EIR Daily Alert Service: China Wealth Fund Wants to Turn Treasuries Into U.S. Infrastructure (Wonderful!)
TUESDAY, JANUARY 17, 2017
Volume 4, Number 11
EIR Daily Alert Service
P.O. Box 17390, Washington, DC 20041-0390
Jan. 16 (EIRNS)—President-elect Donald Trump’s latest and most substantive interview makes very clear what is the new paradigm for the world for the immediate future. Trump prioritizes a deal for nuclear weapons reduction and likely sanctions reduction with Vladimir Putin’s Russia. He states that NATO is “obsolete” and that its European members neither support its military nor fight jihadist terrorism. He forecasts that the European Union is likely to break up, and that this will be a good thing.
Despite the hysterical outbursts this interview with the London Times and Germany’s Bild Zeitung has drawn from the European elite and Obama’s ambassadors there, Donald Trump is simply seeing the new reality—the new paradigm—and indicating he may help make it.
Putin’s Russia is responsible for the possibility of ending 15 years’ continuous Mideast/North Africa wars, and for a new security concept, shared by Xi Jinping’s China, which can break the back of international terrorism. Xi tomorrow will keynote the World Economic Forum at Davos. He is responsible for driving a very large share of the economic and productivity growth in the world, and for offering “a community of common destiny” through the New Silk Road infrastructure, leading fusion research and development, leading lunar exploration.
The United States, rid of the Nobel War Prize President Obama, is offered to join the institutions and actions of this new paradigm.
Fear and hatred of this prospect is the source of the intense campaign of anti-Russia, anti-Trump propaganda in the United States, which is being steered from British intelligence but is deep into a “get-Trump task force” within the intelligence agencies under Obama. That campaign is futile and destructive, and American “progressives” should not be sucked into joining it.
As EIR Founding Editor Lyndon LaRouche put it, “The way Trump is going ahead right now, there’s going to be a big change internationally. It’s not Trump alone. It’s the other elements in the system that are coming together to bring a force into play which will dominate the planet.”
Will the American population, which has voted to reject the old, “globalization, deindustrialization” paradigm, get the new administration and Congress to do what is needed to join the new drivers of growth and scientific progress?
A national, bipartisan petition drive is underway—including LaRouche PAC, which has posted the petition—demanding that Trump, who promised “a 21st-Century Glass-Steagall Act” during the campaign, propose this to Congress in his first address to them. Ending the Wall Street casino’s poisoning of the American economy is a first step. But then there is no national “Hamiltonian” credit institution to remake America’s obsolete economic infrastructure—even when China’s sovereign funds, as reported here, are seeking exactly such an institution to enable them to invest in a new U.S. infrastructure. Obama told voters he considered the fusion power/plasma technology revolution entirely unnecessary, and privatized NASA’s major exploration programs with worsening effect.
U.S. POLITICAL AND ECONOMIC
Jan. 16 (EIRNS)—The trans-Atlantic establishment has been thrown into another round of rug-chewing by U.S. President-elect Donald Trump’s first interview with European media, a joint interview granted to The Sunday Times of London and the German tabloid, Bild Zeitung, published by both on Jan. 15. Leaders from France to Britain and beyond expressed outrage that Trump dared to suggest lifting Russian sanctions in return for a nuclear arms deal, to again call NATO obsolete, and to suggest that not only was Great Britain’s Brexit from the European Union a “great thing,” but, “if you ask me, more countries will leave, too.”
“They have sanctions on Russia—let’s see if we can make some good deals with Russia. For one thing, I think nuclear weapons should be way down and reduced very substantially, that’s part of it,” Trump told his interviewers.
Changes will also occur at NATO, Trump announced: “It’s obsolete, first because it was designed many, many years ago,” secondly, European “countries aren’t paying what they should,” and also, because the NATO alliance “didn’t deal with terrorism.”
Trump’s criticism of Russia’s intervention into Syria as a “very bad thing” that led to a “terrible humanitarian situation,” did not outrage the trans-Atlantic elite, nor his repeated statement that it was “a big mistake” for Germany to have taken in Syrian refugees.
But the same cannot be said for Trump’s reminder that what created this crisis in the first place, was the U.S. intervention into Iraq.
“This whole thing should have never happened. Iraq should not have been attacked…. It’s like throwing rocks into a beehive. It’s one of the great messes of all time,” Trump said. His priority for the military as commander-in-chief? “ISIS,” Trump answered.
Obama’s Ambassador to the European Union, “leveraged finance” expert Anthony Gardner, was already apoplectic that the first question EU officials the Trump transition team had spoken to were asked was “What country is about to leave [EU] next after the U.K.?” thus spreading the idea “that 2017 is the year in which the EU is going to fall apart.” (Time magazine, Jan. 13, 2017).
Now from Trump himself, came the assertion that “Brexit is going to end up being a great thing.”
What was reported in The Times and not Bild was his references to Germany and its Chancellor.
“You look at the European Union and it’s Germany. Basically a vehicle for Germany. That’s why I thought the U.K. was so smart in getting out,” he told the two editors. “I believe others will leave. I do think keeping it together is not gonna be as easy as a lot of people think.”
Jan. 16 (EIRNS)—After Obama’s CIA Director John Brennan again menaced incoming President Donald Trump on Sunday that he “has to be mindful … needs to be very, very careful” about bucking “the intelligence community’s” assessment that Russia is a major threat to the U.S., Trump asked in a tweet: Was Brennan “the leaker of Fake News?”
Brennan gave good grounds for raising that question in his Jan. 15 interview with Fox News’ Chris Wallace. When Wallace pressed Brennan on whether the intelligence community had information—not rumors, but information—about contacts between the Trump camp and Kremlin associates during the election campaign, Brennan would not say no; he demurred that if such information was found in the course of “incidental collection” of intelligence, that information would be shared with the FBI. He said he couldn’t say more.
A story filed on Jan. 12 by BBC correspondent Paul Wood from Washington discards Brennan’s coy claims of “incidental collection.” According to Wood’s detailed account, Brennan set up a six-agency task force—including the FBI, Department of Treasury, Justice Department, CIA, Office of the Director of National Intelligence, and National Security Agency—sometime before June 2016, in order to cook up a case of Russian money going into Trump and Trump’s campaign. Brennan’s pretext for the operation was alleged information he received in April 2016 from “an intelligence agency of one of the Baltic States” of Kremlin money going into the Trump campaign.
Their “information” was so poor, that even the FISA (Foreign Intelligence Surveillance Act) Court turned down the Brennan task force’s applications for permission to make relevant intercepts, first in June and again in July. It was only on the third try, on Oct. 15, that they found a FISA judge who would give the go-ahead for intercepts on Russian banks through which money was allegedly flowing, Wood reported.
Wood made no bones of the fact that his British Broadcasting Corp. story was written to buttress the already-discredited 35-page fraud circulated by “former” MI6 officer Christopher Steele—and that it was written in cahoots with Brennan’s CIA.
“I understand the CIA believes it is credible that the Kremlin has such kompromat—or comprising material—on the next U.S. commander in chief,” Wood wrote at the outset of his article.
Thus, Brennan’s task force was set up, Wood asserts, specifically to get around bothersome restrictions on the CIA acting domestically against American citizens. His source for the information on the FISA warrant? That “was given to me by several sources and corroborated by someone I will identify only as a senior member of the U.S. intelligence community. He would never volunteer anything—giving up classified information would be illegal—but he would confirm or deny what I had heard from other sources.”
THE NEW GLOBAL ECONOMIC ORDER
Jan. 16 (EIRNS)—In a speech to the Asian Financial Forum in Hong Kong today, China Investment Corp. Chairman Ding Xuedong said that CIC wants to change its holdings of U.S. Treasury debt, into an investment in building new infrastructure in the United States. Ding’s speech was reported in the South China Morning Post, Reuters, and other media.
Ding’s estimate of the investment needed to build a new and modern economic infrastructure in America was a very large $8 trillion, which, he said, would not be invested by the U.S. government and private investors alone. “According to our estimate, the United States needs at least $8 trillion in infrastructure investment; there’s not sufficient capital from the U.S. government or private sector. It has to rely on foreign investments.”
Ding said CIC also wants to invest in American manufacturing capacity.
The vehicle CIC is seeking, in fact, does not yet exist; it would be a “Hamiltonian” national credit institution for infrastructure and manufacturing investments, as specified in EIR Founding Editor Lyndon LaRouche’s “Four Laws To Save the United States Economy” in 2014.
CIC now holds $50 billion in U.S. Treasuries, a part of $1.14 trillion in Treasuries held by Chinese institutions. Ding called the return on those Treasuries too low, and said “the returns in public markets are falling.” CIC wants alternatives, and wants to convert those holdings into investments in new U.S. infrastructure projects. The China International Capital Corp. that Ding heads has substantial U.S. Treasury holdings as well.
Jan. 16 (EIRNS)—Back in September 2016, Dr. Atif Ansar of Oxford University’s Saïd Business School led a team which attempted to “prove” that China’s development of a high-speed rail network would simply result in a “boom and bust” cycle for its domestic (and perhaps the world’s!) economy. Today, they are eating crow—admitting what their mathematics refused to show—that China’s infrastructure investment is paying off in ways they never imagined.
This week’s Economist features two articles on Chinese domestic high-speed rail network development. Under the rubric of “The Lure of Speed,” the editors admit that China has almost completed a four-by-four rail grid spanning the entire nation—20,000 km of four major east-west and north-south lines. Moreover by 2035, it plans an even denser eight-by-eight grid in complete operation, ultimately 45,000 km of rail lines. Train speeds—after being temporarily reduced to 300km/hr after the “fall” of Liu Zhijun, the “father of the bullet-train system” (under “corruption” charges in 2011) and an accident which killed 40 passengers—have now been restored to their designed speed of 350km/hr.
Even at the current density, the speed and regularity of the trains has created its own dynamic, with fully 50% of the traffic on the busiest lines being “generated traffic”; that is, “people making trips that they would not have made before,” the perplexed Economist admits. “Life and work have started to follow the sinews of the high-speed rail system,” it says, as the regularity and affordability of the trains leads to growing “commuter corridors” and related regional development. “Trains are expanding the pool of labor and consumers around China’s most productive cities, while pushing investment and technology to poorer ones.”
A second article, generously titled, “Opinion Is Divided on China’s Massive Infrastructure Project,” is spent debunking Dr. Ansar’s previously hailed projections of impending doom for the system. Centering on his choice of a too high, 12%, “discount rate” of future payoff on investment, they mumble that, “at a gentler rate of 9%, the [benefit/cost] ratio improves to about 2.” At a rate of 5.3%, it’s up to 3, at which point, “the proportion of duds [money-losing lines] falls to just 8%,” hardly a threat to the entire system. Ansar’s other assumptions, such as failure to account for future increases in traffic, are likewise exposed as fraudulent.
STRATEGIC WAR DANGER
Jan. 16 (EIRNS)— Syrian opposition groups have said they are prepared to join the Russian-Turkish sponsored Syrian peace talks set to begin on Jan. 23 in Astana, Kazakhstan. Syrian opposition negotiator Mohammad Alloush is cited in a Reuters story saying he would head the opposition delegation to the peace talks, saying this was to “neutralize the criminal role” of Iran in the Syrian conflict.
Alloush was the former senior negotiator for the Saudi- backed High Negotiations Committee during past rounds of UN- sponsored peace talks in Geneva.
According to the Turkish daily Yeni Safak, the opposition groups made the decision at meetings that are now taking place in Ankara that include representatives from Russia and Turkey. They are now forming a delegation that will be different from the one sent to peace talks in Geneva last year by a Saudi-backed opposition group.
“The factions will go and the first thing they will discuss will be the matter of the ceasefire and the violations by the regime,” said an official in a Free Syrian Army opposition group.
A second official, Zakaria Malahifji of the Fastaqim opposition group, said: “The majority of the groups decided to attend. Discussions will be on the ceasefire—the humanitarian issues—aid deliveries, release of detainees.”
The High Negotiations Committee said on Jan. 14 that it had supported efforts towards peace talks in Kazakhstan, and viewed the meeting as a preliminary step for resuming the next round of political negotiations in Geneva.
Malahifji said the new delegation would be formed in coordination with the HNC, but it would differ from it because “the Russians are focusing very much on the military factions.”
Meanwhile Vitaly Naumkin, a Russian Middle East specialist and an advisor to Staffan de Mistura, told Sputnik that in his opinion Saudi Arabia could soon decide to participate in the Astana Syrian peace talks.
Jan. 16 (EIRNS)—U.S. Vice President Joe Biden was in Kiev, today, where he said that “the international community” must stand up against Russian aggression, and urged the incoming Trump administration to be a strong supporter and partner of Ukraine.
“You’re fighting both the cancer of corruption … and the unrelenting aggression of the Kremlin,” Biden told reporters with Ukrainian President Petro Poroshenko at his side, reports Reuters.
But if Russia is so “unrelentingly aggressive,” why is it allowing Ukrainian inspectors to survey Russian military units in the Rostov region of Russia itself? The head of the Russian National Center for reducing nuclear danger, Sergei Ryzhkov, said that the inspection of Russian military units in the Rostov region, to be held under the Vienna document on confidence-building measures of 2011 from Jan. 16-19, was meant to determine the size or confirm the absence of any military activities there. None of the previous such inspections by Ukraine have shown any evidence of any “Russian aggression” against Ukraine.
“The inspectors can record the presence or absence of personnel, staffing and movement of troops, stockpiles of weapons and ammunition,” Ryzhkov said. The inspection team will include two Ukrainians as well as Canadian and Danish experts.
A similar inspection of Russian military units by Ukrainian experts in February 2016 revealed “no military activity by the Russian Armed Forces in the given region and found Russia in full compliance with the provisions of the Vienna accords,” Ryzhkov said.
Jan. 16 (EIRNS)—South Korea’s Defense Ministry today announced that the deal to attain property for the location of the planned THAAD missile deployment in Seongju (southeastern South Korea), a deal that was scheduled for mid-January, will likely be put on hold.
The reason given is that the owner of the property, Lotte Group, a huge multinational corporation, has not yet won approval from its board. Given Lotte Group’s significant exposure to China and Chinese purchases of their goods, they may be reconsidering the offer, due to China’s fierce opposition to the Terminal High Altitude Area Defense (THAAD) as a direct provocation and a serious threat to the balance of power in the region.
The postponement may also give more weight to the opposition forces who are against the THAAD deployment, and who could potentially win an election which would take place within 60 days of any decision by the Constitutional Court to approve the National Assembly’s impeachment of President Park Geun-hye. Such a decision could come very soon. The opposition has demanded that the decision on THAAD be postponed until a new government comes to power.
COLLAPSING WESTERN FINANCIAL SYSTEM
Jan. 16 (EIRNS)—According to a newly released report by British NGO Oxfam, “The gap between the super-rich and the poorest half of the global population is starker than previously thought, with just eight men owning as much wealth as 3.6 billion people.” A year ago, it took the wealth of 62 of the richest people to equal the wealth of half the population on the planet. The eight include six Americans, one Mexican and one Spaniard; all but one take their wealth from finance or from the information technology sector.
Most likely, those eight have not gotten that much richer, but—as seen by the continuing tide of refugees from the British-Saudi-Obama wars flooding into Europe, or the ongoing genocide in Yemen—a segment of the world has gotten much poorer.
Timing its presentation of findings with the annual gathering of the global political and business elites in Davos, Switzerland, the Oxfam report documents the real-world effects of the imperial “long war” policy.
“According to the Forbes list,” says the press release, “Microsoft founder Gates is the richest individual with a net worth of $75 billion. The others, in order of ranking, are Amancio Ortega, the Spanish founder of fashion house Inditex, financier Warren Buffett, Mexican business magnate Carlos Slim Helu, Amazon boss Jeff Bezos, Facebook creator Mark Zuckerberg, Oracle’s Larry Ellison, and [Michael] Bloomberg, the former mayor of New York.”
SCIENCE AND INFRASTRUCTURE
Jan. 16 (EIRNS)—Apollo astronaut Gene Cernan’s family announced today that he passed away, at the age of 82. As the Commander of the Apollo 17 mission, Cernan had become known as “the last man on the Moon,” and a film with that title was made about his life. But although no human has since followed in his footsteps, he never believed that no one would. As he left the surface of the Moon, Cernan said; “America’s challenge of today has forged man’s destiny of tomorrow. As we leave the Moon and Taurus-Littrow, we leave as we came, and, God willing, we shall return, with peace and hope for all mankind.”
That hope was dashed in 2010, with President Obama’s cancellation of the Constellation program, which aimed for a manned return to the Moon. In response, Gene Cernan joined fellow Apollo astronauts Neil Armstrong and Jim Lovell, in testifying at Congressional hearings. They lambasted the cancellation, and described the action as diminishing the space program to one of “mediocrity.”
Following a hearing before the House Committee on Science, Space, and Technology, on Feb. 25, 2006, Gene Cernan, who had been very outspoken before Congress and in public talks, told Soren Anderson from the Seattle Times in an interview: “Kennedy would be rolling over in his grave,” if he saw the state of the U.S. space program. Cernan said that what is needed is leadership. “We can’t afford not to go back to the Moon, and on to Mars,” he said. “There’s no bigger challenge than outer space.” Although he was the last man to leave his footprints on the Moon in the Apollo program, he said, “I am not the last man.”
He has spent his recent years talking with and motivating young people to do more than they may think they can. As quoted today by National Public Radio, Gene Cernan once said: “Dream the impossible—and go out and make it happen. I walked on the Moon. What can’t you do?”