EIR Daily Alert Service, THURSDAY, AUGUST 2, 2018

THURSDAY, AUGUST 2, 2018

Volume 5, Number 153

EIR Daily Alert Service

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

Kochs Are Libertarians, Would Like Trump Impeached

The Koch Network, Like Soros, Promotes Legal Marijuana

Yemen’s Revolutionary Committee Announces Ceasefire Initiative

Eritrea’s Ports Are Ready To Handle Ethiopia’s Exports and Imports

North Korea’s Foreign Minister, or Even Kim Jong-un May Address UN General Assembly

Manhattan District Attorney Will ‘Decline To Prosecute’ Pot, Wants State Legalization

EDITORIAL

The (Dying) Elephant in the Room

Aug. 1 (EIRNS)—The City of London is scrambling to keep its control of the $1.5 quadrillion global derivatives bubble intact, under conditions that increasingly indicate its early demise. At issue is the British Empire’s stranglehold over the trans-Atlantic financial system and economies, under conditions of a surging alternative in the form of the Belt and Road Initiative.

One immediate flashpoint is the U.K.’s “Brexit,” and the City of London’s blackmail demand that they must retain their preeminent control of the world derivatives trade, even as they supposedly “exit” from the European Union. But the British Empire’s existential problem extends way, way beyond Brexit per se. They are threatened by the “exit” of half of humanity from their looting schemes. They are threatened by President Trump’s moves to “exit” from geopolitical confrontation with Russia and China. They are threatened additionally by this week’s emerging alliance between Trump and the Conte government in Italy, which could topple the entire EU structure from the inside.

And they are threatened, of course, by their own overripe bankruptcy, and the conundrum that even if they maintain, or increase, quantitative easing, the speculative bubble of financial assets will contract and implode; and if they slow down QE and raise interest rates, the collapse could be triggered instantaneously. As JPMorgan Chase CEO Jamie Dimon moaned yesterday, we are facing a looming financial catastrophe: “I don’t want to scare the public, but we’ve never had QE. We’ve never had the reversal … and people can panic when things change.”

Given this elephant in the room, Schiller Institute President Helga Zepp-LaRouche today warned once again against the shrill anti-China campaign in the West. “Every step in the direction of confrontation, is the opposite of the New Paradigm of win-win cooperation,” of the sort specified by Lyndon LaRouche’s Four Powers proposal, which is the required replacement for the bankrupt trans-Atlantic financial system and its bankrupt geopolitical old paradigm.

U.S. POLITICAL & ECONOMIC

Kochs Are Libertarians, Would Like Trump Impeached

Aug. 1 (EIRNS)—Given the Washington Post’s effort this morning to report the fight between the Koch political operation and President Trump as “old guard” Congressional Republicans vs. the President’s disruptive politics, it is useful to keep in mind that the Koch brothers are not Republicans at all but have long been Libertarians, and not of the Ron Paul variety.

David Koch was the Libertarian vice-presidential candidate in the 1980 election in which Lyndon LaRouche first contested the Democratic nomination. The Koch Brothers Foundation created the Libertarian Cato Institute in 1974, and has supported both the American Enterprise Institute and the Von Mises Foundation since. The Cato Institute, as an example, spearheaded the promotion of privatizing Social Security under George W. Bush in 2005-06; it has long taken the point for drug legalization.

The Koch brothers have heavily concentrated in recent years on the austerity promoters, the Club for Growth and the Conservative Senate Fund, as well as supporting Tea Party groups which are anti-government rather than anti-Wall Street.

Among the favorite funding recipients of these groups can be found President Trump’s dedicated “Republican” enemies in the Congress, perhaps best represented by Sen. Ben Sasse (R-NE). Otherwise a neo-con, Sasse is a regular speaker at Koch-sponsored events, and unabashedly gets most of his campaign funds (which dwarf those of most Senators) from “large individual contributors” and “conservative PACs” particularly the Conservative Senate Fund, according to the Center for Responsive Politics. Sasse led the unsuccessful effort in November-December 2016 to get Trump’s pledged delegates to vote against Trump in the Electoral College, and has been his leading Senate GOP enemy since.

The Koch Network, Like Soros, Promotes Legal Marijuana

Aug. 1 (EIRNS)—The notorious billionaire libertarian Koch Network, that President Donald Trump slammed in a tweet yesterday, has been actively purchasing votes in Congress for impeaching Donald Trump. They not only support the freedom of the monied to undermine the welfare of the nation at will through free enterprise institutions including the Cato Institute, which they founded, the Mont Pelerin Society associated with Friedrich von Hayek, and the American Enterprise Institute; they are also actively promoting the legalization of marijuana, and attacking the Trump Administration for opposing that policy.

Mark Holden, General Counsel and Senior Vice President of Koch Industries, issued the Koch position paper on marijuana legalization last Jan. 18.  He pointed out that states have been decriminalizing or legalizing the use or possession of pot either for recreational or medicinal purposes. He charges that the U.S. Justice Department during the Trump Administration, “by rescinding a set of memos that largely discouraged federal prosecutors from bringing marijuana-related charges in jurisdictions that had legalized sales has called into question every single local—and lawful—decision.”  He does not mention that it was the notorious Soros-supported Obama Administration that had issued those pro-pot memos.

Holden then makes an argument identical to that of drug-legalizer-in-chief George Soros, saying, “Resources spent fighting a misguided war on drugs should instead go toward programs for those reentering society, including rehabilitation treatment and job training.” He claims, without any supporting data—because there are none—that, “the most successful states are those that have acknowledged that the time has come for a new, smarter approach to drug policy that respects individuals’ human rights and ensures greater safety for our communities.”  He concludes with an invitation to “Read more about why Koch Industries believes in advocating for the principles of a free and open society here.” The “open society,” is the mantra of George Soros’s networks coordinated by his Open Society Foundation and Open Society Institutes.

Russia Expert Stephen Cohen Mops Up Neo-Con Max Boot and Anderson Cooper

Aug. 1 (EIRNS)—Russian affairs expert and Princeton University Professor emeritus Stephen Cohen yesterday derailed an attempt by CNN’s Anderson Cooper and neo-con windbag Max Boot, to bamboozle Americans into believing there was something “scary” about the summit between Presidents Trump and Putin on July 16 in Helsinki.

Cohen reminded the two of U.S.-Russian history going back to the end of World War I, saying: “Ever since then they’ve been meddling in our politics, and we’ve been meddling in theirs. This is low-level stuff. It is not another 9/11. It is not another Pearl Harbor. It is not Russian paratroopers dropping from the sky…. So, you’ve got Mr. Boot saying that Trump should threaten Russia. I think Mr. Boot would have been happy if Mr. Trump had waterboarded Putin at the summit and made him confess. Trump carried out an act of diplomacy completely consistent with American history.  Let us see what becomes of it, then judge.”

Cooper had introduced the discussion by saying that what the two Presidents discussed at Helsinki was a great mystery.  Boot agreed that what happened was “a scary scenario.”  Cohen explained that, as is typical in diplomatic exchanges, what happened was publicly revealed by the two Presidents: They announced initiatives against using nuclear weapons, for peace efforts in Syria, and for resolving the Ukrainian conflict according to the already-agreed upon Minsk accords.

Cooper objected that no one knows what the two did behind closed doors, and Boot attacked President Trump, saying, “He is willing to threaten North Korea. He’s willing to threaten Iran. He never threatens Russia and that is why many intelligence officials think that there is something highly suspect in the relationship of Mr. Putin and Mr. Trump.”

Cohen sneered, “I have no idea what Mr. Boot is talking about. He wants to threaten Russia?  Why would he threaten Russia?  You’ve got two nuclear powers—” but Boot shouted, “Because they’re attacking us….  Russia is attacking us right now according to Trump’s own Director of National Intelligence.”

When Cohen attempted an explanation, Boot charged, “You’ve been consistently apologizing for Russia [for] 45 years.” Cohen protested, “When you say people … are apologists for Russia because we don’t agree with your analysis, you are criminalizing diplomacy, and you are the threat to American national security.”

Cooper asked, incredulously, “Stephen, you’re saying Russia was not attacking the U.S.?” to which Cohen answered frankly, “During the 2016 elections, I don’t think Russia attacked the U.S.”  Boot blurted, “You’re apologizing for Russia as we speak.”

Finally, Cohen made the summary statement reported above, and, with that, Cooper bid his guests farewell.

Manhattan District Attorney Will ‘Decline To Prosecute’ Pot, Wants State Legalization

Aug. 1 (EIRNS)—Manhattan District Attorney Cyrus Vance, Jr.—the son of Jimmy Carter’s Secretary of State Cyrus Vance—announced that as of today, his office would “decline to prosecute marijuana possession and smoking cases.” He criticized what he called “the needless criminalization of pot smoking,” and announced that he would keep lobbying for the full legalization of the drug in New York State: “Our advocacy will continue, to urge New York lawmakers to legalize and regulate marijuana once and for all.”

A press release issued by the DA’s office proudly announces that “District Attorney Vance has vocally advocated for the statutory decriminalization of marijuana possession since 2012.”

NEW GLOBAL ECONOMIC ORDER

Eritrea’s Ports Are Ready To Handle Ethiopia’s Exports and Imports

Aug. 1 (EIRNS)—Economic integration between Ethiopia and Eritrea is moving quickly, only a few weeks after the normalization of relations between the two former enemies. Eritrea’s two major ports, Port Massawa in the north of the country and Port Assab in the south, announced they have completed preliminary refurbishment and are ready to handle Ethiopia’s import and export cargoes. Before the two countries went to war in 1998, the two ports were the main ports for Ethiopia. For the last 20 years the ports have become almost inactive, handling cargo for a country of only 5 million people that had been under sanctions.

Up until now Ethiopia, landlocked since 1998, with a population of more 100 million people—the second largest on the continent—has been fully dependent on Djibouti. Although a new Chinese-built railway connects Djibouti to Addis Ababa, the Red Sea/Gulf of Aden port is already crowded, hosting the ships of the various navies that patrol the Gulf of Aden and Arabian Sea, including the U.S. and Chinese navies. Djibouti also hosts a free trade and industrial zone which shares the port.

The Eritrean port of Massawa is ideal for handling cargo for northern Ethiopia, where there are new industrial zones being developed, as well as mineral and agricultural resources. An Ethiopian business delegation led by former Prime Minister Hailemariam Desalegn, that went to Eritrea on the first flight to Asmara in two decades, visited the Massawa port.

In the south, Assab Port had been the principal port for Ethiopia and had gone through some development in the years prior to the 1998 war, but had declined since. It also hosts an oil refinery which has remained idle for years.

Addis Ababa University Public Policy Prof. Dr. Costantinos Berhutesfa told the Ethiopian Herald, that Assab can reduce the costs of transporting cargo. He explained that with Ethiopia’s tremendous potash resources in the Danakil Depression, the Assab Port is ideal for its exports and for establishing a potash-processing plant.

Assistant Professor of Development Economics, Dr. Teshome Adugna, told the Herald: “High transportation cost is one the major setbacks of Ethiopia’s export trade and re-accessing Assab is instrumental in reducing the unit cost of products in the view to penetrate global markets.” Pointing to the unused refinery, he said Assab would proffer the opportunity to Ethiopia to export processed oil to world market at better prices, once the refinery were renovated.

The only railway in Eritrea is an antique colonial line built more than 100 years ago that runs between Massawa and Asmara, the country’s capital. It still uses the original steam engines and cars. Obviously new railway will have to be developed between the two countries.

COLLAPSING WESTERN FINANCIAL SYSTEM

Someone Wants To Move the Financial Cancer from City of London to Frankfurt

Aug. 1 (EIRNS)—The City of London, which has always opposed Brexit, is reacting with alarm at the report that Deutsche Bank is going to move its derivatives trading from the City of London to Frankfurt, the continental financial center and headquarters of the European Central Bank. The German financial daily Handelsblatt quotes a Deutsche Bank spokesman saying, “In the future, we will make more Euro-derivative deals at the Eurex,” the Frankfurt-based clearing platform. Hessen Finance Minister Thomas Schäfer has welcomed the decision and would like other banks to follow suit.

“New Labour” billionaire Lord Alan Sugar of the U.K. howled that “this is the beginning of the end of London as a provider for financial services.” Clearing is dominated by the City of London, where about $1 trillion (£890 billion) of financial transactions are cleared every day, the Guardian reports. The London Stock Exchange, which owns the London-based LCH clearing house, has warned that the loss of euro clearing under Brexit could cost the City 100,000 jobs.

Are the City of London’s days really numbered as the center of the financial cancer? If so, German citizens should hope that the bubble bursts before it metastasizes to Frankfurt.

Bankrupt City of London Threatens To Stay in Control of World Derivatives, Despite Brexit

Aug. 1 (EIRNS)—“Britain has warned Brussels that thousands of European investment funds will be under threat if it refuses to bow to demands for a comprehensive trade deal with the City of London after Brexit,” The Times of London reported July 30. “The British tit-for-tat warning strategy is designed to highlight the damage that could be caused if Britain fails to get a special deal for the City.”

The “tit-for-tat” threat from the U.K. is that if the City of London firms are not allowed free rein to sell derivatives contracts in the EU, EU firms would be excluded from the U.K. An unnamed British government official claimed, tongue in cheek, that “This was not intended as a threat. Rather, we wanted to set out what both sides could lose if we don’t get a good deal, and it was received in that spirit.”

However, the reality of London’s mafia-like threat was stated bluntly back in July 2017 by Jeremy Browne, formerly City of London special representative to the EU, the Foreign and Colonial Office, and a Member of Parliament from London. “London is Europe’s financial access to the world’s markets. It is arguably the most important financial center anywhere in the world. If Europe does not have London as its entry to global financial markets, it will not have an entry to global financial markets.”

The City of London is also known as the Square Mile, the financial district and historic center of London, with its own Lord Mayor and government. Technically, the City of London is one of the 33 local authority responsibilities into which London is divided.

IMF Reports Greece’s Debt ‘Unsustainable’ after 2038

Aug. 1 (EIRNS)—The International Monetary Fund has released its Article IV IMF surveillance report on Greece, in which its Debt Sustainability Analysis states that while the Eurozone’s commitment to take further measures to ease Greece’s debt is significant, the debt is only sustainable in the medium term, until 2038—as if the current international financial system is going to last until then.

The IMF projects that although the debt-to-gross domestic product ratio will drop in the next few years, it will resume its growth after 20 years. By 2038, gross financing needs are seen exceeding 20% of GDP and rising further, which means Greece needs more debt relief. That didn’t stop the IMF from demanding Athens cut pensions and strictly adhere to the austerity program.

‘Washington’s Indo-Pacific Initiative Won’t Cripple Belt and Road,’ Global Times Editorializes

Aug. 1 (EIRNS)—In an editorial under the above headline today, the semi-official Chinese daily Global Times says that the Indo-Pacific investment plan announced July 30 by U.S. Secretary of State Mike Pompeo won’t, and can’t, hurt the Belt and Road Initiative:

“Washington may hope to disrupt the Belt and Road initiative, but it is highly unlikely the U.S.’s $113 million investment initiative will collide with the Belt and Road Initiative. The Indo-Pacific region is too big and many Western elites have misunderstood the nature of the Belt and Road Initiative, believing it is a geopolitical strategy that should be challenged. Given the backward infrastructure of the Indo-Pacific region, development plans, no matter how many, are far from enough to meet its needs. Different plans should not be exclusive to each other. The Belt and Road Initiative is an open development plan. It’s not about competition, but a platform for cooperation.

“Many countries along the route of the Belt and Road are underdeveloped and have fallen behind in globalization. China’s infrastructure construction capacity and manufacturing capacity are in line with their current needs. With the capacity and Chinese investment flowing into the region, an exploration of large international construction cooperation has been formed.

“What’s important is that China has not interfered in any country’s politics nor sought to expand its sphere of influence. These countries participate in the initiative to expand their foreign cooperation. What are the U.S. and other Western countries worried about?

“The main reason may be that imperialism is deeply rooted in Western countries’ political thinking and they understand the era differently from emerging countries. The West is still dominated by the U.S. politically and militarily, and such a model has influenced Western countries’ perception of non-Western countries.

“Major powers are independent from each other outside the West. The Shanghai Cooperation Organization and BRICS are obviously more equal than NATO and the G7. The consideration for emerging countries is mutual development and cooperation, not conquest. The Belt and Road’s original intention was not an expedition, but for co-prosperity. China welcomes the U.S. to invest in the Indo-Pacific, which may be a good thing for the Belt and Road if the U.S. promotes the development of the region.”

OTHER

North Korea’s Foreign Minister, or Even Kim Jong-un May Address UN General Assembly

Aug. 1 (EIRNS)—South Korea’s Yonhap news agency reported today that a ministerial level North Korean official will be addressing the UN General Assembly (UNGA) on Sept. 29. The report, pointing to the UN Public Information Department’s provisional list of speakers, said the official could be North Korea’s Foreign Minister Ri Yong-ho.

The Yonhap report indicated that there is a possibility that North Korea’s Chairman Kim Jong-un will come to New York and address the UNGA, if Pyongyang’s talks with Seoul and Washington proceed well in the meantime. U.S. President Donald Trump is scheduled to address the UNGA on Sept. 27. A July 26 article in the Korean Heraldhad cited Cho Han-bum, a senior researcher at Seoul’s Korean Institute for National Unification, saying Kim’s appearance at the UN is a distinct possibility.

Yonhap also reported that South Korean Foreign Minister Kang Kyung-wha arrived in Singapore today for talks with North Korea’s Foreign Minister Ri, and for this week’s ASEAN meetings, including the ASEAN Regional Forum (ARF), which will the United States and North Korea with also attend. Yonhap writes, “There’s a possibility of Kang holding trilateral talks with the North’s [foreign] minister and U.S. Secretary of State Mike Pompeo.”

The Korea Herald quoted Foreign Minister Kang saying last month that she “cannot rule out the possibility” of a trilateral summit between the two Koreas and the U.S. during the UNGA, while former UN Korea Forces Commander Gen. Walter Sharp (U.S. Army, ret.) had said earlier that a second U.S.-North Korea summit may take place.

Yemen’s Revolutionary Committee Announces Ceasefire Initiative

Aug. 1 (EIRNS)—In a statement received by EIR, Mohammed Ali Al-Houthi, President of the Revolutionary Committee of Yemen in Sana’a, announced a unilateral ceasefire and requested the same from Saudi-led aggressors. The statement says in part:

“We declared our peace initiative by calling upon the Yemeni officials to stop all military operations in the sea battle fronts—to be a complete ceasefire in all the front battles—if the coalition will respond with the same action, as we are hoping they will do if they are really considering the peace for the Yemeni people, who are suffering because of the blockade and the aggression, a humanitarian crisis considered to be the worst, especially now with such a high level of famine and spread of epidemics; and to start the ceasefire immediately after declaring it unless the aggressors escalate their sea military operations.”

The ceasefire applies to the west coast regions on the Red Sea, and if it is accepted by the Saudi coalition, it would then be extended to all fronts. Al-Houthi also stated that they are ready to relaunch the national reconciliation dialogue, convene a new transitional government and prepare a general election.

Russia and Japan Hold ‘2+2’ Talks of Foreign and Defense Ministers

Aug. 1 (EIRNS)—After meeting in Moscow on July 31 with Russian Defense Minister Sergei Shoigu, Japan’s Defense Minister Itsunori Onodera told the press that, “Japan pays great attention to bilateral relations with Russia…. My visit has great importance,” since it is the first time in 12 years that a Japanese defense minister has visited Russia. Onodera said, “I hope that this memorable visit will bolster mutual understanding and consolidate confidence between our countries.” The two defense ministers concretely agreed to a visit by ships of Russia’s Pacific Fleet to the port of Hakodate on Hokkaido this October.

There were also points of tension in the talks. Russian Foreign Minister Sergey Lavrov told the press at the end of the meeting: “On our part, we once again drew attention to the concerns the Russian side has already voiced over the deployment of elements of the U.S. global missile defense in the region,” referring to Japan’s December 2017 decision to deploy two U.S. Aegis Ashore missile defense systems in Japan.

 

 

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