THURSDAY, AUGUST 4, 2016
Volume 2, Number 247
EIR Daily Alert Service
P.O. Box 17390, Washington, DC 20041-0390
- Obama Launches Yet Another Criminal War on Libya
- Call for Ending Europe’s ‘Universal Banking Model’
- Bank of England Bank Stress Tests are Ludicrous, Says Think Tank
- Credit Suisse, Deutsche Bank Kicked Off Top European Stock Index
- Obama Starts Bombing Libya Again
- Turkey’s President Erdogan Asserts, West Supports Terrorism and Coup Plots
- Former Swedish Prime Minister Bildt on EU and Turkish Coup: Was Brussels ‘Asleep or Just Ignorant?’
- General Kujat: Europe Shouldn’t Support in Aleppo the Same Terrorists Attacking Europe
- Houston Chronicle Exposes Clinton’s and Trump’s Opposition to U.S. Space Exploration Program
- Will an Independent Scotland Be a Republic?
- East Economic Forum: $30 Billion in Projects, Strategic Bilateral Meetings, Being Readied
Aug. 3 (EIRNS)—A classified map was presented to the White House this week, then leaked to NBC which posted it on their website, showing the “progress” of Obama’s war on ISIS over the past two years. ISIS and its affiliates, the map shows, are now active in 18 countries, whereas in 2015 it was 13, and in 2014 it was only 7. Did this convince the warrior-president that his policy was a failure, and to accept President Putin’s repeated proposals to bring the world’s nations together to fight the common terrorist enemy?
Of course not. Rather, Obama launched a second war on Libya, bombing the city of Sirte (Qaddafi’s home town) on Monday and Tuesday, supposedly to prevent ISIS from consolidating a base in the country. Obama went on TV Tuesday to say that the war was “critical” to help Libya’s Government of National Accord fight ISIS, and that the war would continue as long as necessary.
There are several lies involved, as usual. The Government of National Accord is not a government of national accord, but a pseudo-government hand-picked at the UN and shipped into Tripoli with the assignment to “invite” the U.S. to start bombing, using U.S. special forces on the ground as spotters. Obama did not ask for or receive authority from the UN, nor from the U.S. Congress, to launch another war, proving once again his credentials as a war criminal. And, of course, ISIS would not be there in the first place if Obama had not bombed the country back to the stone age and killed its anti-terrorist leader in 2011, which, along with G.W. Bush’s similar treatment of Iraq in 2003, constitute the greatest war crimes of our age, responsible for the terrorist chaos internationally and the horrendous refugee crisis across Southwest Asia and Europe.
Leading bankers, including investment bankers, are now warning that nothing short of ending the “Universal Banking Model” immediately (i.e. restoring or initiating Glass-Steagall bank separation across the trans-Atlantic region) will stop the onrushing collapse of the Western banking system. A former leading Goldman Sachs Director and European Commission official Paul Goldschmidt, wrote that anything short of “doing away with Universal Banking” would cause not only financial breakdown, but also the “destabilizing of the foundations of European democracy”—i.e., fascism.
Helga LaRouche, who has just returned from China, noted today that the Chinese are extremely aware of the danger of the collapse of the western financial system, and the implications for the West and for the world. It is this financial breakdown which is driving Obama’s mad push for military confrontation with Russia and China, placing the world on the brink of thermonuclear war.
The solution is clear, and imminently achievable. The urgency of implementing Glass-Steagall immediately in the U.S. and Europe can not be over emphasized. The LaRouche movement, which is largely responsible for getting the Glass-Steagall bills introduced and sponsored in the U.S. Congress, and placed on the platforms of both parties at the recent Conventions, has mobilized itself to inspire the American population at this moment of historic transformation to reach to the stars, to restore the once-common American belief in science, progress and nation-building, to take down the Wall Street-lords and war-lords, along with their tool Obama, before it is too late.
COLLAPSING WESTERN FINANCIAL SYSTEM
Aug. 3 (EIRNS)—Even former investment bankers are calling for Glass-Steagall and the end of the “universal banking system,” as shown in an article in The Globalist, where Paul Goldschmidt calls for an end to Europe’s “Universal Banking Model.” A former Goldman Sachs banker and European Commission mandarin, Goldschmidt, a Belgian, is now European Affairs chairman at the Thomas More Institute in Brussels and Paris.
He clearly states that the policy of low interest rates, quantitative easing, and the universal banking system is not only a failure, but a toxic mix. Furthermore, the EU policy of creating a large capital market to finance the real economy is not possible with a universal banking system. He writes:
“Universal banks must constantly choose between either intermediating between ‘borrowers’ and ‘depositors,’ while retaining the credit risk on its own books (i.e., commercial bank loans) or between ‘issuers’ and ‘investors’ where the credit risk is passed on to the latter (i.e., capital market funding).
“The potential for conflict is exacerbated when the ‘issuer’ is also a ‘borrower’ from the bank, or when the bank has an in-house ‘asset management’ arm. This problem was already recognized in the U.S.A. after the crash of 1929 and the depression of the 1930s.
“It led to the separation of commercial and investment banking activities (Glass-Steagall Act) as well as specific legislation to protect investors (Securities and Exchange Act).
“This created the foundations on which the spectacular growth of the U.S. capital markets, as distinct from its commercial banking sector, was able to flourish. The separation created a sufficiently broad base for both sectors to operate profitably.
“It is also true that the United States deviated from its previously virtuous path under the progressive ‘deregulation’ of U.S. markets initiated in the late 1970s, including the repeal of the Glass-Steagall Act (1999).”
Citing the fact that “more voices argue for re-imposing a version of Glass-Steagall,” he concludes, “Now is not the time to kowtow to the European banking lobby which continues to exert undue influence resulting from years of a cozy incestuous relationship with national governments….
“Doing away with the ‘Universal Banking Model’ should be a key element in dealing with this explosive situation.
“We simply cannot afford yet another banking crisis. If one were to occur, it would put into jeopardy not only the financial sector, but would also have grave economic and social consequences capable of destabilizing the foundations of European democracy.”
Aug. 3 (EIRNS)—British banks are headed for a financial crisis much bigger than 2008, concludes Prof. Kevin Dowd of the London-based Adam Smith Institute, in research reported by Russia’s Sputnik International today.
Dowd, a professor of Finance and Economics at Durham University, attacked the Bank of England’s stress tests, stating that the U.K. is “sailing blindly into a second global financial crisis”; that “the U.K. financial system is still in poor financial shape after 2008, and the Bank of England’s stress tests disguise that reality.”
Dowd ridicules the fact that the British banking system was “given a clean bill of health” in 2015, as well as the claim “that major U.K. banks could withstand another big shock.” He says, “The purpose of the stress-testing program should be to highlight the vulnerability of our banking system and the need to rebuild it…. Current Bank of England stress tests are like a ridiculously easy exam with a ludicrously low pass standard. If you increase the pass standard to something reasonable…. then every single major bank in the U.K. would fail… The Bank of England is asleep at the wheel again, and we will be back to beleaguered banksters begging for handouts—the taxpayer will be ripped off yet again, but bigger this time.”
The Adam Smith Institute ridiculed the U.K. stress tests for judging a bank’s resilience when facing one single adverse event, and ignoring the likely multiple adverse events that could take place in a global economy. Furthermore, the BOE’s stress tests understate the potential danger of assets like mortgages and sovereign debt. Dowd urged regulators to increase the equity cushions required of banks above the currently required 5%. The BOE stress tests, said Dowd, are “Like having a ship radar system that cannot detect an iceberg in plain view.”
Aug. 3 (EIRNS)—Credit Suisse Group AG and Deutsche Bank AG are being dropped from the exclusive Stoxx Europe 50 index of blue chip stocks next week, following sharp declines in their share prices this year. Stoxx announced late Aug. 1 that the two banks will be kicked out on Aug. 8, due to the “fast exit” rule which requires that if a company on the benchmark ranks 75 or below on the respective index’s monthly selection lists for a consecutive period of two months.
Both Credit Suisse and Deutsche Bank are down around 50% this year, and have lost almost 90% since their all-time highs hit in 2007.
Yesterday Deutsche Bank lost 4.8%, while Credit Suisse lost 6.2%.
Stephen Guilfoyle, chief market economist at Stuart Frankel & Co. yesterday wrote in Yahoo finance: “There may have been no immediate reaction, but it’s plain to see that financial stocks are being slapped around throughout Europe. If a semi-ridiculous batch of stress-tests that weren’t even graded on a pass/fail basis were not enough, then I guess STOXX Ltd.’s decision to toss Credit Suisse and Deutsche Bank from the Stoxx Europe 50 Index by next week was trigger enough. European traders said ‘sold!’ to European banking shares today in a big way….”
STRATEGIC WAR DANGER
Aug. 3 (EIRNS)—On Monday, Aug. 1, President Obama began another bombing campaign in Libya, with five air strikes on ISIS targets that day, and two more on Aug. 2. The Pentagon won’t say where the strikes are coming from, but news reports indicate Marine Harrier jets from the assault ship USS Wasp, offshore, and armed drones flying from Jordan, carried out the strikes against ISIS targets in Sirte, in support of forces of the UN-backed Government of National Accord (GNA) in Tripoli.
Obama went on TV, yesterday, to say that the strikes “were critical” to helping the GNA fight ISIS and that the air campaign would continue as long as necessary to make sure that the extremist group “does not get a stronghold in Libya.” Pentagon spokesman Capt. Jeff Davis told reporters, yesterday, that the targets included two T-72 tanks, one of which he said was giving the GNA forces a particularly hard time, construction vehicles, military vehicles, a rocket launcher and an Islamic State fighting position. The strikes were coordinated by American special forces at a Libyan operations center outside of Sirte “who have been in the country for months,” reports the New York Times. While Obama’s statement implies another never-ending campaign, like those in Syria and Iraq, Davis said that while it was hard to predict how long the air campaign would last, that it would probably be “weeks, not months,” because the target set is so much smaller. “This is a finite period of time and a very finite mission,” he said. “We don’t envision this as being something that’s going to be too long” in duration.
During his remarks, yesterday, Obama linked the migrant crisis in Europe to the crisis in Libya, and expressed some “regrets” regarding the 2011 bombing campaign that led to Qaddafi’s murder and plunged the country into chaos from which it has yet to emerge—but not because he committed an impeachable offense of waging aggressive war on a country that had not attacked the U.S., and had killed its head of state, but because he didn’t sufficiently take into account what would follow!
Rep. Barbara Lee (D-CA), said in a statement on Aug. 1, that she was “deeply concerned” that the U.S. military is becoming more and more engaged in the Middle East without so much as a debate in Congress, never mind a specific authorization. “I have called for and will continue to use every available legislative lever to force a full Congressional debate and vote on any military action, as required by the Constitution,” she said. “We must stop relying on an outdated and overly broad authorization that was passed nearly 15 years ago.”
Aug. 3 (EIRNS)—Turkish President Recep Tayyip Erdogan charged, yesterday, that the West directly supports terrorism and coup plotters. “Now I ask: Does the West give support to terror or not? Is the West on the side of democracy or on the side of coups and terror? Unfortunately, the West gives support to terror and stands on the side of coups,” he said in a speech in Ankara. “We have not received the support we were expecting from our friends, neither during nor after the coup attempt.” He complained that most statements of “support” expressed more concern about the measures that the Turkish government has been taking against the putschists. He particularly targeted Germany, whose government blocked him from participating, via video, in a anti-coup rally in Cologne. He said he was particularly disappointed over the question of the extradition of Islamic cleric Fethullah Gülen, self-exiled in Pennsylvania. “Documents have been sent to the U.S.,” Erdogan said. “When you demanded the handover of a terrorist we have not asked for documents from you.”
Aug. 3 (EIRNS)—Even staunch Atlanticist policymaker Carl Bildt, Sweden’s former Prime Minister and Foreign Minister, questioned the European Union’s reaction to the attempted coup in Turkey, asking whether Brussels was “asleep or just ignorant?” In an article for Politico headlined “Europe, Stand up for Erdogan,” he wrote: “There was no sign of senior EU representatives afterward flying to Turkey in support of an accession country facing the gravest threat to its constitutional order yet. Instead, Europe’s leaders immediately began to question measures taken by the Turkish authorities to cleanse from power any elements thought to be associated with the Gülen movement. When Turkey asked for derogation from the European Convention on Human Rights, EU leaders howled with disapproval, forgetting that France did the same after the November terror attacks in Paris. There is no question that Turkey has the right to, and indeed must, take measures to safeguard itself against forces trying to topple its constitutional order.”
He warned that if the coup had succeeded, “Millions of Turkish citizens fleeing violence, chaos and death would have joined the more than 2 million Syrian refugees hosted in Turkey in setting sail for Europe. The EU would now be facing a refugee disaster of even larger magnitude than in 2015.”
Bildt further warned that Europe risks “losing its moral authority if it does not appear particularly engaged in dealing with the coup itself.”
“The EU would be in a far better position today if EU leaders had gone to Turkey immediately to express their horror at the coup, congratulated the people of Turkey for defeating it, and sat down with the President, the government, the leaders in the Grand National Assembly, and others to discuss how to collectively ensure a democratic and European path for Turkey.”
WIESBADEN, Aug. 3 (EIRNS)—Regarding the strategic policy showdown around Aleppo, Syria, Gen. Harald Kujat (ret.) stood his ground today in an interview with the state radio Deutschlandfunk (DLF) stating that when we have to deal with Islamic terror in Europe, we shouldn’t be supporting the same people in Aleppo. SpiegelOnline today headlined an absurd article on the situation in Aleppo, “Encircled City in Syria: The Islamists Are Aleppo’s Last Hope.” Although the author admitted that Al Nusra that was leading the breakout effort against the Syrian Army encirclement, it is the same organization that the UN and United States have on their terrorist list. Spiegel’s author wrote, “the international community has once again abandoned the Syrian people” [sic] and only the Islamists are trying to improve the situation of those encircled. He then complained that U.S. Secretary of State John Kerry and German Foreign Minister Frank-Walter Steinmeier, instead of backing the terrorists, have called for renewal of peace discussions between Damascus and the opposition.
Aggressively playing the devil’s advocate, General Kujat was blunt in his DLF interview this morning: “Aleppo is a humanitarian catastrophe, because terrorist groups have occupied this city, oppressed the population, and the regime, the Assad regime is attempting to liberate this city. Aleppo is strategically important …, but Aleppo has a key function for supplying the terrorist groups: Al Qaeda, there Al Nusra, occupy Aleppo, along with the Islamic State. It is not the case that the moderate groups are doing battle against the Assad regime and IS. And, I don’t find it logical, that we on the one hand here in Europe, in Germany and France, have to deal with the terrorists and simultaneously take up their cause when they fight in Syria. The two don’t come together.” General Kujat advised the opposition to negotiate.
Earlier in the interview General Kujat was challenged that given the humanitarian crisis in Aleppo, if he would still stand by his comments on the importance of the Russian military intervention in Syria: “Absolutely, Absolutely. There wouldn’t be any peace discussions if the Russians hadn’t intervened.”
U.S. POLITICAL AND ECONOMIC
Aug. 3 (EIRNS)—The Houston Chronicle delivers a long-overdue attack on the Democratic and Republican Parties, and their Presidential candidates, for their disgusting failure to put forth a vision of Americans going back into space.
The Aug. 1 Chronicle editorial demonstrates that Kesha Rogers, LaRouche PAC Policy Committee leader and twice-victorious Democratic nominee for Congress in Houston’s 22nd C.D., the NASA’s home district, is the only political figure in Texas advocating manned missions into space, to uplift human beings to see themselves as capable of transforming the Galaxy.
The editorial begins, “On a hot and sunny September day in 1962, President John F. Kennedy stood behind a podium in Rice Stadium and delivered what’s arguably the most famous speech in Houston history.
“In soaring rhetoric that would echo through the ensuing decades, JFK eloquently made the case for the United States launching its audacious program to land a man on the Moon.
“Unfortunately, whoever becomes our next President apparently hasn’t given it much thought….” The Chronicle reports Hillary Clinton’s campaign website “fails to mention space exploration” and “Trump has indicated he considers NASA a low priority. Answering a questionnaire from Aerospace America, the publication of the American Institute of Aeronautics and Astronautics (AIAA), he expressed support for the space program, but he reportedly responded to a boy who posed the question at a Town Hall last year, “Right now we have bigger problems.” The Republican Party mentions NASA in its platform in three vaguely worded sentences, and touts “public-private partnerships” in space and calls for more “scientific missions.” The Democratic Party platform seems to “take positions on everything … but there’s not a word about our nation’s space program.”
The editorial concludes: “Will our next President propose raising or slashing the budget for NASA? We don’t know. Nor do we know what the future holds for the International Space Station and the Orion spacecraft….
“NASA has a proud legacy of accomplishing seemingly impossible goals, but those goals must be clearly defined. After President George W. Bush cancelled the shuttle program, the space agency seems to have foundered. It’s in stark contrast to the purposeful days of Apollo.
“JFK gave NASA a mission. Our next President needs to follow his example.”
THE NEW GLOBAL ECONOMIC ORDER
Aug. 3 (EIRNS)—Not only will the United Kingdom no longer be united if the Scots hold another referendum on independence, but they just might well become a republic. Scottish National Party Member of the European Parliament (MEP) Alyn Smith called for a second referendum to be held on whether to drop the monarchy if the proposed independence referendum is successful. Smith has just launched his campaign to become Deputy Leader of the SNP.
According to the Guardian Smith was asked on a live webchat: “Where do you personally stand on monarchy versus republic?”
He replied: “I want to see the people of Scotland in charge of Scotland’s future, so once we regain independence I would be up for a referendum on the subject and the people will choose, but let’s do it after independence, so we can have a proper debate about the subject in its own right.
“There are monarchies I like, and there are republics I like, so long as the people have chosen, I’ll respect that choice.”
SNP leader Nicola Sturgeon recently said another independence referendum is highly likely after the U.K. voted to leave the European Union against majority opinion in Scotland. Some polls have recorded that a majority of Scots are now in favor of leaving the U.K. In the 2014 vote, the Scots were not given the right to choose whether their head of state would remain the British Monarch.
Aug. 3 (EIRNS)—The schedule for the East Economic Forum (EEF) to be held in Vladivostok Sep. 2-3, titled “Opening Up the Russian Far East,” is preparing for 2,500 business and political representatives from across the Asia-Pacific. Critical meetings will be held on the sidelines, including a summit between Japanese Prime Minister Shinzo Abe and President Vladimir Putin, as a follow-up on the historic meeting the two held in Sochi in February, which set in motion plans to settle the territorial issues left over from World War II, reach a formal peace treaty within the next year or so, and to engage Japan in the Russian Far East development process.
Also today it was announced that South Korean President Park Geun-hye will attend with about 100 South Koreans. This is a potential shift in the impasse in Seoul’s relations with Russia and China since Park capitulated to Obama’s pressure to deploy THAAD missiles in her country, and unilaterally shut down the highly promising cooperation between China, Russia, and South Korea with North Korea.
Alexander Krutikov, Investment Department Director of the Ministry of Development of the Russian Far East, told journalists on July 26 that 111 projects worth more than $30 billion will be on the table, with about $17 billion raised thus far, mostly from inside Russia. A new stock exchange platform will be launched at the forum “to facilitate access of international investors to promising projects in the Far East,” Krutikov said.
He added that 60% of a planned 13 territories of advanced development, or TADs—which have a simplified tax regime and credit conditions for investor—were ready for business. Companies from China, Japan, Singapore, Australia, and Kazakhstan have already invested in these zones.
Igor Pavlov, Director of the Eastern Economic Forum, told journalists that China has already invested $2.4 billion in the Russian Far East this year.