EIR Daily Alert Service, FRIDAY, AUGUST 17, 2018


Volume 5, Number 164

EIR Daily Alert Service

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



Schiller Institute: U.S., Russia, China, India Must Hold Emergency Summit for New Bretton Woods

Aug. 16 (EIRNS)—The international Schiller Institute is readying the release of a petition, titled “The Leaders of the U.S., Russia, China and India Must Take Action!” It concludes, “We, the undersigned, appeal to President Trump, President Putin, President Xi Jinping and Prime Minister Modi, to convoke an emergency summit in order to create a New Bretton Woods System.”

The petition statement is expected to be posted for signatures and circulation on Friday, Aug. 17, the same day that Schiller Institute President Helga Zepp-LaRouche will give her weekly strategic webcast, providing the latest on the context in which this emergency initiative is being launched.

The petition, and webcast, will appear on the Schiller Institute website. The petition’s text is the following:

Much of the world is in catastrophic disarray. There are acute dangers of a new financial crisis and of a potentially devastating trade war. The refugee crisis in the Mediterranean underscores both the plight of the people in Africa and Southwest Asia, and the disunity of the European Union. The demographic curve in the United States has taken an alarming downturn. For most ordinary citizens, it is very difficult to see how all these different problems can be efficiently addressed.

There is, however, only one fundamental cause for all these seemingly diverse crises. When President Nixon effectively eliminated the fixed exchange rates of the Bretton Woods System in 1971, American economist Lyndon LaRouche warned that a continuation of the monetarist policies that were introduced then, would inevitably lead to the danger of a new depression and a new fascism, unless a new, more just world economic order were created. In the wake of Nixon’s action, there was a step-by-step deregulation of the financial system in the direction of neo-liberalism, which prevented the industrialization of the developing sector, and increased the profits of the speculators at the expense of the common good in the so-called advanced sector. The resulting systemic financial crisis of 2008 was not remedied by removing the causes of the crisis, but instead, the financial institutions of the British Imperial system acted to prolong the system of maximizing profits for themselves.

As Lyndon LaRouche has emphasized for many years, there is only one combination of nations that is powerful enough to replace this currently hopelessly bankrupt neo-liberal system, and that is an alliance among the USA, Russia, China and India. It would represent, by far, the largest political, economic and military power, and thus be able to establish a New Bretton Woods System, in which sovereign governments control their own credit-creation, and can facilitate agreements among themselves to invest in the long-term development of infrastructure, industry and agriculture for the benefit of the common good of their people.

The potential for such an alliance is very clear. China’s Belt and Road Initiative has been instrumental in bringing about the emergence of a completely new economic system, based on “win-win cooperation” among more and more countries, leading to an incredibly rapid eradication of poverty in many of them. New organizations, such as the BRICS (Brazil, Russia, India, China and South Africa), the SCO (Shanghai Cooperation Organization), the EAEU (Eurasian Economic Union), and other regional organizations, are striving in the direction of a new economic order, based on the development of all.

While this may not be obvious to many, the American System of economy based on the principles of Alexander Hamilton, which President Trump has promised to reintroduce, has a great affinity with, and is based on the same ideas as the Chinese economic model and China’s Belt and Road (or New Silk Road) Initiative. The leaders of Russia, China and India have already stated their intention to cooperate on Belt and Road projects in Eurasia, Africa and Latin America.

Once President Trump has been freed from the British coup known as “Russiagate,” (which is now rapidly turning into a “Muellergate,” and leading toward a criminal investigation of the perpetrators of the coup attempt), he will be able to deliver on his promise to put relations with Russia and China on a sound footing.

The only efficient way in which the many problems of the world can begin to be solved, is by the immediate establishment of a New Bretton Woods system—a new international credit system which makes it possible to increase the productivity of the labor force and to upgrade the physical economy. Once such a four-power agreement among the USA, Russia, China and India has been established, all other nations can join the new system, based on the principles of sovereignty and mutual respect for the differences in their social systems.


India Proposes Southwest China Use India’s Northeastern States for Indian Ocean Access

Aug. 16 (EIRNS)—Ram Madhav, National General Secretary of India’s ruling Bharatiya Janata Party, and who is close to the administration of Narendra Modi, is visiting China. As BJP politician in charge of northeast Indian affairs, he has proposed the Chinese utilize the northeastern Indian states to secure an access to the Indian Ocean. Currently, India has proposed to Bangladesh a project which would interlink India’s northeastern states to Bangladesh’s port of Chittagong. At the same time, China is trying to get access to the Indian Ocean by developing a port in Myanmar’s Rakhine province.

Madhav, in his proposal, told the Chinese that southwest China can use northeast India as a hub to get to the Indian Ocean through Chittagong, the Times of India reported. What is also interesting is that, along with Madhav, cabinet ministers of three BJP-ruled northeast Indian states—Assam, Tripura, and Nagaland—are also in China looking for a scope of cooperation between the two neighbors, especially in India’s eastern sector.

Although details of Madhav’s proposal have not been made public, the Times of India report suggests Madhav has asked China to connect to the Bangladesh-Bhutan-India-Nepal (BBIN) land-based transport agreement, with the aim of facilitating movement of vehicles carrying cargo and passengers in each other’s territory, without the need to transship goods from one country’s truck to the other’s at the border.

A Ferry Line from Crimea to Turkey May Open in Fall

Aug. 16 (EIRNS)—A plan to link up Crimea with a number of ports in Turkey is now in progress. According to the CEO of Crimean Sea Ports Aleksey Volkov, freight-shipping agents have carried out negotiations. The Crimean ports involved in the Turkey-Crimea ferry line will be announced soon, RT reported today. “The negotiations with the freight forwarder have been held. The ports that will be part of the future ferry line will be announced later,” Volkov said.

TASS also reported Volkov saying the conditions are ready for the ferry line to start operating, according to RT: “Ports and services are ready, comfortable conditions for the forthcoming cooperation are provided, we are waiting for the partners’ decision and signing the agreement,” Volkov said. The ferry will be used for cargo this year, and passenger traffic will begin in 2019, he said. The Crimean Peninsula will deliver meat to Turkey, while Turkey will ship fruits and vegetables to Crimea.


Genoa Bridge Collapse Shows How Privatizations Kill

Aug. 16 (EIRNS)—After the collapse of the highway bridge in Genoa, public opinion and media in EU countries are raising the question of the infrastructure safety in the EU. Although maintenance has generally been neglected and investments have cut because of austerity policies throughout the EU, the ultimate cause of the Genoa catastrophe is known by the name of “Britannia.”

In fact, although many factors contributed to the collapse of the Morandi Bridge in Genoa, we can state with high certainty that had the highway not been privatized, the bridge would be standing today.

In May, the Benetton family-controlled Atlantia company, which has a 30-year concession on half of the Italian highway network through the Autostrade company, had launched a tender to repair the stays which are now suspected of causing the collapse of the bridge. The tender was concluded in record time, but Atlantia decided to wait to start repairs after the summer. Why? Atlantia will have to answer that question before prosecutors.

We can attempt an answer: The work was postponed in order not to lose the seasonal income bonanza. Italian highways are toll roads, over which most Italian families and many tourists on vacation drive. The A7 highway is in a key position on the route to the Riviera and to the Mediterranean islands, such as Corsica and Sardinia, through the port of Genoa. Starting the repair work in May-June would have meant closing or severely limiting traffic on the bridge and thereby jeopardizing that income.

Had the highway not been privatized, the government-owned IRI company would have put safety first and started repairs immediately.

Atlantia and the entire system of the privately owned highway network (over 6,000 km) is now under scrutiny for lack of investment and maintenance. Although income and profits have steadily increased over the years, Atlantia has decreased investments and maintenance, and instead paying fat dividends to shareholders, and gone into expensive shopping abroad. Between 2012 and 2016, Atlantia paid €1.5 billions in dividends. In 2017 Atlantia made a net profit of €972 millions, a 19% yearly growth.

In May, Atlantia had launched a €16 billion takeover bid for the Spanish highway company Abertis, which ended up in a joint consortium controlled by Atlantia with 50% of the capital plus one share.

Over the years, despite periods in which highway traffic decreased in Italy, Atlantia’s income has steadily increased thanks to its quasi-monopolistic position, and to a 30% increase of tolls since 2008.

According to author Mario Giordano, of the needed €280 million investments on the Liguria highway, Atlantia spent only €76 million last year. Investments are a condition for increasing tolls, according to the concession.

Autostrade was privatized as part of the privatization orgy which started with a symbolic event: The famous meeting on Queen Elizabeth’s yacht Britannia off the coast of Italy on June 2, 1992. Two Italian figures were at that meeting, who played a key role in the privatizations: Treasury Minister Beniamino Andreatta and Treasury Director General Mario Draghi.

Andreatta put the state-owned conglomerate IRI in receivership with a government decree, and he and his successors started to chop it up and privatize it: banks, steel, shipyards, food, transport, etc. Autostrade was given in a 30-year private concession to the Benetton family in 1999. The concession was then extended by four years under the Gentiloni government.

The man who oversaw all privatizations as head of the ad hoc Privatizations Committee was Mario Draghi, who stayed there through all technocratic governments run by Amato, Prodi, Dini and Ciampi. He resigned in 2002 only to become European head of Goldman Sachs, from which he then became governor of the Bank of Italy in 2005 and president of the European Central Bank in 2011.

Notably, the other two major crises urgently facing the current Italian government—the ILVA steel plant and the Alitalia crisis—are also a product of privatizations.

Only One-Fifth of Lower Saxony’s Bridges Are Safe

Aug. 16 (EIRNS)—The Genoa bridge catastrophe has triggered renewed public interest in the condition of bridges in Germany as well. The official line, “everything is fine here,” propagandized by mainstream media and leading politicians in the first hours after the incident in Genoa, has been replaced by newspaper and other media reports on the situation in Germany’s regions, where for many years, construction work on infrastructure has been run on minimal budgets determined by austerity regimes.

Budget-cutters have always welcomed ecologist protests, which delay projects further, just to save money. And unlike other countries in Europe, infrastructure in Germany is predominantly public—federal, state, and municipal. The blame falls mainly on leading politicians who conspired with the EU bureaucracy for decades on how to fund the banks, and prevent the so-called “waste” of public money for projects in the real economy, as that ideology was written down in the infamous 1992 Maastricht criteria.

The result of that ideology, “save money, not lives,” can be seen not only in Italy, but also in most regions of Germany. In the northern state of Lower Saxony, for instance, the road construction agency, LST, has found that only some 1,000 of the state’s 5,000 bridges are in good condition. The bridge in the worst condition is in Goslar, and dates from the year 1934, fully 84 years old. This is a relatively small bridge handling a moderate traffic flow; another one, however, which takes state road B3 across the Middle Land Canal in Hanover, and was built in 1967 (51 years ago), has to handle 65,000 cars and trucks daily, and has similarly been rated as being “critical condition.” Replacement work is to start only in 2020, though—by that time, the bridge may already have collapsed.

It is all too evident that given the range of reconstruction which Germany and other European states need in their infrastructure after decades of neglect, only a crash program the size of several TVAs at once will work—and for that to happen, a New Bretton Woods framework is required.


Siviero: A New Genoa Highway Bridge Can Be Rebuilt in Six to Eight Months

Aug. 16 (EIRNS)—In an open letter to the daily Corriere della Sera, submitted in advance to EIR, bridge builder and author of the “TunEIT” Mediterranean bridge idea, Enzo Siviero proposed to rebuild the Genoa Morandi Bridge in six to eight months, provided that the project is led by a special commissioner with strong powers. The new bridge should use what is left, Siviero suggests, and build a new cable-stayed bridge, or an extradosed one, in steel and using the existing foundations. There are ready-to-use projects around, Siviero wrote.

Siviero also criticized the use of prestressed armed concrete instead of steel for the stays, a “hazard” never used by anyone except Morandi himself. The bridge needed more than normal maintenance, but the awareness of this came too late. And even normal maintenance has generally been neglected in Italy for political reasons. The Morandi Bridge should have been demolished, but this presented some difficulties given the populated area underneath it. Time and excessive load on the bridge did the job.


Coming U.S.-China Trade Talks Are Not ‘Low-Level’

Aug. 16 (EIRNS)—A Chinese delegation will accept an American invitation to visit Washington later this month and continue trade talks. For some reason, Bloomberg has published that the talks will be “low-level,” but this is not the case. The South China Morning Post rightly describes the Chinese group as a “senior government delegation.” Wang Shouwen, who will head it, is not only Vice-Minister of Commerce and a member of the Communist Party of China (CPC) leading group in the Commerce Ministry, but he is also China’s Deputy International Trade Representative and a seasoned trade negotiator. The head of the U.S. delegation will be the Under Secretary of the Treasury for International Affairs, likewise no junior position. The current incumbent, David Malpass, was Deputy Assistant Treasury Secretary under Reagan, Deputy Assistant Secretary of State under George H.W. Bush, and an economic advisor to Donald Trump during the 2016 election.

Revoking Brennan’s Security Clearance Kicks Up Hornet’s Nest among Putschists

Aug. 16 (EIRNS)—President Donald Trump’s decision to revoke the security clearance of the Obama’s CIA Director John Brennan has sent some others of the anti-Trump brigade into a tizzy. Former Obama Director of National Intelligence James Clapper told CNN—for which he now works as an “analyst”—today that President Trump has sent the intelligence community a “chilling message,” the Daily Callerreported.

Trump said in his statement that, in contrast to usual practice of allowing former officials to retain their security clearances, the need to remove Brennan’s has been “now outweighed by the risk posed by his erratic conduct and behavior” and furthermore, “Mr. Brennan has a history that calls into question his objectivity and credibility.” President Trump demonstrated his assertion with some examples, including that Brennan “has recently leveraged his status … to make a series of unfounded and outrageous allegations—wild outbursts on the internet and on television—about this administration.”

Clapper, talking to CNN, claimed the main issue in the clearance debate is freedom of speech, and said Trump is silencing the First Amendment rights of the intelligence community. “That to me is the larger implication here with this revocation of John’s eligibility and the threat for the others, myself included,” he said, Daily Caller quoted him saying. “The larger implication here is the jeopardy to our First Amendment rights, and by extension others. And by the way, there is a very chilling message here to people in the intelligence community. If you tee up intelligence that the President doesn’t like, you may risk losing your clearance and thereby your job,” he said.

Brennan himself responded with an outraged Aug. 16 New York Times op-ed called, “President Trump’s Claims of No Collusion Are Hogwash,” which certainly demonstrated the case for pulling his clearance.

Drug Overdoses Shoot Up To Claim 72,000 American Lives Last Year

Aug. 16 (EIRNS)—A preliminary estimate from the Centers for Disease Control and Prevention (CDC) shows drug overdoses killed about 72,000 Americans last year, a record number that reflects a rise of around 10%, the New York Times reported on Aug. 15. According to analysts referred to in the article, two major reasons for the increase are: A growing number of Americans are using opioids, and drugs are becoming more deadly. According to the CDC estimates, overdose deaths involving synthetic opioids rose sharply, while deaths from heroin, prescription opioid pills and methadone fell, the article reported.

“The number of opioid users has been going up in most places, but not at this exponential rate,” said Brandon Marshall, an associate professor of epidemiology at the Brown University School of Public Health. “The dominant factor is the changing drug supply,” he noted, according to the Times.

“Strong synthetic opioids like fentanyl and its analogues have become mixed into black-market supplies of heroin, cocaine, methamphetamine, and the class of anti-anxiety medicines known as benzodiazepines. Unlike heroin, which is derived from poppy plants, fentanyl can be manufactured in a laboratory, and it is often easier to transport because it is more concentrated.”


Efforts To End Syria War, Bring Migrants Home

Aug. 16 (EIRNS)—Efforts are afoot to bring an end to the Syrian war and get millions of Syrian refugees back home. UPI reported today that Syrian President Bashar al-Assad has worked out a deal with Jordan which will enable thousands of migrants living in camps there to return. Meanwhile, the Russian Chief of the General Staff Gen. Valery Gerasimov has sent a letter to U.S. Chairman of the Joint Chiefs Gen. Joseph Dunford, expressing Moscow’s readiness to cooperate with Washington in helping refugees come home, UPI reported.

On Aug. 15, TASS reported that Russian Deputy Foreign Minister Mikhail Bogdanov and Adviser to the Lebanese Prime Minister George Shaabna met in Moscow to discuss conditions necessary for the return of Syrian refugees to their homes. “They discussed the situation in Syria with an accent on the issue of ensuring necessary conditions for an early return to their homeland of Syrian refugees staying on the territory of the Lebanese Republic,” the ministry said, according to TASS.

Also, representatives from Syria’s Kurdish northeastern region met with government officials in Damascus recently, reported Syria’s Al-Watan newspaper. The Kurdish-led and U.S.-backed Syrian Democratic Council went for new talks on decentralization and local administration, Al-Watan reported. “All the discussions happening now are … to find out the other side’s point of view,” said SDC co-chair Riad Darar.

In Moscow, Russian Presidential Spokesman Dmitry Peskov told reporters that a third meeting of the three presidents of the Astana process guarantor states for Syria’s ceasefire—Russia, Iran and Turkey—was being planned for September. “The possibility of holding another trilateral meeting in early September is being explored, after the three Presidents’ schedules are agreed on through diplomatic channels,” TASS quoted him saying. Russian Presidential Envoy for Syria Alexander Lavrentiev told TASS late last month that the Astana format summit would take place in Tehran.


Philippines’ Duterte, Frustrated with Rampant Corruption and Drugs, Suggests ‘Junta’

Aug. 16 (EIRNS)—Philippines President Rodrigo Duterte said yesterday that he was frustrated at his inability to stop the rampant corruption or to crush the drug trade. Meeting with business leaders, Duterte said: “Guys, I want you to know that I am thinking of resigning because I’m tired. I am not angry with anybody. My chase against corrupt government officials seems to be endless, and it has contaminated almost all government departments and offices.” On his intense and determined war on drugs, he said last week:  “Drugs will not be solved at the end of my term,” and warned the drug crisis may even get worse.

But he has a problem. In the Philippines, the Vice President is elected separately from the President, and although Duterte won his election by a wide margin, the woman who was elected Vice President, Leni Robredo, is from the Aquino party, and has openly opposed Duterte on most issues, including his war on drugs and his open break from the Obama Administration’s push for war with China. She has toured the world speaking at Soros-funded events calling for the legalization of drugs. She barely defeated Sen. Bongbong Marcos (the son of Ferdinand and Imelda), who is still in court seeking to overturn the election based on vote fraud allegations.

Duterte said he would not approve of Robredo taking over, but would prefer a “junta” to take over. “The problem is,” Duterte said, “I cannot suggest to them that you follow the succession which is (in) the Constitution. I have nothing against Robredo, but I don’t think she can improve on anything here. I am hesitant to suggest a constitutional succession. I would suggest to the military, grant a junta … line up here, I’ll put you in your proper place.”

He also said he would have preferred that either Bongbong Marcos or Chez Escudero (who also ran for Vice President) had been elected and could take over.

The Citizen’s National Guard (CNG—headed by Butch Valdes, who also heads the Philippine LaRouche Society), held a successful public event in July, with 1,000 in attendance. The CNG was co-founded by retired military officers, among others, and is dedicated to defending the nation’s sovereignty, to combat terrorism and drugs, and to defend the President. Duterte’s Defense Secretary Gen. Delfin Lorenzana (ret.) was one of the keynote speakers.



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