EIR Daily Alert Service

EDITORIAL

Putin Is the Key to This Crisis, and Trump Is Rejecting the Anti-Putin Hysteria

Dec. 22 (EIRNS)—The neo-cons in the U.S., including Obama and his controllers, are freaking out that a leaked Trump Pentagon transition memo doesn’t list Russia as the top existential threat to the U.S., despite the ravings of some in the senior civilian leadership of the U.S. military under Obama. “For years, top cabinet officials at the Defense Department and the intelligence community cited Russia as the foremost threat because of its vast nuclear arsenal, sophisticated cyber capabilities, recently modernized military, and willingness to challenge the United States and its allies in the Middle East, Eastern Europe, and other regions,” intones the Foreign Policy journal in an article posted on Dec. 20. Gen. Joseph Dunford, the current Chairman of the U.S. Joint Chiefs of Staff, has even named Russia as the greatest threat to U.S. security, ahead of ISIS, Iran and North Korea!

Citing Myra Ricardel, one of President-elect Donald Trump’s Pentagon transition officials, the memo says that Trump’s defense priorities are 1) develop a strategy to defeat ISIS; 2) build a strong defense; 3) develop a comprehensive cyber strategy; and 4) find greater efficiencies within the department. Russia is not mentioned.

In fact, everything that the Washington foreign policy establishment and the U.S. military has done to reorient itself against Russia, Foreign Policy frets, could be undone by a Trump administration that wants better relations with Moscow.

Lyndon LaRouche today indicated that the key to the current strategic and economic crisis rests on Putin himself. “Putin was right,” LaRouche said. “Putin in general, and his team, are right.” While he may not understand everything, “anything that’s important is likely to be something that Putin is aware of—or will be aware of.”

Putin, by outflanking Obama in Syria, demonstrated that terrorism can be defeated, by working within international law, with sovereign governments, and thereby exposed Obama’s criminal alliance with the British- and Saudi-sponsored terrorists to achieve his criminal policy of “regime change.”

LaRouche also pointed to the assassination of Russian Ambassador to Turkey Andrei Karlov, soon after Obama threatened Putin and Russia with “retaliation,” as a factor to be investigated. “I think the warning that we had from the assassination that occurred, gives us an indication of exactly what you’ve got to worry about,” LaRouche said. “The question is not what Putin is doing, but what he intends to do.  By getting a competent assessment of what he’s going to do. It’s key.”

  • Editor’s Note:  EIR Daily Alert will skip the Monday issues for Dec. 26, 2016 and Jan. 2, 2017.

COLLAPSING WESTERN FINANCIAL SYSTEM

Monte dei Paschi Bank Nationalization Likely Friday; Bondholders Will Be Burned

Dec. 22 (EIRNS)—Italian Finance Minister Carlo Padoan assured the public Dec. 21 that the “Italian banking system is solid, even if there are some crisis situations”; but this is now not sure. The immediate “crisis situation” is the likely decision on Dec. 23 to nationalize Monte dei Paschi di Siena (MPS) bank, the third-largest in Italy. The bank’s announcement Dec. 21 that it had only a few months’ liquidity left, led to plunges and suspensions in trading of both its stocks and bonds; and its desperate attempt to raise €5.5 billion new capital appears almost certainly to have failed. Both MPS’s board and the Italian Cabinet had emergency meetings scheduled Thursday night, Dec. 22, on nationalization.

New elements worsen the situation today. First, the MPS bondholders are likely to be burned across the board. Those larger institutional investors who have voluntarily accepted the “swap” to raise capital, have reportedly taken a 20% haircut in the value of their bonds. Retail bondholders, who are ordinary savers, will be burned as well; i.e., the nationalization bailout will include a bail-in.

Secondly, both Bloomberg News and the Financial Times report today that two or more other banks may be nationalized right after MPS; and that the Italian government’s new €20 billion bailout fund may be increased again. Banco Popolare di Vicenza is one bank named in both reports.

Finally, some MPS bonds are now trading as low as 40 cents/dollar; if a nationalization “burns” bondholders by only 20% of their savings, the European Central Bank and/or European Commission could rule that to be a bailout, violating the EU’s bail-in rules, and demand that the bondholders’ losses be increased.

Contagion has hit other Italian bank stocks and bonds, though on a much smaller scale than MPS so far; and has hit the sovereign bonds of Spain with a sudden interest rate rise (1% on 10-year bonds).

STRATEGIC WAR DANGER

Russia Invites Saudis and Others To Join the Russia-Iran-Turkey Agreement on Syria

Dec. 22 (EIRNS)—During an interview with Rossiya 24 television, Russian UN Ambassador Vitaly Churkin urged other countries which have influence in Syria, including Saudi Arabia, to join the agreements just reached by Russia, Iran and Turkey, TASS reported today. “In my opinion, it is very important that this statement contains an invitation for other countries that have influence on the ground to join such efforts,” Churkin said. “It seems to me that it will be important for Saudi Arabia to take a similar position and work in this direction.”

In Beijing, China’s President Xi Jinping, offering his condolences over the assassination of Russian Ambassador to Turkey Andrei Karlov, said: “The Chinese side confirms the intention to develop further cooperation with Russia and the international community in fighting terrorism in interests of common security,” TASS reported today.

At a tripartite meeting on Dec. 20 in Moscow, Russia, Turkey and Iran expressed their readiness “to act as guarantors for a new agreement on Syria,” Russian Defense Minister Sergei Shoigu said, Gazeta.ru reported.  Shoigu said “experts are working to finalize the text of the new document entitled, ‘The Moscow Declaration of Immediate Steps To Promote the Settlement of the Syrian Crisis.’ ”  If the agreements are reached, according to Foreign Minister Sergey Lavrov, that “would promote the process of settling the Syrian crisis and create favorable conditions for political negotiations and humanitarian aid deliveries, at the same time ensuring zero tolerance towards terrorists,” TASS reported on Dec. 20.

THE NEW GLOBAL ECONOMIC ORDER

AIIB Approves $600 Million to Azerbaijan To Finance TANAP Gas Pipeline Project

Dec. 22 (EIRNS)—The Asian Infrastructure Investment Bank’s largest loan in its inaugural year, of $600 million to Azerbaijan, has now been approved by its Board of Directors, Xinhua reported today. The AIIB loan will be used to support construction of a natural gas pipeline from Azerbaijan through Turkey, known as the Trans-Anatolian Natural Gas Pipeline Project. The TANAP will be co-financed by the World Bank.

The approval brings the total amount loaned by the bank in its first year to $1.73 billion in nine infrastructure projects across seven countries. The bank approved its first four loans, totaling $509 million, in June. Three of those four loans were to co-finance projects with multilateral development bank partners.

As a part of the Southern Gas Corridor Program, the TANAP will transport natural gas extracted from the Shah Deniz 2 field located in the Caspian Sea in Azerbaijan, across Turkey and then to Europe. Turkey is the host country of the project.

SCIENCE AND INFRASTRUCTURE

China To Connect Its First High-Temperature Gas-Cooled Reactor to the Grid in 2017

Dec. 22 (EIRNS)—According to a news release by Tsinghua University, reported by the People’s Daily today, China’s first commercial High-temperature Gas-cooled Reactor (HTR), a fourth generation reactor capable of generating 600 MW of electrical power, “is now undergoing the installation and commission stage,” and will be hooked up to the grid in 2017.

Often described as a “meltdown-proof reactor,” the 600 MW HTR is a pebble-bed reactor that uses helium gas as the heat transfer medium, and runs at very high temperatures up to 950°C. The pebble-bed reactor was developed in Germany at the Jülich Research Center, and was then known as the AVR reactor. The first of its kind operated at 46 MW thermal power, about 13 MW electric power.

For the Chinese reactor, which will be the only commercial HTR in operation at the time of its commissioning, a German company, SGL Group, is supplying the billiard-ball-size graphite spheres that encase thousands of tiny pebbles of uranium fuel. “Seven high-temperature gas-cooled reactors have been built, but only two units remain in operation, both relatively small: an experimental 10-megawatt pebble-bed reactor at the Tsinghua Institute campus, which reached full power in 2003, and a similar reactor in Japan,” People’s Daily reported.

Iranian President Rouhani Seals a Transportation Deal in Kazakhstan

Dec. 22 (EIRNS)—Iran’s PressTV reported today the signing of an agreement between the Islamic Republic of Iran Shipping Line and Kazakhstan’s KTZ Express—a subsidiary of the national company, Kazakhstan Railways—on the sidelines of Iranian President Hassan Rouhani’s ongoing trip to Kazakhstan; he arrived in Astana from Yerevan, Armenia, where he met with the President and Prime Minister yesterday; and will depart late today for Bishkek, Kyrgyzstan, before returning to Tehran.

“The agreement is meant to facilitate sea transportation in the Caspian Sea and cooperation between Iran and Kazakhstan on ports and terminals issues, and to connect Iran’s southern ports to Kazakhstan as well as other Central Asian countries,” Iran’s IRNA news agency reported. “It can also facilitate cooperation between Tehran and Astana over the construction of port terminals, as well as mutual investments by the two countries in the area of port facilities.”

Following the meeting between Kazakhstan’s President Nursultan Nazarbayev and President Rouhani today, the Kazakh news agency KazTAG reported an announcement that “Iran and Kazakhstan will cooperate in the field of oil supply and petro-chemistry.” Iran’s Rouhani stated, “We are states producing and exporting oil and gas. We can help each other in this field. We can place our oil on the ports of the Caspian Sea, and the same volume can be supplied to the Southern Iranian ports. As for petro-chemistry, taking into account the major progress of Iran … we can help in development of your petrochemical field.”

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