EIR Daily Alert Service, Wednesday, October 18, 2017

WEDNESDAY, OCTOBER 18, 2017

Volume 4, Number 207

EIR Daily Alert Service

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

EDITORIAL

CPC Congress Opens Oct. 18, Then Trump Goes to China: A New Paradigm Is Possible, and Urgently Necessary

Oct. 17 (EIRNS)—It has been five years since Xi Jinping became Communist Party of China Chairman and President of China at the last CPC National Conference in 2012. The transformation which has taken place in that short span of time, not only within China, but internationally as a result of the Belt and Road Initiative, is world historic, and breathtaking. The New Paradigm posited by Lyndon and Helga Zepp-LaRouche over the past fifty years—for a world free of war and free of poverty, where every citizen of the world is capable of participating in the creation of his or her own future, and that of humanity as a whole—that New Paradigm is now being experienced in China and is being spread around the world through the New Silk Road.

Tuo Zhen, the spokesman for the CPC, told a press conference today that the Belt and Road Initiative has now been incorporated into several UN documents, that “between 2013 and 2016, Chinese companies have invested about $560 billion overseas, paid over $100 billion in various kind of taxes to the host countries, and created millions of jobs for the local communities.” He said the investments have helped the receiving countries to “transform their resources and labor power for development,” and that “China has developed partnerships of various forms with about 100 countries, regions and regional organizations. China’s circle of friends is widening day by day.”

President Trump considers himself among that widening circle of friends, but it is urgent that he take the opportunity of his visit to China in two weeks to fully integrate the U.S. economy into the Belt and Road, both for U.S. industry to participate and benefit from the massive development projects across the globe, and also for China’s huge holdings of U.S. debt to be allowed to participate, as credit, for the rebuilding of the American industrial and scientific greatness of yore. LaRouche’s concept of a national Hamiltonian bank for development, one of his Four Laws, has been enthusiastically received by leading Chinese and Japanese economists in discussion with EIR, as a means of putting their vast reserves of U.S. debt into useful, productive investments, and making the U.S. again a partner in global development, as it was in the era of FDR and JFK.

The London and Wall Street lords who are trying to preserve their bankrupt derivative holdings are franticly trying to stop President Trump from joining this New Paradigm. Over the past days, BBC, the City of London’s The Economist, the Wall Street Journal and the Washington Post have all published wild diatribes against Xi Jinping (the new Mao, the dictator, the new Stalin, the Grand Inquisitor, etc.), intended to poison the U.S. President’s visit to China. As with the Russia-gate hysteria from the same sources, the American population is no longer so easily scammed.

Helga Zepp-LaRouche told a conference call of her associates today regarding this pregnant moment in history:

“We are breaking through on many levels. It may not be the big splash, but I can see progress on many levels, that people do recognize our authority of having developed this vision, and are willing to encounter more serious ideas, including especially that people understand that Lyn [LaRouche] was the forecaster who predicted all these things, starting with his 1971 recognition of what it meant when Nixon took down the Bretton Woods system, especially that he was practically the only person who identified that the Soviet Union would not survive their policies in 1984, his prognosis on the German unification in 1988, his 2007 prediction of the collapse of the world financial system. I think people are now more able to encounter these more profound concepts associated with LaRouche’s ability to make these kinds of correct analyses.

“So I’m basically optimistic that we can win this battle in the short term. So we should be appropriately happy and motivated to convince people to get on the bandwagon, joining a completely new era of civilization, to somehow capture the imagination of people—with Classical music, a world without poverty, a world united around one concept of Mankind. I think we can get it across and get people onboard in large numbers.”

U.S. POLITICAL AND ECONOMIC

Rep. Tom Marino Forced To Decline Drug Czar Position

Oct. 17 (EIRNS)—Rep. Tom Marino (R-PA) has withdrawn from consideration as President Trump’s choice as Director of the Office for National Drug Control Policy,  after it became widely known that he championed a bill that hindered federal agents from going after the big pharmaceutical firms that flooded the United States with addictive opioids.

President Donald Trump made the announcement this morning on Twitter: “Rep. Tom Marino has informed me that he is withdrawing his name from consideration as drug czar. Tom is a fine man and a great Congressman.”

The Washington Post, in a rare deviation from its support of criminal people and policies, landed on the right side of this specific case. Marino was a big supporter of legislation passed by Congress that effectively stripped the Drug Enforcement Agency of its most potent weapon against big drug companies suspected of allowing prescription narcotics to flood America’s streets. The bill weakened a measure to spur aggressive DEA efforts against drug distribution companies that allowed prescription drugs to flow to corrupt doctors and pharmacists. Representative Marino supported the bill, and was supported by the prescription drug industry.

The law that Marino helped pass is still in effect, and Sen. Joe Manchin (D-WV), whose home state of West Virginia has been hit especially hard by the opioid crisis, announced plans yesterday to repeal it.

Manchin said, “I am horrified by how harmful this bill has been for our efforts to effectively fight the opioid epidemic and now it’s time to make it right. I introduced legislation to repeal this horrible bill and reinstate the DEA’s ability to stop opioid distributors and manufacturers who are endangering the American people.

Former Pentagon Whistleblower: Trump Was Fed Fake Intelligence on Iran

Oct. 17 (EIRNS)—Anti-neo-con activist and former U.S. Air Force analyst Lt. Col. Karen Kwiatkowski (ret.) told Sputnik that she believes that President Donald Trump was misled by fake intelligence. “I suspect that Mr. Trump is being fed information regarding Iran as a nation and as a government that is cherry-picked and creatively elaborated, largely outside of intelligence channels, by his neoconservative advisors,” she said. She noted despite Trump’s 2016 promise to “drain the swamp” of discredited foreign policy interventionists, many of them have managed to weasel their way back into government service. “This faction has always slated the destruction of Iran as a regional power for several decades now, and if they have the ear of the President, there is never a better time than the present to press their case,” she said. She insisted, however, that neither Trump himself, nor the U.S. military is determined on a war against Iran.

Graham Allison: ‘Behold the New Emperor of China’

Oct. 17 (EIRNS)—Harvard Professor Graham Allison, who first issued the warning that China must not be subjected to the Thucydides Trap (that a dying power inevitably goes to war with a rising power) has added his voice to the BBC, The Economist, and the Washington Post in warning that President Xi Jinping is an autocratic and power-hungry leader. The headline, above, in today’s Wall Street Journalcould well have been “Beware” rather than “Behold.”

While Allison does accurately describe the incredible development of China, especially under Xi, he paints every aspect in ominous terms of a danger to the West. While acknowledging the crackdown on corruption, he calls it an “inquisition” which instills “a sense of fear (of jail) among party cadres and the moneyed class”

Xi’s transformation of the Chinese economy is dismissed by claiming that Xi has “effected a regime transformation to charismatic one-man rule.”

He falsely claims that Xi has chosen to “upend Deng’s policy—‘hide China’s capability and bide our time.’ ” The truth is that Deng Xiaoping meant to wait until China developed—now Xi is using that development to carry it to others around the world.

He calls the One Belt, One Road a “geoeconomic master plan” which is “nothing if not audacious.”

And of course, Allison portrays China in geopolitical terms: “As the U.S. has retreated from its traditional role on the world stage, Mr. Xi has moved swiftly to fill the void.”

Allison writes that all Western wishful thinking about China has been proven false under Xi. He has “revitalized a party that many Western analysts thought would soon fall to the ‘inevitable’ march of democracy; maintaining robust economic growth when so many expected crisis and collapse; and asserting China’s power abroad against all competitors, getting his way from the South China Sea to the Himalayas.”

Like BBC and The Economist, Allison claims that Xi will not relinquish power after his two terms: “Xi Jinping is the most powerful leader since Mao, and he is set to hold power for as long as he wants.”

Washington Post: ‘Xi Jinping’s Quest To Revive Stalin’s Communist Ideology’

Oct. 17 (EIRNS)—Showing once again that the Washington Post is composed in London (at least, ideologically), the Post’s former Beijing bureau chief John Pomfret today authored an article under the above title, just days after the BBC published “The Thoughts of Chairman Xi—Xi Jinping Is Tightening His Grip on Power,” and The Economistcover story reads: “The World’s Most Powerful Man—Xi Jinping Has More Clout Than Donald Trump. The World Should Be Wary.” It is clear that the Empire is most frightened that President Trump will join President Xi’s New Silk Road.

Pomfret writes on the eve of the CPC National Conference: “We in the West ignore Xi Jinping’s pretensions at our peril.” He whines that those who hoped China would converge with “Western liberal traditions” have lost to those who “favor a totalitarian ideology.”

Xi, says Pomfret, has “embraced the idea of dynastic succession that lay at the heart of ancient Chinese politics.” Then the clincher: “But Xi’s ideology is not simply Chinese…. He has also recommitted China to the revolutionary philosophy of a man whom Mao hailed as his great teacher. That’s Joseph Stalin.”

Get it? The West is the enemy. He writes: “Central to Stalin’s teaching is the idea that the creation of enemies is essential for sustaining the rule of a revolutionary party. Since taking power in 2012, Xi has found new enemies everywhere. He has launched the fiercest crackdown against dissent since the 1989 suppression of pro-democracy protests. Party members are urged to maintain vigilance against the plots of Western liberal democracies who Xi has argued are dedicated to derailing China’s revolution…. It means that in Xi’s eyes, the West, and particularly the United States, remains a necessary opponent. Without an America intent on overturning China’s one-party state, the Communist Party loses its reason for being.”

The braying of all these donkeys is unlikely to deter President Trump from his friendship with President Xi. It is to be hoped that Trump carries through to accept Xi’s real intention, for a new type of relationship among the world’s leading nations, based on win-win cooperation in the New Silk Road.

STRATEGIC WAR DANGER

Philippines Defeats ISIS in Mindanao

Oct. 17 (EIRNS)—Philippine President Rodrigo Duterte announced today that “I hereby declare the liberation of Marawi.” The Oct. 16 military operation in Marawi by government forces successfully terminated a five-month battle for control over the city of Marawi, which had been occupied by terrorist forces. The two leaders of the occupation, Abu Sayyaf leader Isnilon Hapilon and Maute terror group leader Omarkhayam Maute, were killed in the final action. Both had pledged allegiance to the Islamic State group.

Hapilon is listed among the U.S. FBI most wanted criminals. He was said to be the emir of IS in Southeast Asia. Maute was a Philippine police official who was involved in drugs, and launched a terrorist operation in league with Abu Sayyaf.

The fierce battle in Marawi killed more than 1,000 people, and displaced more than 400,000 others. Much of the city has been destroyed. One of the projects China has offered the Philippines is the rebuilding of the city.

COLLAPSING WESTERN FINANCIAL SYSTEM

Carney Says Brexit Can Bust $25-30 Trillion of OTC Derivatives

Oct. 17 (EIRNS)—Bank of England Governor Mark Carney said in the House Commons today that about $25 trillion in over-the-counter (OTC) derivatives are at risk of failing to pay out if “Brexit” is disorderly. What “orderly” means is that new legislation must be passed on both sides well before March 2019, in order for the contracts to be “honored.” Otherwise, Carney said, “all the risk, capital, collaterals, and individuals have to move” to an EU country, which is definitely impossible in his view.

Negotiations between Prime Minister Theresa May and EU Commission President Jean-Claude Juncker in Brussels Monday again failed to make any progress, according to reports.

“There’s nothing the EU or U.K. can do unilaterally,” to prevent the failure of those derivatives, Carney said, and “it’s pretty clear that those contracts don’t continue to be valid.”

Carney’s warning actually comes from a report by the Bank of England Financial Policy Committee in September, which said it will be “complex and difficult” for derivatives between counterparties in U.K. and EU to continue to be valid, or, alternatively, to be rewritten by March 2019. There are “big economic issues” riding on where the contracts were written, and 18 months—or two years—is not enough to change them.

The same applies to the global currency market (foreign exchange), which is $5 trillion in trades/day, with 40% of it traded and booked in London. The U.K. also accounts for about half of the global OTC $600 trillion market, according to the Financial Times on Oct. 16.

Trump’s Threats To Kill Iran Deal Could Kill Europe’s Trade Plans

Oct. 17 (EIRNS)—President Donald Trump’s threat to reject the 2015 Iran nuclear deal is a blow to diplomacy and to German companies’ hopes for many new trade deals with Iran, the German business daily Handelsblatt describes with shocked desperation today.

German companies were overjoyed with the prospect of new deals with Iran when the 2015 nuclear agreement led to lifting sanctions against Iran, whose 80 million people had been cut off from Western markets for a decade, Handelsblatt writes.

But on Oct. 13, U.S. President Trump refused to formally certify to the U.S. Congress that Iran was complying with the accord, and said he might terminate the deal. The U.S. Senate is now drafting legislation that would increase restrictions on the existing deal and impose new sanctions if Iran continues to develop its non-nuclear ballistic missile program—actions not covered by the deal as written.

“I see this as a tremendous breach of trust for the U.S.A., especially also against the European partners,” Wolfgang Ischinger, a former German diplomat and current head of the Munich Security Conference told Handelsblatt. Although the United States may have “isolated” itself with the decision, Ischinger said the EU has no choice but to keep working with Washington and make the best of it.

The EU, however, is using all available channels to try to salvage the deal. An EU Foreign Ministers meeting in Luxembourg yesterday affirmed their backing for the deal. German diplomats have already met more than 30 U.S. Senators in close coordination with the British and the French, Handelsblatt reports. German Foreign Minister Sigmar Gabriel told reporters that “As Europeans together, we are very worried that [President Trump’s} decision could lead us back to military confrontation with Iran.”

The business community of Germany saw the Iran deal as critical to opening back up Iran’s $400 billion economy. Europe had had significant trade relations with Iran until 2002, which made Europeans better positioned to benefit when sanctions on Iran were lifted 18 months ago; German trade had already grown 20% this year, says Handelsblatt. Siemens, Daimler, the chemicals group BASF, as well as Airbus and Boeing stand to lose big. Even worse, U.S. sanction rules apply to companies not based in the U.S. if the trade is calculated in dollars, or if transactions cross U.S. territory or involve its citizens. Iranian businessmen are also very worried, says Handelsblatt.

AIIB’s Jin Liqun: Bank Will Adopt Best International Standard, Not What West Wants Asia To Do

Oct. 17 (EIRNS)—Speaking at a panel discussion at the week-long annual IMF/World Bank meeting (Oct. 9-15) in Washington, President of the Asian Infrastructure Investment Bank Jin Liqun said the AIIB is learning from other multilateral development banks and private banks. He said his observation is that MDBs, including the AIIB, “have to upgrade according to international best standards or international best practice.”

“International best practice, however, is not just the traditional way Western countries follow or what Western countries want Asian countries to follow,” China Daily quoted Jin as saying. As an example, Jin said the international best practice should incorporate the tested good experience derived from developing Asian countries, especially China, over their past three to four decades of development.

During his talks with China Daily in Washington on Oct. 15, Jin said the AIIB is ready to expand “its membership after approving 80 members since its launch less than two years ago.” He told the official Chinese daily that the AIIB is “off to a good start, having met all of its initial objectives by building up a sound management system and a strong pool of talent and having invested in huge projects.”

THE NEW GLOBAL ECONOMIC ORDER

Unifying Spain With the Mediterranean Corridor Railway

Oct. 17 (EIRNS)—More than 1,500 Spanish businessmen and representatives of civil society met in Madrid on Oct. 3, to pressure the government to commit the resources required to build the Mediterranean Corridor railway on time, and done right, not on the cheap. On the books since 1990, the Corridor plan is for a double-track, high-speed, separate-track passenger and freight rail line running from the border with France down to the port of Algeciras on the Strait of Gibraltar in the south, passing through Barcelona, Valencia, Alicante, Murcia, and Malaga along the way. The Madrid forum was the culmination of four prior regional meetings organizing for the rail project.

Two developments shaped the event. One, the Catalan separatist crisis, was recognized by many as “an indirect protagonist” present in the discussions. Spanish Development Minister Inigo de la Serna told the meeting that the corridor is “a project which joins and brings together the general interest, which serves to construct and hold up Spain and achieve greater social cohesion, at a time so consequential as Spain is now passing through, when some have decided to put the unity of the country at risk and end national sovereignty.” De la Serna promised the meeting that the government will uphold its commitment to finance all stretches of the railroad.

The other development driving the meeting, although there are no reports that it was  discussed, is China’s great Belt and Road Initiative which Spain officially committed to participating in at last May’s Belt and Road Forum for International Cooperation in Beijing. The alternative offered by participating in that global development has spurred regional political leaders and business associations to step up pressure on the central government to prioritize construction of long-stalled infrastructure projects.

Valencia is the Mediterranean city designated to be the key port of entry for the 21st Century Maritime Silk Road into Spain, and it is the Valencia Businessmen’s Association which has been leading the organizing for the corridor.

When the full Mediterranean Corridor is projected to be completed in 2025, the travel time from one end of the country to the other along this route, which connects areas of key industrial activity, will be cut by half. When it is connected to the also-uncompleted Cantabrian-Mediterranean Corridor in the northwest, which the government is also being pressured to get going on, the Mediterranean ports of Valencia, Sagunto and Castellon will have a direct high-speed rail connection to the logistics hub in Zaragoza in the interior, and from there to the ports of Bilbao, Pasajes and Santander on the Bay of Biscay in the north. That will cut transport time from Valencia to Bilbao by 61%, from nine hours down to three and a half hours. Keep in mind that the Chinese shipping giant, COSCO, recently purchased a majority share of the company which runs both of those ports.

South Africa President Zuma Taps Mahlobo as Energy Minister To Push His Nuclear Power Plan

Oct. 17 (EIRNS)—In a major cabinet reshuffle, South Africa’s President Jacob Zuma has appointed his confidant David Mahlobo to head the Energy Ministry, raising speculation that Zuma will push through the nuclear deal before his second term ends in 2019, Reuters reported today. Mahlobo was the former state security minister. South Africa is preparing to add 9,600 MW of nuclear capacity—equivalent to up to 10 nuclear reactors—in a contract that could be worth tens of billions of dollars and would be one of the biggest nuclear deals anywhere in decades.

Commenting on the cabinet reshuffle, including bringing Mahlobo to take the energy portfolio, Lawson Naidoo of the Council for the Advancement of the South African Constitution (CASAC) said: “This is all about the nuclear deal. Mahlobo has accompanied the President on visits to Russia, presumably to lay the ground for the Rosatom nuclear deal,” according to coverage by Fin24 business site. CASAC is a private outfit which is critical of Zuma and his politics.

What agitated the anti-nuclear cabal in South Africa further were two events occurring within days. These were: Last Friday’s nuclear site authorization and now today’s cabinet changes, including Energy Minister Mahlobo. On Friday, Oct. 13, Department of Environmental Affairs approved the Final Environmental Impact Report for the Nuclear-1 Power Station and its associated infrastructure, and has authorized the South African electricity utility Eskom to proceed with the construction of new 4 GW nuclear power plant complex at Duynefontein in the Western Cape.

Nuclear reactor makers including Rosatom, South Korea’s Kepco, France’s EDF and Areva, Toshiba-owned Westinghouse and China’s CGN are eyeing the South African project, which could be worth tens of billions of dollars, Reuters reported.

SCIENCE AND INFRASTRUCTURE

Beijing Maglev Begins Test Runs Soon

Oct. 17 (EIRNS)—Beijing’s first medium-low-speed maglev line is expected to start trial operation by the end of this year. The 10.2 km S1 line will connect the western suburban districts of Mentougou and Shijingsha. Eight stations, all elevated, have been built, with a maximum designed train speed of 100 km per hour, said Wang Ping, general manager of Beijing Maglev Corporation.

The line is expected to transport 160,000 people every day, with a capacity of around 1,000 passengers per six-car train, said Wang. The maglev line will be the first rail transit line in Mentougou District, which will greatly ease traffic congestion on roads connecting the district and the city proper.

OTHER

Russian Foreign Minister Lavrov at Valdai Club Hits Russiagate as a Scam Aimed at Trump

Oct. 17 (EIRNS)—Russian Foreign Minister Sergey Lavrov spoke today at the opening of the Valdai Club Forum in Sochi, denouncing the fraudulent witchhunt against Russia as a scam aimed at removing President Trump.

“It has been almost a year since the United States launched a probe into Trump’s ties with Russia, Russian meddling into the election campaign on the Republicans’ side,” Lavrov said. “But there has not been a single leak about a single fact that would have proved these allegations. The U.S. society in general, especially in foreign affairs, is built on leaks—this means that they just do not have these facts.”

He continued: “I think they are counting on undermining the positions of Trump’s administration. Despite the inconsistency of the current administration’s actions in the White House, despite all the extravagance, Trump has not abandoned his slogans, his intentions, which he declared both during the election campaign and after being elected as President, intentions to improve relations with Russia, to cooperate with Russia.”

In regard to the separatist movements being orchestrated in Europe, Lavrov said he hoped they “will not lead to turmoil in Europe. We are interested in the stable European Union.”  Europe must consider, he said, the “sentiments that are now manifesting in a number of countries in favor of a return to greater sovereignty.”

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