EIR Daily Alert Service
TUESDAY, MAY 9, 2017
Volume 4, Number 91
EIR Daily Alert Service
P.O. Box 17390, Washington, DC 20041-0390
May 8 (EIRNS)—With the two-day top-level meeting of a global development initiative—already investing in 65 nations and 20 times as big as the Marshall Plan—taking place this weekend in Beijing, the issue of what to do about the stagnating U.S. and European economies will never be so clear again. Helga Zepp-LaRouche has said that if Donald Trump does go to Beijing and ally the United States economically to the Belt and Road Initiative, he could be seen by history as America’s greatest President. On that path lies not only a great revival of productivity and productive employment for Americans, but the potential resolution of the grave threat of war in Asia, and even—through cooperation with Russia—in the Middle East.
And with the United States participating, the Belt and Road Initiative itself will be far more powerful an economic and technological driver for the more than 100 nations represented in Beijing this weekend.
A major Asian daily editorialized today, “It’s not too late for President Trump to decide to go to Beijing.” For that matter, it’s not too late for newly elected French President Emmanuel Macron to go. The European Union’s and London’s financial elite may be trying to bottle up and even destroy China’s Belt and Road before it develops a new economic infrastructure in Europe, but the growth prospects of all the European nations depend on it.
Unless the right decision is made now, it will soon be too late for the trans-Atlantic economies. They cannot survive another, worse-than-2008 financial crash, and that is what is threatening them right now. Germany’s leading financial daily Handelsblatt has added its “loud warning signal…. A surge in corporate loans, especially in the United States, could unleash a new global financial crisis. The contours of a giant bubble are becoming more and more apparent in the market for corporate bonds. It could burst … due to rapidly rising interest rates and a declining economy.”
An immediate turn is needed, to what are called the “Four Laws To Save the Nation” proposed by Lyndon LaRouche since 2014. Restore the Glass-Steagall Act to break up the Wall Street banks before they trigger a cataclysm; return to National Banking; then create national credit institutions to build modern infrastructure, fund space sciences and fission and fusion technologies.
The whole effort against trans-Atlantic economic collapse can only succeed on that path of collaboration with China, India, and Russia above all.
The City of London and Britain are trying to destroy the possibility, through London and Brussels attacks on the Belt and Road, and through war. There are reports from London that Prime Minister May will ask her new Parliament to let her bomb Syria’s government forces, as her ministers keep publicly demanding. That implies another manufactured “chemical bombing” incident, and would only be done by the U.K. to draw President Trump back into war. BBC is, indeed, starting broadcasts claiming Syria’s President is going to conduct more “chemical bombings.”
The British incitement to confrontation comes just as Russian Foreign Minister and U.S. Secretary of State are holding discussions in Washington this week, with a prospect of ending Syria’s civil war and terrorism. London’s intervention must be defeated—and President Trump must go to Beijing.
U.S. POLITICAL AND ECONOMIC
May 8 (EIRNS)—A Sunday editorial yesterday in the South China Morning Post calls on U.S. President Trump to attend the Belt and Road Forum, and marshals strong arguments for it.
The Hong Kong-based paper proclaims, “But it is not too late for the U.S. to respond to the call to join [the Belt and Road Forum] made during the summit between President Xi Jinping and Trump last month. Just last week, in the midst of apparently warming relations between Trump and Xi, Beijing’s Ambassador to Washington repeated the invitation to the U.S. to participate in the initiative, which opened the gate of opportunities for U.S. enterprises.”
The paper reports that attempts to secure U.S. participation were encouraged when Toshihiro Nikai, Secretary General of Japan’s ruling Liberal Democratic Party, and No. 2 in the party only to Prime Minister Shinzo Abe, said he would attend the summit, a sign that Abe wants to improve ties with Beijing amid tensions arising out of North Korea’s nuclear missile programs.
The article asserts that the U.S.’s suspicion of the Belt and Road Initiative is the reason the U.S. refused to join the China-led Asian Infrastructure Investment Bank (AIIB). Japan also remains cautious about the AIIB, but the article quotes Nikai, who is known for his close ties to China, who said that the North Korean issue means that mutual understanding between key U.S. ally Tokyo, and China, is vital. Further, the editorial reports, “The call for U.S. participation is in keeping with the sentiment expressed by Xi that great power rivalry is best dealt with through mutually beneficial ties centered on win-win cooperation, and combined effort in key areas such as the economy and security.”
May 8 (EIRNS)—U.S. Secretary of State Rex Tillerson and Russian Foreign Minister Sergey Lavrov will hold a meeting in Washington on Wednesday, May 10, in which Ukraine, Syria, and U.S.-Russian relations will head the agenda, a U.S. State Department press release stated today.
“On Ukraine, the sides will discuss the need to stop the violence in eastern Ukraine and resolve the conflict through the full implementation of the Minsk agreements,” the statement says. “On Syria, the Secretary intends to discuss efforts to de-escalate violence, provide humanitarian assistance to the Syrian people, and set the stage for a political settlement of the conflict.”
The Russian Foreign Ministry’s statement says, “At the talks, [the top diplomats] will exchange views on topical world issues and pressing issues of bilateral relations…. Afterwards, Sergey Lavrov will participate in the Arctic Council Ministerial Meeting in Fairbanks” over May 10-11.
In April, U.S.-Russian relations reached a low point after a finding by the British-run White Helmets and the UN Organization for the Prohibition of Chemical Weapons (OPCW) that sarin gas was released at Khan Sheikhoun in Syria on April 4. Experts, such as MIT’s Prof. Ted Postol, released studies showing that the OPCW’s version of the attack could not be true. Others, such as Iraq weapons inspector Scott Ritter, said that the OPCW’s findings of “weapons of mass destruction” were not to be trusted in Khan Sheikhoun—as U.S. Secretary of State Colin Powell, British Prime Minister Tony Blair, and others shouldn’t have been trusted about Iraq.
At Tillerson and Lavrov’s April 11 meeting in Moscow, it was reported that Secretary Tillerson also met with Russian President Putin for two hours. During a joint news conference then, Lavrov said Russia isn’t convinced that President Assad’s government carried out a chemical-weapons attack in Idlib on April 4 that killed at least 85 people and was used to prompt President Trump to strike a Syrian air base. Syria denied using chemical weapons.
In a press conference with Lavrov April 12, Tillerson said, “We have no firm information to indicate that there was any involvement by Russia, Russian forces into this attack.”
When Tillerson visited Moscow, Russian Foreign Minister Lavrov criticized what he described as “a Western fixation on removing dictators and authoritarian leaders.” It is of interest that Secretary Tillerson addressed State Department personnel May 3 here, explaining that America’s values should remain our values, and the basis for our policymaking; but we should not attempt to impose them on other nations, but look for acceptable agreements on policies in accord with our values.
STRATEGIC WAR DANGER
May 8 (EIRNS)—Al Monitor’s “Week In Review” column, posted on May 7, notes that what Russian President Vladimir Putin has accomplished in the past week, is to bring the U.S.-Russian partnership in Syria back on the table only a month after President Donald Trump’s ill-advised April 6 cruise missile attack on the Syrian al-Shairat airbase. Despite the fact that the U.S. is not a party to the agreement, and has misgivings about Iran’s role as a guarantor of the ceasefire, “the United States nonetheless encouraged Syrian opposition groups to participate in the talks and declared (in a May 4 statement posted on the State Department website) that ‘the opposition must also live up to its commitments, with Turkey as the guarantor, to separate from designated terrorist groups, including Hay’at Tahrir al-Sham, which continue to hijack the legitimate aspirations of the Syrian people for a representative and accountable government.’ ”
Because the deal specifically excludes ISIS and al-Qaeda, it re-opens the door to greater U.S.-Russian military coordination beyond conflict avoidance. The deal calls on parties to “take all necessary measures to continue the fight against [IS], Jabhat al-Nusra and all other individuals, groups, undertakings and entities associated with al-Qaeda or [IS] as indicated by the UN Security Council within and outside the de-escalation areas.”
“As Moscow has sought a reliable way to move the Syrian conflict from the battlefield into the political realm (the conflict has gradually claimed more Russian lives and drained more resources) the idea of safe zones became worth exploring,” writes Maxim Suchkov, the editor of Al Monitor’s Russia-Mideast coverage, and an expert from the Russia International Affairs Council. The concept only had to be recalibrated to meet at least three objectives: to not impede Russia’s own military actions on the ground; to be packaged as Russia’s own political achievement domestically; and to be presented as a genuine international effort co-mediated by Turkey and Iran to get them on board. Besides, such a move would also be helpful to show Syrian President Bashar al-Assad and the Iranians that Moscow is not “selling them out to Americans” as they fear. At the same time, there is an understanding that without Washington, implementing the initiative would be more difficult. Hence, Russia’s Defense Ministry said it is willing to resume discussions with the United States which Russia halted after the strikes on the al-Shairat airbase on a flight safety memorandum designed to prevent midair collisions.
May 8 (EIRNS)—On the eve of the May 9 South Korean election, which is expected to result in Moon Jae-in becoming President and calling for a revival of the Sunshine Policy toward the North, the official party paper of the North, Rodong Sinmun, issued a scathing attack on the conservative governments of the past 10 years, but called for cooperation with the new government.
“The history of inter-Korean confrontation, led by the conservatives, should be put to an end and a new era of unification should open up in collaboration between our race,” the daily wrote, according to South Korea’s news agency Yonhap.
The paper places all the blame for the current crisis on the past two South Korean conservative governments of Lee Myung-bak and Park Heun-hye, as the North always has.
“The tragic North-South Korea relations today have been wrought by the conservative groups which, having been in power for the past 10 years, revived the foregone period of confrontation and maximized the political and military rivalry between the same race.”
May 8 (EIRNS)—The BBC, on May 4, published a report claiming that it had obtained an intelligence document—the source of which is not identified—which itself claims that the Syrian government is still producing chemical weapons in violation of the Chemical Weapons Convention and Syria’s agreement with the OPCW. According to the document, this alleged production is taking place at three sites: in Masyaf, in Hama province; and at Dummar and Barzeh, both just outside Damascus.
“All three are branches of the Scientific Studies and Research Center (SSRC), a government agency,” it says. The Masyaf and Barzeh facilities supposedly both specialize in installing chemical weapons on long-range missiles and artillery. The BBC report cites the OPCW as saying that Syria’s declarations of those sites was “not yet sufficient,” therefore, it was “not yet in a position to confirm that the [Syrian] declaration is complete and accurate.” Last month, the Trump Administration sanctioned 271 employees of the SSRC for their alleged involvement in Syria’s alleged chemical weapons program.
COLLAPSING WESTERN FINANCIAL SYSTEM
May 8 (EIRNS)—Handelsblatt Global, the English edition of Germany’s business daily, published on May 5 a warning to Germany’s government and investors, of a global financial crash triggered by defaults in U.S. corporate debt.
The article, with the clever headline “Debt-ja Vu All Over Again,” summarized itself as follows: “A surge in corporate loans, especially in the United States, could unleash a new global financial crisis. That should worry Germany, too, writes the head of Handelsblatt’s finance pages.”
Handelsblatt states the global corporate debt growth universe first: “It’s an enormous number: Companies worldwide took up $3.7 trillion (€3.37 trillion) in new debt in the capital markets last year. That … exceeds the previous record for new corporate bonds. The last time a similarly high [relative] level was reached was in 2006—just before the beginning of the last major financial crisis.
“It is a loud warning signal. The contours of a giant bubble are becoming more and more apparent in the market for corporate bonds. It could burst in the coming years, due to rapidly rising interest rates and a declining economy. In parallel to the gigantic real-estate bubble of the previous decade, the United States could once again become the trigger and possibly the epicenter of the next crisis. And, once again, major German investors would be one of the many victims.”
Handelsblatt blames the Federal Reserve’s and European Central Bank’s zero-interest and qualitative easing policies as a part of the financial crisis threat. By buying up, and driving large investment funds and banks out of sovereign debt, the central banks drove them to take unprecedented loads of corporate debt at low rates, despite high risk. One resulting example is the huge German insurance group Allianz, which, Handelsblatt reports, now has “a portfolio of corporate bonds of more than €220 billion (nearly $250 billion), of which half have a medium to poor credit score from rating agencies.”
Moreover, according to the Institute of International Finance (the big banks’ global lobby), “Only 3% of companies in the United States and Europe invest the money from investors in things like machinery, buildings, IT systems and other long-term projects.” The other 97% has been used for various kinds of “financial engineering.” “In other words, the companies are getting more and more into debt merely to drive up their share prices in the short term. This trend is especially pronounced in the United States. There, the debt bonanza has led to the fact that today one-tenth of these companies cannot pay their interest burden with current profits—and this at a low key interest rate of 0.75 to 1%.”
Let interest rates rise, writes Handelsblatt’s analyst Daniel Schäfer, and the bubble can easily blow up. “Some would call this a farfetched theory, but unfortunately it is supported by many facts and warnings from renowned professionals.”
THE NEW GLOBAL ECONOMIC ORDER
May 8 (EIRNS)—28 Heads of State will attend the Belt and Road Forum for International Cooperation on May 14-15 in Beijing. These include:
Argentine President Mauricio Macri
Belarus President Alexander Lukashenko
Chile President Michelle Bachelet
Czech Republic President Milos Zeman
Indonesia President Joko Widodo
Kazakhstan President Nursultan Nazarbayev
Kenya President Uhuru Kenyatta
Laos President Bounnhang Vorachith
Philippines President Rodrigo Duterte
Russia President Vladimir Putin
Switzerland President Doris Leuthard
Turkey President Recep Tayyip Erdogan
Uzbekistan President Shavkat Mirziyoyev
Vietnam President Tran Dai Quang
Cambodia Prime Minister Hun Sen
Ethiopian Prime Minister Hailemariam Desalegn
Fiji Prime Minister Josaia Voreqe Bainimarama
Greek Prime Minister Alexis Tsipras
Hungarian Prime Minister Viktor Orban
Italian Prime Minister Paolo Gentiloni
Malaysian Prime Minister Najib Razak
Mongolian Prime Minister Jargaltulgyn Erdenebat
Myanmar State Counselor Aung San Suu Kyi
Pakistani Prime Minister Nawaz Sharif
Polish Prime Minister Beata Szydlo
Serbian Prime Minister Aleksandar Vucic
Spanish Prime Minister Mariano Rajoy
Sri Lankan Prime Minister Ranil Wickremesinghe; and
Japan Toshihiro Nikai, Secretary General in ruling LDP, #2 after Prime Minister Shinzo Abe
British Prime Minister Theresa May had originally said she would go, but is sending Finance Minister Philip Hammond instead.
May 8 (EIRNS)—In the countdown to the May 14-15 Belt and Road Forum in Beijing, Xinhua interviewed Chinese scholar Xu Shicheng, highlighting his remarks that the Belt and Road Initiative must include all of Latin America. In the April 25 interview, Xu expressed his pleasure that Argentine President Mauricio Macri, Chilean President Michelle Bachelet, and other high-level Ibero-American officials will be attending the Beijing summit, and that “this is an occasion on which [the Belt and Road] can include not only Asia, Europe and parts of Africa, but also the [Ibero-American] region.”
Xinhua interviewed Xu Shicheng on the occasion of the release of his latest book, The Colorful Modern Culture of Latin America, which, he said, is not an academic work, but which attempts to portray Latin American culture to the Chinese, especially to young people.
A member of the Chinese Academy of Social Sciences, Xu told Xinhua that direct cultural ties between China and Latin America date from the end of the 16th century; and from then through the middle of the 17th century, Chinese traders, artisans, and sailors traveled to places such as Mexico and Peru along the Pacific trade route that passed through the Philippines and was known as the Maritime Silk Road. The Chinese brought silk, porcelain, and artisanry to Latin America, Xu explained, while the Chinese galleons, known as “naos,” brought back foods such as corn, potatoes, tomatoes, peanuts, and tobacco from Latin America to China.
Although retired, Xu Shicheng says he intends to keep writing, because he wants to help Chinese readers, “especially young people, to understand the process of political, economic, social, diplomatic, and especially the cultural development” of Ibero-America. He said his next plan is to write a book on Latin America’s ancient civilizations.
Li Lianfu, interim president of the Ibero-American division of the Association of Chinese Students Returned from Abroad, told Xinhua that Xu’s book is a gift to the just-concluded Year of China-Latin America-Caribbean Cultural Exchange. Currently, Li said, “Sino-Latin American relations are entering a new historical period of comprehensive and profound development. Cultural exchange and reciprocal learning … have become important ways to promote reciprocal knowledge and cooperation in diverse areas.”
SCIENCE AND INFRASTRUCTURE
May 8 (EIRNS)—Although not featured in the media during Xi Jinping’s recent state visit to Finland, there is economic hardware in bilateral relations: COSFIM, a joint venture of COSCO and Finnish logistics company John Nurminen Oy, is using a new generation of special multi-purpose ships built for China at Finnish shipyards. In addition to eight such multi-purpose cargo ships with the latest design, COSCO is having three more special cargo ships built with a high level of performance in icy conditions. These ships are able to adapt to the Baltic Sea even in the usually harsh winters, and their design may also serve further ambitions of China farther north in the Arctic region. The three new vessels are scheduled to be put into use by the end of this year.