EIR Daily Alert Service
THURSDAY, APRIL 27, 2017
Volume 4, Number 83
EIR Daily Alert Service
P.O. Box 17390, Washington, DC 20041-0390
April 26 (EIRNS)—Wall Street is clearly getting distraught over the momentum for Glass-Steagall growing not only in the Congress and around the country, but especially in the White House. Former FDIC chief William Isaac and former Wells Fargo CEO Richard Kovacevich are trotted out for a Wall Street Journal op-ed today called “The Shattered Arguments for a New Glass-Steagall,” which starts out with a blast against President Trump’s chief economic advisor Gary Cohn for backing Glass-Steagall separation of investment banking from commercial banking. “This is deeply disappointing,” they whine, followed by a convoluted yarn about how “diversification” of both commercial and investment banks (i.e., by merging them) has brought about the now “stabilized” banking system, pleading against Glass-Steagall.
Such desperate cries now fill the financial press literally every day. It can be assumed that they are very well aware that the corporate debt bubble in the United States is now significantly greater than the mortgage bubble was before the 2008 crash, now nearing $14 trillion, compared to the $11 trillion and change for the mortgage bubble. Former Goldman Sachs managing director Nomi Prins, author of All the President’s Bankers, told EIR in a recent interview that the corporate debt bubble is now far greater than the mortgage bubble which sparked the 2008 collapse, having increased by 75% over the past decade to nearly $14 trillion, and is almost certainly going to blow up within the year. Even the IMF warned this past week that a significant rise in interest rates could provoke a collapse of 20% of U.S. corporations. Panic is in the air, and a solution, such as Glass-Steagall, would mean that the speculators on Wall Street would have to finally find useful employment rather than getting another taxpayer bailout, while the useful commercial banking sector would be preserved to again finance the real economy.
To save the U.S. economy, however, the President must also join the New Silk Road, now, preferably by attending the Belt and Road Forum being held in Beijing on May 14-15. China’s Ambassador to the United States Cui Tiankai on Monday renewed the invitation issued by President Xi Jinping during his visit with Trump, for the President to visit China and for the U.S. to participate in the Belt and Road. China Daily, in reporting on Ambassador Cui’s invitation, quoted Helga Zepp-LaRouche from the Schiller Institute forum on April 13-14 on “U.S.-China Cooperation on the Belt and Road Initiative,” saying “The Belt and Road cooperation could use the Chinese experience to build up U.S. infrastructure,” and that Trump could become “one of the greatest Presidents in the history of the U.S.” if he joins with China and other nations in the Belt and Road Initiative.
EIR encourages you to view and circulate the following 35-minute video, which provides an overview of that extraordinary Schiller Institute conference, including high-level diplomatic presentations from China and Russia.
Around the world, pre-meetings are taking place for the Belt and Road Forum—in the last 48 hours alone in Poland, Ukraine, Ethiopia, Kazakhstan, and Pakistan. Chancellor Angela Merkel announced that Germany will send its Economic Affairs Minister, while Chinese Foreign Minister Wang Yi, attending an Ancient Civilizations Forum in Athens invited his Egyptian counterpart Sameh Shoukry and others to attend.
The world is still teetering far too close to the potential of global war, sparked by the dinosaurs of the British Empire desperately trying to preserve their division of the world into hostile camps, East and West, by preventing President Trump’s stated intention to be friends with both China and Russia as the basis for global cooperation for development. The choice is stark and urgent—development and global cooperation, or global war.
NEW WORLD ECONOMIC ORDER
April 26 (EIRNS)—A page-one article in today’s China Daily entitled “China Invites U.S. To Join Belt and Road” prominently features Helga Zepp-LaRouche’s call at the April 13-14 New York City Schiller Institute conference for U.S. President Trump to join China’s Belt and Road.
The article begins by referencing Chinese Ambassador Cui Tiankai’s speech at the Bloomberg 2017 International Finance and Infrastructure Cooperation Forum April 24, which was reported in China Daily the day before. Today the government-owned China Daily decided to reprise that coverage, this time giving prominence to Schiller Institute founder Helga Zepp-LaRouche’s comments at the April 13-14 Schiller Institute conference.
China Daily reports: “Helga Zepp-LaRouche, founder and chairwoman of Schiller Institute, a political and economic think-tank, said at a conference on April 13 that the U.S. should join the ‘fantastic new project’ of the Belt and Road Initiative. ‘The Belt and Road cooperation could use the Chinese experience to build up U.S. infrastructure,’ she said at the conference in New York. ‘Trump can become ‘one of the greatest presidents in the history of the U.S. if he joins with China and other nations in the Belt and Road Initiative,’ she added.”
April 26 (EIRNS)—In an April 20 press conference in Washington, World Bank President Jim Yong Kim announced that the World Bank Group is, and will continue to, work closely with the Chinese government on the Belt and Road Initiative. “The One Belt, One Road project is an extremely important one for the Chinese government and also for us,” he said, according to a report in Xinhua April 21.
“The leadership that China is now taking in the overall world of development I think is unprecedented,” Kim said. He underscored that China is very concerned with the issue of development, “not just in neighboring countries, but globally.” Moreover, Kim said, the World Bank Group works very closely with the Chinese government, and also with the Asian Infrastructure Investment Bank, and mentioned that it will soon sign a memorandum of understanding with the AIIB.
Kim, who will be attending the May 14-15 Belt and Road Forum summit in Beijing, reported that the World Bank is currently engaged in a major study with China “on the drivers of China’s future economic growth,” and that “we’re partnering with the AIIB already.” The two financial institutions have in fact co-financed two projects in Indonesia. Kim said he expected that engagement both with Chinese government and with “Chinese efforts at development” can only grow in the future.
April 26 (EIRNS)—While she will not attend the Belt and Road Forum in Beijing next month, German Chancellor Angela Merkel said today that she will send Economic Affairs and Energy Minister Brigitte Zypries. She announced it during a session of the Chinese-German Strategic Dialogue on Diplomatic and Security Affairs in Berlin, in a meeting with Chinese Foreign Minister Wang Yi.
“I support the One Belt, One Road initiative proposed by the Chinese leader. I will send the Economy and Energy Minister to take part in the One Belt, One Road Forum due to my schedule, and I hope it goes well,” Merkel was quoted as telling Wang Yi in a statement from the Chinese Foreign Ministry.
U.S. POLITICAL AND ECONOMIC
April 26 (EIRNS)—Bloomberg’s Elizabeth Dexheimer today reports that Rep. Michael Capuano (D-MA) is considering adding an amendment calling for Glass-Steagall to the bill now being debated in the House Financial Services Committee, sponsored by its Chairman Rep. Jeb Hensarling (R-TX), to gut the Dodd-Frank Act. The so-called “Financial Choice Act” would eliminate the Volcker Rule, end most stress tests, and cut back the Consumer Protection Agency set up under Dodd-Frank. The Republicans intend to ram it through as fast as possible.
Representative Capuano, the only member of the committee who has consistently brought up Glass-Steagall, told Bloomberg: “A total breakup of the banks is my goal, but I’m not adverse to making compromises,” and also saying that he is considering a Glass-Steagall amendment to test whether the Republicans will back Trump’s support for it, as voiced by the chairman of the White House National Economic Council Gary Cohn recently.
Capuano is also planning to introduce into the House a companion bill to the Senate’s 21st Century Glass-Steagall Bill. This would be a second bill for Glass-Steagall in the House, the first being Rep. Marcy Kaptur’s H.R.790.
April 26 (EIRNS)—New Jersey, Pennsylvania, and New York states are engaged in a psychological warfare operation to prepare people for a nuclear war, while Washington, D.C. is undertaking a similar operation to prepare for a massive terrorist attack.
NJ Advance Media reported today that “If a nuclear device detonated near the Hudson River, it could kill thousands and contaminate many others. It would also cause widespread power and communication issues. How would emergency responders handle the hordes of people seeking medical attention after a disaster?”
It reports on an exercise to prepare for the holocaust, as if getting people to a hospital would deal with the problem. The company, which is affiliated with the local dailies such as Newark Star-Ledger and South Jersey Times, reported, “Emergency responders came to participate from all over the state, Connecticut, Pennsylvania, and New York.”
The article concludes by quoting the director of the exercise: “Without being melodramatic, it’s only a matter of time before something happens.”
Meanwhile, in Washington D.C., a “full-scale terror attack drill” was planned for today, according to Fox News, which reports that the exercise “comes amid mounting tensions with North Korea and other threats.” The Metropolitan Washington Council of Governments confirmed in a press release that law enforcement and first responders will participate in the exercise designed to prepare for the possibility of a complex coordinated terror attack in the National Capital Region, including Virginia and Maryland. It will include “a very realistic emergency event involving multiple sites and actors posing as the casualties.”
April 26 (EIRNS)—A Chinese railcar company that is building subway cars for Boston in a Massachusetts factory, signed a $178 million deal with Los Angeles County’s transportation agency which is expected to bring 64 subway cars, 50 local jobs and $38 million in wages and benefits to the Los Angeles region in the coming years, China Daily reports.
The Los Angeles County Metropolitan Transportation Authority (Metro) and China Railway Rolling Stock Corp Ltd (CRRC) signed the deal on April 12 at the Union Station Metro Red Line Station in L.A., with first deliveries scheduled for 2020.
The deal includes five options to buy additional subway cars, which could increase the total value of the contract to 282 cars for $647 million. Metro reported that CRRC offered “the overall best value proposal.” CRRC has an excellent record for on-time vehicle delivery and quality, and offered the highest proportion of local workers.
The subway cars’ exterior shells will be manufactured in CRRC’s facility in Changchun, China, and final assembly will take place in Springfield, Massachusetts, China Daily reports, and that the contract exceeds the federal government’s “Buy America” provisions, which require 60% of component parts be American-made, according to Metro.
April 26 (EIRNS)—What’s behind the Christopher Steele dossier? A lesson in British operations against the U.S.
On April 25, the Washington Times quotes “ex” MI6 operative Christopher Steele, whose 35-page “dodgy dossier” was used to smear President-elect Donald Trump with wild allegations of colluding with Russia, admitting that not everything in the dossier was properly vetted.
Aleksej Gubarev, CEO of XBT Holdings, whom Steele accused of hacking the Democratic Party computer networks with pornography and bugging devices, is suing Steele in a London court for defamation. Steele had also accused Trump’s personal lawyer, Michael Cohen, of traveling to Prague in late August to meet with Russian agents and devise a plan to cover up the Trump team’s alleged role in the hacking. But Cohen never went to Prague. He is now also considering suing Steele.
In court documents filed by his lawyers, Steele has now admitted that the part of his dossier which identified Gubarev as the rogue hacker actually came from “unsolicited” and “raw intelligence”—like raw sewage?—that “needed to be analyzed and further investigated/verified.”
Steele portrays himself as a “victim” of Fusion GPS, the Democratic opposition research firm that hired him “with money from a Hillary Clinton backer,” the Times writes. The documents filed by his lawyers argue that the defendants “did not provide any of the pre-election memoranda to media organizations or journalists. Nor did they authorize anyone to do so…. Nor did they provide the confidential December memorandum [the final one that Steele prepared] to media organizations or journalists. Nor did they authorize anyone to do so.”
Steele fulminates that Fusion GPS was “subject to an obligation not to disclose to third parties confidential intelligence material provided.” But—Steele then admits in the same documents that he just happened to have provided “off-the-record briefings to a small number of journalists about the pre-election memoranda in late summer/autumn 2016.”
It was reportedly former U.K. Ambassador to Moscow Wood who arranged to have Steele meet with David Kramer, a former Assistant Secretary of State who now works at the McCain Institute, and who made sure a hard copy of Steele’s dossier was given to McCain. Working through Kramer, McCain asked Steele to continue to provide additional information on Russian interference in the elections. McCain handed the dossier to FBI Director Comey, who, however, had already obtained it from other “sources.” After continuing to receive more “raw” intelligence, including the unverified intelligence on Gubarev, Steele wrote his final memo in December, after his work for Fusion GPS had officially ended.
“He provided that memo to British national security officials and to Fusion through an ‘enciphered email,’ ” the Washington Times reports, “with instructions to provide a copy to Mr. McCain. In his court filings, Steele said he’d worked for Fusion for “a number of years,” but was hired last June to investigate Trump. He apparently didn’t mention that he had been contacted by the FBI, which offered to pay him $50,000 to continue investigating Trump.
April 26 (EIRNS)—A report released today by the Governors’ Highway Safety Association (GHSA), and the Foundation for Advancing Alcohol Responsibility, indicates that 43% of drivers tested in fatal crashes in 2015 had used a legal or illegal drug, eclipsing the 37% who tested above the legal limits for alcohol.
Of those who tested positive for drugs, more than a third had used marijuana and more than 9% had taken amphetamines.
“As drunken driving has declined, drugged driving has increased dramatically, and many of today’s impaired drivers are combining two or more substances,” according to foundation president Ralph Blackman. The report focuses on fatal crashes.
COLLAPSING WESTERN FINANCIAL SYSTEM
April 26 (EIRNS)—The barrage of attacks on the momentum for restoration of Glass-Steagall—especially against Trump administration figures Gary Cohn (National Economic Council) and others who have reported that Trump is backing it—reached an hysterical level today in the Wall Street Journal. Former FDIC Chairman William Isaac and former Wells Fargo CEO Richard Kovacevich co-authored an op-ed titled “The Shattered Arguments for a New Glass-Steagall”—a take-off on the infamous plaque on the wall of Sandy Weill’s office at Citigroup: “The Shatterer of Glass-Steagall.”
These obviously distraught bankers denounce the chairman of Trump’s National Economic Council Gary Cohn for offering support for Glass-Steagall (“This is deeply disappointing”), then spin a yarn which is truly laughable: “The 1999 repeal of Glass-Steagall was unfairly blamed in the aftermath of the 2008 financial crisis. Some people—apparently Mr. Cohn among them—mistakenly believe that investment banking is so risky that it should be once again kept separate from commercial banking. The truth is exactly the opposite: Traditional investment banking entails very little risk. The danger is stand-alone investment banks that are not diversified enough to survive a shock.”
Ahh—“diversification” has made our banking system safe! Citigroup and Bank of America survived the 2008 crash, they say, because they were “diversified,” while Bear Stearns, Lehman Brothers, and Merrill Lynch were not diversified banks with commercial deposits, that could loot their commercial deposits to pay for speculative losses, and get bailed out by the government! Now, they claim, we are safe: “The financial system has stabilized at historically high capital levels, and the economy is growing again (albeit much too slowly). Today there are no major stand-alone investment banks engaged in high-risk trading for their own accounts.”
But, they whine: “Yet almost unbelievably, there are calls to restore Glass-Steagall, re-create stand-alone investment banks, and allow them to operate once again outside the regulated banking system.” Not mentioned, of course, is that the too-big-to-fail speculative institutions would not be bailed out under a new Glass-Steagall, nor is the fact that the banking institutions could then begin investing in the real economy again, rather than speculation.
STRATEGIC WAR DANGER
April 26 (EIRNS)—The Sixth Moscow Conference on International Security, which runs through April 27 began this morning, with opening remarks delivered by Russian Defense Minister Sergei Shoigu and a welcome message read out to the conference from President Vladimir Putin. The many speakers presented a stark picture of the crisis situation facing mankind.
According to the Defense Ministry, more than 750 guests are in attendance, including defense ministers, delegations of military departments, experts from 86 countries, as well as leadership of the UN, OSCE, SCO, CIS, CSTO, and ICRC.
In his opening remarks, Shoigu said that while terrorism is widely discussed, coordination in fighting terrorism has not been established, and decisions necessary to eradicate it have not been made. Because of this, he said, refugee flows are increasing, and insurgents flow with them, pointing to terrorist incidents across Europe. He pointed to the absence of results in stabilization of Libya, where national statehood has been destroyed by collective efforts of the West.
On Syria, Shoigu said: “We consider the [U.S. April 6] missile attack to be a blatant violation of international law. Besides, Washington’s move posed a life-threatening danger to our military servicemen who have been combatting terrorism in Syria. In light of such actions, we have to take additional measures to ensure the security of our forces,” he said. Even so, Shoigu continued, if the U.S. is serious about eliminating the Islamic State (ISIS), “We are ready to support its efforts,” but that it was “only possible to destroy the IS in Syria through joint actions by all interested countries.”
Foreign Minister Sergey Lavrov remarked that the strike “exacerbates the current problems and postpones the prospects of setting up a broad anti-terrorism front,” comparing the current situation with the false intelligence in 2003 regarding Iraq, which led to the country’s destruction and the emergence of ISIS, and warning that there are now “similar incautious steps.”
The Russians repeated their demand for a full investigation of the chemical weapons allegations in Syria.
Lavrov also warned that the deployment of the U.S./NATO missile defense systems in Europe may actually be lowering the threshold for nuclear war: “The anti-missile umbrella may increase the illusion of invulnerability and impunity, and lead to the temptation of taking unilateral steps in the resolution of global and regional problems, including the reduction of threshold of nuclear weapons use.”
On Ukraine, Lavrov said: “Unfortunately, it is the party of war that prevails in Kiev: armed provocations are continuing on the contact line, which is proved by the reports of the OSCE Special Monitoring Mission. The blockade of Donbass causes damage not only on this region, but also to entire Ukraine.”
On Korea, Lavrov said, “We share the global community’s consolidated position on North Korea’s policy; however, there is no doubt that plans to use military force, which are starting to be voiced, are fraught with disastrous consequences for the Korean Peninsula and the entire Northeast Asia.”
SCIENCE & INFRASTRUCTURE
April 26 (EIRNS)—An article in today’s Global Times, “China Eyes International Moon Village,” reports on the cooperation developing between the European Space Agency (ESA) and the China National Space Administration (CNSA). The article states that China will participate in the building of an international “Moon Village.”
The concept of the “Moon village” is something of a conceptual thought rather than a specific project, which has been put forward by European Space Agency Chief Jan Woerner, focusing in somewhat abstract terms on creating a framework of cooperation among all the different countries that are focusing on lunar exploration.
The Chinese interest in the concept tends to put substance into what had been largely an abstract concept. “ ‘The ‘Moon village,’ a long-term, manned scientific research base,” Global Times reports, “is an inevitable step as lunar studies develop, as it can greatly enhance research and provide unique conditions to study the Moon,’ ” said Jiao Weixin, a professor at the School of Earth and Space Sciences in Peking University. He said that China should be confident and stick to its program of Moon exploration instead of trying to catch up with other countries’ achievements. Jiao said he also believes the “village will eventually turn into a city, and could someday become an affordable tourist destination,” Global Times writes.
April 26 (EIRNS)—The New York Times, the newspaper which drives the campaign to legalize mind-killing drugs, and which championed Obama’s wars and drone killings, has issued what must be seen as a threat, even a death threat, to Philippines President Rodrigo Duterte. Reporting on a scurrilous case presented to the International Criminal Court by a Philippine lawyer calling for Duterte to be tried for crimes against humanity over his war on drugs, “the Slimes” lets loose in an editorial titled “Let the World Condemn Duterte.”
“The ICC should promptly open a preliminary investigation into the killings,” it writes. The Times admits the case does not even meet ICC requirements that all judicial efforts within the country must first be exhausted (there are multiple legal cases over the deaths in the drug war before courts in the Philippines, including against some police and army personnel), but the Times nonetheless concludes with the threat: “This is a man who must be stopped.”