EIR Daily Alert Service

MONDAY, JULY 24, 2017

Volume 4, Number 145

EIR Daily Alert Service

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

EDITORIAL

America’s ‘Number-One Adversary’ Is Wall Street

July 23 (EIRNS)—The United States is in its eighth year of less than 2% annual economic growth, with economic infrastructure falling apart, wracked by drug-addiction deaths of its people in the prime of life, its tax revenues dropping, and huge debt bubbles defaulting toward a financial crash. How foolish that the Chairman of the Joint Chiefs of Staff Gen. Joseph Dunford can’t decide whether the nation’s top adversary and national security threat is Russia, China or North Korea!

That adversary is Wall Street, and the London financial power it is allied with. There is a great deal of evidence that the American people realize this. But their elected officials will not give them the leadership to mobilize to break up the Wall Street casinos and stop a “second 2008” crash, so that the economy can actually be rebuilt.

Most Americans clearly do not agree with “Russia-gate,” the frantic attempt to sweep the people into a new McCarthyism against President Trump, which was started by British intelligence figures more than a year ago and still dominates national media. They want it ended. They backed putting Glass-Steagall reinstatement in both parties’ national platform. A poll just taken shows that majorities of all voters want gasoline taxes raised and used to build new infrastructure projects. They want the nation’s industrial power rebuilt, and space exploration excites more potential astronauts than ever.

But just as Wall Street captured 2009’s anti-bailout, anti-Wall Street tea party movement and turned it into the “no-government” caucus in today’s House of Representatives, President Trump is now surrounded by a virtual Wall Street cabal which opposes Glass-Steagall, any intervention to revive the industrial economy, and any interference in Wall Street’s rush toward another blowout of securitized debt. One of that cabal, Treasury Secretary Mnuchin, is so venal that he put financial sanctions on Secretary of State Tillerson for not being sufficiently anti-Russia.

That is why the LaRouche Political Action Committee has mobilized to take on Wall Street—and the City of London—and pre-empt a trans-Atlantic financial breakdown worse than 2008. The President’s vital peace policy in cooperation with Russia and China, admirably kept up against a war phalanx in the media, Congress, and intelligence agencies, will be swept away if we let that breakdown hit.

The actions of that mobilization are Glass-Steagall re-organization of banking and credit; funding for new physical infrastructure projects across the continent; accelerated return to space exploration, and a crash program of fusion power development. In all these, cooperation with China’s Belt and Road Initiative, and with Russia, will be crucial.

The adversary is Wall Street; it must be broken up.

NEW WORLD ECONOMIC ORDER

China’s First Circumnavigation of the Arctic Rim Is Now Underway

July 21 (EIRNS)—Amid great fanfare, China’s icebreaker Snow Dragon set sail yesterday from Shanghai to start an 83-day, 20,000-mile trip in the country’s first circumnavigation of the Arctic rim, with a crew of 96 onboard. The Ukrainian-built vessel, in service since 1994, will travel the northwest shipping lane for the first time, rather than the northeast lane, which is less challenging, with less ice.

This is China’s eighth Arctic expedition. Lin Sanqing, deputy director of the State Oceanic Administration, said, “Usually, Arctic expeditions are carried out once every two years. Starting this year, we plan to increase the frequency of expeditions.” This year, China plans to open its fifth Arctic research station.

Scientists onboard the Snow Dragon will study navigation, marine biodiversity, hydrology, biology, chemistry, and pollution in the Arctic. The vessel was originally designed to transport supplies to China’s research stations, and has made a half-dozen trips. China has more than 500 polar scientists, and four research stations in the Arctic.

In May, Prof. Li Xiguang at Tsinghua University proposed that China’s Silk Road strategy is likely to include the Arctic, and be called, “One Belt, One Road, One Circle.” Although China is not an Arctic littoral state, it has had an active “engagement” in the region.

Nomi Prins on Japan’s New External Infrastructure Target

July 23 (EIRNS)—Economic history author and Glass-Steagall advocate Nomi Prins reports in the “Daily Reckoning” website, a new Japanese government target for infrastructure investments outside Japan in the next few years. Prins just returned from a number of speaking engagements in Japan.

“Japan is also eager to get more involved in major infrastructure projects around the world,” she writes. “Just last week, the Japanese government set a new goal for Japan Inc., a network of corporate allegiances supporting construction, labor, and jobs. The goal is to export ¥30 trillion ($268 billion) worth of infrastructure packages by 2020. According to its just-released draft plans, Japan Inc. will seek involvement in infrastructure projects over multiple phases, spanning development through post-completion, providing on-the-ground ongoing operational, maintenance, personnel training and consulting services.”

Prins describes Japan as increasingly competing with China in exporting new infrastructure projects which benefit both the receiving countries’ and the investing countries’ economies. High-speed rail development is perhaps the leading technological area.

She notes that “Japan, Inc. also launched a competitive move against China for a high-speed train from Malaysia to Thailand. This is a 350 kilometer link project, worth about $14 billion. Winning that, or a portion of that contract, could prove a boon for Japanese construction and engineering companies. The winning company would be responsible for the design and construction of the railway systems, including tracks, power, signaling and telecommunications. The train will have a maximum operating speed of 320 kph and cut travel time between the capitals to 90 minutes, compared with nearly five hours by car.”

In that context, Prins places the now six months’ standing proposal of Japan’s Prime Minister Abe to President Donald Trump, to invest ¥17 trillion ($150 billion) in public and private funds into new infrastructure projects in the United States over the next decade. Investment in a Northeast Corridor maglev line is part of this.

Major, long-term and low-interest investments require a national credit institution which the United States—with the restricted and embattled exception of the ExIm Bank—now does not have.

Georgia Minister Announces Baku-Tbilisi-Kars Railway Will Soon Be Operational

July 23 (EIRNS)—Visiting Turkey, Georgia’s Economy Minister Giorgi Gakharia said today the Baku-Tbilisi-Kars Railway, an important section in the middle of the Belt and Road, will soon be fully commissioned very soon. “We have great expectations for the results of what the Baku-Tbilisi-Kars railway will bring not only to Georgia, Turkey and Azerbaijan, but also to other countries of the region. I hope that this important project will become fully operational very soon,” he said, the government’s English-language news site Agenda.ge reported July 20.

Baku-Tbilisi-Kars (BTK) Railway Project will enable  the cargo coming into Kars in eastern Turkey to reach Baku, Azerbaijan, via Tbilisi, Georgia, and then across the Caspian Sea to Kazakhstan’s Aktau Port on the eastern shore, to Turkmenistan’s Turkmenbashi Port, on its way to China in the north. BTK, located west of the Caspian Sea, is part of the middle corridor of the modern Silk Road.

Minister of Transport, Maritime and Communication of Turkey Ahmet Arslan, who is travelling with Gakharia said: “This is a historic project and together we are part of this historical fact when we take the first train on this newest railway line. This project is very important for all three countries, as thanks to it, we will be able to further develop economic and cultural relations. I remind you that at the first stage the project was started by Azerbaijan, Georgia and Turkey, but now Kazakhstan and Turkmenistan are also joining the project.”

The project to connect Baku with Kars via Georgia’s capital of Tbilisi by rail was launched in 2007 and construction began in 2008.

STRATEGIC WAR DANGER

Syrian Army Called for Ceasefire in Eastern Ghouta Near Damascus

July 23 (EIRNS)—The Syrian Army declared a ceasefire in the Eastern Ghouta countryside of Damascus starting at noon (09:00 UTC) on July 22, wrote the official Syrian Arab News Agency (SANA). Earlier, reported Xinhua, the Russian Defense Ministry said that its officials had signed a deal with Syrian opposition at peace talks in Cairo on how a safe zone near Damascus will function. “As a result of talks held in Cairo between Russian Defense Ministry officials and moderate Syrian opposition brokered by the Egyptian side, agreements have been signed on how the Eastern Ghouta de-escalation zone will function,” the Defense Ministry said.

On May 4, Russia, Iran, and Turkey, as guarantors of the ceasefire, signed an agreement in Astana, Kazakhstan, to create four “de-escalation zones” in Syria. The four zones include the Idlib Governorate, the northern rebel-controlled parts of the Homs Governorate, the rebel-controlled Eastern Ghouta, and the Jordan-Syria border.

Following the meeting between President Donald Trump and Russian President Vladimir Putin in early July, an open-ended cease-fire in southern Syria brokered by the United States, Russia, and Jordan went into effect on July 9.

On July 22, the Associated Press reported the rebel-held northwestern province of Idlib is calm after two main militant groups agreed to end days of fighting that killed scores.

Rep. Walter Jones to Trump: Don’t Raise Afghanistan Troop Levels, Let Congress Debate Policy

July 21 (EIRNS)—Rep. Walter Jones (R-NC) sent an open letter to President Trump on July 21 urging him not to escalate U.S. involvement in the Afghanistan conflict, and to involve Congress in future plans in that theater.  He wrote that many Congressmen “believe we have been denied our sacred duty to debate and declare war.”  This is especially true on Afghanistan because it has lasted 16 years, cost almost $1 trillion, has involved “no direct goal or strategy,” and continues to lose American lives.

He then cited statements by Donald Trump dating back to 2011 to the effect that Afghanistan is “wasting lives and money in Iraq and Afghanistan,” and “Our troops are being killed by the Afghanis we train.”  Jones mentioned that former Marine Commandant Gen. Chuck Krulak emailed him warning, “No one has ever conquered Afghanistan … and many have tried. We will join the list of nations that have tried and failed.” (Emphasis in original.)

Jones urged Trump to ask Congress to debate and vote on any troop level increases; to involve the whole nation in the decision, and then, “Go before the American people and U.S. military to explain the benchmarks you chose for Afghanistan.

He concluded with the declaration, “Afghanistan is the graveyard of empires!  We do not want a tombstone to read, ‘United States of America.’ ”

Congressional McCarthyites Win on Anti-Russia Bill Trump Opposes

July 23 (EIRNS)—Most members of Congress have again bought the British intelligence and media “talking point,” rejected by the American people, that Russia is a major adversary planning harm to the United States. House and Senate leaders have reportedly agreed on a new version of the anti-Iran/Russia sanctions bill, adding to it new financial sanctions on North Korea, which previously passed the House as a separate bill. The House is to vote Tuesday; the Senate sometime this week.

President Donald Trump and, publicly, Secretary of State Rex Tillerson have opposed these war-sanctions aimed squarely against the progress for peace being made by cooperation between Trump and Russian President Putin. The New York Times gloated Sunday, “Now, Mr. Trump could soon face a decision he hoped to avoid: veto the bill—a move that would fuel accusations that he is doing the bidding of President Vladimir V. Putin of Russia—or sign legislation imposing sanctions his administration has opposed.” Democratic McCarthyite Sen. Ben Cardin lied, “A nearly united Congress is poised to send President Putin a clear message on behalf of the American people and our allies.”

Both the American people and our non-British European allies oppose the sanctions. The European Commission immediately issued a statement reflecting German opposition in particular. “We are concerned the measures discussed in the U.S. Congress could have unintended consequences, not only when it comes to Transatlantic/G7 unity, but also on EU economic and energy security interests,” it said. “This impact could be potentially wide and indiscriminate, including when it comes to energy sources diversification efforts,” the statement goes on. It argues that sanctions are most effective when they’re coordinated but that unilateral measures undermine that effectiveness.

Presidential Press Secretary Sarah Huckabee Sanders indicated Sunday that the President would likely sign the bill, though that is to be seen. The newly negotiated bill originates in the House; lets Congress block any lifting of sanctions within 30 days—though providing that the Senate must be first to do so—but removes the prohibition of oil companies’ deals with Russia, and delays some of the sanctions.

U.S. POLITICAL AND ECONOMIC

Grassley Hearing Draws Fifth Amendment Claim from Glenn Simpson

July 22 (EIRNS)—On July 21, Sen. Chuck Grassley and the Senate Judiciary Hearing issued a subpoena for Glenn Simpson from Fusion GPS to appear before them on July 26.  Fusion GPS is the opposition research outfit which hired British intelligence’s Christopher Steele to peddle the phony anti-Russia, anti-Trump dodgy dossier.  At the same time, Fusion was working for Russian defendants in a bizarre asset forfeiture action brought in the Southern District of New York by British agent Bill Browder, the FBI’s Eurasian organized crime strike force, and former U.S. Attorney and James Comey buddy, Preet Bharhara.  The Russian lawyer who met with Donald Trump, Jr. was a lawyer for the Russian defendants in this legal action.  Grassley is probing what relationship Steele had with the FBI and the Clinton campaign, and what Fusion’s role was in the Southern District of New York action.

According to Grassley and multiple press reports, Simpson has invoked his Fifth Amendment right against self-incrimination in response to the subpoena.  It is unclear whether the criminal exposure Simpson claims has to do with not registering under the Foreign Agents Registration Act, or other potential crimes. Simpson has publicly denied that he had anything to do with the meeting with Donald Trump, Jr. involving lawyer Natalia Veselnitskaya and others, and has also claimed that he is unavailable for Wednesday’s hearing because he is “traveling.” Pictures were taken of Simpson by the media sitting at the Aspen Security Forum, the annual Colorado confab of spooks and the elites in Aspen, which ends today.

Donald Trump, Jr. and Paul Manafort who had also been scheduled for the same Wednesday, July 26 hearing will provide documents and be interviewed privately by Committee staff rather than testifying publicly on Wednesday.

Russia’s Lavrov Comments to NBC on Trump-Putin Discussion of Cyber-Security Cooperation

July 22 (EIRNS)—U.S. President Donald Trump showed his interest in cooperation between Washington and Moscow in cyber-security at his meeting with Russia’s President Vladimir Putin in Hamburg on July 7, Russian Foreign Minister Sergey Lavrov said in an interview with NBC News on July 21.

“When the leaders discuss, they don’t draft documents. They pick up subjects on which they believe the two countries can cooperate for the benefit of their own people; for the benefit of security in the region, and in the world. And they did discuss cyber security. President Trump raised this issue,” Lavrov said, reported TASS.

“He said that he clearly remembered what President Putin publicly said answering the questions about whether Russia meddled with the U.S. elections, and the answer was ‘No,’ ” he said. “But he also reminded, as he did during this meeting in Hamburg, that the Russian Federation many times, many years ago, still under the Obama Administration, proposed to establish a serious process which would concentrate on any apprehensions any of us and maybe some others (because this could have been open for other countries to join)—any apprehensions which anyone might have regarding any problem in cyberspace.”

Lavrov said, “It was the Obama administration which was not very eager about starting to discuss it.” Lavrov went on, “We want cyber-space to be the area where we discuss all concerns—be it interference in domestic affairs of any sovereign state, be it the use of cyberspace for terrorist purposes, or for the purposes of drug business, pedophilia, or other violations of international legislation,” Lavrov said. “And the President of the United States clearly showed interest in having this issue discussed.”

Communications Workers of America Letter Mobilizes Members To ‘Take on Wall Street’

July 23 (EIRNS)—The Communications Workers of America (CWA), which played a role in getting Glass-Steagall reinstatement into the Democratic Party’s 2016 Presidential Platform, mobilizes in its latest newsletter for its members to “Take On Wall Street,” including restoring Glass-Steagall. The union represents 700,000 workers in the United States, working for the major communications and IT companies, as well as in call centers and other shops.

The newsletter says: “Leaders from both the House and the Senate say it’s time to pass new laws to address the predatory economic power of Wall Street banks and billionaires, and to make the financial system work for working people, not just the wealthy and the well-connected. These members are announcing their leadership on various key ingredients of the ‘Take On Wall Street’ agenda, including enacting a 21st Century Glass-Steagall firewall between commercial and investment banking; closing Wall Street tax loopholes on carried interest and CEO bonuses; passing a tax on financial transactions to help pay for college affordability and other investments to help working families, and addressing the revolving door between Wall Street and government by prohibiting ‘golden parachute’ pay packages for financial industry employees who go into government.”

The section is followed by a link to contact Congress Members in support of Take On Wall Street.

COLLAPSING WESTERN FINANCIAL SYSTEM

Italy: Non-Performing Loans Selloff Will Destroy €63 Billion in Value

July 21 (EIRNS)—Through its criminal management of the so-called Italian banking crisis, the EU is forcing a massive destruction of Italian families’ wealth. A large chunk of non-performing loans (NPLs) is insured by properties as collateral, both houses and industrial buildings. By forcing banks to early liquidate those NPLs, the ECB is further collapsing property values, which are already at 50% their 2011 value.

It has been calculated that €88 billion nominal value of those properties are on the market, but this value has already dropped to €44 billion—and in the end, they won’t be sold over €25 billion. “In sum: €63 billion is potentially at risk to be cancelled,” Il Sole 24 Ore wrote July 20.

This plan is going full speed ahead. Unicredit’s CEO Jean-Pierre Mustier announced that Unicredit has almost completed the first phase of selloff of a chest of €17.7 billion of NPLs, at an average price of 13%, to international vulture funds. Next on line are €28 billion bad loans of Monte dei Paschi bank.

It is “a full-fledged economic hara-kiri,” wrote Il Sole.

IMF Assesses Greek Debt Crisis: Athens Needs 45% of GDP To Pay Off Debt

July 22 (EIRNS)—While the International Monetary Fund has approved in “principle” but not in fact, an €1.6 billion loan to Greece as part of the third bailout, more details of the IMF’s debt sustainability analysis have surfaced. According to this analysis Greece’s debt will be 160% of gross domestic product in 2020 and go to 150% in 2020, and reach 150% in 2030, and then jump to 190% in 2060. Debt service will exceed 15% of GDP in 2028, reaching as high as 45% in 2060!

Greece’s total national debt is €310 billion, 50% more than the €210 billion it stood at in 2010. While the debt held by Greek banks, and insurance and pension funds got a 50% haircut in 2012, all foreign banks and hedge funds holding Greek debt were fully paid off in order to keep the Eurozone from blowing up. Now the Greeks are set up to suffer for the next century.

SCIENCE & INFRASTRUCTURE

State Department Acknowledges China-U.S. Cooperation in Science Is Mutually Beneficial

July 22 (EIRNS)—A report by the U.S. State Department in 2016, but just released last month, describes bilateral science and technology activities between the U.S. and China during 2014 and 2015, and concludes that both sides benefit from the cooperation. The biennial report is required by law, and the activities come under the 1979 U.S.-China Science and Technology Cooperative Agreement. Although it is marked “unclassified,” it was released only after a Freedom of Information request by the Federation of American Scientists.

The report states that “science and technology engagement with the United States continues to be highly valued by the Chinese government.” While motivation on the U.S. side includes Obama-era influencing “the foreign and domestic policies of China,” the report also concludes that the cooperation “likely has accelerated scientific progress in the United States and provided significant direct benefit to a range of U.S. technical agencies.”

Highlights of areas of cooperation include:

  • Department of Agriculture: pest control, biotechnology, and enhanced development of “new seed varieties through improved access to Chinese plant genetic resources”;
  • Department of Commerce: various projects with the National Oceanic and Atmospheric Administration.
  • Department of Defense: DOD attended international science and technology conferences in China; exchanges on pandemic response, infectious disease surveillance, malaria, etc.
  • Department of Energy: mostly environment-related projects, but also access to long-pulse magnetic fusion research.
  • Department of Health and Human Services: projects on global immunization, disease response, epidemiologic training, with 19 NIH Institutes involved with Chinese counterparts.
  • Department of the Interior: establishment of two Landsat satellite receiving ground stations in China and data exchange.
  • National Science Foundation: NSF sent 40 U.S. graduate students to China;
  • Office of Science & Technology Policy: annual U.S.-China Dialogue on Innovation Policy with the Chinese Ministry of Science and Technology.

No mention of cooperation with NASA, of course, since that is specifically forbidden by law.

 

 

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