EIR Daily Alert Service, MONDAY, AUGUST 20, 2018

MONDAY, AUGUST 20, 2018

Volume 5, Number 165

EIR Daily Alert Service

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

China Scholars Welcomes India Proposal as a Movement Toward Belt and Road

Putin and Merkel ‘Synchronize’ on Nord Stream 2, Syria, and Trade

Chinese Cargo Ship Transits Bering Strait on First Trip Along Polar Silk Road

U.S. Patriots Blast Russophobia as Threat to American Values

Trump’s 2020 Campaign Manager Warns ‘Big Tech Is Becoming Big Brother’

China’s Chang’e-4 Lunar Rover Readied for Launch to the Far Side This Year

EDITORIAL

Italy LaRouche Leader on ‘Tragedy in Genoa: We Need a Marshall Plan for Infrastructure’

Aug. 19 (EIRNS)—The following statement was issued Aug. 18 by Liliana Gorini, chairwoman of Movisol, the LaRouche movement in Italy.

The collapse of the Morandi bridge in Genoa, with 43 victims, including 3 children, 3 French and German tourists, and 600 people who had to leave their houses because of the risk that what’s left of the bridge will collapse on them, prompts urgent questions which have to be answered, also for the sake of the families of the victims….

Besides the structural problems of Morandi bridges, which will have to be clarified by the ongoing investigation, this is not the first collapse of a bridge in recent years. Since 2013 to today, 10 bridges have collapsed. According to an estimate of the Italian Center for Technological Research (CNR), which demanded a Marshall Plan for highway infrastructure, “In Italy there are thousands of bridges which are too old, and beyond the lifetime for which they were built.” Concrete and steel deteriorate through the years, and the expense for maintenance was only one-fifth of what it should have been. Autostrade per l’Italia, the company owned by Benetton, invested only €2 billion in maintenance for the Morandi bridge, while dividends to shareholders were €3.5 billion. This was an announced tragedy, though the committee which opposed building a second bridge, No-Gronda, one of the many committees opposing big projects, claimed that the Morandi bridge would last another 100 years.

Since 1999, when highways were privatized, a policy of budget cuts has drastically reduced the spending for maintenance, the same policy of budget cuts which had been imposed by the European Union, and which prevented building new infrastructure, both for roads and railways, and also new hospitals. In the name of the Stability Pact great projects have been blocked, school buildings were not be made safe, investments in the earthquake areas were prevented. For the EU bureaucrats the priority was bank bailouts. Human lives lost through the years with this insane policy of support for financial speculation do not matter for them.

They do matter for us, and they should matter for the Conte government, which announced monitoring all bridges at risk and the withdrawal of the concession to Autostrade. The opposition of the Five Star Movement to great infrastructure projects should stop, in the face of this emergency, and funds should be allocated not only for monitoring and the maintenance of our highways and bridges, but also to build new ones with modern, anti-seismic criteria and materials. Those who are responsible for the collapse of the Morandi bridge will have to go to jail.

Enough with the “no” to great projects; the only “no” which should come from the government of change is a determined “no” to the austerity policy which is killing our citizens. Great projects, starting with a new bridge on the A10 highway, will have to become a priority, and the EU Commission will have to accept it and shut up. If they ask where the funds for these investments are coming from, our government should answer: From banking separation, which is in the government program. The Italian state should stop bailing out speculators in derivatives, who are also responsible for the attack against our state bonds, and instead finance infrastructure projects for the common good, freeing resources for the real economy.

Only in this way we can do justice to the victims of this announced tragedy, and prevent other ones.

COLLAPSING WESTERN FINANCIAL SYSTEM

‘Emerging Market’ Crisis Could Quickly Become Global, Cautions Nomi Prins

Aug. 19 (EIRNS)—An Aug. 15 piece by banking historian and former investment banker Nomi Prins in Daily Reckoning, is called “You Should Fear the Emerging Market Debt Bubble.” It warns that contagion from what is currently being called a “Turkish crisis” can quickly become worldwide.

Observing that the dollar’s index value has risen almost 7% in the past six months, triggering the serious fall of many other currencies and forcing sudden interest rate increases in many countries, Prins wrote: “I’ve long argued that the first shoe to drop in the next crisis would likely be EM [emerging market] debt.”

“Borrowing is not a problem when dollars are cheap,” she continued. “Low interest rates mean the cost of servicing that debt is low. The problem starts when the Fed raises rates or the dollar strengthens…. The more the dollar rises, the more EM currencies and related markets fall. Dollar-denominated debt then becomes too expensive to repay or service as the dollar rises relative to EM currencies. Before long default becomes the only option.

“This situation becomes more dangerous than even asset bubbles, because debt is required to be repaid on a set schedule. If a country misses a debt payment, it could set off a chain reaction of defaults” worldwide.

“That’s why an EM crisis could quickly become a global crisis.”

Prins continued, with the sense of “famous last words,” that Federal Reserve Chair Jerome Powell is on the record saying the forced return of capital from developing economies to advanced economies’ markets—the so-called reverse carry trade—“will be manageable.” Those words are now going to be tested in a crisis.

Tabanelli Assessment: ‘Bridges, Pensions and Other Assets Will Test the “Government of Change” ’

Aug. 17 (EIRNS)—The Italian website scenarieconomici.it, run by Prof. Antonio Maria Rinaldi and close to the Rome government, published an article on Aug. 15 by LaRouche activist Flavio Tabanelli entitled “Bridges, Pensions and Other Assets Will Test the ‘Government of Change.’ ”

“With the ‘government of change,’ thirty years of ‘inglorious looting’—the opposite of the ‘thirty glorious years,’ as the French call the historic phase of postwar reconstruction—could actually come to an end,” Tabanelli wrote.

“Not only are structures planned by engineers under stress, but also the demographic capacity of society itself which has been induced, by denying appropriate investments, to renounce building its own base for future progress in living standards.”

Tabanelli listed some examples of the kind of future-oriented projects which have been shut down, such as maglev rail, civilian supersonic flight, ships with magnetohydrodynamic propulsion, fusion energy research. It is not true that Italy has too much infrastructure, that pensions are unsustainable, that the schools must be reformed, that the country has been unable to manage its own sovereignty. A debate must urgently be begun on reviewing all those “conditionalities” which have created the disaster and are still preventing action in the service of the country.

Daniela Aiuto, a Member of the European Parliament from Italy and an architect, tweeted Flavio’s article, quoting the passage on the “inglorious looting.”

Genoa Port as a European Terminus for the Belt and Road May Now Be at Risk

Aug. 18 (EIRNS)—The Genoa port is one of the largest Italian industries, with over 50,000 workers and a GDP of €10 billions. The Morandi Bridge was on the main highway across Genoa, connecting East and West highways. It fell on top of the railway connecting the port to the Piedmont and Lombardy plains. Without a railway the port cannot deal with the current 2 million containers. The entire region is isolated from Northern Italy and France which are its major markets.

But there is much more than that. Genoa had been singled out by the Italian government as a terminus for the Maritime Silk Road element of China’s Belt and Road Initiative. To this purpose, upgrading the railway connection to the north had been under construction, the so-called “third pass,” a combination of tunnels and viaducts that allows for faster and greater freight transport on rail, to connect with Corridors 3 and 5 of the Trans-European Networks (TEN) Algeciras-Kiev and Rotterdam-Genoa.

Unless a real crash program rebuilds the damaged road and rail connections, the future looks grim.

CEO Earnings Up 17%, While Labor Wages Stagnate

Aug. 17 (EIRNS)—The Economic Policy Institute, associated with the labor movement, issued a report today titled “CEO compensation surged in 2017.” It reports that “in 2017 the average CEO of the 350 largest firms in the U.S. received $18.9 million in compensation, a 17.6% increase over 2016. The typical worker’s compensation remained flat, rising a mere 0.3%.”

This results in the CEO-to-worker compensation ratio in 2017 reaching 312-to-1, “far greater than the 20-to-1 ratio in 1965 and more than five times greater than the 58-to-1 ratio in 1989 (although it was lower than the peak ratio of 344-to-1, reached in 2000).”

The report states that the CEO compensation burst is due almost entirely to the bubble in the stock market: “The surge in CEO compensation measured with realized stock options was driven by the stock-related components of CEO compensation (stock awards and cashed-in stock options), not by changes in salaries or cash bonuses.”

THE NEW GLOBAL ECONOMIC ORDER

China Scholars Welcomes India Proposal as a Movement Toward Belt and Road

Aug. 19 (EIRNS)—The Press Trust of India (PTI) reported on Aug. 18 that “Scholars in China have cautiously welcomed India’s move to invite limited Chinese investments for the development of [India’s] northeastern states by connecting them with Bangladesh’s Chittagong port.”

PTI quoted Zhao Gancheng, director of the Shanghai Institute for the International Studies Centre for Asia-Pacific Studies in Beijing, telling Global Times, “China would highly welcome India’s proposal,” but stressed that it needs to be confirmed by Indian Prime Minister Narendra Modi or his government.

EIR Daily Alert reported Aug. 17 that senior ministers from three northeast Indian states, along with Ram Madhav, the general secretary of Modi’s Bharatiya Janata Party, had visited Guangzhou and invited China to bring its Maritime Silk Road to the Indian Ocean through those three states to Chittagong. The states are Assam, Tripura and Nagaland.

PTI called this a “major plan for the region’s development” initiated by India, and said it was the first time that Chinese Belt and Road Initiative investments have been welcomed in India. And it quoted Zhao, in his Global Times interview, saying, “If the Indian government confirms an invitation to China to participate in its northeastern projects, that means India is shifting toward China’s Belt and Road Initiative.”

Putin and Merkel ‘Synchronize’ on Nord Stream 2, Syria, and Trade

Aug. 19 (EIRNS)—Russian President Vladimir Putin and German Chancellor Angela Merkel met for three hours yesterday at the Schloss Meseberg, after Putin flew in from attending the wedding of Austrian Foreign Minister Karin Kneissl. The Putin-Merkel press conference occurred prior to their meeting, because the talks were anticipated to end late in the day.

Sputnik cited Kremlin spokesman Dmitry Peskov that there was no goal of reaching any agreements; he characterized the two leaders’ discussions as “substantial,” and a useful discussion on “synchronization of watches” on a number of urgent issues.

President Putin reaffirmed Moscow’s commitment to continue its work with German businesses. Peskov said, “Putin regularly communicates with representative of big German companies and wants to continue this practice. [The parties] pointed out several projects of big German companies aimed at expansion of their presence on the Russian market. Putin reaffirmed our interest for such cooperation,” Peskov told reporters. He stated that “Last year we registered a significant trade growth of 23%. The trend remains in place this year.”

Putin and Merkel discussed big projects, including Nord Stream 2, and pointed out “the commercial nature and competitive advantage of this project. Both agreed that it was not right to somehow politicize this project,” Peskov said. He told media that Putin and Merkel had discussed possible U.S. sanctions against the Nord Stream 2 project, saying, “There is a general understanding that the project is commercially profitable and competitive and that is why it is necessary to take measures to protect it from possible attacks of third parties and to complete the project.”

Nord Stream 2 is a joint venture of Russian energy giant Gazprom and France’s Engie, Austria’s OMV AG, U.K.-Denmark’s Royal Dutch Shell, and Germany’s Uniper and Wintershall. The pipeline will run under the Baltic Sea from the Russian coast to a hub in Germany, and have an annual capacity of 55 billion cubic meters. It is expected to be in operation by the end of 2019, Peskov said.

Both leaders discussed the transit of Russian gas through Ukraine. RT reported yesterday that at the press conference, Putin stressed Nord Stream 2 is “a purely economic project” and does not mean the transit of gas through Ukraine will stop.

On Syria, Sputnik quoted Peskov that “[The parties] have thoroughly discussed the Syrian issue. Putin pointed out the intensifying flow of refugees returning home, and called on the European countries to support the process to make it irreversible.” Peskov said Putin and Merkel had also discussed the possible creation of the Russia-Germany-France-Turkey format of talks on Syria, stating, “Such format has been discussed. They decided that the dialogue in such a format would be launched at the level of experts and aides in order to upgrade the level of talks in the future.”

Further on economics, Peskov said, “The parties expressed mutual concern over unpredictable decisions, especially in the sphere of tariffs, taken by some states, which may finally have negative consequences for the whole system of trade and economic ties.”

Ahead of the Putin-Merkel meeting, Andrea Nahles, who heads Germany’s Social Democratic Party, which shares the government with Merkel’s Christian Democratic Union, warned that Germany won’t abandon Nord Stream 2, despite U.S. protests. She said Germany should have an “intensive dialogue” with Russia, emphasizing on Funke radio that there are many conflicts internationally where Russia’s participation is required to find solutions.

Chinese Cargo Ship Transits Bering Strait on First Trip Along Polar Silk Road

Aug. 18 (EIRNS)—A Chinese ice-class cargo ship Tian En crossed the Bering Strait yesterday for its maiden voyage to the European market through the Northeast Passage, en route to the ports of France, Sweden, and the Netherlands. “It is the shortest route linking Northeast Asia and Northern Europe, and more importantly, it’s a safe one,” said Captain Chen Xiangwu, referring to the Arctic’s Northeast Passage, also called the “Polar Silk Road,” reported Xinhua. The voyage will save 12 days, compared with traditional sea routes.

Even this time of year, there will be icebergs in the Bering Strait crossing, but the ship will have the assistance of the array of Russian icebreakers dispersed along the route, if needed. It is also intent on avoiding creating any pollution along the route. “We ask our crew to strictly adhere to related international conventions,” said Zhang Li, the deputy general manager of COSCO Shipping which owns the vessel. “The wastes on the ship are deliberately sorted and handled, so that we can help build a green Polar Silk Road.”

In a January White Paper on the Arctic Passage, China committed to making the route a part of the Belt and Road Initiative.

U.S. POLITICAL AND ECONOMIC

U.S. Patriots Blast Russophobia as Threat to American Values

Aug. 17 (EIRNS)—Rep. Thomas Massie (R-KY) published a commentary in RealClearPolitics website on Aug. 16, titled “Russia Hysteria Undercuts Our Values, Impedes Relations.” He wrote that, despite the massive campaign to paint Russia as a threat to the nation, “Hard-working Americans, including constituents in my Kentucky district, care about jobs, paying the bills, putting food on the table, and leaving this country a better place for their children. The alleged vast Russian conspiracy harped upon by the Democrats and media since the election of President Trump is simply not a concern of normal Americans.” Massie pointed to the arrest of Russian citizen Maria Butina, who has been denied bail, as a particular result of the hysteria, and pondered what America’s response would be should Russia arrest an American student for promoting improved relations between the two nations. He praised Rep. Dana Rohrabacher (R-CA) and Sen. Rand Paul (R-KY) for standing up to the hype, and compared Paul’s recent meeting with former President Mikhail Gorbachev to Ronald Reagan’s diplomatic approach to the Soviet Union, which contributed to “communism’s downfall in Russia.”

Massie concluded: “The Russia scare is a distraction from our real threats, which include our massive national debt, porous borders, and an out-of-control federal government that claims the right to spy on Americans without a warrant.”

Sen. Rand Paul, speaking on Fox News Aug. 16, said that he had met with fellow lawmakers of both the Duma and the Federation Council—the lower and upper house respectively, of Russia’s bicameral legislature—during his early August visit, and that both had agreed to send a delegation to Washington to meet with members of Congress. “The downside,” he said, “is, each of the chairmen of each of the [legislative] committees is banned from coming to the United States because of sanctions. So one of the things I’m going to ask the President—I’m going to talk to the President this weekend—is … why don’t we take people off the list who are in the legislature?”

Trump’s 2020 Campaign Manager Warns ‘Big Tech Is Becoming Big Brother’

Aug. 17 (EIRNS)—Headlined, “Brad Parscale: Big Tech Is Becoming Big Brother,” the campaign manager for Trump’s 2020 Presidential campaign, goes after the thought control being imposed through the web by the “giants of Silicon Valley,” such as Twitter, Facebook, and YouTube. Writing an op-ed in the Aug. 16 Washington Examiner, he polemicized: “Social media platforms that once facilitated the free exchange of ideas and information are now actively seeking to silence and censor conservative opinions. This new Orwellian impulse that is taking over Big Tech is particularly problematic because social media websites, which are supposed to be safe spaces for all free speech, get special legal perks. Under Section 230 of the Communications Decency Act, websites such as Facebook and Twitter are not treated as publishers of information provided by another which would subject them to libel laws and other headaches publishers have to deal with because they offer a forum for a true diversity of political discourse.

“This means social media platforms are not merely private companies who can censor whomever they wish. They are considered, by law, to be public forums that allow free and open debate. Yet, they’re doing the exact opposite. They are stifling online speech, warping the national discourse, and obstructing the free flow of ideas. Big Tech is not just biased against conservatives, it is actively trying to silence them and deprive them of online platforms.”

Parscale concludes: “What we are seeing in Big Tech is the inherent totalitarian impulse of the Left come into full focus. The Left is losing at the ballot box, and there are some signs it is starting to lose the culture war too. The free and open Internet has been indispensable in spreading conservative ideas, and it was indispensable in getting Donald Trump elected President—and now the Left wishes to destroy it.”

STRATEGIC WAR DANGER

Russia, Turkey, Iran Summit on Syria in Preparation, but a Four-Way Format Undecided

Aug. 17 (EIRNS)—Work is underway to prepare for a summit in Tehran, Iran of the Astana Process guarantors for Syria—Russia, Turkey, and Iran—but a summit format involving Russia, Turkey, France, and Germany has not yet been agreed to by all parties. “The possibility of holding another trilateral meeting in early September is being explored. After the three Presidents’ schedules are agreed on through diplomatic channels, we will let you know,” Kremlin spokesman Dmitry Peskov told reporters Aug. 16. But a meeting among the leaders of Russia, Turkey, France and Germany on Syria is not on Russian President Vladimir Putin’s schedule yet, he said.

Angela Merkel today said that she was considering the four-way meeting with France, Russia and Turkey, but had not yet come to a decision.

Putin and Turkey’s President Recep Tayyip Erdogan may hold a separate, bilateral meeting in Iran. “Separate negotiations between Presidents Vladimir Putin and Recep Tayyip Erdogan will be held in Tehran during the Russia-Turkey-Iran summit in September,” Izvestiaquoted Peskov as saying.

Are U.S. Weapons and Saudi Money Being Used To Keep Syria Divided?

Aug. 17 (EIRNS)—The State Department announced today that it is cutting money allocated for Syria by $200 million, which is being replaced by $300 million from other member states of the “Global Coalition To Defeat ISIS,” with $100 million pledged by Saudi Arabia. The Saudi money will go to “stabilization” efforts in northeast Syria to include projects to restore livelihoods and essential services in the areas of health, agriculture, electricity, water, education, transportation (key roads and bridges), and rubble removal, according to the official Saudi Press Agency. This $100 million will also help facilitate the return of displaced Syrians, and ensure that ISIS does not reemerge to threaten Syria, its neighbors, or plan attacks against the international community, says SPA. The funds are to be spent in the part of Syria controlled by the U.S.-backed Syrian Democratic Forces (SDF) east of the Euphrates River, including Raqqa, which remains at this point totally destroyed.

The State Department said the contribution was promised on July 12 during the last meeting of the coalition in Brussels. “This significant contribution is critical to stabilization and early recovery efforts and comes at an important time in the campaign,” said State Department spokeswoman Heather Nauert.

But Iran’s Fars News Agency, citing the Arabic-language Al Watan, reports that the United States is building up an airbase in Hasakah in the U.S.-controlled area, and has sent another (the latest of several over the past few weeks) convoy of trucks and military equipment from Iraq to Deir Ezzor and al-Shaddadi. Fars also reports that the oppositionist Syrian Observatory for Human Rights disclosed on Aug. 15 that the U.S.-led coalition has dispatched more 250 trucks, carrying arms and ammunition, to the region under the control of the SDF.

The Syrian Democratic Council, the political arm of the SDF and largely controlled by the Syrian Kurdish Democratic Union Party (PYD), has been meeting with government officials in Damascus as the government of President Bashar al-Assad seeks to bring eastern Syria back under its sovereignty. So far, the talks have hung up over the SDC’s demand for full autonomy. These talks have the approval of the Trump Administration, in keeping with the President’s commitment to pull out of Syria.

SCIENCE AND INFRASTRUCTURE

China’s Chang’e-4 Lunar Rover Readied for Launch to the Far Side This Year

Aug. 18 (EIRNS)—At a press conference in Beijing Aug 16, Chinese space officials unveiled images of the Chang’e-4 lunar rover, which will explore the far side of the Moon. The basic design is based on the size and shape of China’s first lunar rover, Yutu. The Chang’e-4 rover is a rectangular box shape with two solar panels that unfold from the sides, and six wheels. It stands about four feet high.

At the press conference, lunar chief designer, Wu Weiren, said that unlike its predecessor, the new rover has adaptable parts and an adjustable payload, to deal with the more complex far side of the Moon, the more complicated communications set up, requiring a relay satellite, and to meet the scientific objectives of the space scientists, as Xinhua reports.

Like Yutu, the new rover will have four scientific payloads, including a panoramic camera, infrared imaging spectrometer, and a radar penetrating instrument.

The rover has not yet been named, and proposals can be submitted through Sept. 15. It is expected that the Chang’e-4 orbiter and lander with rover will launch before the end of this year.

 

 

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