EIR Daily Alert Service, WEDNESDAY, MARCH 7, 2018


Volume 5, Number 48

EIR Daily Alert Service

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


An Olive Branch from Putin; Another from Trump; and a Big Surprise from Italy

March 7 (EIRNS)—Writing yesterday about Russian President Vladimir Putin’s speech heard round the world on new Russian economic policies and new-technology strategic weapons systems, the former Foreign Minister Igor Ivanov stressed, “Russia is offering an olive branch, not nuclear war.” This is true. The sane response to Putin’s announcements is clear, and elements of it are already being advanced by some veterans of President Reagan’s Strategic Defense Initiative (SDI). Revive the SDI, as a crash program, based on technological cooperation between the United States and Russia, with the aim of developing missile interception based on new physical principles and the latest plasma and directed-energy technologies.

It was presented in full on March 30, 1984 in “The LaRouche Doctrine: Draft Memorandum of Agreement between the United States and the U.S.S.R.” on conditions for peace, technology and economic policies for development of third countries, weapons policies and arms control negotiations.

Putin is now offering a second opportunity for that new paradigm of peace. The first time, the Bush-Kissinger circles redirected the SDI to merely “anti-missile missiles,” and then took the United States out of the ABM Treaty in 2002. Thinking Russia ruined, with only its strategic nuclear missile force left, the Bush plan—Obama continued it—was to ring Russia with anti-missile interceptors and knock Russia out of even the nuclear power club. Putin has just dramatically demonstrated what a strategic failure that policy was; his announcements present the opportunity to negotiate equally again as great powers. That can lead to a revived Strategic Defense Initiative, and more—to using new physical principles to defend the Earth against asteroid or meteor strikes, and to upgrade power production, industry, agriculture, medicine as LaRouche explained in 1984.

President Donald Trump, who appreciates great power relations of mutual benefit despite all attacks on him for it, also made his most explicit statements that his policy toward Korea, is cooperation with China to get direct talks with North Korea, denuclearization and peace on the Peninsula. This alone can get the desired result, if any policy can.

The President is resisting the whole of Washington in refusing to aim his trade penalties at China and Russia alone, as demanded by British imperial-style geopolitics. He has to go further, and join the United States to the new paradigm of economic development and peace represented by China’s Belt and Road Initiative. That depends on candidates and elected officials in the 2018 election campaigns demanding it, with the U.S. economic policies known as the “Four Laws” of LaRouche.

In a welcome surprise, voters in Italy have just voted for national candidates who ran on policy actions LaRouche has put forward: Glass-Steagall breakup of megabanks, and national banking to provide credit for industry and infrastructure. His movement in Italy, known as Movisol, has said in a post-election statement: “Movisol is the only force in Italy which can put together all parties, despite their differences, on this five-point program: LaRouche’s Four Laws and the New Silk Road. A government can, and must, be formed on the basis of this program….”


Trump’s Korea Optimism Contrasts to Washington’s Pessimism

March 7 (EIRNS)—The reactions from the Trump Administration to the breakthrough between North and South Korea, yesterday, range from cautious optimism expressed by President Trump, to skepticism and doubt. “I think that they are sincere. And I think they’re sincere also because of the sanctions and what we’re doing with respect to North Korea, including the great help that we’ve been given from China,” Trump said at a joint news conference with Prime Minister Stefan Löfven of Sweden. “And they can do more, but I think they’ve done more than, certainly, they’ve ever done for our country before.  So China has been a big help. I think that’s been a factor. But the sanctions have been very, very strong and very biting. And we don’t want that to happen. So I really believe they are sincere…. We’re going to soon find out.”

A senior Trump administration official said, “We are open minded, we look forward to hearing more. But … the North Koreans have earned our skepticism, so we’re a bit guarded in our optimism.” The official, speaking to Reuters on condition of anonymity, said “our posture toward the regime will not change until we see credible moves toward denuclearization.” Vice President Mike Pence took a hardline position, declaring that all options were “on the table” until Washington sees evidence that the reclusive country was taking steps toward denuclearization. Director of National Intelligence Dan Coats was equally hard. “North Korea has to agree to not possess nuclear capability…. Until that happens we cannot have an agreement with them,” he told the Senate Armed Services Committee. “Maybe this is a breakthrough. I seriously doubt it. North Korea has approached conversations many times before regarding denuclearization and a freeze—and all have fallen through.”

The breakthrough and the U.S. reactions, all came after the U.S. State Department announced new sanctions on Monday (March 5) on North Korea for allegedly using VX nerve agent in the murder of Kim Jong-un’s brother in Malaysia in February 2017.

Tillerson Pledges $533 Million Aid for Africa, Slanders China

March 7 (EIRNS)—Speaking at George Mason University on March 6, hours before his departure for Ethiopia, U.S. Secretary of State Rex Tillerson said the United States sees a “bright future” for Africa as its population grows and said the Trump administration is “committed to saving lives in Africa,” AP reported; but he repeated known falsehoods about China’s economic development activity in the continent.

Tillerson announced a half-billion dollars in new humanitarian assistance “to fight famine and food insecurity” and address conflict-related needs. Tillerson’s week-long trip will take him from the east side of the continent to the west, with stops in Ethiopia, Kenya, Djibouti, Chad and Nigeria.

Of the $533 million pledged, the State Department said that about $184 million would go to help those affected by conflict in South Sudan and $110 million for those in Somalia. Another $110 million was destined for Ethiopia to help amid a drought. The U.S. planned to direct $128 million to help with Nigeria and the Lake Chad region nations, AP reported.

Regarding China, Tillerson said: “Chinese investment has the potential to address Africa’s infrastructure gap, but its approach has led to mounting debt and few, if any, jobs in most countries. When coupled with political and fiscal pressure, this endangers Africa’s natural resources and its long-term economic and political stability.” As if reading from the City of London’s weekly, The Economist, Tillerson charged that China “encourages dependency using opaque contracts, predatory loan practices, and corrupt deals that mire nations in debt and undercut their sovereignty, denying them their long-term, self-sustaining growth.”

He acknowledged, “significant transcontinental infrastructure is necessary to support the development, spur economic growth, and boost intraregional trade on the continent.” But that infrastructure—for example, urgently needed new electric power—is exactly what U.S. policy does not help with, and China’s does. “We’re there to facilitate and we’re there to help companies understand what the opportunities are…. But it’s really to create the conditions in these countries where U.S. businesses and others—European businesses, Chinese, others to the extent they’re ready to participate under a rules-based system….”

Not the way the Tennessee Valley Authority was built.


Some Call To Revive Reagan’s SDI as Sane Response to Putin’s State of the Nation

March 7 (EIRNS)—Some veterans of the Reagan and both Bush Administrations have noted that reviving the Strategic Defense Initiative (SDI) would be the most serious response to Russian President Putin’s statements on strategic weapons in his March 1 speech.

Peter Pry, who served on the Congressional Strategic Posture Commission, the House Armed Services Committee staff, and in the CIA, told EIR he thinks “the systems Putin described are all under development, but likely on the verge of being deployable.” Most importantly, he said, this presents a chance for a bipartisan strategic defense consensus; the Defense Department BMD Review is still underway, the systems with Earth-based interceptors should be dropped as clearly ineffective and obsolete, and space-based sensors and directed-energy should be prioritized. “Our best response is to revive the Strategic Defense Initiative…. A simple starting objective would be hardening the electric grid against EMP [electromagnetic pulse] from any source,” Pry said.

In a NewsMax column published Monday, wrote: “Most importantly, President Trump should order a new Manhattan Project focused on strategic defenses that may become the basis for a new Republican-Democrat consensus that is politically sustainable….

“For example, space-based defenses could render obsolete the growing offensive nuclear threats from all potential adversaries. Though Democrats have long derided Star Wars they may now find space-based defense more palatable than building 100-megaton bombs to deter Russia’s doomsday drone….

“Even Putin, in his March 1 speech, unwittingly advised us to build Star Wars when he justified his array of new super-weapons to counter alleged U.S. development of a global missile defense system. Unfortunately, the U.S. hasn’t developed a global missile defense system; but we should.”

Pry also pointed to the March 4 statement by Ambassador Henry Cooper (currently head of High Frontier, who served in the Strategic Defense Initiative Office in the 1980s), which concluded: “So … it is time to go back to the future! And Congress set that stage for key supportive actions by the Pentagon’s ongoing Missile Defense Review (MDR) in response to two provisions of the National Defense Authorization Act for 2018 (NDAA-2018).”

Super-Maglev Option Near Testing in China

March 7 (EIRNS)—Chinese researchers are not only working on the development of low- and medium-speed maglev systems for use in urban regions; researchers recently confirmed to the Global Times that a super-maglev train that could travel at speeds up to 1,000 kph is being worked on. According to Professor Deng Zigang and his team from the Southwest Jiaotong University, a proof-of-principle prototype is ready for testing with a track. Deng told China Central Television and other media outlets that the train leverages two unique technologies—maglev and tube transport.

Deng published early work on “a super chute” back in July 2014 via the Institute of Electrical and Electronic Engineers (IEEE). Using the information and ideas published by Deng in 2014, the team has since slashed air pressure down to 2.9 kilopascals of pressure. This is significantly lower than the standard atmospheric pressure of 101 kilopascals, Global Times observed. And unlike Elon Musk’s hyperloop, for which top speeds of 1,000 kph are only predicted so far, the Chinese one will soon undergo real testing.

Mike Griffin Will Make Hypersonic Technology a Pentagon Priority

March 7 (EIRNS)—Less than two weeks ago, former NASA Administrator Mike Griffin became Undersecretary of Defense for Research and Engineering—a new position created at the Pentagon by Congress—in which he will have a mandate to make whatever changes he deems necessary, to “break a lot of china,” and get the defense establishment vectored toward developing “game changing” technology. He says he has the full backing of the Pentagon, and will be given a lot of leeway.

In a speech yesterday at the McAleese & Associates and Credit Suisse defense program conference in Washington, he singled out China, as being ahead of the U.S., specifically in the development of hypersonic systems. Griffin said that developing and fielding hypersonic systems would be a priority for the Pentagon. “China can hold our carrier battle groups and deployed forces at risk,” he said. Currently, “our only response is to let them have their way or go nuclear. That should not be an acceptable situation for the United States.”

Griffin was NASA Administrator under Bush Jr., and pushed hard for progress on Constellation, and against the Office of Budget and Management and Congressional budget balancers who did not want to fund the program. In 1986 he was deputy for technology in the Strategic Defense Initiative Office. He has been in private industry, and conducted laboratory research.


The GOP’s ‘QE4’ Accelerates Again

March 7 (EIRNS)—JPMorgan Chase CEO Jamie Dimon called the Republican tax cut bill “QE4,” the big bailout for corporations (including banks), and they are proving him right.

U.S. corporations announced buybacks of their own stock to the tune of about $155 billion in February alone (the shortest month!), according to the TrimTabs research firm; this was easily a one-month record since such things have been tracked. The annual pace of stock buybacks is headed for approximately $800 billion, according to the same source, another record by far, and nearly equal to the total tax cut the corporations received from the “tax reform” law.

So instead of using most of their borrowing and net income to buy their own stocks, as they’ve been doing since 2010, corporations are now using most of their tax savings to do it. The stealth intent of the “tax reform” evidently was to save the corporate debt bubble from exploding.

But it is only blowing that bubble up more rapidly until it does explode, particularly since the corporations are reportedly using margin debt to leverage their purchases. So they are further leveraging themselves by buying and liquidating their own capital, as well as by taking margin loans to do it.

Growing Poverty Becoming an Issue in German Public Debate

March 7 (EIRNS)—An alliance of 30 organizations, including the German labor federation (DGB), the national poverty conference, and numerous charities, has protested in an open letter against the neglect of the poverty by the political class. Calling on the incoming Grand Coalition government to make the fight against poverty a priority in this next term, the protesters denounce the “scandal that those who are in office have played down the problem of severe poverty for years…. We want the core of the problem to move to the center of public debate and want to put the issue of fighting poverty on the agenda of the Grand Coalition. Securing the existential minimum is a task of the social welfare state, and not of private initiatives and non-profit engagements. No citizen in our social welfare state should be dependent on food donations. The [Grand] coalition program shows a remarkably empty space on this issue.”

The open letter was prompted by the public debate which has erupted throughout Germany, after the decision of the food bank initiative in Essen, to no longer make donations to refugees, in favor of German citizens, because, as they claim, there is not sufficient food available. This decision has come under criticism, including from Chancellor Angela Merkel and other leading politicians. However, many critics, particularly protesting organizations that produced the open letter, have pointed out that the problem is not the lack of food at these food banks, nor the choice between Germans and refugees, but the fact that poverty exists at all in this nominally rich nation.

For instance, the number of impoverished retired citizens and single parents who depend on such food banks every single day has doubled in the past 10 years. Citizens in the Hartz IV “workfare” program—long-term unemployed and welfare recipients—often do not have enough money to buy food, and children in poor families especially suffer from that. The 30 organizations insist in their open letter that the minimal Hartz IV pay be visibly increased, and straightforwardly reject politicians’ claims that there is not enough money to increase the pay. Nor can it be tolerated, they state, that Germans are played off against refugees, in such a manner.


China-Europe Rail Freight Has Risen Sharply Despite EU Russia Sanctions

March 7 (EIRNS)—Bloomberg News, citing a new report from the Center for Strategic and International Studies (CSIS) in Washington, reported that the value of cargo sent between China and Europe by rail surged more than 140% in the first six months of last year. The value of the cargo would have been much higher if the EU sanctions on Russia had been lifted. Agricultural produce sanctions imposed by Russia in retaliation for the U.S.-Europe 2014 sanctions on Russia, blocked the export of agricultural products to Russia, and since China-bound rail freight goes through Russia, European carriers have been prevented from tapping into this potentially lucrative market. This is the reason why trains going back to China are sometime half-empty.

China has taken some measures to overcome that problem, Bloomberg pointed out. “Chinese subsidies can cover as much as $7,000 per container, or more than half the cost, CSIS estimates. That sort of support makes the cost of running half-empty trains back from Europe less prohibitive. China’s massive trade surplus with the region means as much as 70% of the transcontinental rail freight goes west,” the article said.

“Recent growth has been very dramatic. It feels like a new service is being announced every month,” says Jonathan Hillman, director of CSIS’s Reconnecting Asia Project and author of the report. While rail only accounts for 0.9% of cargo volume—and 2.1% of value—shipped between the two markets, Hillman said it was possible that that share would double over the next decade.


Kim Jong-un ‘Understands’ U.S.-R.O.K. Military Exercises Not Pausing

March 7 (EIRNS)—One of the more remarkable items in the six-point statement released, yesterday, by the South Korean delegation to Pyongyang, is the part which attributes to Kim Jong-un the statement that he “understands” that U.S.-South Korean military drills will go on and that they can’t be stopped immediately. This, reports the Hankyoreh newspaper, represents a departure from the hardline stance that the North has often taken toward the exercises, which it frequently denounces as “nuclear war games.”

Kim’s remarks appear to mean that he will not let these yearly exercises spoil the mood for dialogue, says Hankyoreh. “I explained [to North Korea] that it was not feasible to abruptly halt our exercises with the U.S. Kim Jong-un had already been briefed and was aware of our position. I didn’t need to provide any further explanation,” National Security Office director Chung Eui-yong said, yesterday, at the release of the six-point statement. This suggests that Kim is fully aware that the South Korea-U.S. exercises cannot be halted or delayed again.

“It’s a bold statement by Kim to say he understands why the South Korea-U.S. military exercises have to held on the scale of previous years. He has made up his mind to build momentum for dialogue and increase the possibility of talks with the U.S.,” Jeong Se-hyun, a former South Korean Minister of Unification, told Hankyoreh. This flexible stance—the willingness to tackle the military threat in the long run—has bought the South Korean government a little more time for shifting affairs on the Korean Peninsula toward dialogue, Jeong said.


Seoul President Moon Jae-in: We’re Not at a Point Where We Can Be Optimistic, Yet,

March 7 (EIRNS)—South Korean President Moon Jae-in is moving cautiously in the wake of the breakthrough announcement in relations with the North, yesterday, particularly on the matter of the summit with Kim Jong-un to take place in April.

“From looking at the news or Twitter, I believe President Trump is positive about the results of the North Korea visit,” he said in an address to the leaders of South Korea’s political parties, yesterday, reported Channel NewsAsia, a Singapore-based TV network. “However, as this is just the beginning, I believe we are not at a situation yet where we can be optimistic.” He also warned that now is not yet the time to ease up on sanctions on Pyongyang. “Just because there are talks ongoing between North and South Korea doesn’t mean international sanctions can be eased. There cannot be an arbitrary easing of sanctions; we do not wish to do that and I tell you now it is impossible.”

During his remarks, Moon stressed close cooperation with the United States and the need to achieve denuclearization in dialogue with North Korea. According to the Korea Herald, Moon emphasized that denuclearization is the goal, and that no concessions have been given to Pyongyang. “We are at a very important juncture in (establishing) peace on the Korean Peninsula and denuclearization,” Moon said at the meeting. He noted that he is in close communication with U.S. President Trump and he stressed that no concessions or promises have been made to Pyongyang in return for holding the summit meeting.



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