EIR Daily Alert Service

THURSDAY, MAY 4, 2017

Volume 4, Number 88

EIR Daily Alert Service

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

EDITORIAL

This Is Not the 100 Days the British Empire Intended

May 3 (EIRNS)—The dynamic of the “Big Three” international leaders (Putin, Xi, and Trump) is increasingly taking hold in the global strategic situation, albeit unevenly. At the 100-day mark of the Trump administration, the British Empire’s plan was for Donald Trump to be ousted from the Presidency and/or dead; for the world to be on a locked-in trajectory for regional and global thermonuclear war; and for Glass-Steagall to be history—and only history.

The British plan was certainly not for Trump to have talked by phone with Russian President Putin three times as of now, with a meeting between them likely to occur at the G20 summit on July 7; it was not for Trump to have met with Xi Jinping once and spoken with him numerous times; and it was not for Trump to have personally placed the issue of Glass-Steagall on the front burner for deliberation—although which version of “Glass-Steagall,” FDR’s real one or some ersatz “ring-fencing” variant, is still being fiercely fought out, with American citizens weighing in led by a LaRouche PAC mobilization.

Add to that the fact that the upcoming May 14-15 Belt and Road Initiative summit is increasingly dominating the global economic agenda, and that Lyndon and Helga LaRouche are personally at the center of that discussion, with Russia and China as principal interlocutors (as seen most clearly in the April 13-14 New York Schiller Institute conference), and you can see why the British Empire is not the least bit amused.

In fact, they are panicked, and they are still trying to cook up a drive to impeach Trump and carry out a color revolution in the U.S.

Helga Zepp-LaRouche today stressed that we are now in a 10-day countdown to the Beijing Belt and Road summit, and we must double down on insisting that the United States get fully involved in that process. The U.S. has an $8 trillion infrastructure deficit, at the very least, and it needs Chinese expertise and investment to help rebuild the country’s infrastructure at the highest technological level. Furthermore, she emphasized, the U.S. and China should engage in joint ventures, especially in the Middle East and Africa, to bring peace and development to those regions. Zepp-LaRouche stated: There is plenty to do!

It is certain that Russia and China will respond favorably to such an American policy. As the official Global Times of China noted with acuity in a May 2 op-ed:

Anxiety about the Belt and Road Initiative “lays bare the stereotypical U.S. zero-sum mind-set….

“[But] public opinion in the U.S. is subtly changing from being against it, to attaching more importance to studying it….

“[Cooperation would] elevate their mutual trust to the next level … and create a new platform for Sino-U.S. collaboration….

“Beijing has already extended the invitation, and how the U.S. will respond is worth observing.”

NEW WORLD ECONOMIC ORDER

Chinese Press for U.S. Participation in the Belt and Road Forum

May 3 (EIRNS)—The Belt and Road “can be a new platform for Sino-U.S. cooperation” states a Global Times op-ed by Ai Jun on May 2. “The curtain will soon rise on the Belt & Road Forum for International Cooperation,” Ai Jun states. Although many nations from Asia, Europe, and Africa will attend, unfortunately, the U.S. “has cast a cold eye on the initiative.” The speculation and anxiety about the B&R “lays bare the stereotypical U.S. zero-sum mind-set.”

But, “public opinion in the U.S. is subtly changing from being against it to attaching more importance to studying it,” states the op-ed. Joining could be “a lucrative choice for Washington” to “attract more Chinese investment to boost its own manufacturing industry” and to be able to “carry out more cooperation with Beijing in third countries….”

For the U.S. and China, cooperation would “elevate their mutual trust to the next level,” and “create a new platform for Sino-U.S. collaboration.” “Will Trump, whose business is all over the world and has dozens of trademarks in China, neglect all the economic and political benefits? Beijing has already extended the invitation, and how the U.S. will respond is worth observing.”

Xinhua Admonishes, Belt and Road Initiative Is Not an Elite Club for the West

May 3 (EIRNS)—“For a Western world that embraces competition, it is not easy to understand the Chinese way of thinking that calls for harmony and stability,” a commentary by  Xinhua writer Chen Shilei explains in response to a number of Western misunderstandings, and fake news about the New Silk Road initiative. Xinhua has translated the commentary into several languages, giving it broad circulation.

“Some media reports say the initiative is not win-win, as China ‘seeks to dominate,’ adding that China’s state-owned firms ‘grab the lion’s share’ of major projects. But such assertions overlook the fact that capital, including money and human capital, to build the giant trade and infrastructure network needs to come not only from Chinese enterprises, but also from their Western partners. For Western companies, the Belt and Road Initiative presents ‘multinational businesses with historic possibilities,’ according to an article published online by Forbes in February.

“Also, some media reports arbitrarily link the initiative with politics, saying China seeks ‘global leadership’ through the initiative. In fact, the Belt and Road Initiative was proposed during the post-crisis era when the world urgently needed an open and inclusive global economy,” Xinhua’s Chen Shilei writes, pointing out that “almost nine years after the 2008 financial crisis, the world economy is still struggling to recover. According to a UN Conference on Trade and Development and a World Bank report last year, foreign direct investment around the world dropped 13%, while global trade grew slightly more than 1%, the worst performance since the crisis.” Since existing global institutions do not function, “Chinese President Xi Jinping put forward the initiative offering opportunities for cooperation and development for all, which shows the Chinese leader’s global vision and China’s willingness to shoulder due international responsibilities as a major developing country,” Xinhua’s commentary continues.

“Furthermore, as some Western media are hyping the absence of some Western leaders at the upcoming forum, they should be reminded that the initiative is not an elite club for Western countries, but serves mostly for developing countries. It is a circle of friends, with representatives from more than 100 countries…. Western countries ought to be more open-minded about the Belt and Road Initiative proposed by China, a country deeply influenced by a philosophy of seeking common ground while preserving differences. It is hoped that countries along the ancient trade routes and beyond will benefit from the initiative and realize common prosperity to spur a sluggish world economy.”

Hungarian Foreign Minister Endorses Belt and Road Initiative

May 3 (EIRNS)—World politics and world economy being at a point of profound changes, the role of China will be important in the coming period, Hungarian Foreign Minister Peter Szijjarto told Xinhua in an interview. The development of China will also determine the future development of Europe, he said, voicing the expectation that the development of infrastructure in Europe will also benefit from the Belt and Road Initiative of China. In Hungary, the railway connection between its own capital Budapest and the Serbian capital Belgrade, which is being built with Chinese support, joint investments in the automobile sector and increased Hungarian agricultural exports to China show the potentials of cooperation. Bilateral relations between Hungary and China, including culture, have never been as good as now, Szijjarto said. Prime Minister Viktor Orban will be one of five EU heads of state or government to attend the Beijing summit.

Iberian Peninsula Looks to New Silk Road As Its Future

May 3 (EIRNS)—Portuguese Economics Minister Manuel Caldeira Cabral yesterday told the First Sino-Portuguese Economic Forum (held near Lisbon) that Portugal “insists on aligning with, and being present in this strategy of China’s, which we share,” of the Belt and Road Initiative. He suggested that Portugal could play the part of a “pivot country, which builds bridges between Asia and Europe, as well as a port of entry to Europe.” Portugal’s representative to the Belt and Road Forum on May 14-15 has not yet been announced.

Spanish Prime Minister Mariano Rajoy will attend, and Spain’s Ambassador to China Manuel Valencia enthusiastically promoted Spain’s participation in the “unquestionably useful” Belt and Road project, in an April 27 interview with Xinhua. He emphasized that Spain’s great infrastructure companies can be an asset to, and want to participate in the BRI. Spain, in fact, is second only to China in total kilometers of high-speed rail, and its rail companies have developed innovative technologies (e.g., railcars which can handle different gauges).

The Ambassador cited the participation of Spanish firms in the expansion of the Panama Canal, high-speed rail connecting Mecca and Medina in Saudi Arabia, and building the world’s largest refinery in Kuwait jointly with Chinese companies. The companies of both our countries “can become quite complementary” in developing this “infrastructure and connectivity initiative.”

Spain’s major ports—Algeciras, Barcelona and Valencia—are ready to work, he said. “Spain has natural conditions of interconnectivity per se. What is interesting about these connections, as regards the [Belt and Road] B&R, is the connectivity with Central Asia and the Far East.” He suggested the Canary Islands function as a “peaceful aircraft carrier” for business and trade.

“China is a great producer and an economy which has made a great leap,” and our countries can “collaborate very usefully,” he said again. Spanish exports to China hit a new record in 2016, increasing 14.8% year-on-year to nearly $5.4 billion, and where there were four direct flights a week four years ago between China and Spain, there are now 26.

U.S. POLITICAL AND ECONOMIC

Russian Senator Kosachyov: Putin-Trump Discussion Was ‘Constructive’ and ‘Productive’

May 3 (EIRNS)—Commenting on Tuesday’s telephone conversation between Russian President Vladimir Putin and U.S. President Donald Trump, Chairman of the Federation Council’s International Affairs Committee Sen. Konstantin Kosachyov told TASS it was “constructive” and “productive.”  “The third contact between the two Presidents confirmed that the Russian-U.S. dialogue is going on; that both countries are interested in it, and that it can be conducted only on an equitable basis. In that sense the discussion was not only prolonged, but productive, too,” Kosachyov said. “Slowly but surely Russia and the U.S. are shaping their own agenda of bilateral relations and it is to be hoped it will be a working and constructive agenda.”

On the matters they addressed, he continued, “These issues are resistance to terrorism, in the first place, in Syria, and the deterrence of North Korea’s nuclear and missile program. It was agreed to step up working contacts at the inter- departmental level, which is very important in the context of lending a practical dimension to the mechanism of dialogue between the high representatives of the two countries’ foreign ministries, which is already in place and ready for operation.”

Kosachyov also said the “Time is ripe” to restart the inter-parliamentary dialogue between Russia and the United States, which at the moment remains frozen due to the U.S. Congress’s stance.

Glass-Steagall Hangs over House Financial Services Committee

May 3 (EIRNS)—Despite frequent assertions Glass-Steagall will never pass, Wall Street remains fixated on just that possibility.

“TheStreet” financial business website reported yesterday that “a number of Democrats” on the House Financial Services Committee are now “expected” to propose an amendment reinstating Glass-Steagall to the Republican-drafted Financial Choice Act of 2017 being marked up this week by the committee. Previously, it had been reported that only Rep. Michael Capuano (D-MA) intended to do so.

That fact was buried a wire cheering simply because House Financial Services Committee Chairman Jeb Hensarling (R-TX) had not mentioned “Trump’s Glass-Steagall bid” in his speech to the Independent Community Bankers of America conference that day! “However,” TheStreet correctly noted, “many” community bankers are favorable to reviving the Glass-Steagall Act.                   And not just community bankers. The pro-Glass-Steagall website “Wall Street on Parade” chuckled today that more than 300 readers had “pummeled” New York Times writer Andrew Ross Sorkin in angry comments rejecting his latest screed against Glass-Steagall published as “a news article” yesterday.

Meanwhile, Bloomberg news service is asking just about any one they interview whether they think Glass-Steagall can or should be reinstated. That included Freedom Caucus Rep. Jim Jordan of Ohio today, who answered, cautiously, that “everything has to be on the table when thinking about our economy.”

Hillary Clinton Explains Her Election Loss; Trump Differs

May 3 (EIRNS)—Hillary Clinton told CNN’s Christiane Amanpour yesterday that “if the election had been on Oct. 27, I would be your President.” She claimed to take “absolute personal responsibility” for her loss, but then whined that she was “on the way to winning until a combination of [FBI head] Jim Comey’s letter on Oct. 28 and Russian WikiLeaks raised doubts in the minds of people who were inclined to vote for me and got scared off…. The reason I believe we lost were the intervening events in the last 10 days.”

President Trump responded with two tweets this morning: “FBI Director Comey was the best thing that ever happened to Hillary Clinton in that he gave her a free pass for many bad deeds! The phony… Trump/Russia story was an excuse used by the Democrats as justification for losing the election. Perhaps Trump just ran a great campaign?”

STRATEGIC WAR DANGER

Putin: Fill the World’s Streets with ‘Immortal Regiment’ Marches on ‘Victory Day’ over Fascism

May 3 (EIRNS)—Russian President Vladimir Putin chaired a lengthy meeting on April 20 of Russia’s Victory Organizing Committee, reviewing plans for the international celebration on May 9 of Victory Day, including the “Immortal Regiment” marches. The Immortal Regiment consists of individuals whose fathers, grandfathers or other relatives combatted fascism during World War II, who march while carrying a picture aloft of their relative. In memorials last year in New York and other cities across the U.S. and in other countries, members of the Schiller Institute participated in those Immortal Regiment marches.

Putin opened the meeting by noting that the current generation has “a moral and human duty to the generation of victors, to those who fell for their motherland, and to those who revived and developed the country after the Great Patriotic War.” He continued that “We see how falsification and manipulation of historical facts create division between countries and peoples, draw new dividing lines, and create supposed enemies. The line that some countries now follow, and which elevates Nazism to heroic status and justifies the Nazis’ accomplices, is particularly dangerous.” Putin emphasized that, on May 9, “I am sure that streets in Russia and abroad will once again fill with crowds of people willing to join the ranks of the Immortal Regiment. This deeply symbolic and touching event took place in 50 countries last year.”

Astana Meeting on Syria Opens with High-Level U.S. Representation

May 3 (EIRNS)—The Fourth International Meeting on the Syrian Settlement opened in Astana, Kazakhstan, today, with, for the first time, U.S. representation higher than an ambassador, in the person of Acting Assistant Secretary of State for Middle East Affairs Stuart Jones. The White House announced yesterday that Jones would attend after President Trump’s phone conversation with Russian President Vladimir Putin, though the decision to send him was reportedly made the day before. Otherwise, all the delegations that were expected—the Russian, Turkish, and Iranian delegations representing the guarantor powers of the ceasefire that was announced on Dec. 29, 2016; UN Special Envoy Staffan de Mistura, the representative from Jordan, and the Syrian government delegation.

The delegation representing the armed opposition groups, led by Mohammed Alloush, the political director of Jaish al Islam, arrived in Astana yesterday, but announced today that it was suspending its participation in the talks “because of the violent air strikes on civilians,” an opposition source told AFP. AFP also reported that an opposition source confirmed that the Russian proposal to create de-escalation zones in Syria, which Putin and Trump had also discussed, is under consideration.

Korea’s Moon Jae-in Rejects THAAD Deployment, Can Work with Trump

May 3 (EIRNS)—South Korean presidential candidate Moon Jae-in, now far ahead in the polls for the May 9 election, gave an interview to the Washington Post published May 2.

Moon was a top advisor to leftist President Roh Moo-hyun, who served from 2003-2008. Relations with the U.S. were very strained during that period, but Roh’s continuation of his predecessor Kim Dae-jung’s Sunshine Policy toward the North brought about some progress, through the Six-Party talks (Russia, China, North Korea and South Korea, Japan and the U.S.), although that progress was later undermined by George W. Bush and by Obama.

Moon has strongly opposed the THAAD deployment in South Korea, which has increased his support. Post reporter Anna Fifield was shocked to hear him speak well of President Donald Trump.

On THAAD, which the U.S. announced to be operable this week, Moon said: “One of the biggest problems with this THAAD deployment decision was that it lacked democratic procedure, and it has resulted in a wide division of the nation and aggravated foreign relations. If the South Korean government were to push this issue further, it would only make matters worse…. I hope the U.S. government will fully consider these issues…. If South Korea can have more time to process this matter democratically, the U.S. would gain a higher level of trust from South Koreans…. If this matter can be reviewed by the next administration, the new government would look for a reasonable solution based on the alliance between South Korea and the U.S. that can secure the national interest as well as a national consensus.”

The message is clear that if the new government is not allowed to review the deployment, relations with the U.S. will be harmed.

Moon Jae-in countered the accusation that he opposes the alliance with the U.S.; he called it “the most important foundation for our diplomacy and national security.” But, he continued: “I believe we need to be able to take the lead on matters in the Korean Peninsula as the country directly involved. I do not see it as desirable for South Korea to take the back seat and watch discussions between the U.S. and China, and dialogues between North Korea and the U.S. I believe South Korea taking the initiative would eventually strengthen our bilateral alliance with the U.S.,” and, by implication, vice versa.

Moon then said: “I think I am on the same page as President Trump. President Trump judged the Obama administration’s policy of strategic patience as a failure with regard to North Korea, so he has stressed the need for a change in North Korean policy.”

Fifield was stunned: “I didn’t come here today expecting you to agree with Trump!”

Moon continued: “Trump talks about strenuous pressure, sanctions and even the possibility of a pre-emptive strike, but I believe his ultimate goal is to bring North Korea back to negotiations for the nuclear program. In that respect, I share the same opinion as President Trump. Both the Lee Myung-bak and Park Geun-hye administrations completely failed in resolving the North Korean nuclear issue. I agree with President Trump’s method of applying sanctions and pressure to North Korea to bring them out to negotiate. If that happens, I would meet with Kim Jong Un to secure the nuclear program.

“I believe President Trump is more reasonable than he is generally perceived. President Trump uses strong rhetoric toward North Korea, but during the election campaign, he also said he could talk over a burger with Kim Jong Un. I am for that kind of pragmatic approach to resolve the North Korean nuclear issue.”

Is THAAD in South Korea Part of U.S.-Run Integrated Missile Defense System In Asia?

May 3 (EIRNS)—Contributing to the uproar in South Korea is the statement by Adm. Harry Harris, Jr., the commander of U.S. Pacific Command, during his April 26 testimony to the House Armed Services Committee, in which he said that the U.S. is moving forward with building an integrated missile defense system with Japan and South Korea. “USPACOM will continue working with Japan, the R.O.K. [South Korea], and Australia to improve our level of staff coordination and information sharing and the goal of creating a fully-integrated ballistic missile defense (BMD) architecture that must also address the increasing cruise missile threat,” Harris said. The justification for this is the North Korean nuclear and missile threat, as well China’s development of “counter-intervention technologies,” such as hypersonic weapons.

According to a report in the Korea Herald, Harris’s statement about bringing South Korea into a regional integrated missile defense system is contrary to South Korean policy and statements. It also raises the question: Will the THAAD deployment in fact be part of the U.S. regional system? South Korea is developing its own Korea Air and Missile Defense system, which it has said is interoperable with, but not part of, the U.S. system. The Herald reports South Korea’s Defense Ministry has reiterated it will not join the U.S.-led global missile defense program, highlighting that South Korea’s THAAD deployment and the U.S. BMD initiative are “totally separate issues.” Harris’s statement, however, confirms the view in both Russia and China, that the U.S. is building a regional BMD system aimed at them, and is roping South Korea and Japan into it.

North Korea Will Not End Its Nuclear Weapons Program as Long as It Faces a Threat

May 3 (EIRNS)—The Director of the Russian Foreign Ministry Department of Non-Proliferation and Arms Control Mikhail Ulyanov stated, “It is evident that Pyongyang will not abandon its nuclear weapons as long as it sees itself directly threatened. Ulyanov spoke yesterday at the first session of the Preparatory Committee for the 2020 Review Conference of the Parties to the Treaty on the Non-Proliferation of Nuclear Weapons in Vienna.  His remarks were posted to the website of Russian Embassy to the D.P.R.K.

“We are nonetheless convinced that existing tensions on the Korean Peninsula are caused not only by Pyongyang’s nuclear and missile programs, but also by an increased military activity in the Northeast Asia of some regional and especially non-regional states,” he said.

“Not a minute should be lost. Otherwise the confrontation logic may become overwhelmingly dominant,” he said. “Russia rejects the nuclear status of the D.P.R.K. We do not accept nuclear tests conducted by Pyongyang and its defiance of the relevant UN Security Council resolutions.”

China’s line is very similar to Russia’s. The official People’s Daily ran an editorial which argued that “the latest developments on the peninsula highlighted an imperative need for all parties to intensify their efforts to bring stakeholders to the dialogue table. The D.P.R.K. should not be obsessed in a wrong path of repeated nuclear tests and missile launches that resulted in rounds of sanctions. At the same time, how, the R.O.K. and the U.S. have been adding fuel to the escalated tensions since the two allies, who have been maintaining a high-handed pressure on the nuclear issue of the Korean Peninsula, revealed a strategic intention to crush the D.P.R.K.”

COLLAPSING WESTERN FINANCIAL SYSTEM

Puerto Rico Bankruptcy Roils $3.8 Trillion Municipal Bond Market

May 3 (EIRNS)—At the request of Puerto Rican Gov. Ricardo Rossello, the financial control board put in place last year to oversee the island’s finances, filed in Federal district court in San Juan this morning to place the central government under bankruptcy protection. While at this point, it’s not specified how much of Puerto Rico’s $73 billion debt is included in the bankruptcy filing, this will be, hands down, the largest municipal bankruptcy in U.S. history, dwarfing the city of Detroit’s $18 billion bankruptcy in 2013.

Panic has already set in as to how this will affect the $3.8 trillion U.S. municipal bond market, which holds significant amount of Puerto Rican debt. Bloomberg fretted today that the bankruptcy may impose “deep losses on bondholders” who had bought up Puerto Rico’s tax-free municipal bonds.

As a U.S. Territory, Puerto Rico is denied the right to declare bankruptcy. But under the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA), passed last year in Congress, the island government was able to act through the control board to invoke Title III, a bankruptcy mechanism.

On May 1, as protesters took to the streets to denounce the government’s imposition of harsh austerity, a legal stay protecting Puerto Rico from lawsuits expired, with no progress made in restructuring talks. On May 2, the Wall Street Journal reported, creditors began filing lawsuits in Federal court, attacking the government’s fiscal plan which writes down certain categories of debt by as much as 70%. Hedge funds, speculators, bond insurers and vulture funds beat a path to the courts to demand their pound of Puerto Rico’s flesh. For the moment those lawsuits are frozen.

Although the initial filing only applies to the central government, other government agencies are likely to file soon.

 

 

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