EIR Daily Alert Service, WEDNESDAY, JANUARY 24, 2018

WEDNESDAY, JANUARY 24, 2018

Volume 5, Number 17

EIR Daily Alert Service

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

EDITORIAL

Mueller’s Russiagate Scam Is Imploding, But Neocons Are Hell Bent for War

Jan. 23 (EIRNS)—There should be no misunderstanding that the two contradictory courses of developments within the United States today are somehow merely a coincidence.

On the one hand, the two-year long campaign to stop Donald Trump, the so-called “Russiagate,” orchestrated by British intelligence agent Christopher Steele and his assets within the Obama intelligence community, is now verging on collapse. The outright criminal actions by this conspiratorial cabal now stand exposed—and many of them should end up in prison. Peter Strzok, who led much of the Russia investigation at the FBI, and as a member of Robert Mueller’s Russiagate task force, has been caught bragging in a text message to his lover (and fellow FBI agent) about a “secret society” to bring down Trump just after his election. Strzok was also exposed as expressing his belief that there was no substance to the charges of Russia collusion, even as he was joining the Mueller witchhunt.

On the other hand, the neoconservative hawks on both sides of the aisle, and in London, and even within Trump’s immediate circle, have unleashed a shrill cry to prepare for war against the fake “threats” from Russia and China. The Chinese have taken note of the danger, while the Russians have more than taken note. There are multiple warnings from every part of the Russian establishment that the West appears to have gone mad—that despite Trump’s clear and repeated calls for peaceful and friendly relations with Russia, the drive for war is rapidly approaching the point of no return.

At the Davos World Economic Summit, which opened today, Andrei Kostin, chief executive of VTB, one of Russia’s leading banks, told the Financial Times that his biggest concern was the dangerous situation being created by the NATO buildup of arms in Europe, which risked an “accident” between NATO and Russian forces. “We are at the beginning of a new arms race,” said Kostin, who is very close to Putin. “NATO is asking for more weapons and spreading more weapons in Europe, and Russia will retaliate absolutely the same.” Former U.S. Defense Secretary William Perry has made the same point—that the “launch on command” posture and the reckless U.S. military buildup in both Europe and the Pacific has brought the world closer to war than ever existed during the Cold War.

Kostin issued another warning, in light of threats in the U.S. Congress of yet more sanctions on Russia: “Any economic sanctions against institutions, personally I say, it would be like declaring a war. I see no reason why the Russian Ambassador should stay in Washington any longer after that, or the American Ambassador staying swimming in cold water in Moscow. I think that is a ‘worse than the cold war’ situation, and that is very dangerous. And I think that Congress is playing with fire, because the relationship is going from bad to worse and we are not responsible for that.”

There is only one way to end the madness. The geopolitical blinders must be ripped from the eyes of American and European populations, and especially their leaders. The new paradigm for humanity, long proposed by Lyndon and Helga LaRouche, is no longer simply a vision of the future—it is right before us, in the New Silk Road, already transforming the majority of nations in the world, in Asia, in Africa, in Ibero-America, and even in parts of Europe and the United States. To ascribe evil intent to this transformation, which rests on close cooperation between China and Russia in both economic and strategic matters, is pure madness. There is nothing holding back the Western nations from full participation in this new organization of relations in the world—not being replaced as the dominant power by the rising powers (as the geopolitical true believers in a unipolar world would have it), but as full partners in a partnership of sovereign nations committed to one common vision, for a better destiny for mankind.

The exposure by the LaRouche Political Action Committee of the British-orchestrated “Russiagate” as an attempted coup against the government of the United States has now burst into the public eye, but the financial Lords of the City of London and Wall Street would prefer war to accepting the end of their Imperial domain. This fight can be won, but the desperation of the dying species known as the oligarchy leaves little time to achieve this great transformation. The time for action by all good souls is now.

U.S. POLITICAL AND ECONOMIC

Strzok-Page Text Message after Trump Election: ‘This is the First Meeting of the Secret Society’

Jan. 23 (EIRNS)—Attorney General Jeff Sessions released a statement to the press Monday insisting he would do all in his power to retrieve the “lost” five months of text messages between FBI conspirators Peter Strzok and Lisa Page. “We will leave no stone unturned to confirm with certainty why these text messages are not now available to be produced and will use every technology available to determine whether the missing messages are recoverable from another source,” Sessions said. “If we are successful, we will update the congressional committees immediately…. I have spoken to the Inspector General and a review is already underway to ascertain what occurred and to determine if these records can be recovered in any other way,” Sessions said. “If any wrongdoing were to be found to have caused this gap, appropriate legal disciplinary action measures will be taken.”

The Department of Justice did turn over 384 pages of new text messages between Strzok and Page to congressional committees, while claiming that tens of thousands had gone missing. “Rather than clearing up prior FBI and DOJ actions, these recently produced documents cause us to further question the credibility and objectivity of certain officials at the FBI,” said a statement released Monday by House Judiciary Committee Chairman Bob Goodlatte, House Oversight and Government Reform Committee Chairman Trey Gowdy, and House Permanent Select Committee on Intelligence Chairman Devin Nunes, who reviewed the new text messages.

In another explosive revelation, Representative Gowdy told Fox: “The day after the election, the day after what they really, really didn’t want to have happen, there’s a text exchange between [Strzok and Page] … saying, ‘Perhaps this is the first meeting of the secret society.’ ” Gowdy continued, “So, of course I’m going to want to know: What ‘secret society’ are you talking about?”

President Trump tweeted this morning: “In one of the biggest stories in a long time, the FBI now says it is missing five months worth of lovers Strzok-Page texts, perhaps 50,000, and all in prime time. Wow!”

Strzok Texted There’s ‘No There There’ in Russiagate, Then Joined Mueller’s Team

Jan 23 (EIRNS)—One of the text messages from Peter Strzok to Lisa Page released yesterday was sent on the day after Mueller’s appointment as special prosecutor, in which Strzok is pondering whether he should accept an appointment to Mueller’s team. Strzok, who as deputy assistant director of the counterintelligence division at the FBI had led the investigation into Trump since July 2016, knew what was there.

“You and I both know the odds are nothing,” wrote Strzok. “If I thought it was likely, I’d be there no question. I hesitate in part because of my gut sense and concern that there’s no big there there.”

Did that stop him from joining the witchhunt? Of course not. The truth was far less important that the coup—so he joined the “secret society.”

STRATEGIC WAR DANGER

U.S. Arming the Nazi Azov Battalion in Ukraine, Exposes Max Blumenthal

Jan. 23 (EIRNS)—Max Blumenthal, in a long article published in The Real News Network (therealnews.com) and carried on the website of the American Committee for East-West Accord, reports on the U.S. arming of the Nazi Azov Battalion in Ukraine, beginning during the Obama Administration.

It started in October 2016, he reports, “when the Texas-based AirTronic company announced a contract to deliver $5.5 million worth of PSRL-1 rocket-propelled grenade launchers to an Allied European military customer. In June 2017, photos turned up on Azov’s website showing its fighters testing PSRL-1 grenade launchers in the field.” Then, in November 2017, “an American military inspection team visited the Azov Battalion on the front lines of the Ukrainian civil war to discuss logistics and deepening cooperation. Images of the encounter showed American army officers poring over maps with their Ukrainian counterparts, palling around and ignoring the Nazi-inspired Wolfsangel patches emblazoned on their sleeves.”

He writes that Azov, which has been incorporated into the Ukrainian National Guard, is recruiting in right-wing organizations across Europe. “Foreign fighters are promised training with heavy weapons, including tanks, at Ukrainian camps filled with fascist fellow travelers.”

He writes that AirTronic Chief Operating Officer Richard Vandiver, in an interview in December 2017 on Voice of America, said the sale of grenade launchers was authorized through “very close coordination with the U.S. Embassy, with the U.S. State Department, with the U.S. Pentagon and with the Ukrainian government.”

Blumenthal continues that the House Defense Appropriations Act adopted last September included a provision ensuring that “none of the funds made available by this Act may be used to provide arms, training, or other assistance to the Azov Battalion.” But, Blumenthal writes, “the provision has yet to be authorized. Back in 2015, pressure from the Pentagon prompted Congress to strip out a similar restriction, and questions remain about whether it will ever be enforced.”

He also reviews the history of CIA support for Nazis after World War II, including recruiting Mykola Lebed, a Gestapo-trained leader of the OUN (Organization of Ukrainian Nationalists). He then turns to the Maidan:

“The relationship came full circle after the corrupt but democratically elected Ukrainian President Viktor Yanukovych was ousted in the 2014 coup known as Euro-Maidan. From the ranks of the neo-fascist street toughs that waged a pitched battle against national riot police in Kiev’s Maidan Square, the Azov Battalion was formed to do battle with pro-Russian separatists in the country’s east. The militia’s commander, Andriy Biletsky, had earned his stripes as a leader of the fascist group, Patriot of Ukraine.” He notes that “the veteran fascist Social-National Party founder Andriy Parubiy has risen to the role of Speaker” in the Kiev parliament, “while Vadym Troyan, a leader of Biletsky’s neo-Nazi Patriot of Ukraine organization who served as a deputy commander of Azov, was appointed police chief of the province of Kiev.”

“Across Ukraine,” he writes, “Nazi collaborators like Stepan Bandera have been celebrated with memorials and rallies proclaiming them as national heroes…. Last May, Azov supporters held a torchlit rally in Lviv, in honor of Gen. Roman Shukhevych, the late commander of the UPA insurgent militia that helped massacre thousands of Jews in Lviv.”

VTB Bank CEO Andrei Kostin Issues Stern Warning of War

Jan. 23 (EIRNS)—The CEO of one of Russia’s leading banks, Andrei Kostin of VTB Bank, who is close to Putin, was interviewed by the Financial Times on the sidelines of the Davos World Economic Forum today, issuing a warning in the strongest terms that the danger of war between the U.S. and Russia was extremely high, and that new economic sanctions against Russia could well be seen as a “declaration of war.”

FT writes that Kostin said that his biggest concern was the “dangerous” situation being created by the buildup of arms in Europe, which risked an “accident” between NATO and Russian forces. “We are at the beginning of a new arms race,” Kostin said. “NATO is asking for more weapons and spreading more weapons in Europe and Russia will retaliate absolutely the same. So who will benefit from this? Only the generals and those who produce arms. America is saying Europe should pay more for this. Who needs it? It is very dangerous.”

Kostin states that the U.S. Treasury is due to deliver a report to Congress early next week on oligarchs and “parastatal entities” close to Putin that is likely to be used as a basis for further sanctions against Russian interests, FT reports. “VTB and Sberbank, the two biggest Russian banks, are both majority-owned by the Russian government and they fear the U.S. could try to exclude them from the SWIFT international interbank payment system, which would severely restrict their cross-border operations.” (The next significant deadline under the Countering America’s Adversaries Through Sanctions Act (CAATSA) is Jan. 29, when the Treasury must submit reports to Congress on “oligarchs and parastatal entities of the Russian Federation” and “the effects of expanding sanctions to include sovereign debt and derivative products.”)

Kostin also said: “Any economic sanctions against institutions, personally I say it would be like declaring a war. I see no reason why the Russian ambassador should stay in Washington any longer after that or the American ambassador staying swimming in cold water in Moscow. [Ambassador Huntsman joined Russians last week in the Epiphany plunge through the ice into water blessed by priests—ed.] I think that is a worse than cold war situation and that is very dangerous. And I think that Congress is playing with fire, because the relationship is going from bad to worse and we are not responsible for that….

“There is so much military equipment close together, anything can happen. Maybe it will not lead to a nuclear war, but it will further kill our relationship. Who knows what is going to happen in Syria, or in the Baltics or in the Black Sea where you have now American military ships. The more arms you have, the more reason to believe there could be an explosion just by accident.”

Herman Gref, Kostin’s counterpart at Sberbank, in an interview with the FT in December last year also warned that any far-reaching potential U.S. move such as excluding Russian banks from SWIFT would be “irrational” and “make the cold war look like child’s play.”

COLLAPSING WESTERN FINANCIAL SYSTEM

Former BIS Chief Economist: Central Banks Are in a Catch-22 Dilemma as Crash Approaches

Jan. 23 (EIRNS)—“Central banks are now caught in a ‘debt trap.’ They cannot keep holding rates near zero as global inflation pressures build because that will lead to an even more perilous financial bubble, but they cannot easily raise rates either because it risks blowing up the system.”

Sounds familiar? For decades now, Lyndon LaRouche and EIRhave warned that the system was doomed either to implode via hyperinflation or explode through bankruptcy. This “Catch-22” situation as above described was exposed by William White, head of the OECD’s review board and former chief economist for the Bank for International Settlements, in an interview from Davos with the Daily Telegraph’s International Business Editor Ambrose Evans-Pritchard.

White says that the collapse is inevitable as a result of central bank QE policies that have made the system more dangerous than in 2008. “All the market indicators right now look very similar to what we saw before the Lehman crisis, but the lesson has somehow been forgotten,” White says. Debt global rations have surged by a further 51 percentage points of GDP since the Lehman crisis, reaching a record 327% according to data from the Institute of International Finance (IIF).

With QE, “central banks have been pouring more fuel on the fire,” White says. “Nobody knows what is going to happen when they unwind QE. The markets had better be very careful because there are a lot of fracture points out there.” He points to the unwinding already going on, with the Fed selling now $50 billion a month of Treasuries. And as for interest rates, the latest stability report by the U.S. Treasury’s Office of Financial Research (OFR) warned that a 100 basis point rate rise would slash $1.2 trillion of value of bonds (referenced to the Barclays U.S. Aggregate Bond Index). Ten-year Treasuries have already risen to a three-year high of 2.66% last week.

Credit in dollars beyond U.S. jurisdiction has risen fivefold in 15 years to over $10 trillion. “This is a very big number. As soon as the world gets into trouble, a lot of people are going to have trouble servicing that dollar debt.”

To show how credit quality has deteriorated, White mentions at the onset the spreading of an unregulated debt tool, the “German Schuldschein bonds” (GSB). Schuldscheine are IOUs whose market has been historically restricted to German companies, but it has recently expanded to international customers who have no access to other forms of credit where a rating is required, and has turned into a form of high-risk shadow banking. Schuldscheine require no rating. The German Schuldschein debt is now 50% abroad.

A case in point is the just-bankrupted British company Carillion, which had raised £112 million through GSBs.

“Pharmaceutical companies are subject to laws forcing them to test for unintended consequences before they launch a drug, but central banks launched the huge social experiment of QE with carelessly little thought about the side-effects,” White said. “We are running out of ammunition. I am afraid that at some point this is going to be resolved with a lot of debt defaults.”

THE NEW GLOBAL ECONOMIC ORDER

China Highlights Panama’s ‘Extraordinary Strategic Position’ in the Belt and Road Initiative

Jan. 23 (EIRNS)—In a Jan. 22 press conference in Panama City to discuss the importance of the just-concluded meeting in Chile of the China-CELAC Forum, China’s Ambassador to Panama Wei Qiang discussed his country’s rapidly-developing bilateral relationship with Panama, and emphasized Panama’s “extraordinary strategic position” in the Belt and Road Initiative, due to its strategic location, its trade, logistical capabilities, and its role as “an important financial center.”

While no date has yet been set for President Xi Jinping’s visit to the country, Wei underscored that the Chinese President’s desire and willingness to visit “is firm.” When the date is set, the announcement will be made simultaneously by both governments.

One might interpret Wei’s words as a message to those Central American, Caribbean, and South American countries that still maintain diplomatic relations with Taiwan, as he pointed out the benefits Panama is enjoying having established diplomatic relations with China seven months ago. There are five Central American and five Caribbean nations, and one South American country which still maintain ties to Taiwan rather than to Beijing.

Wei particularly expressed his satisfaction with the “rapid results” in bilateral relations seen in those seven months with more rapid progress to be made in the future, “to make up for lost time,” as some Panamanian officials have explained it. He pointed to visits by high-level delegations to each other’s countries—with more planned; as well as the signing of at least 20 cooperation agreements, the excellent cooperation existing between him and Panama’s Ambassador to China, and the great progress in “human and cultural connectivity.” A feasibility study is already underway for negotiating a Free Trade Agreement between them, as well. Just last week, he reported, executives from the Bank of China and the Industrial and Commerce Bank of China (ICBC) visited the country to explore expansion of their operations in the Panamanian market.

Ambassador Wei said that with Panama’s participation in the Belt and Road Initiative, which was discussed last week by Panama’s Deputy Foreign Minister and Wang Xiaotao of China’s National Reform and Development Commission (NRDC), several projects can get underway, the first of which is the pre-feasibility study for the proposed high-speed rail line between Panama City and Chiriqui on the Costa Rican border. A train that would connect all of Central America could become a reality sometime in the future, he said pointedly. But first, the Panamanian portion of it should be completed. President Juan Carlos Varela attached great importance to this megaproject, and had asked China to get involved, Wei said.

Building the Local Infrastructure for the Belt and Road Great Projects

Jan. 23 (EIRNS)—When the economic planners began designing and building the dams, hydroelectric plants, and transmission lines to provide protection from floods, and bring power and light to the Tennessee Valley, under President Franklin Roosevelt’s TVA, they quickly realized that workers suffering from malaria, and who could not read, would not be able to meet the task. The TVA carried out an extensive public health care program, to prevent, treat, and cure disease. It built schools and libraries, and offered classes to students of all ages. It set up demonstrations to teach people how to use electric appliances, and carried out R&D programs to create new technology and increased productivity.

China is now facing a similar challenge, in not only building the infrastructure along the Silk Road, but developing the populations so they can make use of it. The Belt and Road Initiative brings more than “national level” projects to countries, but also helps lay the basis for states and communities to benefit from them, as a People’s Dailyarticle today puts it.

The article describes some of the projects that Chinese companies build, such as bridges, roads, schools, clinics, and water projects, for local communities. Often, these smaller, necessary projects are built by China for free, explained Yan Li, chief information officer with CITIC Construction. They boost project efficiency, and improve people’s lives. And not all of the tools that people need are physical. Another project that changes people’s lives, is the Digital Silk Road. This is “equally important, to bridge the development gap and people’s mindset with the promotion of science and technology.”

The TVA, which transformed a population that had not yet left the 19th century, was the envy of every country in the world that had an underdeveloped, “dirt poor,” rural population. Now it is China that has started that transformation in the nations that are part of the World Land-Bridge.

German Classical Music Education in Cairo

Jan. 23 (EIRNS)—German Music School Cairo opened its doors on Jan. 12, being the first of its kind in the North African country. Owned by Rahn Schulen Kairo (Rahn Schools Cairo), it aims to promote musical creativity in pupils between the ages of 6 and 18, and strives to prepare them for advanced education in music. The school is inspired by Germany’s school curriculum and distinguishes its approach through the concept of combining music and education. It is also affiliated to a number of German and German-Egyptian cultural institutions.

“Musical education will take place under the supervision of Egyptian Maestro Ahmed el-Saedi, the principal conductor of the Cairo Symphony Orchestra,” a Rahn Schools statement reads. Artistic and musical consultant for the school is Helgid Schmidt, former piano instructor at the Leipzig University in Germany.

Speaking to the Music In Africa journal, el-Saedi said the new school would offer high-quality education in the study of various Classical instruments. “The idea of a German music school in Cairo is to give quality instruction rooted in the German norms. It is the same idea of implementing international education in Egypt,” he said. “It enables students who go to international schools to have music instruction of European standard and prepare them for further music education at European institutes.

“At the moment we give instruction only in piano, violin and violoncello. Students also get instruction in solfeggio and choir. We intend to add new areas of studies at a later stage.”

At the same time, former chairwoman of the Cairo Opera House Ines Abdel-Dayem was appointed as Egypt’s new Minister of Culture on Jan. 14.

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