EIR Daily Alert Service, TUESDAY, AUGUST 28, 2018

TUESDAY, AUGUST 28, 2018

Volume 5, Number 171

EIR Daily Alert Service

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

 

Shut Down Mueller’s ‘Russiagate’:  U.S. Economic Future Is at Stake

President Xi Stresses the Belt and Road Initiative as a New Form of Global Governance

Extending the Belt and Road Will Become a Major Theme on Its Fifth Anniversary

British-Spawned ‘Get Trump’Effort Takes Some Hits

NAFTA Ended, ‘United States-Mexico Trade Agreement’ Replaces Free Trade

Could Political and Military Opposition Kill the Space Force?

In Secret Talks, Wall Street Wants a Guarantee That Argentina Won’t Default

‘Reverse Carry’ Currency Crisis on Again

Russia Charges, U.S. and U.K. Preparing Another ‘False Flag’ Attack, This Time in Idlib

U.K. Labour Party’s 2017 Income Breaks Record, Far Above Tories

 

EDITORIAL

Shut Down Mueller’s ‘Russiagate’: U.S. Economic Future Is at Stake

Aug. 27 (EIRNS)—For the London-led coup plotters against Donald Trump’s presidency, another bubble of triumph has popped; former White House special attorney and Hillary Clinton’s close friend Lanny Davis has retracted and publicly apologized for his claims that former Trump lawyer Michael Cohen could tell investigators about “Russian collusion” by Trump. As the Washington Post admitted today, Davis’s claims “dominated United States news for days,” but were false. The President’s level of approval among American voters appears to have been unaffected by last week’s convictions of former associates, on hyped-up charges completely unrelated to any mythical “collusion” with Russia.

But this will not stop legal assassin Robert Mueller and the major U.S. media from plowing up dirt, attacking Trump, and spreading McCarthyite hysteria against Russia and China, unless they are stopped by mobilized American citizens between now and the midterm elections. Mueller’s intention is to send an “investigative report” begging for impeachment to the new Congress. Americans have to mobilize to shut down his unlawful collaboration with British intelligence assets, and to make sure a Congress is elected which completely rejects impeachment and supports great-power cooperation, as Trump has said he does.

They have to do this quickly now, before London’s and Wall Street’s global debt bubble, much bigger and more unpayable than in 2007-08, blows out again. Today’s resumed plunges of the so-called “emerging market currencies” warn that that blowout is not long in coming. President Trump and the United States will have to work withChina, Russia, and India to head off that collapse with a new international financial arrangement. A New Bretton Woods must be launched together by those nations, using Glass-Steagall banking regulations and national credit institutions in the way described by economist and statesman Lyndon LaRouche.

Take a good look at the Belt and Road Initiative (BRI) launched by China just five years ago. This array of great projects of infrastructure and development is now providing $5 trillion in trade—40% of the $16 trillion total annual trade in goods worldwide; and 60% of the growth in that trade, along with electrical power, water supplies, communications, new railroads and roads, poverty reduction programs. It is now sending 3,500 freight trains a year across all of Eurasia, from China to Europe.

Look at the heads of state and government and cabinet ministers from all of Africa heading to China later this week for the Forum on Africa-China Cooperation summit. China’s trade with Africa is growing 20%/year, and is balanced; it is Africa’s primary capital goods investor, and poverty in that continent has at last begun to fall.

Guiding all this, said China’s President Xi in marking five years of the BRI, is the Confucian Chinese idea that China’s policy should seek “the harmony of Heaven”—the common benefit of nations.

That is not a policy to be fought, by tariffs or otherwise, but to be joined in new credit agreements for reconstruction and productive employment in many countries, a “world land-bridge” of infrastructure development. As President Trump has negotiated a trade agreement for manufacturing and wage growth with Mexico, he can negotiate much more productive agreements with those great powers. The British Mueller coup against him must be stopped now.

THE NEW GLOBAL ECONOMIC ORDER

President Xi Stresses the Belt and Road Initiative as a New Form of Global Governance

Aug. 27 (EIRNS)—Speaking today at a symposium on the Belt and Road Initiative to commemorate the fifth anniversary of its inception on Sept. 7, 2013, China’s President Xi Jinping underlined its importance as the basis of a new type of global governance. “In the past five years, the ‘One Belt and One Road’ has greatly improved the level of China’s trade and investment liberalization and facilitation, and promoted China’s open space from the coast, along the river to the inland, along the border, forming a new open pattern of land and sea linkage, east and west mutual aid,” Xi said. “The trade volume of goods with the countries related to the Belt and Road has accumulated more than $5 trillion, and the direct foreign investment has exceeded $60 billion, creating more than 200,000 jobs for the local economies. China’s foreign investment has become an important factor driving the growth of global foreign direct investment.”

Xi pointed out that the world today is undergoing a period of great development, great change, and adjustment. “We must have a strategic vision and establish a global outlook. We must have both a sense of risk and a sense of history, and we must have a sense of historical opportunity to work hard in this century-old change. … Building a community of human destiny with the ‘One Belt and One Road’ as a platform for practice, is proposed from the perspective of China’s reform and opening up, and long-term development. It is also in line with the Chinese philosophy that the Chinese nation has always upheld, in line with the Chinese people’s concept of harmony under heaven and occupies the commanding heights of international morality. Building the Belt and Road is not only a means of economic cooperation, but also an important way to improve the global development model and global governance and promote the healthy development of economic globalization,” Xi said.

“We must work hard to open up the market, build more trade promotion platforms, guide powerful enterprises to carry out investment cooperation with the countries along the Belt and Road, develop new trades and new modes of cross-border e-commerce, and pay attention to trade balance. We must work hard on financial security, speed up the formation of financial support and build a ‘One Belt, One Road’ policy system, promote the internationalization of the RMB [currency] in an orderly manner, guide social funds to jointly invest in national infrastructure and resource development projects along the route, and provide foreign exchange funds for enterprises going global,” he said.

Extending the Belt and Road Will Become a Major Theme on Its Fifth Anniversary

Aug. 27 (EIRNS)—As China celebrates the fifth anniversary of the announcement of the Belt and Road Initiative on Sept. 7, 2013, it is underlining its world-shaping effect and preparing to extend the BRI to Africa at the Sept. 3-4 Forum of China Africa Cooperation (FOCAC) summit. In an article in today’s Global Times by Chu Daye, entitled “B&R Kindles Confidence, Inspiration Around the World,” Chu writes that the BRI “has offered the world an innovative approach to development and inspiration,” quoting experts gathered at a conference on Aug. 26. “As of May, China has signed 103 cooperation documents with 88 countries, regions and global organizations.” “China’s ports now connect with 600 global ports to ensure maritime connectivity and the number of freight train services has risen to 10,000 between China and the EU.” (The 10,000th train just pulled into Wuhan station in the past week.) “Trade in goods with B&R countries and regions totaled more than $5 trillion and foreign direct investment to these destinations hit $70 billion during 2013-17. In 2017, China’s trade with B&R partners accounted for 40% of global trade in goods in terms of value.”

“The rail cargo service between China and Europe and other regions is a China-led remake of the existing international rail transport that spans the Eurasian landmass, noted Bai Ming,” a research fellow at the Chinese Academy of International Trade and Economic Cooperation in Beijing. “Before the creation of such trains, an intercontinental railway freight service existed but was not functioning much. ‘There was road and train, but no traffic and cargo,’ ” Bai Ming said.

Ning Jizhe, director of the National Bureau of Statistics at a news briefing today said that over the five years of the BRI, Chinese enterprises have established 82 economic parks in the BRI countries, with $28.9 billion in total investment, and 24,00 jobs created for local communities.

Wang Yiwei, director of China’s Institute of International Affairs at Renmin University, who has written two books on the BRI, contrasts China’s innovation strategy with the U.S. and Europe. American innovation, he says “emphasizes labor and improving efficiency. The European emphasizes saving resources and energy via sustainable development. … The two types of development strategies left developing countries in mid-air as they have ample labor, rich resources but lacked skilled laborers and were weak in technology. Developing countries were marginalized in global economic development. … B&R supersedes the old ways.” As the BRI is meeting new obstacles thrown up by the British Empire in both Europe and the U.S., China is preparing a new thrust together with the African countries, who understand its importance for their development.

U.S. POLITICAL AND ECONOMIC

British-Spawned ‘Get Trump’ Effort Takes Some Hits

Aug. 27 (EIRNS)—Former special Clinton White House lawyer Lanny Davis, who is now representing former Trump New York lawyer Michael Cohen, took a big hit to his credibility over the weekend. Davis is now “walking back” his cocky assertion that Trump was aware of Russian meddling on his behalf in the 2016 election, and that Cohen might have information about the June 9, 2016 meeting involving Trump, Jr. at Trump Tower with a Russian lawyer.

Davis now says, as reported by The Hill, “he ‘should have been more clear’ that he doesn’t know the extent of Cohen’s knowledge, particularly when it comes to the Trump Tower meeting.”

Trump tweeted Aug. 25, in response to Davis’s recantation, that it proves the allegation that Trump knew in advance about the meeting was “Just another phony story by the Fake News Media! In June, the Washington Post reported that Cohen had witnessed a conversation between Trump and his son about the meeting before it occurred. The Post attributed it to an anonymous source at the time, but over the weekend the Post admitted the source was the now recanted Lanny Davis.

The Spokesman, an English/Chinese newspaper with a 1.3 million circulation, reported that Trump’s approval rating did not drop in NBC/Wall Street Journal polls even after the Alexandria, Virginia Federal jury verdict last week finding Trump’s former campaign manager Paul Manafort “guilty” on 8 of 18 charges.

Constitutional lawyer Alan Dershowitz, an informal adviser to Trump, said on ABC-TV’s This Week yesterday that the investigation in the Southern District of New York could be the most dangerous for Trump “because I think he [Trump] has Constitutional defenses to the investigation being conducted by Mueller. But there are no Constitutional defenses to what the Southern District is investigating. So, I think the Southern District is the greatest threat.”

But as for Michael Cohen, Dershowitz and columnist Pat Buchanan agreed completely. To quote Buchanan: “Cohen pled guilty to something which is not a crime,” to try to injure Trump and thereby get leniency for his own, actual, tax evasion crimes. “Cohen claims he and Trump thus conspired to violate federal law. But paying girlfriends to keep past indiscretions private is neither a crime nor a campaign violation. And Trump could legally contribute as much as he wished to his own campaign for President.”

NAFTA Ended, ‘United States-Mexico Trade Agreement’ Replaces Free Trade

Aug. 27 (EIRNS)—Presidents Donald Trump and Enrique Peña Nieto announced in a public phone call today that their negotiators had concluded a trade agreement “terminating NAFTA,” in Trump’s words, and replacing it with what he called “the United States-Mexico Trade Agreement.” He called it “a really good deal for both countries” and “something that’s very special for our manufacturers and for our farmers from both countries, for all of the people that work for jobs.” It could raise both auto/machine tool manufacturing employment in the United States, and auto wages in Mexico.

The negotiations took just over one year.

The outlines of the agreement are known although the details have not yet been published. Its primary known elements have to do with the auto industry, and with the investor-state dispute settlement mechanism (ISDS), beloved by Wall Street and City of London banks, which enabled multinationals to ignore nations’ laws when operating under “free trade” deals like NAFTA or the Trans Pacific Partnership (TPP).

The North America-made components content of motor vehicles finally assembled in the United States will be raised by the new agreement from 45% to 75%; and the portion of auto industry workers working in “high-wage areas” will be raised to a comparable extent, lifting prevailing wages in significant sections of Mexico’s auto industry to $16/hour or above.

The United States had proposed complete elimination of the ISDS, and Mexico had agreed. But the Wall Street Journal reported that after a lobbying blitz by the Business Roundtable (for Wall Street) and the U.S. Chamber of Commerce, ISDS was retained for major sectors—oil, gas, infrastructure and transport.

During the call with Peña Nieto, Trump clearly indicated his intention to negotiate trade separately now with Canada, although allowing “maybe we’ll include them into this deal”—as Mexico clearly wants to do—but likely on very different issues.

There is enough time for Peña Nieto to sign the deal before leaving office Dec. 1, as both he and President-elect Andrés Manuel López Obrador wanted.

Could Political and Military Opposition Kill the Space Force?

Aug. 27 (EIRNS)—Opposition to the President’s proposed creation of a Space Force as a separate military service has been voiced by a number of military professionals, policy analysts, and even astronauts. But recent opposition by a Republican Congressman and within the military could bury the idea.

Rep. Mike Coffman, Republican from Colorado, which has tens of billions of dollars of defense contracts, who is chairman of the Military Personnel subcommittee of House Armed Services, told the Gazette of Colorado Springs last week, “To create an entirely new department, it’s ridiculous.”

Coffman served in both the Army and Marine Corps Reserve as an officer, and deployed in the 1991 Gulf War and again in Iraq in 2005. A major concern is that creating a whole new bureaucracy will vacuum up funds that should be used for the military’s actual needs. He supports a Space Corps under the Air Force.

Coffman’s view holds extra weight due to his committee position and military background. His opposition could have an impact on the position of other Republican Congressmen, who have not wanted to be critical of the President, and it could take the discussion out of the partisan realm, to be debated on its merit. Representative Coffman is the only other GOP sponsor of Glass-Steagall beside prime sponsor, Rep. Walter Jones (NC).

Second, there is reportedly an internal disagreement in the military space community over what the primary mission of a Space Force would be—space “war fighting” and protecting space assets, or use of space assets to support ground forces and the other military branches.

Doug Loverro, former deputy assistant secretary of defense for space policy, says there are “vast cultural gulfs” within the military space community about what the primary mission should be, SpaceNews magazine reports. To make it more complicated, there is also a vested interest in the intelligence community. “The NRO (National Reconnaissance Office) views itself as a service provider [for the military services] and takes immense pride in delivering the best overhead space reconnaissance support that can be done,” says Loverro.

COLLAPSING WESTERN FINANCIAL SYSTEM

In Secret Talks, Wall Street Wants a Guarantee That Argentina Won’t Default

Aug. 27 (EIRNS)—Amidst intensifying rumors of a debt default, three envoys from Argentine President Mauricio Macri were deployed to a confidential Aug. 15 meeting in Manhattan with Wall Street bankers and investment fund managers to convince them that Argentina will not default, that Macri has the current volatile economic and political situation under control, and that he will win next year’s presidential elections with no challenge from former President Cristina Fernández de Kirchner.

According to the daily Página 12 and Clarín, deputy chief of staff Mario Quintana, Central Bank Vice President Gustavo Cañonero and Finance Secretary Santiago Bausili were grilled at length, most importantly on how the government intends to secure financing to cover upcoming debt payments. Wall Street stopped lending long ago, and investors are dumping Argentine stocks, bonds and debt paper like hot potatoes.

The Argentines vowed that Macri has a “Plan B”—to either revise the current IMF standby agreement or get advances on future disbursements, Clarín reported. Respected economist Alfredo Zaiat reported in the Aug. 26 Página 12 that the government is leaking that it may also seek a credit line from the U.S. Federal Reserve or a U.S. Treasury bailout.

The Wall Street characters weren’t convinced, however, so now a chagrined Macri has to return in mid-September to offer his personal guarantees. Nor is the issue of former President Fernández de Kirchner settled. Quintana vowed that she will “eventually” be jailed on corruption charges, and that Macri and his candidates are best positioned for re-election. But given current financial upheaval and social revolt against Macri’s brutal austerity regime, and his plummeting popularity rating, the City of London and Wall Street aren’t reassured. Hence the escalating judicial persecution of Fernández on phony corruption charges, and the heightened threat to her life, expressed in the Aug. 25 editorial demand by the Anglophile daily La Nación that she be stripped of her “excessive” and “costly” security.

EIR is also investigating the Aug. 24 report by Clarín columnist Marcelo Bonelli that “the Trump Administration” has offered to provide information on bank accounts Fernández used to hide bribes she allegedly took when President. It may involve the same Department of Justice, FBI networks behind both Brazil’s notorious “Lava Jato” (Car Wash) anti-corruption drive and the ongoing coup attempt against the Trump Presidency.

‘Reverse Carry’ Currency Crisis on Again

Aug. 27 (EIRNS)—The Argentine currency fell to a historic low of 31.57 pesos to the dollar today, while the black-market or “blue” dollar traded at 32.20 pesos. This was the fifth consecutive day of decline, despite today’s Central Bank auction of $210 million.

The Turkish lira declined 4% today after a holiday week in which markets were closed.

Brazil’s real rose slightly, but in the past three weeks it has declined by 9%, reaching a two-year low of 4.08 to the dollar, heading toward what Reuters called “uncharted territory” of 4.10.

STRATEGIC WAR DANGER

Russia Charges, U.S. and U.K. Preparing Another ‘False Flag’ Attack, This Time in Idlib

Aug. 27 (EIRNS)—Yesterday the Russian Defense Ministry released more details about the expected chemical weapons provocation in Syria that Russian authorities first warned of Aug. 24. Russian Defense Ministry spokesman Maj. Gen. Igor Konashenkov said that the operation is planned to unfold in the village of Kafr Zita in Syria’s northwestern Hama Province in “the next two days,” reported RT. Konashenkov said that “English-speaking specialists” are already in place to use “poisonous agents,” at the same time that a group of residents from the north have been transported to Kafr Zita and are currently being prepared “to take part in the staging of the attack” and be filmed suffering from alleged “ ‘chemical munitions’ and ‘barrel bombs’ launched by the Syrian government forces,” reported RT. The groups of residents will be used to assist “fake rescuers from the White Helmets.” They will be filmed apparently suffering from the effects of chemical weapons and then be aired in “the Middle Eastern and English-language media.”

Kafr Zita is about 10 km southwest of Khan Sheikhoun, where the April 2017 provocation occurred.

Today, Konashenkov reported that the U.S. Navy is building up its force of guided-missile destroyers in the Mediterranean ahead of the expected provocation. “The United States keeps building up the cruise missile carrier group in the Middle East as part of preparations for another provocation in Idlib Province to be presented as an alleged use of chemical weapons,” Konashenkov told TASS. He pointed out that “these preparations are fresh confirmation of U.S. intentions to use as a pretext a likely simulation of the government forces’ chemical attack, which Hayat Tahrir al-Sham militants are plotting with active support from British secret services.” Hayat Tahrir al-Sham was formerly known as Jabhat al-Nusra.

TASS does not report whether Konashenkov identified the U.S. ships, but other news reports and Twitter postings name the USS Carney, which has been in the Black Sea for the past two weeks but just transitted the Bosporus back out to the Mediterranean; and the USS Ross. These U.S. ship movements follow by just a few days the reinforcement of the Russian Navy’s Mediterranean squadron by two frigates from the Black Sea Fleet.

OTHER

U.K. Labour Party’s 2017 Income Breaks Record, Far Above Tories

Aug. 27 (EIRNS)—Released last week, the U.K. Electoral Commission’s figures for annual income for political parties held some surprises. Jeremy Corbyn’s Labour Party hauled in the largest amount of cash ever raised by a political party in a single year, £55,793,000. This was almost 25% more than the Conservatives, who only managed to raise £45,947,000.

Perhaps more significant, Labour received £16.2 million in “membership fees” last year, up 15% from the £14.6 million raised in 2016. Labour now has five times the membership of the Tories. Not only did the income from memberships for the Tories drop 43%, from £1.5 million in 2016 to £835,000 in 2017, but to their great embarrassment, it was revealed that the party received more money from dead people—in the form of “bequests”—than from any other group. In this category, at least, the Tories could boast of an “increase!”

While the United Kingdom might be the last place one would expect to find evidence of the New Paradigm, these figures certainly show that the old paradigm—of the City of London’s geopolitics and monetarist debt slavery—is certainly a “dying breed.”

 

 

 

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