TUESDAY, AUGUST 9, 2016

Volume 2, Number 250

EIR Daily Alert Service

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

EDITORIAL

Trans-Atlantic Financial System Is Over the Edge; Putin Moves for Strategic Alternative to War

Aug. 8 (EIRNS)—Effective today, the European stock market index, Stoxx Europe 50, simply removed Deutsche Bank and Credit Suisse from its listings, so that its index level wouldn’t be dragged down by the banks’ plunging share values. This is the latest expression of the reality that, not only is the trans-Atlantic financial system over the edge, but the danger comes from the continued lying and non-action. Over the last 48 hours, many major media in Germany and elsewhere are reporting on the history of the devolution of Deutsche Bank, and cases of insolvency, but they completely evade the question: what to do. They have no answer.

Lyndon LaRouche observed that they, “look to the past.” But, for the solution, we must, “look to the future.” He stressed that the collapse of the financial system is the key issue today. In July, he proposed that there must be a public-good rescue of Deutsche Bank, on the basis of a new mandate of bank functioning and credit for funding productive activity, as was the case under the late Deutsche Bank Chairman Alfred Herrhausen. Helga Zepp-LaRouche issued a July 12 statement on this, “Deutsche Bank Must Be Rescued for the Sake of World Peace.”

Short of that, the pretense is over, that the trans-Atlantic banking sector is still intact, and can be tinkered into functionality.

Directly associated with the financial system blow-out, is the push for confrontation and war. There are continued war cries from the U.S. hawks, on cue from the British/Saudi axis. U.S. Air Force Secretary Deborah Lee James told Fox News on Aug. 6, that Russia is “an existential threat” to the U.S. Moreover, the “War-Hawks for Hillary” phenomenon, is in fact, running cover for Obama to conduct war on Russia.

In reality, Russian President Vladimir Putin is actively providing the leadership for a way off the current path to sure doom. Look at greater Southwest Asia. Today Putin met in Baku with Iranian President Hassan Rouhani and Azerbaijani President Ilham Aliyev, for discussions that included the “North-South International Transport Corridor”—the 7,300 km corridor running from the Arabian Sea to Scandinavia; they considered a draft declaration for joint work against terrorism. Tomorrow, Putin meets in St. Petersburg with Turkish President Recep Tayyip Erdogan, who told TASS yesterday that, there is no resolution possible in Syria without Russia. In Istanbul, on Sunday, a mass rally in support of Turkey brought out more than 3 million people.

These Southwest Asia developments can be seen as part of a wider re-alignment process. In the Asia Pacific, Japan and South Korea will send significant delegations to the Sept. 2-3 Eastern Economic Forum in Vladivostok, hosted by Mr. Putin. China will host the G20 Summit on Sept. 4-5, including guest nations—Egypt, Pakistan, Thailand, and others.

It is the United States which is at dead center, unmoving; and it is our historic calling to force a change. A critical intervention starts tomorrow in New York City, when the first issue of The Hamiltonian comes off the presses in 10,000 copies. The broadsheet is a targetted escalation by the LaRouche Political Action Committee to shape the U.S. Presidency, in the context of the immediate crisis.

STRATEGIC WAR DANGER

The Battle for Aleppo: Strategic Geometry Shifting in Favor of Assad and the Russians

Aug. 8 (EIRNS)—Despite numerous reports that jihadi rebels are regaining ground around Aleppo, the real point is that the long-term shift in the strategic geometry is in favor of the government of Syrian President Bashar al-Assad, which several major Western media have recently alluded to.

“Vladimir Putin may be on the cusp of a pivotal victory in Syria’s civil war that would make it much harder for the U.S. to achieve its stated goal of ousting Bashar al-Assad without a major military escalation,” reported Bloomberg, yesterday. “Russia will stick to its guns in Syria and show the whole world we are right,” said Frants Klintsevich, deputy head of the Russian Federation Council’s Defense Committee, in comments made to Bloomberg by phone. Driving the last rebel groups out of Aleppo within a few months is now “quite realistic,” he said.

The battle for Aleppo has devolved into a fight over supply lines, say the on-the-ground reports over the last 24-48 hours. The general consensus among the reports—even from sources that are generally supportive of the Assad government—is that armed opposition groups have indeed cut the government supply lines that pass through southern Aleppo into the government-held western half of the city, after days of fierce fighting. At the present time, the Syrian army doesn’t appear to have the manpower to retake these districts. On the other hand, Al Masdar News reports, today, that government forces have widened the corridor through districts on the north side of the city that they captured two weeks ago, enough so that they can get supplies through. At the same time, Syrian army units are reported to be on the move in northern Latakia province and are threatening the rear areas of the armed opposition in Idlib city, which is the staging area for the assault on Aleppo itself.

Bloomberg notes that the Syrian Observatory for Human Rights claimed that the rebels broke through the siege of eastern Aleppo but have not been able to secure the route. Gulf Cooperation Council-based analysts, such as Riad Kahwaji, head of the Dubai-based Institute for Near East and Gulf Military Analysis, assert that the rebels’ breaking of the siege of Aleppo, is “proof that this is a battle much harder to win than the Russians or the Iranians thought.”  But, as Russian Federation Council lawmaker Klintsevich’s statement clearly indicates, neither the Russians, nor its allies in Syria were expecting to end this quickly.

The other factor coming into play is the Russian-Turkish rapprochement, which will be further consolidated by the meeting between Turkish President Recep Tayyip Erdogan and Russian President Vladimir Putin in St. Petersburg on Aug. 9. “The Syrian regime wouldn’t have been able to besiege Aleppo had it not been for the Turkish-Russian rapprochement,” Rami Abdel Abdurrahman of the Syrian Observatory told Bloomberg. “The military support is not what it used to be,” he said, referring to reports that the flow of weapons to the insurgent groups, particularly that of U.S.-made TOW anti-tank rockets, has slowed considerably in recent weeks.

Anti-Russia Hysteria from the U.S. Reaches Fever Pitch

Aug. 8 (EIRNS)—U.S. Air Force Secretary Deborah Lee James is the latest Obama Administration figure to determine that Russia represents an existential threat to the United States. Speaking Aug. 6 with Fox News “America’s News HQ” program, James said “I think the number-one threat is Russia. Russia is one of the handful of countries that could actually present an existential threat to the U.S.”

James had just returned from a tour of the Baltic states, and from Ukraine. The latter, she said, is “suffering from the illegal annexation of Crimea,” and from Russia’s “numerous ceasefire violations” in the East. This is a “resurgent Russia,” she said. “They have nuclear weapons; they have been acting in very aggressive manners in recent years, and they are also investing and are testing military capabilities…this is very worrisome for the United States and to our allies.”

James’s remarks are restrained, however, compared to those of Washington Post hack Jackson Diehl who uses his column today to spew uncontrolled hysteria and rage against Putin, depicting him as a ruthless, cynical, unprincipled opportunist, guilty of murdering his political opponents, and having had the audacity to charge that the Ukrainian coup was carried out by U.S. intelligence operatives instead of the “Ukrainian people.”

Mouthpiece for the war party that he is, Diehl argues that “there is the world the West knows, and there is Putin’s alternative reality.” In fact, he asserts, “the world is awash in state-sponsored conspiracy theories, most of them anti-American,” a prime example of which, he adds, is Egyptian President Abdel Fatah el-Sisi, who argues that the U.S. has a plan to divide Egypt into pieces. No one could possibly believe anything so absurd, he implies.

Diehl’s hysteria is so great that he lumps Donald Trump together with Putin, warning that were both to govern their respective countries at the same time, it would mean not only the “triumph of amoral statesmanship, but the rise of Russian influence at America’s expense.”

Discussion of Saudi Role in Terrorism Also Reaching Sensitive Point in Germany

Aug. 8 (EIRNS)—In the wake of reports that the two Islamist attackers of Würzburg and Ansbach  pre-attack communications with their controllers via the latter’s Saudi-registered cellphones, there is a lot of coverage in the German mainstream media now about Saudi connections to terrorism. A report by the German news agency, DPA, noting that most of the terrorists since 9/11 have been “employees of the Saudi state,” is taken up by numerous news dailies.

A syndicated article, run by the Springer newspaper chain, even makes references to a certain detail regarding the Saudi role behind the 9/11 attacks as documented in “U.S. investigations.” The article also cites Saudi diplomats’ involvement, the broader Wahhabite problem as a breeding ground for extremism such as the Islamic State (Daesh/ISIS), the Saudi campaign against the Shi’ites and Iran, but any direct mention of the 28 pages of the Joint Congressional Inquiry into 9/11 as such is avoided. The German BND foreign intelligence report from the beginning of the year that warned against the destabilization of the entire Southwest Asian region by the radicalized new generation of Saudi leaders is mentioned. In conclusion, the article states that the Saudis are “at the center of the problem, not of the solution.”

NEW STRATEGIC PARADIGM

Historic Russia-Iran-Azerbaijan Summit at Baku Sets in Motion Future Development West of Caspian

Aug. 8 (EIRNS)—The Presidents of Azerbaijan, Russia, and Iran met for a one-day summit in Baku today to plan out for the first time a contiguous development program which would develop the region west of the Caspian Sea and resolve conflicts that continue to haunt the area. Speaking to reporters before leaving Tehran, Iran’s President Hassan Rouhani said, “This is the first trilateral summit between Iran, Azerbaijan and Russia, which is of paramount importance, given the situation in the region and the Caucasus,” Financial Tribune of Iran reported yesterday.

Virtually at the center of this summit discussion was the urgency to make operational the International North-South Transport Corridor which would create a rail link from Iran’s Persian Gulf port at Bandar Abbas to Europe through Russia and Azerbaijan. This would facilitate South Asian countries, India, in particular, and Southeast Asian nations to skirt the Suez Canal and send their bulk items by sea and rail to Central Asia, Russia, and Europe. The route will not only save transportation cost but also reduce transportation time by almost a third.

Azerbaijan President Ilham Aliyev stressed today that the trilateral cooperation among Russia, Iran, and Azerbaijan is a stabilizing factor in the region. “The North-South international transportation corridor project will ensure both the security and economic interests of our countries,” said President Aliyev, Baku-based Trend News Agency reported onsite.

Since Azerbaijan is already connected by railroad to Russia, the missing link is the Iranian and Azerbaijani rail connection. Azerbaijani President Aliyev was quoted by APA news agency on Aug. 6 saying he and the Iranian President Hassan Rouhani have “signed a memorandum on acceleration of the North-South project…. The Azerbaijani side wants to further participate in the project’s financing.”

Following the Presidents’ summit, the three foreign ministers, Azerbaijan’s Elma Mammadyarov, Iran’s Mohammad Javad Zarif, and Russia’s Sergey Lavrov, held a joint press conference today. Mammadyarov made the point that the unresolved Nagorno-Karabakh conflict with Armenia impedes the development of the region and realization of “North-South” corridor, Baku-based APA news agency reported. He also pointed out that “opportunities were created for the settlement of the Nagorno Karabakh conflict after the meeting of Presidents in St. Petersburg,” referring to the June meeting of Azeri President Aliyev and Armenia’s President Serzh Sargsyan hosted by Putin. Mammadyarov continued, that the “Declaration noted concerns over unresolved conflicts and the fact that they interfere with the development of the region. The declaration notes that the unresolved conflicts should be resolved in accordance with international principles and norms,” APA reported.

Turkey, Russia May ‘Develop Turkish Stream Infrastructure Together’; Her Majesty Is Not Amused

Aug. 8 (EIRNS)—In an interview with the Turkish Anadolu Agency, Russia’s National Energy Security Fund Deputy Director Alexei Grivach said the initiation of the Turkish Stream gas pipeline could be an important result of the Aug. 9 meeting between the Turkish President Recep Tayyip Erdogan and Russia’s President Vladimir Putin. “Some European politicians may oppose the project but this is not important. Turkey and Russia may undertake the needed infrastructure together,” the Turkish agency quoted him as saying. The Russian-Turkish side of the pipeline could be built, but its connection to Europe could be blocked. Greece had already been interested in the project, but Bulgaria and Romania could raise criticism against it, he also said. Angora Gas General Manager Gökhan Yardim told Andadolu that the project would take shape over two decades.

The plan envisages that most of the pipeline will run across the Black Sea to the Turkish village of Kiyiköy on the European side of the Bosporus, far away from the insecure regions of the country.

In the wastes of Buckingham Palace, Her Majesty is not pleased with Erdogan’s and Putin’s meeting. Her leading mouthpiece for the City of London, the Financial Times made its disapproval known in an article entitled “West Uneasy as Moscow and Ankara Edge Closer,” which warned that “The summit has taken on broader geopolitical significance.” The FT cited Alexei Malashenko of the Moscow Carnegie Center as saying that the West’s criticism of Erdogan after his successful recovery from the attempted coup on July 15, rather than supporting him, “is extremely beneficial to Russia.”

“Ankara also welcomed the fact that Moscow gave its unequivocal backing to Turkey following the failed coup,” wrote FT, and quoted a Moscow-based Turkish diplomat that Turkey-U.S. relations “are the worst in 50 years” over the U.S. rejection of Turkey’s extradition request of U.S.-based cleric Fethullah Gülen. The FT cites one cynical and arrogant European diplomat saying, “Erdogan can lash out all he likes, but he needs us. He knows he cannot trust Putin. How many Turkish-Russian wars have there been over the last 300 years? How many did the Turks win?” (How many did the British Empire help orchestrate?)

By contrast, Lyndon LaRouche said the Erdogan-Putin meeting offers hope for the formation of a new Eurasian economic alliance which would result from Putin’s Eurasian economic and diplomatic initiatives.

Millions Demonstrate in Istanbul Anti-Coup Rally on Eve of Putin-Erdogan St. Petersburg Summit

Aug. 8 (EIRNS)—An anti-coup rally drew millions in Istanbul from three major parties: the ruling Justice and Development Party (AKP), the opposition Republican People’s Party (CHP) and the National Movement Party (MHP). The Kurdish-oriented People’s Democratic Party was not invited. Hurriyet claimed the rally had 3 million participants; and Yeni Safak claimed there were 5 million.

Commenting on the development, Lyndon LaRouche said this could be seen in the context of tomorrow’s meeting in St. Petersburg between Turkish President Recep Tayyip Erdogan with Russian President Vladimir Putin. It demonstrates an important element of unity within Turkey for shifting its policy to the survivors club led by Putin.

Erdogan called for the demonstration and invited CHP leader Kemal Kiliçdaroglu and MHP leader Devlet Bahçeli and their political parties to participate. The event was opened with a reading from the Quran by Mehmet Görmez, the head of Turkey’s Religious Affairs Directorate (Diyanet); the only speakers were Erdogan, and the three party leaders, the CHP and MHP leaders, Kilicdaroglu and Bahceli, and Prime Minister Binali Yildirim in his capacity as AKP leader; and Chief of Staff Gen. Hulusi Akar. All speakers denounced the coup attempt and declared its defeat by the overwhelming majority of the population as a “turning point” in Turkey’s history.  No party flags were present, and in addition to the Turkish flag, the flags of Azerbaijan, Afghanistan, Albania, and the Free Syrian Army (FSA) could be seen.

Hurriyet Editor-in-Chief Murat Yetkin writes that the unprecedented number of participants “marks a milestone” in Turkish history, and that with the participation of the two major opposition parties, “It was not a picture which the perpetrators of the failed coup attempt had expected.”  He expressed hope that this unity will continue, although warning it is not yet clear this will be the case.

U.S. POLITICAL AND ECONOMIC

Petition Circulating To Demand Congressional Vote on Glass-Steagall

Aug. 8 (EIRNS)—Fourteen labor, civic, immigration and political activists’ groups, including the AFL-CIO, are circulating a petition demanding that Congressional leaders allow a vote on the bipartisan 21st Century Glass-Steagall Act. Although the petition states that the vote should take place after the election, the fact that people are mobilizing on behalf of Glass-Steagall is a reflection of the rapidly-growing national sentiment for action against Wall Street.

Urging people to sign the petition, The Nation pointed to the fact that both Democrats and Republicans have made the “surprise move” of including reinstatement of the Glass-Steagall Act in their official party platforms.

“Momentum is growing to pass a modern Glass-Steagall Act,” The Nation points out. “A huge majority of working people support the idea of reinstating the Act and a bipartisan bill—introduced by Sen. Elizabeth Warren and supported by Sen. John McCain—has already been introduced in the Senate that would put in place a modern version of the Glass-Steagall Act.”

The petition, which will be delivered to leaders of the House and Senate, reads as follows:

“To: Leaders in Congress

“Wall Street greed and risky behavior is out of control and needs to be reined in. There is a simple solution: pass the 21st Century Glass-Steagall Act. Both the RNC and DNC platforms call for a new Glass-Steagall and there is bipartisan support for the 21st Century Glass-Steagall Act.

“We demand that you listen to working people and your own party and allow a vote on the 21st Century Glass-Steagall Act after the election.”

Some of the sponsors are: The Nation; AFL-CIO; American Federation of Teachers; Americans for Financial Reform; Jobs With Justice; Just Foreign Policy; People For the American Way; Progressive Congress

Zika Virus Threatens U.S. Gulf States; Locally Transmitted Outbreaks Just a Matter of Time, Experts Warn

Aug. 8 (EIRNS)—Despite efforts to portray the locally-transmitted Zika virus outbreak in a Miami, Florida neighborhood as limited, and able to be contained, public health experts and epidemiologists say otherwise. The states along the Gulf Coast—Louisiana, Alabama, Mississippi and Texas—are particularly vulnerable, they warn, both because of tropical temperatures, and the high rates of poverty. Already a new Zika case in southwest Miami-Dade—outside of the affected area of Wynwood—is under investigation.

Dr. Peter Hotez, head of the Tropical Medicine School of the Baylor University School of Medicine in Houston, warned last week at a town hall meeting, organized by State Rep. Carol Alvarado, that the Miami outbreak won’t be contained, regardless of what the Centers for Disease Control and Prevention (CDC) says. “All up and down the Gulf Coast, in urban and poor areas, they’re at risk for Zika. I’ve been saying Houston is at risk since last December,” the Houston News reported Aug. 5. He notes that Texas is the “epicenter for tropical disease” in the U.S.

Dr. Mary McIntyre, State Epidemiologist at the Alabama Department of Public Health, said that measures are being taken to delay local transmission, but “it’s just a matter of time,” before it occurs. Mississippi, a state where West Nile virus is a serious problem, and whose poverty rates are very high, is likely to be hit hard.

The CDC has given Texas $6 million for anti-Zika efforts, but as Houston Mayor Sylvester Turner remarked, that’s not enough. He said the city has allocated $1.5 million of the $6 million for mosquito-control programs, but that “the debris removal, the spraying, all of the other efforts, that’s a multimillion-dollar program.” Currently there are 93 reported cases in Texas, 31 of which are in the Houston-Galveston area, and 27 in Harris County.

Dr. Umair Shar, Executive Director of the Harris County Public Health department reports that he is scrambling for funds, diverting resources from other county health programs, but warns that Zika-related costs will “skyrocket” once local outbreaks begin. “We’ve robbed Peter to pay Paul, locally, but there comes a point where you can’t just keep doing that,” he said, Houston’s KHOU TV reported.

COLLAPSING WESTERN FINANCIAL SYSTEM

A Quarter of Spain’s Unemployed Have Been Out of Work for At Least Four Years

Aug. 8 (EIRNS)— A new study has showed that more than a quarter of Spain’s unemployed have not worked for more than four years while a full 25% of the workforce is on short-term contracts. Spain’s jobless rate, at more than 20%, is among the highest in Europe. Of the 4.5 million or so unemployed, 1.127 million have not worked for more than four years, a figure that has increased eleven-fold since the crisis in 2008.

Under present conditions those who have been unemployed for more than one year are unlikely to be hired because they would have to be re-trained. Those who have not worked in four years, under current conditions will never be re-hired. Many of these unemployed are over 50 years old and 60% of long-term unemployed have no higher education than a high-school degree.

The 25% on short-term contracts might have their contracts renewed, but they will never be entitled to the benefits enjoyed by permanent employees. “Companies look at how long people have not been working. If somebody has been out of work for more than a year, then they don’t even consider them,” Enrique Neguerela of the regional unemployment department of Galicia told El País. “Somebody who has been out of work for four years needs to be re-trained and to be given a job immediately. Training and employment is the only way.”

Spain has been without a permanent government since the elections in December which failed to either produce a majority government or a negotiated coalition government. A second election in June also failed to produce a majority government. Mariano Rajoy and his People’s Party again won the plurality but failed to win a majority, and has still been unable to form a government since he reportedly refuses to make any meaningful concessions to potential coalition partners, including the Socialists (PSOE) and the center right Ciudadanos. The left-wing Podemos has yet to come up with a viable program as an alternative to both the People’s Party or the Socialists, which has left Rajoy running a caretaker government since December.

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