the total bankruptcy of the entire British system.”

Politically, the entire European Union and its institutions are crumbling. The Establishment is totally clueless, and out of touch with the reality that their own policies have unleashed, of looming thermonuclear war, rampant Satanic terrorism, and economic meltdown—and growing hatred and rage of the victimized population towards that Establishment. The same process characterizes the United States under Obama.

It should be apparent that the continuation of these policies for any length of time will lead to a total catastrophe for mankind. We either bring about the common aims of mankind and create a New Paradigm, or mankind is doomed, Helga Zepp-LaRouche stressed today. That was the central message of the June 25-26 Schiller Institute conference in Berlin.

If people think that Man is essentially a beast who looks after his own hide first and foremost; and if they act—or fail to act—on that basis, then we are looking at the end of civilization. A new way of thinking, a new image of creative man, a New Paradigm, is the only option.

Zepp-LaRouche posed the issue today at a Washington, D.C. press conference held by the Chongyang Institute for Financial Studies and the National Institute of South China Sea Studies:

There are many military experts internationally who are warning that the situation today is more dangerous than at the height of the Cold War. Furthermore, we are about to experience another financial crash worse than 2008. I think the terrorist activities, especially of the last two weeks, in Bangladesh, Turkey, Indonesia, and European countries, clearly show that terrorism is out of control. And actually, with the Brexit, the European Union is in a process of disintegration, very dramatically.

“So my question is: Can mankind not rise to a higher level of cooperation and go for a new paradigm where geopolitics is overcome and replaced by the commons aims of mankind? The world is in dire need for the United States and China to work together, because without the two countries joining hands, the world is in trouble. So the question is: Can the world move to a new paradigm of peaceful cooperation for the future tasks of all of humanity?”

COLLAPSING WESTERN FINANCIAL SYSTEM

Bank of England’s Carney Hits Panic Button, Announces Emergency Measures To Flood the System with Liquidity

July 6 (EIRNS)—Mark Carney, the governor of the Bank of England, who doubles as the head of the Basel-based global policymaking Financial Stability Board, on July 5 announced a series of urgent measures to deal with the “challenging outlook” and the “risks that have crystallized” in the wake of the Brexit vote, which include “reduced and fragile liquidity in core financial markets.” The measures amount to a damn-the-torpedoes attempt to flood the system with hyperinflationary liquidity on all fronts, to forestall what is a blowout already underway.

At the same time that Carney was releasing the Bank of England’s twice-yearly Financial Policy Committee (FPC) report, which included the new measures, Chancellor of the Exchequer George Osborne was meeting with the City of London’s top bankers to discuss the crisis and measures being taken to try to prevent the inevitable meltdown of the system. As Business Insider reported yesterday: “The talks show just how seriously Osborne is taking the threat of the Brexit vote to the U.K.’s national economic health. The last time such a congregation of banking chiefs was summoned to Number 11 [Downing Street, the Chancellor’s official residence] was during the 2008 financial crisis.”

Lyndon LaRouche commented today that this announced British policy is a “policy disaster, which will not lead to anything except the total bankruptcy of the entire British system.” He said there is zero possibility of recovery under the current system; they may try to “hide the disaster” for a short while, which they have done in the past, “but there is no solution for the bankrupt British system,” which has to be entirely replaced.

Carney’s announced measures include:

1) Dropping the extra capital reserve ratio that British banks must hold from 0.5% to 0%, which frees up £5.7 billion ($7.4 billion) in reserves, which presumably increases the banks’ lending capacity by $195 billion. The Bank of England’s stated policy, until yesterday, had been to increase the ratio from 0.5% to 1.0% in the near future. Carney announced that 0% would stay in place for at least a year.

2) Suggesting that the BOE will be further reducing interest rates and/or increasing quantitative easing at their July 14 meeting.

3) Calling for a “re-think” of the new Basel Committee regulations, especially regarding derivatives, to make it easier and more profitable for banks to issue derivatives. The Bank of England “encourages the Basel Committee to review carefully any possible unintended effects of forthcoming leverage ratio standards on the ability of the banking system to cushion shocks and to draw on central bank liquidity facilities as necessary.”

Or, as the FPC report states: “The FPC stands ready to take actions that will ensure that capital and liquidity buffers can be drawn on, as needed, to support the supply of credit and in support of market functioning…. As the outlook evolves, the FPC stands ready to take any further actions deemed appropriate to support financial stability.” Carney elaborated in comments to the press: “It’s important to ensure that there is no question about the availability of credit.”

Post-Brexit Crash Is On

July 6 (EIRNS)—The long-building European banking crash, provided a trigger by the “Brexit” vote of the British people against the City of London, Frankfurt, and Brussels, is gathering steam.

In Great Britain today, the pound sterling fell below the $1.30 barrier, to its lowest level since 1985, when it hit $1.2565. This alone has been enough to cause a commercial real estate panic. In three days, six U.K. property funds whose assets were “worth” a total of £16 billion have suspended trading to stop runs by investors. As the commercial property fund bubble bursts, it will have a much wider effect, since €35 billion worth of commercial property assets are used to back loans to small and medium enterprises (SMEs) and are used by banks as part of their capital base. Most exposed to the “property funds” are RBS (£26 billion of loans to these funds) and Lloyds, reports the Guardian.

On Tuesday the Bank of England published its semi-annual assessment of risks to the financial system. It said that some of the risks it had warned about in the run-up to the referendum had begun to crystallize, including the downturn in the commercial real estate market. Yields on U.S. Treasuries hit record lows out to 30 years. Investors had to pay Japan 0.27% to lend it money for 10 years; or pay Germany 0.19% to do so.

Bank stocks throughout Europe are heading below 2008 crash levels. Switzerland’s Credit Suisse Group AG lost nearly 2%, and now its shares are trading below 10 Swiss francs for the first time ever. Stock in German lender Deutsche Bank AG has lost close to 6%, and Commerzbank has lost 5%. As for British banks’ shares, Lloyds Banking Group lost 7.15%, Royal Bank of Scotland Group 7.51%, and Barclays 3.28%.

Much is being made of the potential doomsday of Italian banks. But today a very big, non-Italian bank called for bail-in rules to be “reassessed” and full-throttle bank bailouts restored. Lorenzo Bini Smaghi, Société Générale chairman, told Bloomberg TV, “Italy’s banking crisis could spread rapidly to the rest of Europe. The whole banking market is under pressure. We adopted rules on public money; these rules must be reassessed in a market that has a potential crisis, to decide whether some suspension needs to be applied.”

And as Italy’s securities regulator, Consob, applied a ban on short sales of Monte dei Paschi di Siena Bank stock, Italian Prime Minister Matteo Renzi “broke the rules” by denouncing Deutsche Bank (not by name, but unmistakably) as more dangerous than all the Italian banks combined: “If this non-performing loan problem [in Italy] is worth one,” Renzi said, “the question of derivatives at other banks, at big banks, is worth 100. This is the ratio: 1 to 100.”

Banca Monte dei Paschi lost 25.47% at the start of the day but went up as much 17% (to all of €0.31, or $0.34) after the short-sale ban. Financial site TheStreet warned that when Deutsche Bank crashes, it will take the entire system with it. Deutsche Bank reported a nominal derivatives exposure of $72.8 trillion as of April 2016, 13% of total outstanding global derivatives ($550 trillion at the end of 2015). This with a market capitalization now below $20 billion.

Germany, with $4 trillion GDP, or the EU, with $18 trillion, could not control a Deutsche Bank crash, bailout or no.

STRATEGIC WAR DANGER

Chilcot: Blair’s Iraq War Was Unnecessary

July 6 (EIRNS)—Today’s release of the report of the Iraqi Inquiry, chaired by Sir John Chilcot, into the British role in the 2003 invasion and subsequent occupation of Iraq, is, in the words of the Guardian, a “crushing verdict” against Tony Blair’s decision to go to war alongside the G.W. Bush Administration.

“This is really bad for Blair, and it’s going to get worse,” a pleased Lyndon LaRouche said today, upon being briefed on the report’s release.

The most damning conclusion from the report, as recounted in the 12-page statement that Chilcot delivered this morning on its release, is that the war was completely unnecessary. “Military action in Iraq might have been necessary at some point,” Chilcot said, but in March of 2003 there was no imminent threat from Saddam Hussein; the strategy of containment could have been adapted and continued for some time; and the majority of the Security Council supported continuing UN inspections and monitoring. In short, the Commission concluded that Blair lied about the threat of weapons of mass destruction coming out of Saddam Hussein’s Iraq, lies which were used to launch a completely illegal war.

Documentation in the report also shows the degree to which Blair actually dragged the G.W. Bush Administration into the war, even as elements of that administration were already predisposed to going to war in Iraq. Within weeks of the 9/11 attacks, Blair was already making suggestions to Bush as to strategies for so-called regime-change in Baghdad. The strategy for trying to gain UN Security Council backing for the war was also Blair’s project. Even though Blair was publicly committed to seeking a UN resolution authorizing the war, he was privately assuring Bush that, resolution or no, British troops would join the U.S.-led invasion.

Chilcot also hammered Blair on the aftermath of the invasion. Blair had claimed in testimony to the Commission that the difficulties encountered in Iraq after the invasion could not have been known in advance.

“We do not agree that hindsight is required,” Chilcot said. “The risks of internal strife in Iraq, active Iranian pursuit of its interests, regional instability, and Al Qaeda activity in Iraq, were each explicitly identified before the invasion.”

Blair immediately responded with a statement in self- defense, promising more to follow. “The report should lay to rest allegations of bad faith, lies or deceit,” he lied, adding that whether people agree or disagree with the decision, “I took it in good faith and in what I believed to be the best interests of the country.” He said that in the follow-up statement he would issue, “I will take full responsibility for any mistakes without exception or excuse,” and “at the same time say why, nonetheless, I believe that it was better to remove Saddam Hussein, and why I do not believe this is the cause of the terrorism we see today, whether in the Middle East or elsewhere in the world.”

Blair issued a second statement later in the day, rejecting, by theGuardian’s count, at least nine of the key points that Chilcot had made, including Chilcot’s conclusion that the war was not a last resort.

“Given the impasse at the UN and the insistence of the U.S.A.—for reasons I completely understood and with hundreds of thousands of troops in theatre which could not be kept in situ indefinitely—it was the last moment of decision for us….” In other words, the war was necessary because the troops were there and ready to go.

U.K. Parliament Committee Urges NATO-Russia Dialogue

July 6 (EIRNS)—The Defense Committee of the British Parliament has just issued a 58-page report on the eve of the July 8-9 NATO summit, urging that “a meaningful dialogue” occur between NATO and Russia, lest “we run the risk of a descent into conflict that may be preventable through better communication.” Like many other political forces and groups across Europe, of variegated ideological outlooks, a section of the British Parliament has clearly gotten very nervous about the insane drive to war with Russia coming from the Obama administration and the British Monarchy.

“Dialogue between NATO and Russia is essential to reduce the risk of military escalation and misunderstandings between them both,” the report says. “We should expect any NATO military consolidation to be mirrored on the Russian side of the border. Further militarization of the border in this way could increase the risk of misunderstandings, miscalculation or accidents.” The report also calls for military-to-military dialogue with Moscow “both before and during the Warsaw summit … [to] reduce the potential for an unintended escalation of hostilities.”

Despite its other features (denouncing Russia’s “annexation” of Crimea, calling for sanctions to be maintained, etc.) Kremlin spokesman Dmitry Peskov welcomed the British report: “I’d suggest seeing the report in a positive light, because there’s an idea to establish dialogue, despite some misperceptions.”

U.S. Intelligence Veterans Urge Germany’s Merkel To Pull NATO Back from Brink

July 6 (EIRNS)—On the eve of this weekend’s NATO summit in Warsaw, the organization Veteran Intelligence Professionals for Sanity (VIPS) has issued an open letter to German Chancellor Angela Merkel, urging that, “before things get still worse, seasoned NATO leaders need to demonstrate a clear preference for statesmanship and give-and-take diplomacy over saber-rattling. Otherwise, some kind of military clash with Russia is likely, with the ever-present danger of escalation to a nuclear exchange.”

First published in Consortium News and signed by outspoken intelligence veterans such as Ray McGovern, Larry Johnson, former Sen. Mike Gravel and Scott Ritter, the open letter to Merkel is refreshingly blunt:

“The likelihood of a military clash in the air or at sea—accidental or intentional—has grown sharply…. Accordingly we encourage you, as we did before the last NATO summit, to urge your NATO colleagues to bring a degree of judicious skepticism to the table at Warsaw—especially with regard to the perceived threat from Russia.

“Many of us have spent decades studying Moscow’s foreign policy. We shake our heads in disbelief when we see Western leaders seemingly oblivious to what it means to the Russians to witness exercises on a scale not seen since Hitler’s armies launched ‘Unternehmen Barbarossa’ 75 years ago, leaving 25 million Soviet citizens dead. In our view, it is irresponsibly foolish to believe that Russian President Vladimir Putin will not take countermeasures—at a time and place of his own choosing.”

The VIPS letter weighs in clearly on the dispute underway inside Germany, as well: “We believe Foreign Minister Frank-Walter Steinmeier was correct to point out that military posturing on Russia’s borders will bring less regional security. We applaud his admonition that, ‘We are well advised not to create pretexts to renew an old confrontation.’ ”

After reviewing in some detail the Nazi coup d’état in Ukraine as the proximate cause that triggered the escalation between the U.S./NATO and Russia, the VIPS letter suggests areas of joint work with the Russians: “It would be highly constructive if NATO would take responsibility for assessing the fundamental factors behind the hideous outbreak of the terrorist acts that took so many lives over recent days in Istanbul, Dhaka, Bangladesh, and Baghdad. In this context, as well as in central Europe, violence begets violence.”

U.S. POLITICAL AND ECONOMIC

Some in Congress Ready To Release 28 Pages; ‘It May Come to That’

July 6 (EIRNS)—At a press conference held in front of the U.S. House of Representatives today, U.S. Reps. Walter Jones (R-NC), Stephen Lynch (D-MA) and Thomas Massie (R-KY), together with representatives of the 9/11 Families Mrs. Terry Strada and others, demanded that Obama and the his intelligence establishment release the still classified “28 pages” final chapter of the Congressional 9/11 report, and do it before the 15th anniversary of the attack that killed 3,000 Americans.

The Congressmen declared that the American people are entitled to know the truth; that the families are entitled to know, and that the citizens are entitled to know. Rep. Walter Jones told the press, “One country is responsible for 9/11.” And that country is being protected by Obama’s intelligence establishment, just as it was protected by George W. Bush’s.

The Congressmen have introduced legislation calling on Obama to release the pages; new legislation (H.Res.779) calls on the Intelligence Committee to publish it in the Congressional Record.

But for the first time before the press today, Representatives Jones, Lynch, and Massie discussed the approach of Senator Mike Gravel, in reading the classified Pentagon Papers on the Vietnam War into theCongressional Record in 1971. Lynch said that the there was an attempt to prosecute Senator Gravel for reading classified documents, but the U.S. Supreme Court upheld his right to do so under the “speech and debate” clause of the U.S. Constitution—by a 9-0 vote.

Representative Lynch told the press, “We believe that we are protected. And it may come to that; it may come to a point where Walter Jones and myself and Mr. Massie go to the well of the House and read the text of the 28 pages, if we can’t get it released to us.”

THE NEW GLOBAL ECONOMIC ORDER

India’s First River Diversion Completed in One Year

July 6 (EIRNS)—Chief Minister N. Chandrababu Naidu of India’s Andhra Pradesh state today released water into the Polavaram Right Main Canal (PRMC) through the Pattiseema Lift Irrigation Scheme (PLIS), interlinking the Godavari and Krishna Rivers in West Godavari district, Press Trust of India (PTI) reported today. The project was completed in one year’s time.

The highlights of the project are:

  • Surplus floodwater of more than 300 billion cubic feet (bmc) which had been discharged into the sea will now be used to green the lands;
  • Through the PLIS, the government will divert 80 bmc of Godavari River water to the Krishna River;
  • There have been 24 pumps erected to pump water into the PRMC;
  • Besides irrigating 530,000 hectares in Krishna and West Godavari districts, the water released from the project will also stabilize the Krishna River’s Delta area served by irrigation canals.

The Godavari is the second-longest river in India after the River Ganges, having its source in the western state of Maharashtra. It flows east 910 miles before emptying into Bay of Bengal in Andhra Pradesh. The Godavari and the Krishna are both called Peninsular rivers, and their interlinking is the first of India’s proposed 30 river-interlinking projects. Two other interlinking projects are presently in progress.

SCIENCE AND INFRASTRUCTURE

VVER-1200 To Make Russia a Major Nuclear Player, Media Report

July 6 (EIRNS)—Reporting from Novovoronezh Atomic Power Station in Russia, where Reactor-6, a VVER-1200 reactor, has recently been installed, Agence France-Presse says the reactor is “re-launching Russia’s ambitions” to become a major player in the nuclear industry. The story was prominently picked up by the {Japan Times} and Jiji Press.

The VVER-1200 is an evolution of the VVER-1000 design, with special emphasis on safety in place, such as faster shutdown, passive heat removal system, and a “core catcher.” The “core catcher” is made from special concrete ceramic to prevent fuel core material from trickling through. The presence of a “core catcher” and the passive heat removal system would have prevented the kind of accident that Fukushima endured after the tsunami in March 2011. The passive heat removal system employs a cooling system and water tanks built on top of the containment dome.

The article cited Vladimir Lobanov, director of the training center at the Novovoronezh Atomic Power Station, explaining that the VVER-1200 can withstand a 9-magnitude earthquake or a plane crash.

The article also said that “on a global scale, more than half the reactors now being built are under Rosatom (Russia’s state-owned regulatory body of all nuclear power stations), notably in China, Finland and Vietnam.” It cited the World Nuclear Association’s recent annual report that said 173 new reactors are planned from now to 2030, while 65 are currently under construction, mainly in developing countries.

“Between 20% and 25% of the nuclear power stations under construction in the world will be Russian ones,” Rosatom’s deputy chief Kirill Komarov told Russian television at the AtomExpo conference, which gathered delegates from almost 50 countries in Moscow in late May, AFP reported.

 

 

 

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