EIR Daily Alert Service
FRIDAY, JULY 7, 2017
Volume 4, Number 134
EIR Daily Alert Service
P.O. Box 17390, Washington, DC 20041-0390
July 6 (EIRNS)—As the scheduled summit on Friday between Presidents Trump and Putin draws near, there is great potential for a breakout from the British-orchestrated drive to sabotage cooperation between Russia and the United States. Yet, as Helga Zepp-LaRouche warned today, this is no time for complacency—“Everything can fall into place, or could fall apart.” The North Korean situation is being driven to the brink and blamed on China, while the British are manufacturing fake-news of a chemical attack in Syria and blaming it on Russia. The issue of war or peace is immediately before us.
The British, and the neo-cons in both the Republican and Democratic parties in the U.S., cheered on by the lying media, want to take the U.S. back to the Obama-projectory for war with Russia and China. The level of hysteria and desperation in campaign to bring down the President was displayed today in the press conference between President Trump and Polish President Andrzej Duda following their meeting in Warsaw, when a reporter tried to trap Trump, saying: “Answer yes or no, did Russia interfere in the U.S. election?” Trump rose to the occasion, saying, in paraphrase: “It could have been Russia, and it could have been other countries. I think it has been going on for many years.”
Trump did not mention the British, but, of course, he is quite familiar with the scurrilous dossier of lies prepared by MI6 agent Christopher Steele (on the payroll of British assets in both the Republican and Democratic parties, and possibly also by Mr. Comey’s FBI), painting Trump as a dupe to the Russians, blackmailed and controlled by Putin.
Pressed by the degenerate journalist, who said that the U.S. intelligence community blaming it squarely on the Russians, Trump responded, accurately, that the intelligence community and the journalist’s fellow reporters were recently exposed as peddling fake news in claiming that “all 17 U.S. intelligence agencies agreed” that it was the Russians, and that the media had been forced to admit they were wrong, on this and several other fake news stories regarding Russia. “Remember Iraq?” Trump asked. “Everyone agreed that Iraq had weapons of mass destruction, 100% agreement, and they were wrong, and we ended up in one big mess.”
Secretary Tillerson, on his way to the G20 meeting which starts Friday, told the press that the most important part of the Trump-Putin summit Friday “is to have a good exchange between President Trump and President Putin over what they both see as the nature of this relationship between our two countries.” He noted that in Syria, “We began an effort … to rebuild confidence between ourselves and Russia at the military level, but also at the diplomatic level. I think this is an effort that serves both of our interests, as well as the broader interests of the international community.”
Trump will also be meeting with Xi Jinping on Friday. He has already stated publicly that he wants America to cooperate with China in the Belt and Road Initiative, the New Silk Road. At the same time, a large group of China’s leading agricultural experts will be speaking at an event in Manhattan on Friday, co-sponsored by the Schiller Institute, together with Helga Zepp-LaRouche and a number of leading American farmers and agriculturalists, on the urgency of global cooperation to meet the growing crisis of hunger in the world. The FAO reported this week that the number of malnourished people in the world was again rising, demonstrating the need for cooperation to expand the science and technology needed to feed every citizen of the world.
Trump has pledged to end “regime change” wars, to work with Russia in defeating terrorism, and to work with China on the New Silk Road. He has also pledged to implement Glass-Steagall, to end Wall Street’s gambling operations and return to the American System of Hamiltonian directed credit for the physical economy and the general welfare. Will he do it? This question will be significantly clarified by the historic events of the coming days.
U.S. POLITICAL AND ECONOMIC
July 6 (EIRNS)—U.S. Secretary of State Rex Tillerson commented on the upcoming meeting between Presidents Donald Trump and Vladimir Putin.
“We are at the very beginning, and I would say at this point it’s difficult to say exactly what Russia’s intentions are in this relationship, and I think that’s the most important part of this meeting—is to have a good exchange between President Trump and President Putin over what they both see as the nature of this relationship between our two countries,” Tillerson said in a comment to reporters aboard his flight to Hamburg, reported Sputnik.
Tillerson said Washington has been working to “identify areas that we should have mutual interest in—and Syria certainly is one.”
“I think the important aspect of this, is that this is where we began an effort… to rebuild confidence between ourselves and Russia at the military level, but also at the diplomatic level. So I think this is the effort that serves both of our interests, as well as the broader interests of the international community,” he said, and saying that Washington hoped it would pave the way for other important discussions that would strengthen bilateral ties.
STRATEGIC WAR DANGER
July 6 (EIRNS)—The Northeast Asia Cooperation Dialogue, an annual security forum, will convene in Singapore for two days starting on July 11. This meeting is significant because not only will the U.S. and South Korean envoys on North Korea meet there—and they may be joined by their Japanese and Russian counterparts—but a North Korea representative may also be at the conference.
According to Yonhap, the NEACD is regarded as the “Track 1.5” platform where North Korea, along with South Korea, the United States, China, Japan and Russia, usually send senior nuclear envoys. North Korea sent Choe Son-hui, in charge of North America affairs, to the conference last year, but Pyongyang has not confirmed yet whether a North Korean diplomat will join this year’s gathering, reports Yonhap.
July 6 (EIRNS)—UN Special Envoy for Syria Staffan de Mistura had nothing but praise for the fifth meeting on the Syrian ceasefire in Astana, despite Western news media characterizations of it as a failure. In De Mistura’s view, there was, indeed, progress made at the meeting, even though the documents on implementation of the de-escalation zones were not signed, and that this process is crucial to the next meeting in Geneva, which convenes on July 10.
He argued that the two processes reinforce each other. “Astana is particularly meant for producing a ceasefire, what they call a de-escalation, and that is why we believe that Astana does deserve patience and support, and there is more energy and time required—and we are with them in trying to make sure this will happen,” he said during a press conference after the meeting closed on July 5. He said that while necessary, de-escalation is an interim step. “What is needed in order to sustain is progress on the political side,” and that is very much facilitated if there’s a cease fire on the ground that is holding.
“You can imagine having a Geneva meeting in the middle of escalation instead of de-escalation. That would’ve not helped,” De Mistura said in response to a question. “I don’t see that happening I hope, and therefore I believe this meeting is, as we always thought, an opportunity of mutually supporting Geneva and Geneva supporting Astana because as I said, without a political process even de-escalation is not sustainable.”
COLLAPSING WESTERN FINANCIAL SYSTEM
July 6 (EIRNS)-The oldest active bank in the world, Monte dei Paschi di Siena (MPS), was officially bailed out/bailed in July 5. The formula used with gentle approval by the European Central Bank and European Banking Authority was “preventive recapitalization,” and allows a “bail-in light,” also called burden-sharing. Concretely, shareholders and junior bondholders have been burnt. Senior bondholders and money accounts have been spared. Retail customers who are junior bondholders will receive 18% of their bond value in stocks.
This allowed a government capital injection of €3.9 billion, which makes the Italian Treasury the main shareholder (NB: MPS was state-owned before it was privatized in 1995). €4.3 billion will be provided by so-called “burden sharing.”
MPS had issued subordinate bonds and sold them to retail customers in order to partially cover losses incurred by the acquisition of Banca Antonveneta in 2008, and by the successive derivative-scams sold to MPS by Nomura and Deutsche Bank.
ECB permission is also conditional on a “restructuring plan” aimed at producing €1.2 billion yearly profits starting next year.
Nobody really believes that this will happen. What will happen, however, is that the “restructuring” will involve the layoff of 6,000 employees nationwide and the shutdown of 600 branches.
A few hours after the bail-out/bail-in was made known, the Siena prosecutor’s office closed the investigation into the alleged suicide of MPS manager David Rossi, who died after falling from the window of his office on March 6, 2013.
July 6 (EIRNS)—The BRICS New Development Bank (NDB) is participating in projects in all countries of the BRICS (Brazil, Russia, India, China, and South Africa). “In Russia we have two active projects [estimated at] $560 million,” bank President Kundapur Vaman Kamath said at a video press conference from the bank’s headquarters in Shanghai. He said the bank also is investing in five projects in China worth $1.7 billion; six in India worth $1.8 billion; seven in Brazil worth $800 million; and three projects in South Africa worth $1.2 billion.
In addition BRICS culture ministers signed a five-year plan on July 6 to implement an intergovernmental agreement on cultural cooperation, at a meeting in the Chinese city of Tianjin. That covers various aspects of cultural partnership for the period of 2017-2021. This includes joint efforts to preserve cultural heritage and exchanges, setting up a library alliance and chief librarians from the five nations will convene for the first time in China next year.
July 6 (EIRNS)—On July 5, “Wall Street On Parade” rebutted a July 3 New York Times op-ed that reported that the danger to the U.S. economy stemmed from the threat that Trump and the Republicans might lift the Dodd-Frank regulations, which the Times credits with the post-2008 “recovery.” In their article “Why Wall Street Should Be Viewed as a Major National Threat,” the blog’s editors Pam and Russ Martens use the Comptroller of the Currency’s (OCC) July 3 report as a primary source, to point out that Dodd-Frank has utterly failed to deal with the derivatives bubble.
As of now, four banks hold 89% of the national banks’ derivatives. Citigroup’s holdings have increased from $41.3 trillion in 2008 to $54.8 trillion today. They point out that between 2007 and 2010, Citi was paid over $2.5 trillion in zero-interest loans and other funds, and provided with hundreds of billions in guarantees to make its “recovery” possible. They point out that the total world GDP for 2016 was $75.6 trillion and ask, “What is just one U.S. bank holding company, Citigroup, doing with 72% of total world GDP in derivatives?”
They quote the U.S. Treasury’s Office of Financial Research report, explaining, “Systematic concentration risks are not possible to infer when supervisors examine bilateral exposures that lack granular data such as contract details,” to demonstrate that Dodd-Frank has failed to make derivatives trade transparent, as it was supposed to do.
They also note that in 2014, Citi convinced Congress to place derivatives trading back under FDIC protection, and that the office of Vice Chairman for Supervision of the Federal Reserve, established to make sure the rules were enforced, has never been filled.
THE NEW GLOBAL ECONOMIC ORDER
July 6 (EIRNS)—South Korean President Moon Jae-in and China’s Xi Jinping held a long, cordial meeting in Berlin today ahead of the G20. Both South Korean and Chinese readouts of the meeting say that both sides called for healing the strains in the relationship left over from the previous South Korea government’s decision to deploy the THAAD missile system, although the issue is not yet settled. This was the first bilateral meeting of the two leaders.
The two agreed on the need for dialogue with North Korea, along with sanctions and pressure, and that South Korea would take the leading role in the issue.
The Korean Herald reported that “President Xi expressed his support on President Moon’s efforts to bring lasting peace on the Korean Peninsula through the resumption of inter-Korean talks and the easing of military tensions, Park Soo-hyun, Moon’s spokesperson, said after the meeting, which lasted 75 minutes, longer than the scheduled.” Xinhua reported that Xi said: “For a period of time, China-South Korea relations have been facing difficulties, and we do not want to see that.”
The two agreed that Moon would visit China “in the near future,” and Moon invited Xi to visit Seoul.
SCIENCE AND INFRASTRUCTURE
July 6 (EIRNS)—Opposition to South Korean President Moon Jae-in’s policy to stop construction of new nuclear power plants and to phase out operating reactors, is gaining steam. Yonap reports on July 5, that 410 scholars and professors have written a letter to President Moon, urging him to stop his anti-nuclear policy. The government “should immediately cease to extinguish the nuclear energy industry that provides cheap electricity to the general public,” they said in a press release. The scholars and professors further urged the President to consult experts in the industry, and not just listen to his aides.
The global nuclear industry reeled when newcomer, South Korea, won the contract to build four reactors in the U.A.E., one of which is ready to go online. Without a domestic nuclear industry in South Korea, the export of its nuclear power plants will be over.
July 6 (EIRNS)—A bullet train made its inaugural run today from Beijing to Xiong’an New Area in Hebei Province. This is part of the Beijing-Tianjin-Hebei economic triangle, which is essentially expanding the capital region around Beijing, providing high-speed connections to facilitate easy commuting for the entire region.
Many of the “non-core” functions in Beijing will be moved to the outer regions.
July 6 (EIRNS)—The “International Symposium on Funding Science and People Cooperation for a Prosperous Belt and Road” was held on July 3-4, led by the National Natural Science Foundation of China, (NSFC) and involving scientific research funding agencies from more than 30 countries and a number of international organizations, China.org.cn reports today. The NSFC already has many bilateral relationships with scientific organizations in advanced countries, but this is an initiative to involve many developing countries with weak scientific capabilities.
There was consensus among the participants for exchanges of personnel, communications, and collaboration in research, and the intention to help with funding in developing countries. Indicative is the quote from chairman of the National Science Foundation of Sri Lanka, Sirimali Fernando, that the framework would help “escalate” his country’s capacity in scientific research.
The article reports that NSFC now funds $29.4 million in cooperative projects in Belt and Road countries, for exchange events and cooperative research. The symposium reached a consensus to build a framework to fund cooperate programs, and also regard the scientific exchanges as deepening cultural exchanges.