EIR Daily Alert Service, MONDAY, JULY 16, 2018

MONDAY, JULY 16, 2018

Volume 5, Number 140

EIR Daily Alert Service

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

EDITORIAL

Full Implications from Unstructured Summit May Not Be Seen Immediately

July 15 (EIRNS)—A televised interview today with President Trump’s National Security Advisor John Bolton (with other recent remarks by officials from both sides) makes it clear that the entirety of Monday’s Helsinki summit between U.S. President Donald Trump and Russia’s President Vladimir Putin will be based entirely on what the two Presidents discuss and agree upon at the outset, purely between the two of them alone, unaccompanied by any aides or officials whatsoever, in a one-on-one meeting with no time limit. It was President Trump who had proposed this unusual format, and the Russian side agreed to it.  In this respect, the Helsinki summit resembles the historic Wuhan, China, meeting in April between Chinese President Xi Jinping and Indian Prime Minister Narendra Modi, which turned the course of Chinese-Indian relations back towards growing friendship and cooperation. Those two, Xi and Modi, also met alone without advisors. But the format Trump proposed for Monday’s summit even goes beyond Wuhan, in that the two National Security Advisors, with the U.S. Secretary of State and the Russian Foreign Minister, plus both Ambassadors, and probably other officials not yet identified, will all be standing by in Helsinki, ready, if asked, to immediately act upon and formalize any elements of what the two Presidents agree on between them.

The unusual intimacy of this one-on-one arrangement is required to avoid disruptive outside factors, and still more to cement a deep personal friendship between President Trump and President Putin, like President Trump’s friendship with China’s President Xi. Lyndon LaRouche has always held the view that history, like science and all human action, is personal; he has maintained this both explicitly, and by the example of his own personality permeating all his many achievements.

The fact that the most important business of this summit will be conducted under four eyes alone, with no other witness, may mean that some of its most important results may not be known for some time.  Yet the very fact of its occurring at all, despite the total opposition of the British faction, is of supreme importance and is a tribute to LaRouche’s work and leadership of his movement.

Over the course of Monday, the responsibility of Lyndon LaRouche’s movement will vastly increase.  Now the British Imperial faction is totally out of its depth.  More and more LaRouche and his movement are being looked to for leadership—the only possible leadership for all who aspire to be what Friedrich Schiller called “citizens of the world.”

U.S. POLITICAL AND ECONOMIC

Format for Trump-Putin Helsinki Summit Sets Democrats Howling

July 14 (EIRNS)—The summit meeting between Russian President Vladimir Putin and U.S. President Donald Trump will begin at 10:00 UTC (06:00 U.S. Eastern Time) on Monday, July 16, and it will be held in the Presidential Palace in Helsinki, Finland, President Putin’s aide Yuri Ushakov told reporters Friday, reported TASS.

First the two Presidents will meet, accompanied only by their interpreters. Trump will arrive in Helsinki on Sunday, and Putin will arrive Monday, Ushakov said.

“We don’t actually know how much time the discussion between the two Presidents will take up. We don’t have any restrictions on our part. It will kick off with a tte-à-tte conversation where only the interpreters will be present. After that, the Russian-U.S. negotiators proper [Secretary of State Mike Pompeo and Russian Foreign Minister Sergey Lavrov] will begin, and most probably they will have the format of a working breakfast, with some members of the delegations attending,” he said.

“After the negotiations, the Presidents are supposed to hold a news conference where each of them will make an address to the audience and will answer four questions—two questions from each side,” he said, stating that this is “a standard format for news conferences of this kind.”

Ushakov complained that the press had incorrectly reported that the demand for a “tte-à-tte” had come from Trump, saying, “All of this falls in line with our interests, and we’d also like the summit to kick off in exactly this format.”

Meanwhile, back in the Beltway, several Democratic Congressmen have issued hysterical calls to cancel the summit, along with the reliably hysterical Sen. John McCain (R-AZ). Said McCain, “If President Trump is not prepared to hold Putin accountable, the summit in Helsinki should not move forward.” Sen. Mark Warner (D-VA), the vice-chairman on the Senate Intelligence Committee, said the President should cancel the one-on-one meeting: “If the President won’t make Russia’s attack on our election the #1 issue at the summit, then it should be canceled,” Warner tweeted. He added the insult, “There should be no one-on-one meeting between this President and Mr. Putin; there need to be other Americans in the room.” Democrats Rep. Adam Schiff, Sen. Tammy Duckworth, Sen. Chuck Schumer, and DNC Chairman Tom Perez gnashed their teeth and issued similar statements.

British Empire in Rug-Chewing Fit that Putin and Trump Might Make Peace

July 15 (EIRNS)—Desperate to head off a possible accommodation between President Trump and President Putin, the British, Robert Mueller, and the “resist” holdover forces in the U.S. have staged fresh information warfare operations to sabotage the Trump-Putin summit.

In the United States, two interrelated events occurred. First, embattled FBI agent Peter Strzok appeared before a joint House hearing on July 12 to claim that the Republicans on the House Judiciary and Government Oversight Committees were doing “Putin’s work” by continuing to examine the British and Obama Administration/Democratic Party origins of Russiagate.

Less than 24 hours later, Robert Mueller today indicted 12 members of Russia’s GRU military intelligence branch for allegedly hacking the DNC, John Podesta, and various other Democratic Party entities, in order to interfere in the 2016 U.S. elections against Hillary Clinton. Russia’s alleged cyber-activities are the central premise of Robert Mueller’s entire witch hunt against President Donald Trump. Senate Minority Leader Chuck Schumer immediately demanded that Trump cancel his meeting with Putin, based on the indictment.

Former U.S. National Security Administration Technical Director William Binney on July 13 declared the document to be “a fabrication,” after having conducted a quick review of Mueller’s indictment, stating: “The only actual forensic investigations performed on available data regarding ‘hacks’ of the DNC are independent investigations assessed and approved by a group of us at the Veterans Intelligence Professionals for Sanity (VIPS),” Binney stated.

“The FBI never even bothered to examine the DNC computers, relying instead on the DNC and Atlantic Council cyber contractor CrowdStrike for its evidence. Our analysis demonstrated that the ‘Guccifer 2.0’ and ‘DCLeaks’ personas were created inside the United States. Our analysis also fully demonstrated that the transfer of the information was consistent with a download to a thumb drive, not transmission over the internet.

“Separate and apart from the VIPS analysis, former CIA intelligence officer Ray McGovern and I have consistently said that available data surrounding charges regarding ‘Russian hacking’ suggest that the CIA’s Vault 7 Cyber weapons arsenal enabling false attribution and ‘tell-tale’ signs in Cyrillic and other ‘obfuscation’ may be at work….” Binney said.

Russian Foreign Ministry Analyzes Mueller Indictment as Effort To Sabotage Summit

July 14 (EIRNS)—The Russian Foreign Ministry released a statement on Special Counsel Robert Mueller’s evidence-less indictment of 12 Russians, allegedly members of the GRU military intelligence:

“Obviously, this discharge is geared to spoil the atmosphere ahead of the Russian-U.S. summit. Now influential political forces in the United States, which are against normalization of relations between our countries and for two years have been indulging in vilifying Russia, are trying to get the most out of yet another fake matter that will be forgotten very soon,” the Foreign Ministry said, reported TASS.

“It is regrettable that it has become a routine practice with Washington to multiply fake information and initiate criminal proceedings out of political motives. We have only one question: how long are they going to keep on making this shameful fuss that discredits the United States? Sooner or later, its initiators will have to take responsibility for the damage they have done and continue to do, in their selfish interests, to American democracy undermining trust in it,” the ministry said.

Vladimir Putin’s Diplomacy Intense Ahead of Trump Summit

July 14 (EIRNS)—Russia’s President Vladimir Putin met today with Palestine State President Mahmoud Abbas, after meeting with Israeli Prime Minister Benjamin Netanyahu, Jordanian Foreign Minister Ayman Safadi, and Akbar Velayati, a senior advisor for international affairs to Iran’s Supreme Leader Ayatollah Ali Khamenei, over the previous days, and will meet Qatar’s Emir Tamim bin Hamad Al Thani on July 15.

The entirety of Southwest Asia will certainly be a major topic in the Trump-Putin summit.

Putin also met over the July 13-15 weekend with leaders from Gabon, Sudan, Moldova, Hungary, France and Croatia, many of whom came to Russia at the close of the World Cup soccer tournament.

NEW WORLD ECONOMIC ORDER

Xi Jinping Will Visit U.A.E. and African Countries before BRICS Summit in South Africa

July 15 (EIRNS)—President Xi Jinping will visit the United Arab Emirates, Senegal, Rwanda and South Africa from July 19-24, before attending the Tenth BRICS Summit in Johannesburg, July 25-27, reported Xinhua.  He will then visit Indian Ocean island-nation of Mauritius as a stopover on his return to China. This will be Xi’s first foreign visit since re-election as China’s President in March.

In September, Beijing will host the Forum on China-Africa Cooperation summit, which China will co-chair with South Africa.

South Korean Cooperation Committee Returns from Rason

July 15 (EIRNS)—A group of 11 representatives of South Korea’s Presidential Committee on Northern Economic Cooperation returned today from a two-day visit to North Korea’s northeastern border region of Rason, where they had discussed possible trilateral economic cooperation involving the two Koreas and Russia, reported Yonhap.

Chairman of the President’s Committee Song Young-gil said, “The Rajin-Khasan project is not subject to UN sanctions but to sanctions imposed by the U.S. So we plan to draw up and propose a broad picture and make preparations for joint study until there is progress in denuclearization and discussion begins on lifting those sanctions.”

President Moon Showcases His ‘Southern Policy’ in Singapore

July 15 (EIRNS)—An Asia Times article today, “Moon Looks to Southeast Asia for Peace and Prosperity,” by Nile Bowie, says that South Korean President Moon Jae-in’s ongoing visit to Singapore has showcased his administration’s “New Southern Policy.” According to Bowie, the new policy is a key strategy that seeks to diversify and enhance Seoul’s political and economic relations with the 10 member-states of the Association of Southeast Asian Nations (ASEAN), as well as India, whence the South Korean leader departed prior to arriving in Singapore.

According to Seoul Trade Minister Kim Hyun-chong, India and ASEAN are thought to be the “next China” in terms of economic growth. That means South Korea aims to enhance strategic cooperation with them to the level of major powers such as the U.S., Russia, China and Japan, countries that have traditionally been the focus of Seoul’s foreign policy, Bowie writes.

China Plans To Invest Another $3 Billion in Nigeria’s Oil Sector

July 15 (EIRNS)—China National Offshore Oil Corp (CNOOC) is willing to invest another $3 billion in its existing oil and gas operation in Nigeria, the state-owned Nigerian National Petroleum Corp. (NNPC) said today, following its meeting with the Chinese in Abuja, Reuters reported. During a visit to Nigeria’s petroleum corporation, CNOOC Chief Executive Yuan Guangyu said the Beijing-based oil company had invested more than $14 billion in its Nigerian operations and expressed readiness to invest more. Other foreign oil companies, including ExxonMobil, also operate in Nigeria through joint ventures with NNPC.

In addition to Nigeria, China has also invested heavily in the oil sector of Venezuela. According to an April 3 article for CSIS Commentary, “When Investment Hurts: Chinese Influence in Venezuela,” even as other countries have backed off from doing business with Venezuela, China doubled down on its support. “Over the past decade, Venezuela received over $62 billion from China, which is 53% of all money lent by China to Latin America. China currently owns $23 billion worth of Venezuela’s foreign debt, making it the country’s biggest creditor,” said the CSIS Commentary, which is otherwise a typically vicious attack on China’s foreign investment policy.

COLLAPSING WESTERN FINANCIAL SYSTEM

IMF Chaos Fells Haitian Government, as Fund Demands More Blood

July 15 (EIRNS)—Yesterday the Haitian government fell, after Prime Minister Jack Guy Lafontant resigned, so as to avoid a certain no-confidence vote in the Chamber of Deputies. Now President Jovenel Moïse will have to name a new prime minister and form a new government. In a televised address to the nation last night, Moïse promised to form a new, “inclusive” government “to relieve the misery of the people,” and develop industry, Agriculture, and infrastructure.

Nothing is resolved, however. Last week, when Lafontant announced the elimination of fuel subsidies per IMF demand, the country exploded into several days of violent protest. Although the measures were temporarily rescinded, IMF spokesman Gerry Rice announced June 12 that the Fund is devising a new “revised reform plan,” to “gradually” raise fuel prices against the hemisphere’s poorest nation, while mitigating the impact of the increases on its most impoverished population. The Fund claims the fuel price increases will “help” Haiti, by “unlocking” international support. They will most likely lead to further political upheaval in a country deliberately left to die by the “international community” in the wake of a magnitude 7.0 earthquake in 2010 and the Category 4 hurricane in 2016.

Darker Clouds Are Gathering Over Deutsche Bank

July 14 (EIRNS)—A Citigroup July 13 report speculated that Deutsche Bank shares are headed to fall to 7.50 (from just under 10), and advised to sell. Finance Magazin reports that short positions for €1 billion have been taken against Deutsche Bank by four hedge funds. Also Kommerzbank is being targeted by short positions for €370 millions according to Bundesanzeiger.

A further decline in the price Deutsche Bank shares below €10 (€9.64 on Friday, July 13) might send the bank down an irreversible slope towards insolvency. The bank is already technically bankrupt because of its exposure to Level 3 assets.

Deutsche Bank has reduced its exposure to derivatives, but its stock collapsed more quickly than that, so that the ratio of derivatives to capital is greater than last year. The new Mediobanca survey, to be published July 20, will update figures for derivatives in Europe’s 21 largest banks. EIR has had a preview of such figures. Similar to other banks, Deutsche Bank has reduced its exposure to derivatives by 25% and to Level 3 derivatives in particular by 16%. The problem is that its share price has plunged 40% since the beginning of the year!

At the current stock value Deutsche Bank has a market capitalization of €30,442 billions, with a €22 billions exposure to Level 3 derivatives—assets that cannot be priced because they have no market. Level 3 derivatives are de facto losses.

Were Deutsche Bank to write off those derivatives, as it should do under honest bookkeeping, it would wipe out 73% of its current market capitalization.

Deutsche Bank is too big to fail, but also too big to bail out. The solution is that proposed by Lyndon LaRouche on July 12, 2016: freeze financial liabilities and go back to the tradition of the bank’s martyred chairman Alfred Herrhausen, who was assassinated on Nov. 30, 1989. (See EIR Editorial by Helga Zepp-LaRouche, July 15, 2016, “Deutsche Bank Must Be Saved, for the Sake of World Peace!”)

STRATEGIC WAR DANGER

Trump Wants To Reduce Nuclear War Threat, Insists on ‘Stupidity’ of Russiagate Witch Hunt

July 14 (EIRNS)—U.S. President Donald Trump indicated July 13 that he wants to discuss nuclear weapons reductions with Russian President Vladimir Putin when they meet on Monday: “The proliferation is a tremendous—I mean to me, it’s the biggest problem in the world, nuclear weapons—biggest problem in the world,” he said during a joint press conference with British Prime Minister Theresa May. “If we can do something to substantially reduce them; I mean, ideally get rid of them, maybe that’s a dream, but certainly it’s a subject that I’ll be bringing up with him,” Trump said of his July 16 summit with Putin. The President further said that nuclear arsenals were “also a very expensive thing, but that’s the least important.”

In this context, Trump blasted Special Counsel Robert Mueller’s “Russiagate” probe as a “rigged witch hunt.” “We have this stupidity going on, pure stupidity, but it makes it very hard to do something with Russia because, anything you do, it’s like: ‘Russia—Oh he loves Russia,’ ” Trump said. “I love the United States, but I love getting along with Russia and China and other countries. I call it ‘the rigged witch hunt.’ I think that really hurts our country, and it really hurts our relationship with Russia.”

Trump-Putin Summit May Raise Intermediate-Range Nuclear Forces Treaty

July 14 (EIRNS)—The U.S. and Russian Presidents may raise the topic of the Intermediate-Range Nuclear Forces (INF) Treaty, including in the context of the United States’ deployment in Romania of “launching pads capable of firing not only interceptors, but also smart Tomahawk missiles,” Russian Presidential aide Yuri Ushakov stated, reported TASS.

Though otherwise buying the nonsense about Russia’s “malign behavior,” former U.S. Energy Secretary Ernest Moniz and former U.S. Sen. Sam Nunn, co-chairmen of the Nuclear Threat Initiative, fully endorsed the need for the Trump-Putin summit, particularly on those strategic issues. “Outdated Cold War nuclear postures, new cyber dangers and the spread of nuclear knowledge and technology, make it imperative that our leaders work together to prevent a nuclear blunder, with the Helsinki summit being an essential step to restarting nuclear risk reduction efforts,” they wrote in a July 13 op-ed in The Hill. “There’s much to be done, but it must begin with the two Presidents creating a climate for dialogue across our governments; one that will provide a stable foundation for managing our differences and addressing common existential threats.” Moniz and Nunn warn, “Absent serious attention to crisis management and risk reduction, an accident or miscalculation involving our military forces leading to a major international incident and escalation is likely.” Therefore, “We must find ways to increase decision time for leaders to respond to what may be a false warning….

“President Trump can use the Helsinki summit to begin to carve out a Russia policy that reduces the unnecessary nuclear dangers we are currently running, while maintaining our values and protecting our allies and interests. The meeting is a chance to reaffirm the declaration from Presidents Reagan and Gorbachev that nuclear war cannot be won and must never be fought; to extend and preserve mutually beneficial agreements that provide transparency, verification, and stability on nuclear arms; and to launch a dedicated effort to cooperate on areas of common interest, including preventing nuclear terrorism.” However, they admonish: “But the President can succeed only with support from our allies abroad and Republicans and Democrats at home.”

Ushakov on Value of U.S.-Russia Military Coordination in Syria

July 14 (EIRNS)—In his press conference yesterday, Kremlin aide Yuri Ushakov said U.S.-Russian military cooperation in Syria has been very useful. “I can note that the Russian and U.S. military have very useful experience of mutual coordination (of actions in Syria): they established operational communications channels and it helped and is still helping to avoid dangerous incidents and unpredictable situations in air and on the ground. It is very important,” he said, commenting on the Syrian settlement issues ahead of the July 16 summit between Presidents Vladimir Putin and Donald Trump.

He also cited cooperation within the Geneva peace process, as well as the joint situation monitoring center in Amman, Jordan that was tasked to exchange information about ceasefire violations in the southern de-escalation zone in Syria. Moreover, Presidents Putin and Trump, on the sidelines of the November 2017 APEC summit in Vietnam, were able to produce a joint statement to promote a political settlement in Syria.

SCIENCE & INFRASTRUCTURE

China Fast-Tracks Its Next Space Missions To Make Breakthroughs

July 15 (EIRNS)—The Chinese Academy of Sciences announced its next group of space science missions scheduled to start in 2020, and described in detail by Science on July 11. China began planning its space science missions only 10 years ago, but over the past five years, successfully carried out the first group of four missions.

For the second group of “Phase 2” projects, the government has agreed to the scientific community’s request, and broken tradition by deciding to “fast track” a promising gravitational wave experiment, circumventing the 10- to 20-year selection review process of previous missions.

The Gravitational Wave High-Energy Electromagnetic Counterpart All-Sky Monitor mission, or GECAM, will build on the 2016 U.S. gravitational wave observations. In a unique configuration, GECAM will consist of two satellites in orbit on opposite sides of the Earth, enabling observation of the entire sky, to search for gamma rays emanating from the events that generate gravitational waves. Funding to conduct the technical studies was fast-tracked and available soon after the request.

The gravitational wave experiment will complement two other missions, the Science article explains, including the Einstein Probe, which will be looking for low-energy X-rays, which are associated with violent phenomena, such as those that produce gravitational waves. Another mission will study solar physics. International cooperation is part of the program.

OTHER

U.S. and North Korea Meet on Soldiers’ Remains from Korean War

July 15 (EIRNS)—In what has been widely acknowledged as a positive development in easing U.S.-North Korea tensions, U.S. military officials met with their North Korean counterparts today to discuss the repatriation of the remains of U.S. soldiers left after the Korean War ended in 1953, reported the Washington Post.

The meeting had originally been scheduled to take place on July 12, but North Korea called it off at the last minute, citing a lack of preparations, according to Yonhap. North Korea then suggested holding the talks be held at the level of general officers on July 15 with the U.S.-led UN Command (UNC), to which the U.S. agreed.

This was the first such meeting in over nine years.

Today’s talks began around 10 a.m. at the inter-Korean border village of Panmunjom and lasted for two hours. Maj. Gen. Michael Minihan, chief of staff for the UNC, led the U.S. side, and North Korea’s delegation included a two-star General.

The talks were expected to focus on details, such as when and how the remains should be transferred. Yonhap claimed North Korea could also demand something in exchange for the return, or raise other issues related to the armistice that ended fighting in the Korean War.

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