EIR Daily Alert Service, MONDAY, AUGUST 27, 2018

MONDAY, AUGUST 27, 2018

Volume 5, Number 170

EIR Daily Alert Service

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

EDITORIAL

An Idea Whose Time Has Come: LaRouche’s Four Power Alliance To Create a New Bretton Woods

Aug. 26 (EIRNS)—Nearly ten years ago, on Nov. 18, 2008, Lyndon LaRouche delivered an historic webcast presenting his proposal for putting the British Empire out of its (and the planet’s) misery, with a Four Power alliance of the U.S., Russia, China and India, to be the initiating force for a New Bretton Woods international financial system. The old speculative system was then in the middle of its 2008 death rattle crisis, from which it has still not—nor can it ever—recover.

The world would be a far different place today had LaRouche’s call been heeded back then. But the intervening decade has not been lost.

First, a global alternative to the bankrupt British Empire has taken shape, especially over the last five years, in the form of China’s Belt and Road Initiative. Even more important than the hundreds of billions of dollars of great projects that have been launched, the BRI is unleashing waves of optimism—what Helga Zepp-LaRouche has referred to as the Spirit of the New Silk Road—in corners of the planet previously sunk in despair. What else can one think, when one reads the remarks of the President of Togo, Faure Gnassingbé, on the eve of the Sept. 3-4 Forum on China-Africa Cooperation (FOCAC) in China? He told CGTN TV: “You know that the path to growth has no end. There is no limitation to our progress, so far. We have achieved some progress, but more can be done.”

Second, more recently governments have been elected in the U.S., Italy and elsewhere, that are favorable to working with the four powers identified by LaRouche, and to fundamentally changing the global order, including its disastrous free trade dogmas and predatory regime-change wars. The ultimate such regime-change war is currently underway inside the United States itself, with the British Empire’s assault against the U.S. Constitution and the Trump presidency, using its assets in the FBI, the media and the political parties.

That British foreign war against the U.S. must be defeated, much as we have defeated their earlier similar efforts—from the Revolutionary War, to the Civil War, to World War II. The period between now and the November mid-term elections is one decisive battle in that war.

Mustering the forces needed to achieve that, and to get the U.S. on board with the Belt and Road Initiative, requires the kind of in-depth understanding of both the problem and the solution that Lyndon LaRouche provided in his Nov. 18, 2008 webcast—for which reason we include some relevant excerpts:

“That’s how the world incurred a presently outstanding debt, through such means as derivatives, in the order of quadrillions of dollars! Far in advance of anything that could ever be paid. So, we are never, never going to pay those debts! We couldn’t pay those debts. So, we’re never going to pay them.

“What do you do in a case like that? What does the United States do in a case like that, under our Constitution? You declare those debts in bankruptcy. And what do you do with them in bankruptcy? You sort them out! Those things that should be supported, will be supported, and the rest of it will just wait, or die away. The great majority, the vast majority of the obligations outstanding today, as nominal claims against countries, will be cancelled….

“Now, you have two ways to go: Either you collapse the world, with starvation and mass death, and those effects. Or, you put the thing through bankruptcy reorganization. And how do you do that? Well, what I specified is very elementary: I have four nations in mind that can take the lead on this thing. And the four nations, which together, represent the greatest consolidation of power on this planet: These nations are the United States, Russia, China, and India, as joined by other nations, which join in the same deal. We put the world through bankruptcy reorganization. How do we do it? We use the U.S. Constitution to do that.

“The U.S. Constitution is unique in the fact we have a kind of Federal Constitution we have: that our dollar is not a monetary dollar; it’s a credit dollar….

“Now, if the United States says, that we are going to back up our dollar, and enters into an agreement with Russia, China, and India, to join us, with other countries, in doing the same thing, to put the world through bankruptcy reorganization, in which we will cancel most of the outstanding financial obligations: It has to happen. Otherwise, no planet! If you try to collect on quadrillions of dollars of outstanding claims, from whom are you going to collect, by what means, and what’s the effect? It is against natural law, to collect on that debt! How many people are you going to kill, to collect that debt? How many countries are you going to destroy, to collect that debt?…

“So therefore, we can create a new credit system, among nations, which I think—if the United States, Russia, China, and India agree, most nations of the world will happily join us, especially considering the alternative. And therefore, we can create a new world system, a new money system, a credit system as opposed to a monetary system. And under those conditions, we can proceed to advance credit on a large scale, for physical reconstruction of the world’s physical economy. We can organize a recovery of the same type, which we undertook with President Franklin Roosevelt, back in the 1930s and 1940s. And we won’t change from that, I should think, once we’ve done it.

“That’s the only alternative.

“Now, what that means is, politically, the end of the British Empire; or what’s called the British Empire…. So, under these conditions, we then proceed to world reconstruction. And what we do, instead of the present free-trade system, is we go back to a protectionist system, a fixed-rate system; in other words, currencies will have a fixed rate of exchange with respect to each other, or adjustable by treaty arrangements, but they do not float. And we then proceed to utter the credit, for large-scale infrastructure investment, which will be the driver of the physical reconstruction of the planet.

That’s the only remedy.”

THE NEW GLOBAL ECONOMIC ORDER

Togo President Gives Interview to China Television: ‘The Path to Growth Has No End’

Aug. 26 (EIRNS)—On the eve of the Forum on China-Africa Cooperation (FOCAC) conference in Beijing, in an interview with Chinese TV network CGTN on Aug. 23, the President of the Togolese Republic Faure Essozimna Gnassingbé optimistically proclaimed, “The path to growth has no end.”

Togo is a west African country of 8 million people, bordered on its west by Ghana. China led the construction of Togo’s international airport, which has been operational for two years, and serves the region.

As reported by Togo First, CGTN asked, “Which types of China companies do you wish to attract to Togo?” President Gnassingbé responded, “[Chinese] investments have helped Togo grow and advance in its development. However, you know that the path to growth has no end. There is no limitation to our progress, so far. We have achieved some progress, but more can be done…. Regarding our preferred sectors for new investments, I would obviously say agriculture, since it is the most important for our economy. Our agricultural sector needs to be modernized and industrialized, transformed into an agro-industry. I would say we need Chinese firms to invest in that sector.”

Later in the interview, the Togolese President remarked, “While some economic powers try to do things on their own, the foundation of the relationship between China and Africa lies in dialogue, focusing on a win-win cooperation. Both sides win…. In regards to economy, I believe we will have the opportunity to discuss a major project, which I praise, the ‘One Belt, One Road’ project. We will discuss how Africa can contribute to this ambitious, generous and revolutionary project…. [I]t is quite rare to see a country, even a huge one such as China which is currently the world’s second leading economic power, launch such a major project that would involve almost every continent.”

He also said that he recently read President Xi Jinping’s book on ways to fight poverty.

Hysteria Against El Salvador’s Relations with China Reaches Fevered Pitch

Aug. 24 (EIRNS)—Beginning with the Aug. 23 statement from the office of the White House Press Secretary attacking El Salvador’s sovereign decision to establish diplomatic ties with China, and depicting China as interfering in the “domestic politics of a Western Hemisphere country,” the hysteria against the spread of the Belt and Road in Ibero-America is reaching new heights.

The White House Press Secretary’s statement—which reads like it was written by Vice President Mike Pence and his gang of neo-cons, in much the same way they tried to poison the well against China on the eve of President Trump’s historic state visit there—warns that El Salvador’s “non-transparent” decision doesn’t just affect that nation, but also the “economic health and security of the entire Americas region.” This is of “grave concern” to the United States, it goes on, which requires a “reevaluation” of its relationship with El Salvador.” The press secretary admonishes countries that think they’ll get economic growth or infrastructure development from Chinese investments will be sorely disappointed in the long run. Governments around the world “are waking up to the fact that China’s economic inducements facilitate economic dependency and domination, not partnership.”

Preceding the White House Press Secretary’s statement were ravings this week from various neo-con voices in the U.S. Congress and State Department. On Aug. 21, Sen. Marco Rubio (R-FL) and Sen. Cory Gardner (R-CO) introduced an amendment to restrict U.S. funding to El Salvador, according to a press release from Rubio’s office.

An Aug. 23 article on the Infodefensa.com online defense publication suggests that the U.S. may also try to “condition” participation of the three “Northern Triangle” nations—Guatemala, Honduras and El Salvador—in the free-market boondoggle known as the Alliance for Prosperity by threatening to impose the Global Magnitsky Act, which sanctions nations for alleged human rights violations and corruption.

Then, at the Aug. 22 Senate Foreign Relations Committee hearings, Senator Rubio and others demanded to know whether nominees for U.S. ambassadors to Nicaragua and Honduras, Kevin Sullivan and Francisco Palmieri respectively, would make it a “priority” to ensure that those two countries maintain ties with Taiwan, rather than the One-China policy. The two men vowed they would. Sen. Ed Markey (D-MA) worried that as more Central American countries break with Taiwan, citing the Dominican Republic and El Salvador, this might lead to a “domino effect.”

COLLAPSING WESTERN FINANCIAL SYSTEM

New Indicators in Sharp Decline in Trans-Atlantic Potential Relative Population-Density

Aug. 24 (EIRNS)—Two new demographic studies of 18 developed Western nations show that life expectancy declined in 12 of those countries in 2015, according to an Aug. 22 report in Reuters. “This hasn’t occurred in decades, and the size of these most recent declines were larger than prior declines,” said study co-author Jessica Ho of the University of Southern California in Los Angeles. The studies were published in The BMJ (formerly British Medical Journal), described as one of the world’s oldest medical journals published by the British Medical Association.

EIR has reported on previous studies pointing to the ongoing demographic collapse in the United States. In the new studies, the trend is shown to apply across the board in the trans-Atlantic sector. “This is the first time in recent decades that so many high-income countries simultaneously experienced declines in life expectancy for both men and women,” Reuters wrote. “Most of these countries reversed their life-expectancy decline in the 2015-2016 period, but in the U.S. and the U.K., the declines continued, the [studies’] authors note.”

Reuters pointed to the opioid crisis and drug overdose deaths as a leading culprit. But they also quote lead study author Dr. Steven H. Woolf of Virginia Commonwealth University in Richmond saying: “A leading cause is fatal drug overdoses—fueled by the opioid epidemic—but we make a mistake if we focus only on the drug problem, which is just the tip of the iceberg. Deaths from alcoholism and suicides have also increased, what some call deaths of despair.” Woolf further commented that there are rising midlife death rates from dozens of diseases of the heart, lungs, digestive systems and other organs. It even found rising death rates during pregnancy and early childhood, Woolf said. “Something far-reaching is affecting the health of Americans in the prime of their lives,” Woolf said.

That “something” is caused by what Lyndon LaRouche scientifically defined as allowing a society’s potential relative population-density to drop below its actual population. Willy-nilly, the result of that will be some combination of demographic collapse, life expectancy reduction, waves of forced migration, wars, drug and other epidemics, soaring poverty, and cultural decay.

Over Half of Americans Under 18 Live in Poor Households Needing Government Assistance

Aug. 24 (EIRNS)—According to the latest statistics published by the U.S. Census Bureau, and reported by CNSNews.com on Aug. 22, in 2016 some 52.1% of all American youth under the age of 18 lived in households that were receiving “means-tested government assistance,” i.e., their level of income/poverty justified participation in aid program such as food stamps or free school lunches.

This is a sharp rise over the last two decades, under the British Empire-run Bush and Obama Administrations. In 1998, some 36.9% of children under 18 years of age lived in such households; by 2008, that had risen to 40%; in 2013 it broke 50% for the first time; and it rose steadily for the next four years, to stand at 52.1% in 2016. In absolute numbers, this meant that 38.4 million out of the 73.6 million people under 18 in the U.S., lived in households receiving such means-tested government assistance.

The demographic breakdown indicates that the problem is even worse: The higher percentages of those receiving benefits are in the younger age cohorts. For example, the national average for all ages in 2016 was 35.9% living in such households; in the 18- to 24-year cohort, it was 40.1%; and in the under-18 group, it was 52.1%.  In other words, there is an inverted pyramid, in which poverty requiring such federal assistance is disproportionately affecting the young.

Russian Central Bank May Cap How Much Capital Foreign-Owned Bank Branches Can Hold Abroad

Aug. 24 (EIRNS)—The Central Bank of the Russian Federation has announced a plan to put a ceiling on the amount of their capital that foreign-owned banks operating in Russia, can hold abroad. Until now, there has been no limit; the new plan, however, would put a limit of 20%. This amounts to capital controls, in an effort to protect the Russian banking system and economy from international speculation, of the sort that is currently driving the value of the ruble down sharply. RT reports that 15 major foreign banks are protesting mightily against the central bank plan, including Goldman Sachs, Citigroup, JPMorgan, Deutsche Bank, and HSBC.

According to RT, “the Central Bank of Russia proposed the rationing measures in response to fresh anti-Russia sanctions from the U.S. and Europe that could allow foreign lenders to block access to the funds for its units based in Russia, two sources close to the issue told Bloomberg.”

Under the new U.S. sanctions, not only are hundreds of millions of dollars of Russian assets inside the U.S. being frozen, but Russian assets in third countries have begun to be affected. For example, Reuters reported earlier this week that Credit Suisse had frozen some $5 billion in assets linked to Russia as a result of Washington’s sanctions. Credit Suisse engaged in some fancy semantical acrobatics to try to deny that they had “frozen” anything, but their official explanation was far from convincing:

RT explained in other coverage: “Switzerland has been one of the destinations for money leaving Russia. According to data from the Russian central bank, around $6.2 billion, or 14% of total Russian cross-border outflows, went to Switzerland in 2017.

“Other Swiss banks, including UBS and Julius Baer, told Reuters they also respected international sanctions. The banks, however, declined to say whether they had taken similar asset-freezing operations.”

Federal Reserve Chair Powell Admits Myopia—‘I Don’t See the Crisis Yet’

Aug. 24 (EIRNS)—With Fed “doves” like St. Louis President James Bullard (and U.S. President Donald Trump) arguing for an end to interest rate increases now, Federal Reserve System Chairman Jerome Powell at the annual Economic Policy Symposium, sponsored by the Kansas City Fed in Jackson Hole, Wyoming, said he was not taking the so-called emerging-market currency crisis seriously yet. This coheres with his famous last words in late July, reported by Nomi Prins, that the emerging-market flows “are quite manageable.”

Powell said the Fed would keep “gradually” raising rates although “there are risk factors abroad and at home that, in time, could demand a different policy response.” At issue is a quarter-point increase in September which, obviously, Powell wants to implement, while other members of the Federal Open Market Committee—Bullard, Governor Lael Brainard, and regional presidents, such as Minneapolis’s Neil Kashkari, all hardly Trump co-thinkers—disagree.

Powell said, “I see the current path of gradually raising interest rates as the approach to taking seriously both of these risks [stopping U.S. growth, or setting off high inflation—ed.]. As the most recent FOMC statement indicates, if the strong growth in income and jobs continues, further gradual increases in the target range for the federal funds rate will likely be appropriate.”

STRATEGIC WAR DANGER

Russian Lawmakers Blast New U.S. Sanctions as Premised on ‘Baseless Accusations’

Aug. 26 (EIRNS)—TASS is giving prominent play to various Russian legislative voices responding forcefully to the new round of British-orchestrated U.S. sanctions against Russia, voices broadly consistent with earlier remarks by Foreign Minister Sergey Lavrov and other officials. For example, Leonid Slutsky, the chairman of the Foreign Policy Committee in the State Duma, told reporters on Aug. 24 that “the U.S. puts itself outside the format of international legal norms and commonly accepted notions like presumption of innocence or irrefutable evidence this way,” in its announcement of a new round of sanctions against Russia. “It has simply flushed them down the drain. This is appalling, this looks like a devilish nightmare.”

Slutsky attacked the entire premises of the new sanctions. “Baseless accusations, like the ones in the situation around the Skripals are deemed sufficient, and here we have a yet another package of sanctions stemming from argument in the ‘highly likely’ series…. In essence, they tell us, well, prove that you are not four-legged.”

Vladimir Gutenev, the first deputy head of the Economic Policy Committee of the Duma, went further, insisting Russia retaliate “asymmetrically” by placing nuclear weapons in third countries, as the U.S. does; and he also promoted the totally incompetent idea of using gold-backed crypto-currencies for arms sales and other commercial transactions. (This consideration of London’s crypto-currencies fraud also crept into the final communiqué of the July 25-27 Johannesburg BRICS summit, and is given credibility in certain circles inside Russia.)

“I believe that now Russia has to draw its own red lines,” Gutenev stated. “The time has come to ponder on variants of asymmetric response to the U.S., which are now being suggested by experts and are intended not only to offset their sanctions but also to do some retaliatory damage,” Gutenev stated. He continued:

“It’s no secret that serious pressure is being put on Russia, and it will only get worse…. We should follow the advice of certain experts, who say that Russia should possibly suspend the implementation of treaties on non-proliferation of missile technologies, and also follow the U.S. example and start deploying our tactical nuclear weapons in foreign countries. It is possible that Syria, where we have a well-protected airbase, may become one of those countries.”

He further said that, in light of “U.S. attempts to thwart deals on Russian weaponry and civilian goods,” Russia should “consider the possibility of conducting transactions in crypto-currencies that are linked to the value of gold. And I’m sure that this will be a very interesting option for China, India, and other states as well.”

Russia Is Developing Weapons Based on ‘New Physical Principles’

Aug. 26 (EIRNS)—Air Defense Force Lt. Gen. Alexander Leonov announced at the Army-2018 international military and technical forum in Russia on Aug. 25, that “work is underway [in Russia] to develop weapons based on new physical principles,” TASS reported. The concept of “new physical principles” was at the heart of Lyndon LaRouche’s Strategic Defense Initiative proposal of the early 1980s, as a science driver for both ending the era of “mutually assured destruction” (MAD) nuclear deterrence, as well as unleashing global economic reconstruction. Such principles are also at the heart of President Vladimir Putin’s March 1 presentation of Russia’s new military capabilities, which has struck fear into the heart of the British Empire and their allied proponents of geopolitics globally.

General Leonov reported: “The research involves creating systems based on various physical principles. These are the methods of active and passive location, self-guidance and laser guidance. Work is underway to develop weapons based on new physical principles…. No country has such a full set of long-, medium-, short-range and close-in air defense weapons. This system allows creating universal multilayered air defense over the battlefield.”

TASS explained that “new physical principles are a notional term used to underline that the weapons’ destructive factors are based on processes and phenomena that were not earlier applied for military purposes. The weapons based on these principles include laser and microwave guns, sonic weapons, electromagnetic bombs and others.”

Bolton and Patrushev Agree To Renew Contact Between Foreign and Defense Ministries

Aug. 24 (EIRNS)—During their five-hour meeting Aug. 23 in Geneva, U.S. National Security Advisor John Bolton and the Secretary of Russia’s Security Council Nikolai Patrushev agreed to keep the lines of communication between them open. “We made a lot of progress, we’ve identified certain areas where lines of communication could be restored and more work done by the affected agencies—the State Department, the Defense Department,” Bolton said afterwards.

Patrushev noted that the “constructive” meeting did not proceed in an “accusatory tone,” and urged the White House to quickly follow up on the proposals discussed. Patrushev said that he personally invited Bolton to Russia for the next round of talks. “We’ve posed a lot of questions to each other, and we need to solve them. We need to meet not just for the sake of meeting, but when we are ready,” he told Russian media, reported Reuters. They did reportedly agree to re-open broader lines of communication between the two foreign and defense ministries. Patrushev, who also said a broad agreement on restarting contacts between the two countries’ military chiefs-of-staff had been reached, said he had invited Bolton and U.S. officials to Russia for future talks, but said no date had been agreed for a follow-up meeting, RIA reported.

The meeting ended without a joint statement, however, and Bolton and Patrushev made separate appearances before news media afterwards. The matter of alleged Russian meddling in U.S. elections was one of the stumbling blocks to a joint statement. “I made it clear that we wouldn’t tolerate meddling in 2018,” Bolton stated. According to Patrushev, the U.S. demanded that the communiqué read that “Russia interfered in U.S. elections, but denies it.” Patrushev said that Moscow agreed to include the sentence if, in turn, the statement would also say that “the U.S. mustn’t meddle in the affairs of other nations,” at which point Bolton’s team gave up on the whole idea, reported RT.

U.S. POLITICAL AND ECONOMIC

Trump Tells Attorney General Sessions To Release DOJ/FBI Subversion Documents

Aug. 24 (EIRNS)—Since yesterday morning, President Donald Trump has conducted an open dialogue involving his Attorney General Jeff Sessions before the entire world. It began with an interview he gave to Fox and Friends’ Ainsley Earhardt and reached a high point of intensity with his response to Sessions’ assertion that he did take charge of the Justice Department and “Department of Justice will not be improperly influenced by political considerations.”

Trump replied in a two-part tweet: “Jeff, this is GREAT, what everyone wants, so look into all of the corruption on the ‘other side’ including deleted Emails, Comey lies & leaks, Mueller conflicts, McCabe, Strzok, Page, Ohr, … FISA abuse, Christopher Steele & his phony and corrupt Dossier, the Clinton Foundation, illegal surveillance of Trump Campaign, Russian collusion by Dems—and so much more. Open up the papers & documents without redaction? Come on Jeff, you can do it, the country is waiting!”

When Earhardt asked Trump about rumors that Sessions and his Deputy Attorney General Rod Rosenstein would be fired, Trump talked about releasing all of the documents on the conduct of Special Counsel Robert Mueller and his team. “At the right time I think I have to do the documents,” Trump said, and that he had wanted to stay uninvolved, but that the level of the witch hunt, the surveillance of the campaign, and the other activity meant that he had to act.

The interview had begun as a discussion of the broadly promoted claim of the dual disaster: The nearly simultaneous announcement of the conviction of Paul Manafort on 8 of the 18 charges against him, and the plea bargain deal negotiated by his former attorney Michael Cohen.

Trump explained that Cohen was one of many attorneys that he used, primarily on what he called “small deals.”  He pointed out that none of the charges against Cohen involved his Presidential campaign. He explained that the payments Cohen pled guilty to making as illegal campaign financing were not paid for by the campaign and Cohen pled guilty to acts that were not, therefore, even crimes. Trump pointed out that Obama paid large fines for “huge” violations and that almost every Presidential campaign has committed violations that are generally treated as civil, not criminal, infractions. He explained that Cohen had a variety of criminal difficulties involving his taxi cab and other business interests unrelated to Trump, and that he was able to cut a deal in exchange for incriminating Trump. Referring to both the Cohen and Manafort cases, he referred to the DOJ practice of “flipping,” and said it should be illegal.  He described how someone can get out of 10 or more years of prison by testifying against someone else, regardless of the truth of that testimony.

SCIENCE AND INFRASTRUCTURE

Will ‘Commercial Space’ Become the ‘New NASA’?

Aug. 26 (EIRNS)—Christian Davenport, an apologist for the rise of so-called “commercial space”—privatizing federal policymaking on the national mission—has an article in today’s Washington Post, titled, “The Change Agents Bringing Tradition-Bound NASA into the Future.” He lays out quite clearly what is at stake in space policy. Describing NASA as “risk-averse, stuck in the old ways of doing things, stymied by a big 60-year-old bureaucracy that was chastened by two fatal space shuttle disasters,” Davenport says that NASA’s recent decision to agree to a rocket fuel-loading procedure by SpaceX that numerous agency watchdogs had determined to be too high risk, “signals an ongoing cultural shift as the agency partners with a growing commercial space industry that thrives on pushing boundaries.”

He points out, rightly, that this “cultural shift” has been bipartisan, with President George W. Bush starting the commercial cargo program for deliveries to the International Space Station, and Obama expanding it into commercial crew deliveries, as he cancelled Constellation. (Both programs funded with billions of dollars taken out of NASA’s budgets.)

For the next project—the diversionary lunar gateway—Davenport reports approvingly that NASA is not “dictating” the requirements or design for components, but “reached out to industry for suggestions.” Imagine if the Apollo program had been carried out through suggestions from industry.

Davenport is the author of the book, The Space Barons: Elon Musk, Jeff Bezos and the Quest To Colonize the Cosmos.

Two weeks ago, even more directly, Deputy Defense Secretary Patrick Shanahan made the disgusting comment to reporters that, “Commercial space is the new NASA.”

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