EIR DAILY ALERT SERVICE

FRIDAY, JULY 21, 2017

Volume 4, Number 144

EIR Daily Alert Service

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

EDITORIAL

This Promethean Moment

July 20 (EIRNS)—The Trump-Putin summit is being followed up with further ceasefires in Syria, leading, as President Trump has said, to a ceasefire across the whole country—so that soon, the only gunfire in Syria will be that directed against the terrorists, until they are defeated. At the same time, the U.S. State Department and the Russian Foreign Ministry have set in motion two long-term strategic dialogues. Further, the exchange of new Ambassadors between Washington and Moscow is being expedited, as the two Presidents agreed on July 7.

But at the same time, an unchecked, out-of-control world financial-economic crisis is barrelling forward towards chaos and disaster. Italy is facing bankruptcy-deadlines, with electoral deadlines, which may unravel the whole euro system, and with it, the world system. In New York City, transit breakdowns are intensifying and spreading, which, if not confronted by an overall upgrade plan, will come to a head by Labor Day, when passenger traffic normally rises significantly.  And, as Diane Sare, LaRouche PAC Policy Committee coordinator for New York, said during the July 17 Policy Committee weekly webcast, an infrastructure disaster in New York City is a national and international disaster, not a local matter.

President Trump is under heavy fire by “Russia-gate” lies, but he is fighting back with spirit.

Freelance columnist Finian Cunningham wrote yesterday days ago in RT, “Evidently, Trump is paralyzed by the toxic atmosphere of Russophobia in Washington.” But, although it’s under attack, the Trump Administration is clearly not “paralyzed.” It’s the Democrats who have been paralyzed by Russia-gate. Most Democrats are not being permitted to do anything on behalf of the life-and-death interests of their constituents; all they’re allowed to do is run around yelling nonsense about Russia!

But in sum, as Helga Zepp-LaRouche has pointed out, the most urgent part of the President’s agenda—that of the friendly relations with Russia and China required to prevent atomic war, and facilitate Silk Road cooperation—is moving decisively forward.  But the other part of the agenda: Glass-Steagall, large-scale infrastructural development, and the Four Laws of Lyndon LaRouche—that vital part of the agenda is stalled.  Hence the continued, indeed quickened, rush off the cliff of financial and economic collapse.

For this reason, the heart-wrenching “deaths of despair” of our fellow Americans, which were triggered into an avalanche by the policies of the George W. Bush and Obama Administrations, are apparently continuing still to mount.  With over 90 deaths per day by drug overdoses alone, these drug overdoses have now incredibly become the leading cause of death among Americans under 50.  Deaths due to alcoholism may exceed these numbers—while cases of outright suicide are not far behind. What unbelievable carnage in peacetime!

So what do we say?

We say that the question is not about what the President has done. The question is what you have done. Remember what Lyndon LaRouche did with the Reagan Administration in the last century. What have you done, to create an unstoppable movement of people who understand Lyndon LaRouche’s Four Laws and their deadly urgency, and are fighting to enact them now?

Helga Zepp-LaRouche today urged everyone to formulate a call to arms for the battle against Wall Street, which is trying to prevent Glass-Steagall and the Four Laws. We face the same thing in Europe, where the British Empire and its allies are trying to stop the Eurasian Land-Bridge and the New Paradigm; they are trying to cool it down by all means.

We must call on the population to step forward—President Trump can’t do it alone.  He is fighting enormous odds—and the whole purpose of “Russia-gate” is to keep him from fulfilling his campaign promises.

We must fight for the $4.5 trillion of infrastructure needs outlined by the American Society of Civil Engineers, or better, for the $8 trillion estimated by the China Investment Corp. If chaos and panic break out in New York after Labor Day or earlier, out-of-control chaos could produce an irretrievable catastrophe, even a national catastrophe or worse. Zepp-LaRouche stressed this point, “We must have a national and international emergency mobilization. Once you have a chaotic collapse, everything goes. We’re sitting on the edge of it now. Those who are not going for Glass-Steagall are criminals.”

Lyndon LaRouche, in discussion with colleagues today, said, “Wall Street is the problem.” Further, “This is a key issue which must be pushed to the top, to be followed through, to prevent this danger to the economy as a whole.”

He said, “We have to force it through in great measure, and get it done. It’s the only way to get real action.” He concluded the discussion, “I think we can probably get something going.  It certainly is necessary to think of doing that, and to act on it.”

U.S. POLITICAL AND ECONOMIC

Washington and Moscow On Verge of Exchanging Their New Ambassadors

July 20 (EIRNS)—The nomination of Russian Deputy Defense Minister Anatoly Antonov as Ambassador to Washington seems imminent. On July 19, Deputy Foreign Minister Sergei Ryabkov, fresh from talks with Under Secretary of State Thomas Shannon in Washington, said Antonov was the best man for the job. “Six years of his work in the capacity of a deputy defense minister make up an invaluable asset for his future activity in Washington, and I think he is the best possible pick for the ambassador’s duties,” Ryabkov told Rossiya 1 TV channel. Antonov originally came to the Russian Defense Ministry from a high post in the Foreign Ministry.

TASS cites an unnamed source that Antonov had been nominated by the Foreign Ministry, and now it is up to the Russian Presidency to approve.

Furthermore, Ryabkov said Russia’s Foreign Ministry has agreed to the proposal of former Utah Gov. Jon Huntsman as U.S. Ambassador to Russia. “We have given our consent, knowing Mr. Huntsman’s biography well, and realizing that he is a high professional, a man with strong beliefs, very experienced,” he told Rossiya 24 TV network yesterday.

Huntsman was also Ambassador to Singapore, and more recently was Ambassador to Beijing from 2009-2011.

No Breakthroughs for U.S.-China Economic Dialogue, But Process Will Continue

July 19 (EIRNS)—The Comprehensive Economic Dialogue between China and the United States ended today with no major breakthroughs and no joint press conference. The anti-Trump press is crowing that this signifies the “failure” of President Trump to cut a deal with China on trade. But both the statements issued by the U.S. and by the Chinese expressed a commitment to continue the process, with the next step seeming to involve a year-long plan to work out measures with China to eliminate the U.S. trade deficit.

While the U.S. was demanding increased access to China’s financial market, a reduction of subsidies to the state-owned enterprises, and a cut-back on China’s steel production which the U.S. claims has created a “glut” in the steel market, China is calling for a reduction in the restrictions placed on Chinese purchases of high-tech products. The Chinese indicate that if they had the same access to the U.S. high-tech market as Brazil does, they could purchase much more from the U.S., and in this way reduce the U.S. trade deficit. But the U.S., rather paranoid about China’s rapid technological progress, has continued to maintain very tight restrictions on technology exports to China.

Given the differences in the position of the two sides, it would probably have been a miracle if they had achieved substantive agreements in such a short time. But both sides have now maintained continual close relations, often on a daily basis, according to Zhu Guangyao, China’s Vice Finance Minister, over the present 100 days program for rebalancing trade, which President Xi and President Trump agreed to at Mar-a-Lago in April.

And with a decision on establishing a one-year period to continue that process, there is every possibility that they will have more substantive agreements at the next meeting, or perhaps even when President Trump visits China later this year. There is also the outside possibility that the U.S. might react by slapping tariffs on Chinese steel, which would significantly upset the rapport that the two leaders have succeeded in establishing.

Grassley To Hold Hearings on British Operative Christopher Steele and His ‘Dodgy Dossier’ on Trump

July 20 (EIRNS)—Senate Judiciary Committee Chairman Charles Grassley will hold an open hearing July 26 on the 2016 dossier on Donald Trump, produced by British intelligence operative (“former MI6”) Christopher Steele, and on related matters. Grassley had originally planned a hearing for yesterday, but it was postponed after Fusion GPS founder Glen Simpson refused to attend. Fusion is the Washington, D.C.-based research firm which contracted with Steele, based in London. Now Grassley says he’s prepared to subpoena Simpson. There is also a closed-door hearing planned.

The hearings, held under the rubric of the Foreign Agents Registration Act, are designed to get more of the story behind the Steele dossier out into the open. Grassley has said that he wants to explore Fusion GPS’s connection to the FBI, specifically former FBI Director James Comey, and how the dossier was leaked around to the press. Now Grassley has re-scheduled the hearing for next Wednesday, July 26, calling Glen Simpson, Paul Manafort, Donald Trump, Jr., and William Browder to testify. Browder, the son of Earl Browder, the former head of the Communist Party USA, is a London-based hedge-fund manager who is a vehement opponent of Putin’s Russia, and the main force behind the anti-Russia Magnitsky Act, which was the subject of the set-up meeting between Donald Trump Jr. and Russian lawyer Natalia Veselnitskaya, that is now the subject of Special Counsel Robert Mueller’s investigation. At the time of the meeting, Veselnitskaya was working with Fusion GPS against Browder in a case that the Justice Department brought against her client. Browder has been a vocal critic of Fusion GPS’s credibility. In January he attacked the veracity of the Fusion GPS dossier on Trump.

Grassley has been focused on the role of British intelligence and the FBI in setting up President Trump. He holds his cards close to his chest, and the prospect of this hearing has drawn much speculation as to what he’s up to.

Oregon Moves Closer to Decriminalizing All Drugs: Heroin, Cocaine, Meth, Ecstasy—You Name It

July 20 (EIRNS)—Oregon House Bill 2355, which passed the state House with a vote of 36-23, and the Senate with a vote of 20-9, decriminalizes a half-dozen hard drugs, including heroin. The bill now goes to Gov. Kate Brown for approval. The only caveat in the bill is that the user not have any prior felony convictions or more than two prior drug convictions. A second pro-drug bill, House Bill 3078, reduces drug-related property crimes from felonies to misdemeanors, according to the Lund Report.

Oregon proudly proclaims that it was the first state to decriminalize personal consumption of cannabis in 1973, legalize medical marijuana in 1998, and fully legalize “recreational use” in 2015. And now this atrocity.

All of this is justified by the drug lobby with the arguments that the war on drugs has failed; that drug addiction is a health problem, not a criminal problem; and that it is racist to throw people in jail for drugs. The entire policy of conducting a new Opium War against the population of the United States and other countries, and of justifying it with these arguments, was concocted by the British Empire, and its agents such as George Soros, as EIR has extensively documented.

COLLAPSING WESTERN FINANCIAL SYSTEM

Italy Must Raise €32 Billion for the Banks

July 20 (EIRNS)—In order to comply with EU capital rules, Italian banks must raise some €32 billion in the next period, which is about 2% of GDP. This is because 16 of 19 Italian banks don’t meet European standards on non-performing loans, according to a July 19th report by Mint Partners, “Non-Performing Loans: Southern Europe’s Next Tipping Point,” published in the Zero Hedge blog, which extrapolates from European Banking Authority (EBA) charts. This defines the choice: Either Italy must pull out of the EU, or plunder its population in order to meet the Eurozone deficit rules.

MEP Marco Zanni has forecast a major banking crisis, which, timed with the Italian general elections next year, could make an Italexit scenario possible.  Unlike Britain, however, Italy is a member of the euro single currency, and hence an Italexit would entail leaving the Eurozone.

EU standards on bank capital focus on credit, but not on derivatives. Credit losses are accounted strictly, whereas derivative assets are accounted according to blown-up figures produced by the banks’ own models. At the same time, EU regulations prevent banks from renegotiating terms with their commercial debtors, making a solution impossible. This has put pressure on the Italian banks, but has covered up the huge derivatives debt of the northern European banks.

One more aspect aggravating the crisis is that the EU (ECB, EBA) set a deadline for Italian banks for selling NPLs (non-performing loans,) which pushes the price down, often to 11-13% of face value; whereas NPLs are on average sold at 40% of face value.

Commodity Speculators Suffer from Low Volatility

July 20 (EIRNS)—The Wall Street Journal’s Stephanie Yang explains a problem with Wall Street today, under the headline, “Low Volatility Stings Traders.” Most of us recognize that stable prices are essential to planning and controlling economic activity, but not Wall Street.  Goldman Sachs blamed relative market stability for its lowest quarterly earnings in history. Many traders lost big-time by betting that reduced oil production would increase prices as their cherished “law of supply and demand” specifies, but it did not.  Yang quoted a trade consultant saying, “There is a lot less volatility, and that makes it much more difficult … to trade and to trade well.”

Greeks Food Intake Drops 27% as Creditors Fatten on Bail-Out Profits

July 20 (EIRNS)—A report by the Bank of Greece revealed that the food intake of the Greek population has dropped by 27% since 2010, when the bail-out began. At the same time, the German Bundesbank reports that it has made over €1.5 billion in profits from the Greek bail-out! The Bank of Greece report is indeed shocking. While Greeks have less food to eat, their disposable income has collapsed by 40%, ravaged by unemployment, higher taxes, and cuts in pensions and salaries. Gross income collapsed by 26%, as people’s savings dramatically decreased between 2009 and 2014. Only 13.5% of those asked could say that their income was greater than their expenses, compared to 21% in 2009.

And as Greeks are tightening their belts, the country’s international creditors are fattening up from big profits. According to the German daily Süddeutsche Zeitung, as reported in Protothema, German Finance Ministry statistics indicated that Germany has made €1.34 billion in profits on loans to Greece since 2009. These profits include €393 million made by the German government’s Kreditanstalt für Wiederaufbau from interest payments on a loan of €15.2 billion it made to Athens in 2010. The first Greek state debt-buying scheme by the Eurozone’s central banks brought the Bundesbank a profit of €952 million.

It had been agreed that these profits would be returned to Greece, but, according to Protothema, the agreement was suspended in 2015 when the Syriza-led government came to power, apparently as a form of punishment.

Despite the fact that Athens has complied with all the creditors’ demands, neither was the debt-return agreement restored, nor has the promised debt-relief materialized, primarily because of the policy of Berlin, especially Finance Minister Wolfgang Schäuble.

Obama Pension ‘Reform’ (Cuts) Act Used To Rob Its First Victims

July 20 (EIRNS)—Today’s Drudge Report called attention to the homicidal theft now being conducted against retirees under the terms of the Multiemployer Pension Fund Reform Act signed by President Barack Obama in 2014.  In order to spare the Pension Benefit Guaranty Corporation (PBGC) from actually guaranteeing pension payments as it was established to do in 1974, MPFRA established a procedure that gave employees and retirees relying on pension funds approaching bankruptcy, the right to vote whether they wanted to let the funds collapse quickly or to reduce pension payments drastically.

CBSMoney interviewed a number of people affected by the first fund that got permission to act under the MPFRA, Cleveland Iron Workers Local 17. Despite having paid into the plan throughout their careers, and, in some cases, taking early retirement based on the pledge of adequate pension support, these retirees are faced with cuts of up to 63% that moved them, overnight, from the middle-class to poverty-level conditions and the threat of homelessness.

STRATEGIC WAR DANGER

Russia and U.S. Beginning Strategic Stability Dialogue

July 20 (EIRNS)—Citing a U.S. diplomatic source, TASS reports that the just-completed talks in Washington between Russian Deputy Foreign Minister Sergey Ryabkov and U.S. Under Secretary of State for Political Affairs Thomas Shannon, marked the beginning of a “strategic stability dialogue.”

Following the meeting of the two diplomats July 17-18, the State Department released a statement mentioning talks on strategic stability, and convening a new meeting of the Bilateral Consultative Commission (BCC) overseeing the implementation of the New START Treaty. Moscow and Washington are “committed to holding future New START Bilateral Consultative Commission and Strategic Stability Talks and will exchange scheduling proposals in the near future,” said State Department spokeswoman Heather Nauert.

“The United States and Russia continue to implement the New START Treaty in a pragmatic manner,” Ryabkov said. “The U.S. and Russian delegations continued the discussion of practical issues related to the implementation of the Treaty.”

“Strategic Stability Talks, which are separate from the BCC, will be a bilateral interagency exchange on a number of issues related to maintaining strategic stability between Russia and the United States,” TASS quoted him.

Under Secretary of State Shannon To Attend Vienna Meeting on Iran Nuclear Agreement

July 20 (EIRNS)—U.S. Under Secretary of State for Political Affairs Thomas Shannon arrived in Vienna today for talks on the international agreement on Iran’s nuclear program, the State Department said in a press release yesterday. “Shannon will travel to Vienna, Austria, July 20-22, to lead the U.S. delegation to the Joint Commission meeting of the Joint Comprehensive Plan of Action (JCPOA) regarding Iran’s nuclear program.”

The participants attending the Joint Commission meeting will include the five permanent members of the UN Security Council— China, France, Russia, the United Kingdom, the United States—plus Germany; and Iran and the European Union.

SCIENCE AND INFRASTRUCTURE

Rosatom and African Youth Nuclear Group To Collaborate: ‘Nuclear Is the Future of Africa’

July 20 (EIRNS)—Russia’s Rosatom nuclear industry organization has signed a memorandum of understand with the African Young Generation in Nuclear, a non-profit organization, which was initiated earlier this year in Kenya. Its mission is education, with the goal to bring youth across the continent into the nuclear industry.

The MOU with Rosatom was signed during the July 18-20 POWER-GEN & DistribuTECH Africa 2017 conference. Africa’s population is a predominantly young one, said Viktor Polikarpov from Rostaom, at the signing. “This is why we attach great importance to working with the young people who will implement and take further the nuclear programs we have laid the groundwork for,” he said. “Nuclear is the future of Africa.”

Gaopalelwe Santswere, President of the African Young Generation in Nuclear, explained that the organization has a membership of over 350 professionals working in the nuclear power sector across Africa. “Africa is the new nuclear frontier,” he said, “and we are working to equip the continent’s young professionals with the skills they will need in this new environment.” Santswere said that his organization aims to formalize similar agreements with other industry organizations.

Public education and youth recruitment to nuclear are key elements in defeating the aggressive mobilization by the financial mafia and their political shock troops out to destroy Africa’s only power-producing nuclear program, in South Africa, and prevent other African nations from going nuclear.

THE NEW GLOBAL ECONOMIC ORDER

China, Czech Republic Strengthen Cooperation in Belt and Road Framework

July 20 (EIRNS)—As part of his goodwill tour of the Czech Republic, senior Chinese Communist Party official Liu Yunshan addressed the 2017 China Investment Forum in Prague July 18, during which he emphasized that the “China-CEE 16+1 cooperation mechanism” has produced excellent results in the framework of the Belt and Road Initiative (BRI). The 16+1 mechanism is a platform created in April of 2012 between China and 16 Central and Eastern European (CEE) countries.

According to Xinhua, Liu particularly pointed to connectivity in policy, infrastructure, trade, financing, and people-to-people exchanges between China and the 16 CEE nations. Liu recalled that Chinese President Xi Jinping, in his welcoming ceremony speech at the May 14-15 Belt and Road Forum for International Cooperation in Beijing, had “given a strong boost” to deepening and expanding cooperation under the 16+1 mechanism. Now, he said, is the time for all parties to “seize the opportunity” to integrate their development strategies, and push for major projects.

Czech Prime Minister Bohuslav Sobotka and President Milos Zeman are both enthusiastic supporters of, and participants in, the Belt and Road Initiative. Addressing the Prague forum, Sobotka described the BRI as the most important initiative in the world today, and reported that his government is prepared to act as a “pioneer” in promoting it and the 16+1 mechanism. “We believe that the Belt and Road Initiative will achieve great success,” he said, and stressed that the Czech Republic seeks to become a regional shipping center and transportation hub under BRI.

According to Liu Yunshan, the Czech Republic is the first European country to sign a cooperation agreement with China, to jointly build the Belt and Road. Cooperation between the two nations will deepen across a variety of sectors, Liu said.

OTHER

Trump Fights Back against Coup Plot in New York Times Interview

July 20 (EIRNS)—President Donald Trump went on the offensive against the “Russia-gate” coup plot against him in an interview with the New York Times July 19. The President called three New York Times reporters into the Oval Office after his meeting with Republican Senators about the GOP health care bill. The first part of the interview was about health care, but then the Times reporters turned to the Russia investigations.

President Trump was very aggressive in going after former FBI Director James Comey, Special Counsel Robert Mueller, Attorney General Jeff Sessions, Acting FBI Director Andrew McCabe, and Deputy Attorney General Rod Rosenstein for their conflicts and hypocrisy. On Comey, Trump said that in retrospect, he now realizes that Comey was trying to get leverage over him in their first meeting during the transition, where Comey showed Trump the Christopher Steele Russia-sex dossier. Trump also blasted Comey for lying in his testimony, and for leaking to the press. He also attacked Acting FBI Director McCabe’s conflicts for taking money from Virginia Gov. Terry McAuliffe, the former Democratic Party leader, for the Virginia state Senate campaign of McCabe’s wife.

Trump further took Sessions to task for recusing himself on the Russia case without telling the President beforehand. “Well, Sessions should have never recused himself, and if he was going to recuse himself, he should have told me before he took the job, and I would have picked somebody else.”

He aimed criticism at Deputy Attorney General Rosenstein for urging Trump to fire Comey, and then himself appointing Mueller as Special Counsel to investigate the connection of that firing to the Russia investigation. Further, Trump pointed out the hypocrisy that Mueller had sought to become Comey’s replacement, and had been interviewed by Trump for that job, and the next day he was appointed Special Counsel by Rosenstein.

Trump said, “So, now what happens is, he (Mueller) leaves the office. Rosenstein leaves the office. The next day, he is appointed special counsel. I said, what the hell is this all about? Talk about conflicts? But he was interviewing for the job. There were many other conflicts that I haven’t said, but I will at some point.”

The Times reporters tried to bait Trump on what circumstances would lead him to fire Mueller. “If Mueller was looking at your finances and your family finances, unrelated to Russia, is that a red line?” the Times reporter asked. “Would you fire Mueller if he went outside of certain parameters of what his charge is?”

Trump refused to answer, but indicated clearly that Mueller has a narrow mandate as Special Counsel. “I can’t answer that question because I don’t think it’s going to happen.”

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