The German Question: The Spark for the Collapse, or a Driver for World Development
Aug. 17 (EIRNS)—If Deutsche Bank is allowed to descend into an uncontrolled collapse, exploding the largest pool of derivatives among the world’s banks, not only the German economy will be destroyed, but all of Europe and the United States with it. And yet that is what is on the agenda, literally any day. Yet another voice from the financial elite is screaming the alarm today: “Deutsche is in more trouble than people realize,” said Brad Lamensdorf of Ranger Equity Bear in an interview with the U.K.-based Daily Express. “Something is very, very broken.”
“Nothing is stable in the European banking system,” said Lyndon LaRouche in response. “The German economy is on the edge of an explosion. Merkel and Schäuble are trying to manage the impossible. They must go. It’s only a question of when the break will occur.”
There is a means to solve this crisis, but not unless leaders emerge immediately in Germany to restore stability. This requires first the recapitalization of Deutsche Bank under a new regime, which writes off the worthless derivative bubble and restores commercial banking under Glass-Steagall-style regulation. If that is done, now, LaRouche said, then Germany, in cooperation with Putin’s Russia, can avoid a sudden crash and drive a new paradigm of cooperation between the trans-Atlantic nations and the Russia-China partnership which is now leading the world economy forward, despite the Western collapse.
Leading forces in Germany are trying to improve relations with Russia. Foreign Minister Frank-Walter Steinmeier met with his Russian counterpart Sergey Lavrov in Yekaterinburg on Aug. 15, where the two agreed to “encourage contacts between government agencies, between regions in the Russian Federation and the Federal Republic of Germany,” Lavrov stated, adding that “we believe that interest shown by Frank-Walter in working with Russia’s regions deserves all kinds of support.” According to Lavrov, as reported in TASS, the two also discussed bilateral relations in “political, cultural, humanitarian and historical areas.” How long can the insane sanctions regime and NATO war mobilization be tolerated?
Time is short. Putin has hit Obama’s war plan on two vulnerable flanks: first in Syria, working under international law with the sovereign government of Syria to militarily defeat the terrorist apparatus on fronts across Syria, exposing Obama as a supporter of the Saudi-controlled al-Qaeda networks to achieve his criminal regime change aggressions; second, Putin has brought Turkey to its senses, ending Obama’s use of that country to funnel arms and terrorists into Syria.
Obama has responded by deploying the neo-Nazi gangs in Ukraine to launch terrorist attacks in Crimea—i.e., in Russian territory—and escalating the war on the Donbas region. Putin announced that the planned meeting of the Normandy Four group (France, Germany, Russia and Ukraine) at the Sept 4-5 G20 meeting in China, to attempt to salvage the Minsk agreements, was now pointless, with Kiev opting for terror on Russian territory. Hollande, Merkel and Poroshenko spoke by phone today—without Putin—and called for the Normandy process to continue. Others have proposed that Germany and Russia should proceed on their own to deal with Ukraine, to demand an end to the Obama-backed provocations from Kiev.
War is on the agenda—a war that would quickly become global and nuclear. While Germany, under new leadership and in tandem with Russia, can prevent the economic collapse and stop the rush to war, it will take the courage of American citizens to stop Obama (and his stooge Hillary Clinton) from subjecting the U.S. to Wall Street’s destruction of the physical economy and taking the world to war. These decisions must be made now, not through a fraudulent election between two enemies of the American System, but now, through Constitutional means, removing Obama for his multiple crimes against the Constitution and against humanity, implementing Glass-Steagall, restoring national banking, and restoring America’s commitment to a fusion-powered future on Earth and in space.
No “practical” partial measures can succeed.
U.S. POLITICAL AND ECONOMIC
Lavrov, Kerry Continue Action Plans To Ensure Ceasefire in Syria
Aug. 17 (EIRNS)—Russian Foreign Minister Sergey Lavrov held a telephone discussion with U.S. Secretary of State John Kerry in which they discussed coordinated actions to fight terrorists in Syria and to ensure cessation of hostilities, according to TASS.
The two diplomats “continued discussing the situation in Syria with an accent on the situation in Aleppo, where the Russians support the government forces carry out a large-scale humanitarian operation,” a statement by the Russian Foreign Ministry said. “They discussed in detail preparations for practical implementation of the agreements reached during a visit of John Kerry to Moscow on July 15, regarding coordinated action in [the] fight against terrorist groups in Syria and to ensure the regime of cessation of hostilities,” the ministry said on Aug. 16.
Col. Christopher Garver, spokesman for the U.S.-led international coalition, told journalists at a press briefing via teleconference, that Russia had fully coordinated its airstrike from Iran to targets in Syria with the allied coalition.
“What I will say is, the Russians did notify the coalition as per the Memorandum of Understanding for safety of flight,” Colonel Garver said. “They activated that system, as we have in the past. They informed us they were coming through and we ensured safety of flight as those bombers passed through the area and toward their target and then when they passed out again. They did not impact coalition operations in either Iraq or Syria during the time,” the U.S. colonel emphasized. “We knew in time when they activate the safety of flight memorandum of understanding instructions. It’s not a lot of time, but it’s enough, and it was enough time to make sure that we could ensure safety of flights.”
Obamacare Is Becoming a Tax Indeed—A Heavy One
Aug. 17 (EIRNS)—This week has seen both a worsening of the trend of insurance companies abandoning the individual-policy exchanges of Obamacare, and a New York Federal Reserve study which showed that Obamacare is causing employers in New York to eliminate jobs and substantially shift health insurance costs to the workers in their plans. “Obamacare in Crisis” read the headline in Bloomberg News; but it is the economy as a whole in a crisis which is being worsened by Obamacare’s shrinkage of healthcare per capita.
Big insurers are losing $2 billion/year participating in the exchanges, they say. In November 2015, when UnitedHealth Group said it expected to post big losses on its Obamacare policies in 2016, rivals such as Anthem and Aetna signaled their Affordable Care Act businesses were doing fine. The Obama administration used that as evidence to refute claims of systemic problems. Now it cannot be denied; the four biggest U.S. health insurers report they’re each losing hundreds of millions of dollars on their Obamacare plans, despite being directly paid substantial government subsidies. UnitedHealth is quitting 31 of the 34 states where it sells ACA policies. Humana is exiting from 8 of 19 states and from 90% of the 1,351 counties where it offered policies a year ago. Anthem hasn’t announced plans yet. On Aug. 15, Aetna said it will stop selling Obamacare plans in 11 of 15 states.
On average, insurers are looking to raise premiums by about 24% in 2017, estimates Charles Gaba of ACASignups.net, a website that tracks the health-care law. As many as a quarter of all U.S. counties, mainly in rural areas, are at risk of having just a single insurer offering plans on their Obamacare exchange next year.
As Business Week reported Aug. 16, Obamacare individual policies have largely been taken out by older, less healthy people who are more expensive to insure. “ ‘What we are left with is a highly subsidized program for relatively low-income people,’ says Dan Mendelson, the CEO of consulting firm Avalere Health. ‘We’re not getting to the broader vision of a robust private market structure that enables a broad swath of Americans to purchase their insurance.’ ”
Meanwhile the New York Federal Reserve released a study Aug. 17 of companies all over New York State who are required to offer company plans under Obamacare. The study did not find companies shifting workers to part-time to avoid the mandate, but, worse, they are laying them off. Some 21% of industrial companies reported cutting their workforce in response to the Affordable Care Act. A third reported raising their prices to make their customers bear part of Obamacare costs. And “the vast majority” reported changing their plans with “higher deductibles, increased co-pays, and higher out-of-pocket maximum payments” by their employees.
Hillary Clinton’s “plan” to save Obamacare now involves spending more money on advertising to drive enrollment of the missing younger “millennials”; and increasing the already substantial taxpayer subsidies so that it costs no more than 8.5% of the insured individual’s income, down from 9.5% this year.
STRATEGIC WAR DANGER
Russian-Iranian Military Cooperation Gets Closer
Aug. 17 (EIRNS)—Not only did the launching of Russian air strikes from Iranian soil catch the U.S. and its allies off guard, but they also signal a new level of military cooperation between Russia and Iran in the fight against terrorism in Syria.
“I think we’re still trying to assess exactly what they’re doing,” State Department spokesman Mark Toner said, yesterday.
The Iranian decision to let the Russians use the Hamadan air base in northwest Iran is being described as “historic,” because the Iranians, even during the days of the Shah, have always jealously guarded their sovereignty. The tactical advantage, stressed by both Russian and Iranian military experts quoted in the Russian news reports, is that Hamadan is about 1,000 miles closer to targets in Syria than air bases in southern Russia. This will allow forward-deployed Tu-22M3 Backfire bombers to carry heavier bomb loads to their targets, with a reduction of flying time by as much as four to five hours.
Beyond that advantage, however, the fact that Russian planes are flying from Iran indicates a higher level of military cooperation between Iran and Russia.
“It is good to see that apart from a political front, this cooperation has acquired a new color in the form of reliable military partnership,” Sabbah Zanganeh an expert in international politics of the Middle East and a member of the Defense Affairs Commission of the Majlis (Parliament), told Sputnik.
The Associated Press reports that the Obama Administration was caught flat-footed by the Russian move to Iran. It may have been a reminder to the Obama Administration that Moscow could be cozying up to Iran if Washington doesn’t come around. “The Russians are showing they have options in Syria while they have Washington over a barrel on Aleppo,” said Andrew Tabler, a Syria expert with the Washington Institute For Near East Policy (WINEP).
The Russian Defense Ministry announced that a second series of air strikes was flown from Hamadan, today, using Su-34 bombers to attack ISIS targets in Deir ez-Zor, Syria.
Saudis Kill Yet More Women and Children in Yemen
Aug. 17 (EIRNS)—The Saudis are continuing their bombing campaign against Yemeni women and children. The latest air strike came in the district of Nehem, northeast of the capital, Sana’a, yesterday, killing 17 people, mostly women and children, reports theNew York Times. The paper cites local eyewitnesses describing it as a double-tap strike, where rescuers who went to pull victims from the rubble of a home were themselves hit by a second strike.
Saudi officials, of course, insist that they strike only military targets, and they accuse the Houthis of using civilian facilities to carry out attacks against the government and its coalition partners. Maj. Gen. Ahmed Asseri, the Saudi military spokesman, claims that the school that was bombed on Aug. 13 was a training facility for the Houthi militia. As for the bombing of the Médecins Sans Frontières (MSF) hospital on Aug. 15, the Saudi-led coalition is supposedly looking into it, but, “For the time being, we cannot call it bombing of a hospital,” General Asseri said. UN officials and aid organizations working in Yemen, as well as local eyewitness accounts, have repeatedly contradicted these Saudi claims.
Al Masdar News (AMN) reports, this morning, that Houthi militias fired three missiles at a Saudi military base in Jizan, within Saudi Arabia, on the Red Sea coast. There haven’t been any casualty reports from there, but they are assumed to be large as “this area is filled with Saudi soldiers and military equipment.” AMN says that the rocket attack “was [made] in retaliation to the Saudi Coalition’s airstrikes over the densely populated Saada and Sana’a Governorates on Tuesday morning.”
COLLAPSING WESTERN FINANCIAL SYSTEM
Another View that Deutsche Bank Is Near Blowout
Aug. 17 (EIRNS)—Warnings are continuing over the danger of a Deutsche Bank collapse bringing the banking system down with it.
In an interview in the Daily Express, hedge fund manager Brad Lamensdorf said Deutsche Bank is dangerously undercapitalized and highly debt-leveraged, and pointed to its anomalous recent action in selling its prized wealth management business Alex Brown. “Why would you sell your crown jewel if you weren’t in trouble?” Lamensdorf asked in the interview.
That sale was a rather desperate attempt to gain capital which the bank now cannot raise by selling shares on the market. When it released its second quarter report July 25, the bank claimed it had gotten very near the 11% so-called “safe” level of capital, by selling Alex Brown & Co. A ratio of capital to “risk-weighted assets” is worthless enough to begin with. But Deutsche Bank also reported zero profit and a huge 20% year-on-year drop in revenue, in that report. And the report announced that the already severe cost-cutting program of CEO John Cryan would have to be intensified, signalling that revenue was falling at least as fast as costs—a bad sign.
“Deutsche is in more trouble than people realize,” Lamensdorf said. Commenting on the fact that the bank’s share price has collapsed since 2008 Lamensdorf went on, “It suggests something is very, very broken.” While the market might be stable for the moment, Lamensdorf questioned—given the bank is currently “very fragile in a very stable market”—what will happen to Deutsche Bank in even a 5-10% market correction.
What’s NEET? European Youth ‘Neither in Employment nor in Education or Training’
Aug. 17 (EIRNS)—All that the European Union’s statistical agency, Eurostat, had to report to mark International Youth Day on Aug. 12, is that up to 31% in the age group 20-24 are neither in employment nor in education or training; so common, they even have an acronym, NEET, to describe it.
The worst-hit is Italy, with 31.1%, followed by Greece, with 26.1%, and Croatia at 24.2%, Romania at 24.1%, Bulgaria at 24.0%, and Spain and Cyprus both at 22.2%. In contrast, Eurostat reported, the lowest NEET rates for this age group were recorded in the Netherlands (7.2%), Luxembourg (8.8%), Denmark, Germany, and Sweden (all 9.3%).
Across the European Union in 2015, almost 5 million people aged 20-24 (or 17.3%) were neither in employment nor in education or training. Italy, Greece and, Spain had shown the greatest increase in the decade between 2006 and 2015, with increases of 9.5%, 9.3% and 9.0%, respectively.
China’s Overseas Direct Investment Surges with Silk Road
Aug. 17 (EIRNS)—During the first seven months of the year, China’s non-financial outbound direct investment (ODI) expanded over 2015 by a whopping 61.8%, reaching $102.75 billion, according to the Ministry of Commerce, reported Xinhua today.
While foreign direct investment (FDI) also increased, by 4.3% to $77.13 billion, this makes 2016 (at the current pace) the first year that China will be a net exporter of capital.
ODI in the U.S. and Germany more than doubled from a year earlier. Large overseas mergers and acquisitions over the seven months was $54.3 billion, accounting for more than half the total ODI, in 63 countries and regions, covering 15 sectors, including information transmission, services, software, and manufacturing.
THE NEW GLOBAL ECONOMIC ORDER
Foreign Ministers Steinmeier of Germany and Lavrov of Russia Have Cordial Meeting in Yekaterinburg
Aug. 17 (EIRNS)—German Foreign Minister Frank-Walter Steinmeier and Russian Foreign Minister Sergey Lavrov held a cordial meeting in Yekaterinburg, Russia, on Aug. 15, where they discussed the war in Syria and the Minsk Agreement on Ukraine, and jointly participated in the Opening Ceremony of the German-Russian Summer School, titled, “Development of the Energy Sector: Modern Challenges at Work Now.”
The account of Eduard Popov in the news portal Fort Russ Aug. 15 differed from press accounts, in reporting of the friendly atmosphere of the Steinmeier-Lavrov meeting. Popov says that both diplomats are political heavyweights; that Steinmeier is more popular than Chancellor Angela Merkel in Germany, and that it is quite possible that he expects to run as the lead candidate of the Social Democrats in the September 2017 Bundestag elections. The author says it is well-known that Steinmeier visits Moscow and meets with his Russian colleagues, and even President Putin, far more often than Chancellor Merkel, and that his approach to NATO and sanctions is “far more flexible than that of even other Social Democrats,” let alone the CDU.
The fact that the meeting was conducted using names and the Russian familiar form “ty” (you), shows an attempt to build an alternative to the Normandy Format, says Popov, and that “perhaps this separate alliance outside the Normandy Quartet is capable of transcending situational frameworks.” Popov points out that “It is probably no coincidence” that German politicians’ criticism of Moscow and Lavrov’s position on a humanitarian corridor from Aleppo has collapsed, and Lavrov’s harsh anti-Ukrainian statements (made in diplomatic terms) did not meet with any strong objections from Steinmeier.
Popov opines that the meeting in Yekaterinburg was “a step in comparing notes and networking, with the potential winner of Bundestag elections which are not too far off.” The article concludes that Steinmeier “is not a pro-Russian politician. He is a pro-German politician and a professional, and as such Russia understands and is interested in him. What Russia failed to do with [SPD former Chancellor] Gerhard Schröder (due to the SPD’s defeat in elections) might succeed with Steinmeier” if the SPD wins the elections.
Edinburgh Festival: Full Reading of the Chilcot Report, Indicting Tony Blair
Aug. 17 (EIRNS)—The entire Chilcot Commission Report, which concluded that former British Prime Minister Tony Blair was guilty of war crimes in going to war in Iraq in 2003, is being read aloud continuously as a production at this year’s Edinburgh Festival in Scotland, by actors, politicians, and others over a period of days, Sputnik reported today.
One reader was former Scottish Socialist lawmaker Colin Fox, who told Sputnik, “It felt like taking part in the biggest legal indictment of Tony Blair that’s ever been. There are 12 volumes—2.6 million words —and I only read about 100, so I feel I’ve partly indicted Tony Blair for war crimes, which is what millions in this country want to do.”
Fox said that today Iraq is being destroyed by a “sectarian civil war. It’s absolutely hellish. People are butchering each other. What Tony Blair left behind in Iraq is an ethnic, bloody, barbaric civil war. It’s almost like a living testimony to what George W. Bush and Tony Blair did to the world. It’s appalling.” The show’s creator, Bob Slayer, said a lot of it is testimonials from individuals actually involved, so you get a certain person’s complete picture “in perhaps an hour of watching.”
Duterte Prepares New List of Drug-Tied Politicians—A War On Drugs Which Is Succeeding
Aug. 17 (EIRNS)—Philippine President Rodrigo Duterte and his National Police chief, Gen. Ronald dela Rosa (who headed the police in Davao when Duterte was mayor), have prepared a new list of drug-tainted pols, even as the Soros networks internationally are throwing a fit over Duterte’s tough (and successful) war on drugs. The Philippine Supreme Court Chief Justice who ordered judges and others named by Duterte’s earlier lists not to report to the police unless issued an arrest warrant, has nonetheless started to investigate four judges who were on one of the lists. Duterte had instructed those on his lists to report to authorities “or get whacked”—which he clarified as meaning “sacked.”
According to Sen. J.V. Ejercito, the new list includes members of the House of Representatives, mayors, and councilors. He said many are from provinces in Mindanao.
The Dangerous Drugs Board said there are at least 1.3 million drug addicts, most of them users of shabu, or methamphetamine hydrochloride. The Philippine Daily Inquirer reports that “The shabu plague, which has infected 99% of barangays in Metro Manila, apparently went off the radar screen of the Aquino administration.”
Sen. Leila de Lima, the justice secretary under the former President, (Obama puppet) Noynoy Aquino, and now chairwoman of the Senate Committee on Justice and Human Rights, is investigating the reports of hundreds of drug-related killings, accusing of Duterte of promoting vigilante killings. But General dela Rosa said on Aug. 15 that the war on drugs would not be deterred by De Lima, and that he would pursue Duterte’s campaign promise to end the drug problem within six months of his Presidency.
“I don’t care what investigation will come,” he said. “I will continue to motivate my men to exploit the momentum. The momentum is on our side. We don’t have to slow down. [We will] continue the fight. These killings are not by vigilante groups. They’re done by drug syndicates. You will be surprised when we release our data, the facts on who is killing who. You will know that later. We don’t need to be scared for the truth to come out. Our going to the Senate is a sign we are true to our words, true to our deeds. We will not be hiding anything…. We are at war, so if you go to war, you don’t go there unprepared and our preparations should not be half-hazard. If you’re there you must be decisive. If a policeman joins a raid, you must be ready to kill or be killed.”
Finally a government which recognizes that the British Opium Wars kill people and nations.