EIR Daily Alert Service, TUESDAY, JULY 3, 2018


Volume 5, Number 131

EIR Daily Alert Service

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



Europe Has New Leadership: Schiller Institute Conference Achieves All Its Objectives

July 2 (EIRNS)—The Schiller Institute’s June 30-July 1 conference just concluded in Germany did what its founder and President Helga Zepp-LaRouche had publicly proposed that the “migration summit” of the European Union June 28-29 should do.

That was to focus European leadership on economic and infrastructure development of Africa through Europe-China cooperation, extending the Belt and Road Initiative through the Mideast and Africa. Thus will begin the only real solution to the crisis of migrant flows fleeing into Europe from terrorist wars and impoverishment in those regions. (The revival of European high-technology industry will of course flow from this process.)

The EU summit was held without taking up LaRouche’s proposal and, by all accounts, did nothing at all. But the Schiller Institute gathering, starting from the high standpoint of Mrs. LaRouche’s keynote—a new paradigm of international relations based on mutual development of nations—achieved what the EU summit did not attempt, and established itself as a new leadership for Europe.

The conference drew together 300 European leaders and activists for two days’ non-stop discussion of extending the Belt and Road Initiative, with African leaders, Chinese and Russian diplomats and expert representatives, Europe expert economic and military speakers, and a dynamic “New Silk Road” organization from war-wracked Yemen. GBTimes, a Finland-based media company focussed on “bringing China closer,” reported the proceedings extensively.

Moreover, two American speakers in political circles supporting President Donald Trump, expressed strong support for the Schiller Institute’s campaign to replace wars with development in these regions. Their presentations can be widely circulated in the United States as well.

The planning documents for accomplishing this work are published by EIR and the Schiller Institute: The Second Edition of The New Silk Road Becomes the World Land-BridgeExtending the New Silk Road into West Asia and Africa; and the Arabic-language Operation Felix: The Miracle of Yemen’s Reconstruction and Connection to the New Silk Road.  The conference proceedings will be published in Executive Intelligence Review in coming weeks.

Helga Zepp-LaRouche had forecast the June 12 U.S.-North Korea summit would be a “game-changer” for the new paradigm, and invoked its spirit in her keynote speech. With a second Trump-Kim meeting already now mooted for the New York UN General Assembly session in September, the next potential game-changer, especially for ending “perpetual warfare” in the Mideast, will be the July 16 summit of Presidents Trump and Putin.

British opposition to that Helsinki summit is extraordinarily fierce; Britain intelligence’s “Russiagate” campaign against President Trump aimed to make U.S.-Russian cooperation impossible, and to force the President from office for even considering it. U.S. Defense Secretary Mattis has just threatened in writing to end the U.S.-U.K. special defense relationship; and with Trump scheduled to meet British Prime Minister May three days before his summit with Putin, we have to be on full alert for British acts of sabotage against that summit.

But Helga LaRouche also pointed to a much broader threat to the new paradigm—a looming financial crash exploding out of a superheated global bubble of corporate debt which has been blown up by the “big four” central banks since the 2007-08 crash. Trump has forestalled that crash for a while with a huge corporate tax cut, but thereby likely only made it worse when it hits.

Stopping that crash means implementing Glass-Steagall bank separation immediately, as voters in the United States and Europe keep demanding. And it requires establishing national credit institutions to replace the speculative casino debts which are likely to vaporize under Glass-Steagall.

Such national credit is being issued by China’s public commercial banks to drive the Belt and Road Initiative’s development projects. But the United States and European countries have yet to rediscover Alexander Hamilton’s method to do it. It is spelled out in Lyndon LaRouche’s June 8, 2014 “Four New Laws To Save the Nation,” and is what makes LaRouche’s movement the new leadership.


Russia Aware of U.K.’s Intense Hostility to Trump-Putin Summit

July 2 (EIRNS)—More than outbursts in London press, the strong opposition of British officialdom to President Donald Trump meeting with President Vladimir Putin, is quite formal, and Russian leadership is aware London is the primary opponent.

CNN’s Fareed Zakaria went to London to get distilled fury against the summit in an interview with David Cameron’s former Chancellor of the Exchequer George Osborne and Tony Blair’s public spokesman Alastair Campbell.

Osborne said, of the summit being held, “It makes the U.S. a less reliable partner for Western countries like my own…. Trump’s unprecedented approach to Russia has stirred discord among European leaders who want to isolate Putin.” And “There are new rising powers like, of course, China and a more resurgent Russia. The one thing I’d say is Trump’s not doing anything to counter those forces; he is accelerating them.” This straightforward statement that Trump blocks London’s anti-Russia policy, was contrasted with Campbell’s hysterical attacks. Campbell was part of Blair’s 2003 propaganda team responsible for “sexing up” the report on Iraq’s weaponry, turning it into the infamous “weapons of mass destruction,” that legitimized the Iraq War.

Russia’s RT ran a July 1 interview with former diplomat and military expert Alexander Bartosh. He stated his view that the “Russian threat” is now all the U.K. has in Europe, post Brexit; it uses it to sell military and intelligence expertise in Europe, and will “lose the market.” But, Bartosh says, “The common belief that America and Britain are such great friends isn’t really justified, as there are many in the U.S. who support tougher and more pragmatic relations with the U.K.”

RT also published British journalist Neil Clark’s op-ed, “Putin-Trump Summit Should Be Welcomed, not Feared” on July 2. Clark described how shocked Margaret Thatcher was by the 1985-86 Reagan-Gorbachev summits. He quotes her having written later: “My own reaction when I heard how far the Americans had been prepared to go [to eliminate nuclear weapons in 10 years for a mutual SDI], was as if there had been an earthquake beneath my feet…. Somehow I had to get the Americans back onto the firm ground of a credible policy of nuclear deterrence. I arranged to fly to the United States to see President Reagan.” She got him to reaffirm U.S. strategic modernization, inclusive of Britain’s nuclear Trident fleet.

Mattis Intervenes in U.K. Political Clash Over Defense Spending

July 2 (EIRNS)—Britain’s the Sun tabloid is reporting that U.S. Secretary of Defense James Mattis has sent a letter to U.K. Minister of Defense Gavin Williamson in which he says that Washington is “concerned” that Britain’s military prowess is “at risk of erosion.” In a clear threat, Mattis also makes states that, while Britain may want to “remain the U.S. partner of choice,” France is already boosting its defense spending—and is waiting in the wings to replace the U.K. In the two-page letter, General Mattis argues that Britain’s position as a leading world power “has been the credibility of the U.K.’s armed forces.” But, he goes on, “I am concerned that your ability to continue to provide this critical military foundation for diplomatic success is at risk of erosion, while together we face a world awash with change.”

Mattis’ letter, which reportedly reached Williamson two weeks ago, came in the midst of a spat between Williams and the generals, on the one side, and Prime Minister Theresa May and Chancellor of the Exchequer Philip Hammond on the other. Williamson has been lobbying hard for a large increase in the defense budget, as much as £20 billion over the next 10 years, a demand which comes up against a pledge that May has made to inject the same amount of money into the National Health System.

“A global nation like the U.K., with interests and commitments around the world, will require a level of defense spending beyond what we would expect from allies with only regional interests,” Mattis wrote to Williamson. In other words, Britain’s defense spending has to be well above NATO’s 2% threshold. The Sun reports that the British military leadership is demanding a rise to 2.5% a year, which would mean a cash increase of £6-7 billion from the present level of £35.3 billion.


Former Defense Secretary Perry Believes a North Korean Nuclear Deal Is Possible

July 2 (EIRNS)—President Bill Clinton’s Defense Secretary William Perry writes today in Politico, “Why I’m Still Hopeful About Trump’s North Korean Deal: And Why It Also Won’t Be Easy.” Though the agreement President Trump and Kim Jong-un signed at the Singapore summit is now just a promise, he writes, “that hope also remains justified.”

Perry says three main points must be recognized now:

1) “Everything hasn’t suddenly changed in Pyongyang.” Its two primary goals 1) preserving the Kim dynasty and 2) commanding international respect are more secure with nuclear weapons than without them, even if it means economic isolation. Effective diplomacy should convince North Korea that its strategic objectives have better prospects without nuclear weapons.

2) There are no attractive military options. Any preemptive strike against North Korea would escalate quickly into a broader war, costing millions of lives.

3) Trump, Kim, and South Korean President Moon Jae-in all deserve credit for creating “a moment of real diplomatic promise”; in 2000, it “curdled into a tragic missed opportunity.” With other countries, the U.S. offered recognition, security assurances of no attack, and economic incentives. But the clock ran out on Clinton’s term in January 2001. “This bargain seemed self-evidently in the interests of the U.S. and its regional allies,” making Perry confident that George W. Bush would finish it. “Instead, he abandoned diplomacy, and, during both the Bush and Obama Administrations, Pyongyang plunged with success into a bomb- and missile-development program that gives North Korea the capacity to kill millions.”

“Denuclearization will take time, and require intensive verification procedures,” but Perry points out that we have negotiated equally difficult agreements with the Soviet Union.

Solving it today, Perry writes, is more difficult because the D.P.R.K. now has nuclear weapons; but is easier because of the cooperation of Asian nations.

One new plus factor is that now, unlike 20 years ago, when North Korea would not treat South Korea as an equal partner, but only as a subsidiary of America, this has dramatically changed with South Korean President Moon, and Kim acknowledged that.

If it succeeds, everyone—Moon, Kim, and Trump would get great credit. Perry does not mention the effective assistance China would give this deal today.

Political Will for U.S.-Russia Dialogue Has Succeeded, Peskov Informs Media

July 2 (EIRNS)—Today Kremlin spokesman Dmitry Peskov told reporters, “No doubt, Moscow and Washington have many issues where their positions are diametrically opposed. But you see that now political resolve has prevailed, and at the moment, understanding is growing that such issues for discussion should not be an obstacle on the path to establishing and expanding bilateral dialogue, in this case at the top level.”

Peskov was referring to the July 16 Trump-Putin Summit in Helsinki, TASS reported. However, he took issue with President Trump’s statement that he planned to discuss Crimea with President Putin there. Peskov emphasized that Moscow considers recognizing Crimea as Russian is non-negotiable “The Russian President has stated many times and explained to his interlocutors that such an issue as Crimea cannot be, and will never be, on the agenda, as Crimea is an inalienable part of Russia. All other issues are a matter of consensus, for discussion and a search for possible common ground.”

Peskov said that President Putin “and Russia are open for dialogue and jointly searching for compromises,” TASS reported. He cautioned that an upbeat trend in Russian-U.S. political contacts is an encouraging fact, but that it is too early to speak of a thaw in relations: “Let us not rush to speak about thaws,” Peskov said, as first the sides must “discuss and review the differences and sources of major concern in bilateral relations.”

As to whether President Putin would meet with the five U.S. Republican Senators now visiting Russia, Peskov replied, “So far there is no such meeting on the President’s agenda, but we know that the American legislators have planned very extensive meetings with their colleagues.” The five Republicans include John Kennedy of Louisiana, John Hoeven of North Dakota, John Thune of South Dakota, Steve Daines of Montana, and Kay Granger of Texas. They arrived in St. Petersburg June 30 and met with its Gov. Georgy Poltavchenko. They go to Moscow on July 3, to meet with their counterparts in the Federation Council, the upper house of Russia’s bicameral Federal Assembly, ahead of the Trump-Putin meeting.


Corporate Debt Crash Threatens Trump’s ‘Recovery,’ and the World

July 2 (EIRNS)—A surprising admission appeared in the headline story of the Wall Street-oriented CNBC this afternoon: “Companies Buying Back Their Own Shares Is the Only Thing Keeping the Stock Market Afloat Right Now.” The story opened, “Stocks right now are hanging by a thread, boosted by a bonanza of corporate buying unrivaled in market history and held back by a burst in investor selling that also has set a new record.”

The wave is juiced by the large Republican tax cut that went into effect Jan. 1, and is reaching astonishing levels: $242.1 billion in the first quarter; $433.6 billion in the second quarter. CNBC quotes one market strategist as saying: “Corporate cash is going to find a home, and it’s either going to be in buybacks, dividends or M&A activity. Where it’s not going to be is in capex [business capital investment]…. Individuals are looking at the turbulence we’ve seen this year that we had not seen last year. That creates its own sort of exit sign for investors who don’t want to deal with that.”

New reports have been issued, including by the global giant McKinsey Consulting Co. on June 28 (“Rising Corporate Debt; Peril or Promise?”), on the gigantic rise in corporate debt since the 2008 crash. McKinsey shows that the explosion of corporate debt by $11.7 trillion has been dominated by debt growth of $7.4 trillion in the United States and Europe—not by China’s companies’ debt increase of $2 trillion.

Tariffs by the United States, China, Canada, Mexico, and Europe all take effect this week and are being blamed for the immediate fear of “recession.” But it is the central banks’ debt bubble and rising interest rates, not President Trump’s tariffs, which are threatening a crash.

Nonetheless, the GOP tax cut has made the debt bubble more dangerous, even while postponing its explosion and generating more economic growth in the United States this year.

In Rolling Stone July 2, well-known journalist Matt Taibbi calls for a financial transaction tax and the Glass-Steagall Act; his subhead is, “As the country sits atop a giant debt-bomb, measures are needed to rein in excess speculation.”


U.A.E. Announces ‘Pause’ in Assault on Hodeidah in Genocidal War on Yemen

July 2 (EIRNS)—The U.A.E. government announced yesterday that it was suspending its assault on Yemen’s port city of Hodeidah “to support UN efforts to reach a political solution,” reported Reuters, which reports that the frontlines have been quiet in the past week.

“We welcome continuing efforts by UN Special Envoy Martin Griffiths to achieve an unconditional Houthi withdrawal from Hodeidah city and port. We have paused our campaign to allow enough time for this option to be fully explored. We hope he will succeed,” U.A.E. Minister of State for Foreign Affairs Anwar Gargash said on Twitter. Reuters states, however, that the demand for an unconditional withdrawal by the Houthis has led previous talks to collapse, and, in his comments on July 1, Gargash made clear that if this were to happen again, the U.A.E. would continue its military campaign.

In any case, the real reason why the U.A.E. stopped the offensive may be different from what they say, as, according to the Iranian news agency Tasnim, reports coming out of Hodeidah suggest that Saudi-backed militants and the U.A.E. forces have suffered major losses in the past days in the western front. The Houthis, for their part, are treating the U.A.E. announcement with a great deal of skepticism. Mohammed Abdul-Salam, the movement’s spokesman, said yesterday that the U.A.E. military operation has not stopped, and the claim of a halt in the offensive was only made to “deceive public opinion.” Elsewhere in his remarks, reports PressTV, Abdul-Salam said that the U.A.E.’s declared ceasefire was an attempt to whitewash its failure to occupy Hodeidah. He said that, although the Houthi movement accepted the UN’s technical and managerial roles in Hodeidah, it would not accept the world body’s observatory role in the city.

The military situation in Hodeidah, particularly the south side of the city, where the airport is located, is not all that clear—except that the U.A.E.-backed forces still have not launched the amphibious assault on the seaport that they had been promising. Yesterday’s announcement might suggest that the Saudi-U.A.E. genocidal attempt to carve up Yemen has run into serious difficulty.

Syrian Army Rolling Up Jihadi Groups in Southwest Syria

July 2 (EIRNS)—The Syrian Arab Army (SAA), backed by Russian airpower, is continuing to roll up jihadi control of territory in Daraa and Sweida provinces. Al Masdar News reported this morning that Syrian army units are approaching the town of Nassib, a couple of kilometers from a crossing station on the Jordanian border and about 13 km southeast of Daraa city, itself. For the rebel forces, losing the Nassib Crossing could be devastating, as it would give the SAA access to the southeastern part of Daraa city, Al Masdar reports. For the SAA, seizing the Nassib Crossing is a high priority, because it will allow them to reopen the Damascus-Amman Highway for the first time in several years.

At the same time, Free Syrian Army (FSA) elements in the town of Busra al Sham, about 27 km east of Nassib, have agreed to surrender to the Syrian army. With Busra Al-Sham under their control, the SAA will be able to not only secure the provincial border of Al-Sweida, but also to take hold of the eastern countryside of the Daraa Governorate for the first time since the start of the armed conflict in Syria, according to another Al Masdar report. A number of other towns have also reportedly accepted the surrender terms of the Syrian army.

An analysis in the Israeli daily Ha’aretz, by its military correspondent Amos Harel, suggests that in Israel, the reality of the Syrian offensive in the south has now been accepted. Harel reports that Israel is unlikely to aid the rebel groups (which may include groups that, according to other news reports, Israel has helped in the past) now being rolled up by the Syrian army.

“The combined assault by the Assad regime [sic] and the Russian air force are gradually pushing the rebels out of southern Syria and causing tens of thousands of refugees to flee toward the borders of neighboring Jordan and Israel. At the same time, the assault presents Israel with a new test: how to maintain the red lines it has set for its defense without being dragged into direct conflict with the Syrian regime,” Harel writes. “And no less important, how to do this without clashing with Russia, with which Israel has greatly strengthened ties over the past few months and regards as an ally in fulfilling its key goal, distancing Iran and the Shi’ite militias from the border on the Golan Heights,” which Israel seized from Syria in 1967. All of this is the immediate challenge for Israel, he writes.


At Its Own Pace, China Develops a Rocket To Take Men to the Moon

July 2 (EIRNS)—Xinhua reviews the range of China’s new rockets that are under development today, the most far-reaching of which will take China’s manned space program beyond Earth orbit, is the Long March 9. This Saturn V-class heavy-lift vehicle will be able to take 140 tons of payload to low Earth orbit, 50 tons to an Earth-Moon transfer orbit, and send 44 tons to Mars orbit. The Long March 9 (and the manned landing on the Moon) are expected to be ready in 2030.

Long Lehao, with the Chinese Academy of Engineering and a launch vehicle chief designer, said in a speech at Tsinghua University that the heavy-lift vehicle could also be used for unmanned deep space exploration and building space-based solar power plants.

In the near future, China is developing a reusable rocket, the Long March 8, scheduled for a maiden flight in 2021. The medium-sized Long March 7, whose launches were halted after an accident last July, will resume flights, and take 20-ton segments to China’s space station, starting next year.

An AFP story today covering the same story, runs the faulty headline, “China Aims To Outstrip NASA with Super-Powerful Rocket.” Aside from the fact that the Chinese do not “aim” their space program by what other countries are doing, NASA’s Space Launch System, of comparable capability as the Long March 9, will be test flown almost a decade before the Chinese rocket—hardly a race.

AFP asserts that China’s space station is being developed by a “military-run space program,” without mentioning the recent invitation China has made through the United Nations for any other country to participate.

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