THURSDAY, AUGUST 25, 2016

Volume 3, Number 2

EIR Daily Alert Service

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

EDITORIAL

The Obama Crisis Is Upon Us Now

Aug. 24 (EIRNS)—The biggest single obstacle to the world’s moving into a new global paradigm of cooperative development, scientific advances and a new era of space exploration and discovery, is the multiple crises that have been provoked by British agent Barack Obama over the course of his seven-and-a-half years in office.

It is fortunate that world leaders will be gathering in a series of summit meetings, beginning in the next weeks, that will afford an opportunity to face these accelerating crises and, under the leadership of individuals like Vladimir Putin, Xi Jinping and Narendra Modi, take bold action.  Xi Jinping has already made clear that he will use his chairmanship of this year’s G20 to revive the original objective of creating a new global financial and economic architecture (the G20 evolved from President Bill Clinton’s G22 initiative to come up with solutions to the 1997-1998 phase of the still-onrushing global financial collapse).

The Obama disasters are hitting around the globe, including in the United States, where Obamacare is on the verge of a blowout, with major health insurance companies insisting on rate hikes for 2017 of 40-62%, and many states unable to maintain the health insurance markets that Obama had claimed would reduce insurance rates and expand coverage.

Obama’s failed policies in the Middle East and North Africa continue to be a hair-trigger for a major war with Russia. Pentagon officials have issued direct threats to shoot down Russian and Syrian planes if they threaten U.S. Special Forces personnel who are operating with Syrian rebel groups inside Syrian territory—in flagrant violation of Syrian sovereignty. Yesterday, the folly of the Obama policy reached an all-time low, with U.S. forces providing support to a Turkish-led invasion of northern Syria, to combat both ISIS and Kurdish fighters—who are also backed by U.S. military personnel. Russian Foreign Minister Sergey Lavrov, who is to meet with U.S. Secretary of State John Kerry in Geneva on Aug. 27-28, openly clarified that there can be no joint U.S.-Russia war against the Islamic State, unless the U.S. makes clear that Washington is not supporting the Al Qaeda Nusra Front, which recently changed its name and claimed to have dropped its al-Qaeda ties.

In the Asia-Pacific region, the deployment of the U.S. THAAD missile defense system to South Korea has increased the risk of war in that volatile area.  The U.S. and South Korea are now conducting joint maneuvers off the Korean coast, which has prompted North Korea to launch a test of a submarine-based missile, which landed inside Japan’s Air Defense Identification Zone (ADIZ) in the East China Sea.

Despite clear evidence of genocide on the part of the Saudis in their war on Yemen, the United States continues to provide key support to the Saudi war coalition, and continues to sell hundreds of billions of dollars in weapons to the Kingdom—even after the release of the 28 pages from the original Joint Congressional Inquiry report on 9/11, that showed deep Saudi regime support for the terrorists that attacked the World Trade Center and the Pentagon.

Everything that President Obama has touched since coming into office has proven to be a disaster, and the cumulative effect of his war policies and his monetary and economic policies have brought the world to the brink of disaster.

At the same time, the efforts by Russia, China, India and other countries of the Eurasian region have created new opportunities for economic growth, through projects well underway, under the One Belt, One Road program of China, which is now also adopted by the Eurasian Economic Union (EAEU) and is being joined increasingly by ASEAN nations and others.

It’s long overdue for Obama to be dumped, and his British-dictated policies dumped along with him.

COLLAPSING WESTERN FINANCIAL SYSTEM

Deutsche Bank and Hedge Funds Panic over Negative Interest Rates

Aug. 24 (EIRNS)—The policies of the European Central Bank have wreaked havoc on the entire European financial system, to the point that “the dead bank walking” Deutsche Bank and major European hedge funds are screaming for a change—before they crash and burn altogether.  The Global Edition of Handelsblatt dated Aug. 23 featured an article on the consequences of the ECB’s negative interest rates and quantitative easing, quoting extensively from Deutsche Bank’s chief executive John Cryan, who wrote a guest column on the eve of Handelblatt’s Banking Summit in Frankfurt, on Aug. 31-Sept. 1.  Cryan complained bitterly that “Monetary policy is now running counter to the aims of strengthening the economy and making the European banking system safer.”  By forcing banks to pay interest on funds they deposit with the ECB, under mandatory increased reserve requirements, and by looting pensioners through the negative interest rates, Cryan charged that the ECB has made a terrible situation far worse. Cryan called for a drastic change in ECB policies, freely admitting that Deutsche Bank is going through a “painful restructuring and battling to keep the confidence of investors,” and the ECB policies are making it far more difficult.

Handelsblatt also quoted from a Cologne-based asset manager, Bert Flossbach that central banks are “forced to resort to ever more aggressive policies to stop the financial system from collapsing, and that has made the markets totally dependent on central bank interventions.”

Hedge funds are also on the chopping block due the ECB’s negative interest rates.  Forced to post collateral with the big European clearinghouses that manage the derivatives trade, they are now losing money on those deposits, which usually take the form of purchases of government bonds, now with negative interest rates, “which threaten to erode their main profit driver: the gap between their cost of funding and their revenue from lending,” Reuters warned today.

The freakout by Deutsche Bank and some leading European hedge funds is reflective of a much deeper crisis, that goes far beyond 2008:  the entire trans-Atlantic banking and financial system is drowning in debt and engaging in the same gambling games that led to the 2008 blowout. And the remedies being peddled by the ECB and other central banks are accelerating the blowout.

ECB Warns Governments: Either Implement Fascist Austerity or We Blow Out the System

Aug. 24 (EIRNS)—In the context of increasing warnings of a financial collapse from several quarters, Benoit Coeuré, European Central Bank (ECB) Executive Board member and close aide to ECB President Mario Draghi, told an audience in Geneva that if government fails in “structural reforms” and “fiscal policies” (read: deregulation and budget cuts), the ECB will intensify its monetary expansion, with all the risks that that entails.  “If nothing takes place (in terms of reforms) then the [European] Central Bank may have to do more,” Coeuré said. “The only message here is if there is not much taking place on the structural reform front, if there is not much taking place on the fiscal policy front, from what can be done, then the ECB would have to do more.”

However, Coeuré warned that “anything we do also comes with side-effects—possible future risk for financial stability. So far we have mitigated, managed and curbed those risks.”

STRATEGIC WAR DANGER

Turkey Launches Armed Incursion into Northern Syria

Aug. 24 (EIRNS)—This afternoon, after meeting with U.S. Vice President Joe Biden, Turkish President Recep Tayyip Erdogan announced that Syrian rebels, backed by Turkish artillery and tanks took the Syrian border town of Jarabulus, on the Euphrates River, from ISIS. According to a Reuters report, the operation began at 4 a.m. local time (02:00 UCT), with U.S. and Turkish air strikes against ISIS targets. The air strikes were apparently followed by the insertion of Turkish special forces into Syria and Turkish artillery strikes across the border. Turkish tanks reportedly crossed the border some hours later.

“The aim of the operation is to ensure border security and Syria’s territorial integrity while supporting the U.S.-led coalition against Islamic State,” one military source told Reuters. The military operation was aimed at clearing the Turkish border of “terrorist elements,” halting a new wave of refugee flows, and delivering humanitarian aid to civilians in the region, the last significant town held by the jihadist group on the border with Turkey, state-run Anadolu Agency reported, according to Hurriyet. It also aimed at “prioritizing and supporting Syria’s territorial integrity,” it said.

However, both the Kurds and the Syrian Foreign Ministry have denounced the Turkish incursion as an act of aggression. A source in the Syrian Foreign Ministry told SANA that Syria condemns the incursion as a blatant violation of Syrian sovereignty and affirms that fighting terrorism isn’t done by ousting ISIS and replacing it with other terrorist organizations backed directly by Turkey. Syrian Kurdish Democratic Union Party (PYD) leader Salih Muslim, in a Twitter posting, this morning, declared that “Turkey is in Syrian Quagmire. will be defeated as Daesh.”

The Turkish assault into Syria began hours before Biden arrived in Ankara to meet with Erdogan and Prime Minister Binali Yildirim. While the main agenda item for Biden’s visit is the Turkish demand for the extradition of U.S.-based Turkish cleric Fethullah Gulen for his alleged involvement in the failed July 15 coup attempt, the U.S. relationship with the Syrian Kurdish PYD and its armed People’s Protection Units (YPG) is also high on the list of Turkish concerns. Biden therefore promised that the YPG, which played a key role in the recent liberation of Manbij, Syria from ISIS, would not be allowed to stay west of the Euphrates River. “They cannot and will not, under no circumstances, get American support if they do not keep that commitment,” Biden said during a joint press conference with Yildirim, today, reports Hurriyet.

Putin, Merkel, Hollande To Discuss Ukraine on Sidelines of G20 Meeting

Aug. 24 (EIRNS)—Russian President Vladimir Putin, German Chancellor Angela Merkel and French President François Hollande spoke by phone, yesterday, and agreed to meet on the sidelines of the G20 summit in China. “The three leaders agreed to maintain personal contacts over Ukraine, in particular, to hold a joint meeting on the sidelines of the September 4-5 summit of the Group of 20 in China,” reports a Kremlin statement. The sides discussed “issues of Ukraine’s internal crisis, including prospects for the continuation of the Minsk process, based on the synchronization of the political steps and measures in the sphere of security,” the Kremlin said. The Russian President, German Chancellor and French President emphasized “the importance of the provision of a permanent legislative framework for the special status of Donbass, the constitutional reform and amnesty, the organization of local elections.” All these questions “should be coordinated in the Contact Group (on the Ukrainian crisis resolution) where Kiev has the possibility to conduct a direct dialogue with the (self-proclaimed republics) of Donetsk and Lugansk.”

During the conversation the leaders also “expressed concern over the persisting instability along the conflict sides’ contact line and systematic violations of the ceasefire regime.”

SCIENCE AND INFRASTRUCTURE

South Korea Advances Technology for Tritium Fusion Fuel Production

Aug. 24 (EIRNS)—The National Fusion Research Institute (NFRI) of South Korea has succeeded in developing the technology for the “mass” production of tritium fuel that will be needed for the International Thermonuclear Experimental Reactor (ITER) tokamak, today’s Korea Times reports.  The new technique will enable the production of more than 50 kilograms of tritium per year. While another isotope of hydrogen, deuterium, also a fusion fuel, occurs naturally, aside from very small trace amounts, tritium can only be produced artificially. ITER will demonstrate fusion with the deuterium-tritium reaction, which is the easiest reaction to create, requiring the least amount of energy input.

NFRI says that this new production technology will lower the cost of importing tritium for ITER, which currently stands at a cost of about $26,000 per kilogram.

Each of the ITER partners (U.S., Russia, Japan, Europe, India, China, South Korea) contributes about 9% of the cost of the tokamak project, not in money, but in hardware. South Korea is working on 10 procurement items, and tritium systems is one of the 10.

Major Advances in Russian Nuclear Reactor Technology

Aug. 24 (EIRNS)—World Nuclear News (WNN) reported Aug. 10 on “a Russian government decree published earlier this month that indicates the country plans to construct 11 new nuclear power reactors by 2030—including two BN-1200 sodium-cooled fast neutron reactors. The BN-1200 units are to be built at the Beloyarsk and South Urals nuclear power plants. …”

According to this report, “the decree also approves building a facility to produce high-density U-Pu nitride fuel and the construction by 2025 of the BREST-OD-300, which is part of the Russian state nuclear corporation Rosatom’s ‘Proryv,’ or Breakthrough project, to enable a closed nuclear fuel cycle. The ultimate aim is to eliminate production of radioactive waste from nuclear power generation. The Breakthrough project comprises a fuel production/re-fabrication module for production of dense uranium plutonium (nitride) fuel for fast reactors; a nuclear power plant with a BREST reactor; and a used fuel retreatment module.” Mashinostroitelny Zavod (MSZ), part of the Russian nuclear fuel manufacturer TVEL, has also “announced the start of research and development work on the technical design of the ‘absorbent element’ of the core of the BREST-OD-300 reactor” WNN reported.

Russian nuclear technology also earned kudos in India where Russia has supplied the 1000MW VVER nuclear reactors for India’s Kudankulam nuclear power plants (KKNPP-I & II). M.R. Srinivasan, first chairman of the Nuclear Power Corp. of India Ltd. (NPCIL) said: “Kudankulam NPP is incorporating the largest power unit in the Indian Electricity System, as each reactor is producing 1000 MW. Our other power units, nuclear or coal fired, are of smaller size. Therefore, Kudankulam means an important jump in the size of the power unit,” he was quoted as saying by Russia & India Report today.

RIR also quoted R.S. Sundar, site director for Kudankulam NPP, telling journalists on Aug. 15: “I am very happy to share that we have recently completed 175 days of continuous operation of Unit 1 and its performance is excellent.” Sundar said, “almost 100,000 people visited the Kudankulam NPP site through various programs and this helped us in making the public understand the safety of the Kudankulam NPP reactors clearly.”

NEW STRATEGIC PARADIGM

Iran To Become Major Player in Silk Road Economic Belt

Aug. 24 (EIRNS)— A week-long forum in Tehran on the “Silk Road Economic Belt” indicated great enthusiasm for this project which is quickly catching on in the Middle East. The Silk Road Economic Belt is the overland “One Belt” component of the One Belt, One Road initiative; the “One Road” is the 21st Century Maritime Silk Road.

The conference was opened by Ahmad Mohammadi, the head of the Iran-China Friendship Association. Mohammadi said the interaction between the two countries has long existed, but has taken new dimensions with the initiative. “The proposal has been well received in Iran, and the Islamic Republic is preparing to accept the proposal,” Mohammadi said. In order to implement the project, he said, the first step is to establish a secretariat of the project in China, adding that this can be followed by sessions of the secretariat with the representatives from the participation states.

Mohammed Reza Dashiri, the head of the international department of the Iranian Foreign Ministry, said the Belt and Road is aimed at creating a friendly environment for a better neighborhood in terms of political, economical and security dimensions, and continued, “The Islamic Republic is determined to actively participate in the project, and believes that joining the plan would help the regional and international economic development.”

The China-proposed initiative could promote interaction between Iran and China and can be a turning point with win-win venture in bilateral ties, Mohammad H. Emadi, advisor to Iran’s Agricultural Ministry, told Xinhua in an interview. The Belt and Road Initiative is “a new paradigm and a turning point in the relationship between Iran and China and among all central Asian states,” Emadi said.

“Since some financial sanctions by the West against Iran are still in place, it would be a good idea to develop mechanisms for transactions between Iran on the one hand and China and other countries involved in the initiative on the other,” said Mohsen Shariati Nia, a professor at Tehran Shahid Beheshti University. “In addition, the private sectors of both countries should engage in strategic cooperation and investment projects, so that short-term trade ties could grow into comprehensive economic interactions.” He said Iran’s role in the “Silk Road Initiative” should be more than a mere link between East and West: “Iran should play a key role as a partner of China, which will result in the strategic cooperation.”

Concurrently with the conference, Tehran is also hosting a cultural festival called “2016 Experiencing China in Iran,” showcasing northwest China’s Xinjiang Uygur Autonomous Region, and featuring a photo exhibition, music and dance performances, and other cultural activities.

Despite Tensions, Chinese, and Japanese, South Korean Foreign Ministers Meet, Commit to Future Collaboration

Aug. 24 (EIRNS)—Despite the many well-known tensions among them, the Foreign Ministers of China, Japan and South Korea met in Tokyo yesterday to discuss regional as well as bilateral issues, and to establish a basis for continued cooperation in a region rife with U.S. and British imperial provocations. It wasn’t clear until late Monday that the meeting would take place, and there was no joint communiqué issued at the end. Nonetheless, progress was made. China’s Wang Yi, Japan’s Fumio Kishida, and Yun Byung of South Korea pledged to bring their heads of state/government together for a trilateral summit by the end of this year.

Just before the summit began, North Korea test-fired a submarine-launched ballistic missile, which fell into the Sea of Japan, within Japan’s Air Defense Identification Zone (ADIZ), Xinhua reported today. In this context, all three ministers stated their commitment to the denuclearization of the Korean Peninsula. Wang Yi underscored, that nuclear issues must be settled through dialogue and negotiations.

On the sidelines of the summit, each of the foreign ministers held bilateral meetings with the foreign ministers from each of the other two countries, described, in some cases as quite tense, given several festering issues. However, in the joint press conference of the three, Kishida stated “there are various issues among the three countries, but we have to overcome that with our political wisdom.” Wang Yi added, “Despite the issues the three countries have, we have an important responsibility for the peace and stability of the region. We would like to enhance our cooperation by overcoming the difficulties,” the Japan Times reported.

The upcoming G20 summit was also discussed, and in remarks quoted by Xinhua, Wang Yi said that China wants to strengthen cooperation and communication with Japan and South Korea “to make the summit a conference that boosts confidence, helps build consensus, guides future directions, and makes due contribution to promoting world economic development and improving global economic governance.” The three countries, he said, “should shoulder the responsibility of promoting economic development in East Asia, taking the lead in regional cooperation in East Asia and maintaining regional peace and stability so as to make greater contributions to the overall revitalization of Asia as well as to world peace and development.”

All three foreign ministers pledged to make concerted efforts to ensure the success of the G20 summit. Wang Yi affirmed, “China, South Korea, and Japan should develop their relations in the spirit of taking history as a mirror and looking to the future.”

U.S. POLITICAL AND ECONOMIC

Obamacare on the Verge of Collapse in Many Counties

Aug. 24 (EIRNS)—President Obama rejected the idea of a single-payer Federal medical insurance program, and, instead turned over the drafting of the Obamacare legislation to the big health insurance companies. The system was doomed from the start, and, as of now, major health insurance providers, including United Healthcare and Aetna, have pulled out of most of the markets, and according to a recent study by Kaiser Family Foundation, in five states and in a total of 664 counties around the United States, people will only have one health insurance option.  And the Kaiser study was conducted before Aetna made their announcement, pulling out of Obamacare.

Alabama, Alaska, Oklahoma, South Carolina and Wyoming are the five states where there will be only one insurance provider available, and North Carolina and Kansas are almost down to just one company.  Of the 664 counties with single insurers, 70% are in rural America, compounding an already-collapsing health-care infrastructure in these areas.

When President Obama was making his pitch for Obamacare before Congress, he told lawmakers:  “My guiding principle is, and always has been, that consumers do better when there is choice and competition.”

While Tennessee is not even on the list of the states hit hardest by the pullout of big insurance companies from the Obamacare exchanges, the State Commissioner of Commerce and Insurance, Julie Mix McPeak told The Tennessean recently that “I would characterize the exchange market in Tennessee as very near collapse … and that all of our efforts are really focused on making sure we have as many writers in the areas as possible, knowing that might be one.  I’m doing everything I can to prevent a situation where that turns to zero.”  Business Insider noted that Blue Cross Blue Shield of Tennessee, the only statewide insurer, has asked for a 62% increase in premiums they can charge in 2017, on top of a 36.3% hike already implemented this year.  The other two large health insurers in Tennessee, Humana and Cigna, have both requested 40% premium hikes for 2017.

OTHER

Resistance Forming in Brazil, on Eve of Impeachment Coup against Rousseff

Aug. 24 (EIRNS)—On the eve of her Senate impeachment trial, which begins on Aug. 25, President Dilma Rousseff delivered the message to a “Meeting in Defense of Rights and against the Coup” in São Paulo yesterday and a similar rally in Brasilia today, that she will defend herself personally before the Senate, because the impeachment trial is a “parliamentary coup” which threatens democracy. It is also being used, she said, to impose vicious economic measures which the electorate would never support: freezing expenditures on education and health for 20 years, in violation of the Constitution; ripping up labor laws; cutting pensions and the minimum wage; and “the great privatization of the Nation’s wealth.”

The mood in patriotic layers of the country was expressed starkly at a “Public Act of Constitutional Resistance” held at the Federal University of Rio Grande do Sul on August 18, where leading legal scholars and others identified the so-called “Lava Jato” anti-corruption operation as “judicial fascism” premised on the precepts of the Nazi Crown Jurist, Carl Schmitt, whose purpose is to impose a colonial looting economic system upon the country, for which the impeachment of President Dilma Rousseff is only the first step.

Former President of the Brazilian Lawyers Association Marcelo Lavenere told the overflow crowd at the Economics School auditorium, to be prepared to form a resistance movement like that which formed after the 1964 military coup, if the President is impeached. The media-driven “Lava Jato” operation, led by “pop-star” judges like Sergio Moro, is “the worst attack that Brazilian democracy has suffered in the last 100 years. It is worse than the ‘64 coup,” Lavenere charged. Then Brazil faced an enemy well-defined as an enemy, “and the military, at least, were not such sell-outs as [acting President] Michel Temer [and others] … who want to hand over all our resources to the international elites.”

Pedro Estevam Serrano, Constitutional Law Professor at São Paulo’s Catholic University, identified the media as the means by which the rich are being mobilized as “the rabble” who provide the social basis for “judicial fascism” imposed through “Lava Jato.” Serrano, who has written a new book, Coups and Authoritarianism in Latin America—A Brief Essay on the Judiciary as the Instrument of Exception, cited Nazi Carl Schmitt’s theory that “the true sovereign is whoever has the authority to establish the exception.” Serrano added: “who has that power today in Brazil is the judiciary.”

 

 

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