EIR Daily Alert Service, WEDNESDAY, AUGUST 15, 2018



Volume 5, Number 162

EIR Daily Alert Service

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


Giuliani Calls for an ‘Independent Counsel To Investigate the Investigators’

Trump Objects to Certain Provisions in Defense Authorization Act

U.S. General in Riyadh To Push Saudis on Yemen School Bus Bombing Investigation

Project Democracy Networks Destabilizing Bolivia, Want President Evo Morales Out

Motorway Bridge Collapse in Italy Highlights Failing Infrastructure in the EU

Beijing Forum: Reducing Poverty in Africa Requires the Belt and Road



West’s Financial System on the Brink: Only Four Powers’ New Bretton Woods Can Prevent Chaos

Aug. 14 (EIRNS)—The Western monetary system is hanging by a thread. The immediate panic in Turkey, Argentina, and elsewhere eased slightly today, but the problem is not localized to one or more crisis points—it is systemic, the result of the past 10 years’ refusal to change the policies which caused the 2008 breakdown. When Wall Street exploded in 2008, Bush and Obama showed their colors—the red, white and blue of the Union Jack, not the U.S. flag—refusing to implement Lyndon LaRouche’s call for restoring FDR’s Glass-Steagall Act, while enacting laws which encouraged a full return of the derivative speculation at the expense of the real economy. This led to the revolt of the population expressed in the election of Donald Trump, who pledged to restore the U.S. industrial economy and end the perpetual imperial warfare.

Now, however, as LaRouche insisted after the 2008 crash, Glass-Steagall alone will not do the job. Nothing short of an entirely new world financial order can succeed in replacing the “Casino Mondial” of floating exchange rates and unbridled speculation, which has taken the place of investment into the real economy, with the IMF and the ECB as the “enforcement” mechanism. Such a New Bretton Woods approach is required, restoring fixed exchange rates in a gold reserve system, while “New Silk Road” projects based on national credit expand the productivity and well-being of the entire human race.

Achieving such a new paradigm requires that Donald Trump sit down with the leaders of the other three great powers in the world—Russia, China and India—to formulate a new Bretton Woods agreement. This was LaRouche’s insight in 2009, that only these four powers acting in tandem would have the power to replace the British Empire with a new financial system among sovereign nations based on real development. This vision was confirmed at the historic BRICS Summit in South Africa last month, where Russia, China, and India dedicated themselves to extending the spirit and function of the New Silk Road to all of Africa and the so-called developing sector.

Trump has declared, repeatedly, that Xi Jinping, Vladimir Putin, and Narendra Modi are friends, despite the massive effort by the British and their assets in the U.S. to turn the nation against both Russia and China. Now, the Russiagate scam is exposed and could soon be ended, with the accusers becoming the accused. Trump’s lawyer Rudy Giuliani declared that it is time for Obama’s CIA chief John Brennan to be brought before a grand jury for his criminal connivance with British intelligence operative Christopher Steele, who orchestrated the ongoing coup attempt against the government of the United states. Leading Congressmen are now focused on the British intelligence role in the Russiagate coup attempt. This cleansing of the British imperial filth within the U.S. establishment must be successfully completed, immediately, freeing Trump to do what he must, through the Four Power alignment: to create the New Bretton Woods.


Giuliani Calls for an ‘Independent Counsel To Investigate the Investigators’

Aug. 14 (EIRNS)—President Donald Trump’s lawyer Rudy Giuliani stepped up the drive to crush the British coup operations against the President in his Monday guns-blazing interview on Fox News’ Sean Hannity show, naming former CIA Director John Brennan as the “quarterback” running the fraudulent Mueller show, demanding Brennan be brought before a grand jury, and calling for a special counsel to investigate the whole crew (Brennan, Mueller, Strzok, et al.).

Just-fired FBI official Peter Strzok is not just anybody in this operation, Giuliani pointed out. “He was there at the very beginning. He wrote all the initial documents justifying this investigation. He ran it for 11 months. He conducted the critical interview with [Trump’s first National Security Advisor, Gen. Michael] Flynn with a very strange situation where Flynn pled guilty to a lie that the FBI said he wasn’t guilty of…. He’s [Strzok] the one who was carrying the dossier and using the dossier to justify the FISA wires.”

Even so, Strzok is “a bit of a puppet,” Giuliani said. “There’s Mueller, he’s a puppet. I’m going to tell you who was the quarterback for all of this…. The guy running it is Brennan…. And he should be in front of a grand jury.” “
Giuliani charged that Brennan peddled a false dossier, a “cut and paste job by a down and out ex-spy, English spy, who hated Trump and was paid by the Hillary Clinton and the DNC,” to get Harry Reid and a couple of Republican Senators to demand an investigation.

“A totally phony investigation. Now, why can’t we get an investigation when there are clear facts showing possible violations of the law? … Even in the order appointing Mueller, which is completely illegitimate, they don’t point out any crime. You have to point out a crime under the independent counsel regulations. They don’t point it. We have lots of crimes and we can’t get [Attorney General Jeff] Sessions to move and appoint an independent counsel.”

The interview came to an end; Hannity thanked Giuliani, who had the last word: “Independent counsel to investigate the investigators.”

Source Who Lied That Trump Called Foreign Students ‘Spies,’ Lied about His View of Charlottesville

Aug. 14 (EIRNS)—The lie that President Trump declared that all foreign students in the U.S. were “spies,” in the midst of an alleged anti-China tirade at a meeting with CEOs last week, has taken on a life of its own around the world, despite the fact that there is no evidence that he said any such thing. China’s Global Times reported that “more than 4,000 signatures had been collected by Aug. 13 on the White House petition website, urging U.S. President Donald Trump to apologize for reportedly saying ‘almost every student that comes over to this country is a spy.’ ” China is particularly incensed at the statement, as Chinese students account for 32.5% of overseas students in the U.S. Global Times writes that “Chinese observers condemned the President’s fear-mongering comments as ‘regrettably irrational’ and dangerous to the Chinese community residing or studying in the U.S.”

But there is no evidence the President made those remarks. The report came from a renowned liar, Politico’s Annie Karni. Karni’s source is unnamed, and it is not even clear that her supposed source was invited to the meeting, although she claims her source was in the room. The transcript of the meeting has no such statement—in fact, he spoke of his friendship with Xi Jinping and his hope the tariff issue would be resolved.

But lo and behold, Karni was also the individual who set off a social media firestorm a year ago, misquoting Trump as identifying himself with the neo-Nazis in the Charlottesville, Virginia violence.

At a press conference on Aug. 15, 2017—where Trump was argued the need for infrastructure projects, including their expected positive effects on race relations—the media were in a frenzy. Trump keeps calling for questions on infrastructure, but the media only wanted to make Trump refute his statement that there was violence from both sides at the Charlottesville events. Trump had pointed out that there were violent elements within the alt-right and the alt-left, and that there were some in the alt-left that had clubs and had charged at the alt-right. He says that they charged “at ’em.”

But the Politico transcript version that day changed it to “at us”—as if Trump identified himself with the alt-right. Karni, at Politico, singled out the phrase “at us” in a separate tweet, which triggered off the New York TimesWashington Post, CNBC, and the social media in general. After people double-checked the videotape, Politico retracted “at us” and inserted “at [indistinguishable],” and Karni deleted her tweet. But Karni’s assertion of Trump identifying himself with the alt-right, or even neo-Nazis, had already radiated throughout the social media uncorrected.

Trump Objects to Certain Provisions in Defense Authorization Act

Aug. 14 (EIRNS)—President Donald Trump signed the fiscal year 2019 National Defense Authorization Act yesterday with much fanfare. In his public remarks, Trump praised the bill as providing the largest boost to the U.S. military in many years. However, his signing statement, as posted on the White House website, indicated that he had objections to numerous provisions of the bill, including many dealing with foreign relations. His objections are primarily about implied or direct restrictions on his right to act on certain issues under his presidential powers as commander in chief, rather than the issues themselves. Nonetheless it is worth taking note that the areas involved include: Russian sovereignty over Crimea; blocking U.S. funding for implementation of the Open Skies Treaty; limitation on military cooperation with Russia; strengthening the military of Taiwan; prohibition on China’s participation in RIMPAC; and certification regarding the Saudi-U.A.E. campaign in Yemen.

A number of those provisions require the President to certify to Congress that certain stipulated conditions have been met before he can take certain diplomatic and military actions. Other provisions “purport to dictate” the position of the U.S. in external military and foreign affairs. In both cases, the statement says that the President will treat those provisions consistent with Article I executive authorities under the U.S. Constitution, “including the authorities to determine the terms upon which recognition is given to foreign sovereigns, to receive foreign representatives, and to conduct the Nation’s diplomacy.” One of the sections enumerated at this point in the statement prohibits the expenditure of funds for any activity that recognizes the sovereignty of the Russian Federation over Crimea.


Khamenei Insists Iran Will Not Talk to U.S., But Neither Does It Face War from the U.S.

Aug. 14 (EIRNS)—Iran Supreme Leader Ali Khamenei said yesterday that there will be no talk of negotiations with the U.S., while at the same time he asserted that the threat of war is very low. He said at a gathering in Tehran of people from around Iran that “accurate reasoning and past experiences” prove that negotiations with a “deceitful and bullying regime” like the U.S. could not take place, reported Tasnim News. Pointing to the U.S. government’s strategy for negotiations, Khamenei said Iran can enter the “dangerous game” of negotiations with the U.S. only when it achieves the desired might in the economic, political and cultural spheres and resists Washington’s strategy of propaganda campaign and pressures. “But at present, negotiations (with the U.S.) will be certainly detrimental to us and is forbidden.”

But Iran doesn’t face war (at least not a military war). “However, they (Americans) do not propose the issue of war explicitly, but seek to overplay the specter of war indirectly in order to intimidate the Iranian nation or the cowards,” Khamenei underlined. “No war will break out, because we, like the past, will never begin a war, and Americans will not launch an attack either, because they know that it would harm them hundred percent,” Ayatollah Khamenei stated.

Khamenei’s assessment of the war danger appears to be on point, at least for now. An interesting analysis in Fars News, sometimes said to be close to the Islamic Revolutionary Guard Corps, states that the U.S. military presence in the Persian Gulf (the naval presence at least) has been declining. The USS Theodore Roosevelt aircraft carrier group left the Gulf on March 27 and hasn’t been replaced. The Harry Truman is supposed to be on the way but it returned to Norfolk, instead.  The only major surface warship in the Gulf is the guided missile destroyer USS The Sullivans, though there are other vessels stationed in Bahrain. Fars reports that U.S. officials have not explained about their decision to decrease deployment in the Persian Gulf but observes that the drawdown of U.S. naval forces in the region appears contrary to the increase in harsh rhetoric from the U.S. administration.

U.S. General in Riyadh To Push Saudis on Yemen School Bus Bombing Investigation

Aug. 14 (EIRNS)—U.S. Secretary of Defense James Mattis told reporters traveling with him in Brazil on Aug. 12 that he had sent a three-star general to Riyadh to convince the Saudis that they need to start a real investigation into the Aug. 9 bombing of a school bus in Yemen’s Saada province that killed dozens of children. According to the Washington Post, the general, who has not been named, met with Saudi officials on Sunday. Lt. Cmdr. Rebecca Rebarich, a Pentagon spokeswoman, told the Post the general “adjusted his already scheduled visit to Saudi Arabia to discuss the incident with the Saudis and look into the situation.” She also said, “He pressed the Saudis to devote the resources and oversight required to do a thorough and complete investigation and release the results to the public.”

Riyadh continued to defend the raid as a “legitimate military action” intended to hit Houthi leaders even as the funerals for the victims were being held yesterday. The coalition said on Aug. 10 it would investigate the strike after UN Secretary-General Antonio Guterres condemned the attack and called for an independent probe, reports Reuters. A day later, however, the Saudi mission to the UN delivered a message to Guterres reiterating that the raid was “legitimate” and targetted Houthi leaders “responsible for recruiting and training young children.”

The death toll is now reported to be 52, of whom 40 are children. The head of the Houthis’ supreme revolutionary committee Mohammed Ali al-Houthi attended the funeral, and blamed the United States for “this ugly massacre of Yemeni children.” Anwar Gargash, the foreign minister of the U.A.E., which is the major Saudi partner in the war, wrote off the tragedy as part of the “ugly side” of war.

Project Democracy Networks Destabilizing Bolivia, Want President Evo Morales Out

Aug. 14 (EIRNS)—Networks associated with the Project Democracy apparatus for which the “New Paradigm” of global cooperation and economic development is anathema, are organizing to ensure that Bolivian President Evo Morales can’t run for a third term in next year’s elections, claiming he has trampled on democracy and is a serial violator of human rights. Elements within Bolivia’s armed forces have also joined this campaign, lying that Morales has fostered corruption and lack of professionalism in the military.

It would be more accurate to say that Morales’ alliance with Russia and China, and his firm commitment to the Belt and Road Initiative, is the real complaint. In his 12 years in government, Morales has overseen impressive economic growth, improvement in living standards and promotion of Bolivia’s scientific and technological advancement.

Now, he intends to run for a third term in the 2019 presidential elections, disregarding the February 2016 referendum called to determine whether he could amend the Constitution to run again. He was defeated very narrowly, thanks to a smear campaign financed by foreign NGOs and their media allies, and the nation’s Constitutional Court subsequently invalidated the results.

This is provoking outrage from “democracy” advocates, who promote regime change and coups against anyone deemed unacceptable to the City of London and Wall Street. The Inter-American Institute for Democracy (IID), whose leaders share the outlook of the London-spawned Atlas Foundation and Mont Pelerin Society, charges Morales with persecution and jailing of political opponents and has demanded the Inter-American Human Rights Commission investigate.

Former President “Tuto” Quiroga, who was soundly defeated by Morales in the 2005 presidential elections and who also hobnobs with the same Mont Pelerin/Atlas networks, is loudly warning that the Organization of American States (OAS) and its Human Rights Commission, as well as the Inter-American Court in Costa Rica, will soon issue a ruling denouncing Morales’s “tyranny,” and echoing the findings of the Venice Commission of the Council of Europe, also known as the European Commission of Democracy Through Law, Eju-TV reported Aug. 13. In a March 2018 report the Venice Commission referenced the February 2016 referendum and concluded that “reelection is not conceived of as a human right.”

New Sanctions Are Aimed against Astana Process for Peace in Syria, Suggests Lavrov

Aug. 14 (EIRNS)—In his joint press conference with Turkish Foreign Minister Mevlut Cavusoglu after their meetings today in Ankara, Russian Foreign Minister Sergey Lavrov pointed out that the latest round of U.S. economic sanctions affect Russia, Iran and Turkey, the three guarantors of the Astana process working towards a resolution of the Syrian war.

“We probably won’t see any direct linkage with the Syrian crisis in the statements made by the U.S. side when it declares sanctions against our countries,” said Lavrov, referring to Russia, Iran and Turkey, “but objectively, of course we feel the wish of the West, and first of all the U.S., but not only, to prevent the Astana process from achieving concrete results and present it as not quite successful.

“These attempts were seen earlier, and most likely they will continue.  But the fact that Turkey, Russia and Iran, having not always concurring, and sometimes far from concurring stances on this or that aspect of the Syrian crisis, have found wisdom and willingness to settle concrete problems, has reversed the situation in Syria,” Lavrov stated.

Netanyahu Joins Witch Hunt Against British Labour Leader Corbyn

Aug. 14 (EIRNS)—Israeli Prime Minister Benjamin Netanyahu tweeted a denunciation of Labour Party leader Jeremy Corbyn today, throwing his weight behind the outrageous slander campaign against Corbyn being orchestrated by the Tories and the Blairites in England, to stop Corbyn’s rapid rise to power, and his potential election as Prime Minister.

Netanyahu’s tweet: “The laying of a wreath by Jeremy Corbyn on the grave of the terrorist who perpetrated the Munich massacre and his comparison of Israel to the Nazis deserves unequivocal condemnation from everyone—left, right and everything in between.”

Corbyn responded: “Netanyahu’s claims about my actions and words are false. What deserves unequivocal condemnation is the killing of over 160 Palestinian protesters in Gaza by Israeli forces since March, including dozens of children.” Corbyn added in a second tweet that the Israel’s recently passed nation-state law “discriminates against Israel’s Palestinian minority.”

The newest scam against Corbyn came from a photo published by the Daily Mail tabloid on Aug. 10, showing Corbyn in 2014 standing next to a wreath with a group of Arabs. The claim is that the wreath honored Black September, the Palestinian terrorist group that carried out the 1972 attack against the Israeli Olympics team in Munich. Corbyn responded by saying he was at a wreath-laying “to some of those who were killed in Paris in 1992,” but that he was not involved in the ceremony. The 1992 assassination apparently refers to PLO security official Atef Bseiso, who was one of the PLO leaders declared by Israel to be responsible for the Black September terrorist attack. A Mossad team was then deployed around the world to assassinate the accused.

The Tory Home Secretary Sajid Javid even called on Corbyn to resign as opposition leader, saying in a tweet that “If this was the leader of any other major political party, he or she would be gone by now.”


Motorway Bridge Collapse in Italy Highlights Failing Infrastructure in the EU

Aug. 14 (EIRNS)—The collapse of a highway bridge in Genoa today, killing 35 as of this morning, has dramatically posed the issue of failing infrastructure and austerity policies in the EU. The Morandi Bridge, named after its architect, connected the end of the A7 highway from Milan with the beginning of the A10 from Genoa to Nice, France. The bridge was built in the 1960s and therefore was not very old, but its construction technique proved to be faulty, and it was estimated that maintenance costs would be more than the costs of constructing a new bridge.

The fault of the bridge consisted in the stays of the beamed bridge being constructed from prestressed concrete rather than the usual steel cables. Over the years, the increase in freight traffic added to the built-in instability of the bridge, so that a collapse was considered as highly probable soon. The bridge was monitored, but apparently that did not help.

The reason why a new bridge was not built is because: 1. The highway was privatized and the new owner, the Atlantia company belonging to the Benetton family, played down the danger; 2. The EU-induced austerity policy which has collapsed infrastructure spending in Italy; 3. Environmentalist opposition.

Especially grotesque is that the M5S, which now heads the Infrastructure Ministry, among others, opposed the construction of the new viaduct, by endorsing the Atlantia arguments that with opportune maintenance the Morandi bridge “can last a hundred more years.”

The M5S opposes large infrastructure, including whatever is essential to connect Genoa to the Belt and Road Initiative, and which is aimed at pulling heavy freight traffic off the roadways onto rail.

Derivatives Turn Europe’s Turkish Exposure into Wall Street Banks’ Exposure

Aug. 14 (EIRNS)—In a piece titled “The $4 Trillion Answer to Why Turkey Is Rattling Wall Street Banks and Insurers,” the Pam and Russ Martens duo of “Wall Street On Parade” remind Americans that the explosion of the derivatives bubble, which the Turkish crisis could trigger, would bring down the Wall Street banks and U.S. life insurers, not just the European banks holding Turkish debt. European and Wall Street banks are, after all, counterparties to each other’s trillions in derivatives. The authors cite the following warning contained in the 2016 annual report of the Office of Financial Research within the Treasury Department:

“U.S. global systemically important banks (G-SIBs) have more than $2 trillion in total exposures to Europe. Roughly half of those exposures are off-balance-sheet…. U.S. G-SIBs have sold more than $800 billion notional in credit derivatives referencing entities domiciled in the EU….

“At the end of 2015, U.S. life insurers’ derivatives exposure, as reported in statutory filings, totaled $2 trillion in notional value. This $2 trillion does not include derivative contracts held in affiliated reinsurers, non-insurance affiliates, and parent companies that do not have to file statutory statements. Details on these entities derivatives positions are not publicly available….

“According to statutory data on insurance company legal entities, nine large U.S. and European banks are counterparties to about 60% of U.S. life insurers’ $2 trillion in notional derivatives. These data show that despite central clearing, derivatives interconnectedness between the U.S. life insurance industry and banks remains substantial.”

The OFR also warned that no one has any data on the size of shadow banking markets, and therefore “the probability remains high that data deficiencies will again prevent risk managers and regulators from assessing risks before it is too late,” Wall Street on Parade wrote.


Beijing Forum: Reducing Poverty in Africa Requires the Belt and Road

Aug. 14 (EIRNS)—A three-day Africa-China Poverty Reduction and Development Conference began in Beijing today, one of the many task-oriented meetings being held preparatory to the summit of the Forum on China-Africa Cooperation (FOCAC) this September. Following today’s discussions, participants will visit the Experimental Zone in the Bijie region of Guizhou province in the southwest, where China’s poverty reduction program started. Bijie is now considered a model of the program, as its work towards total eradication of poverty in this once bitterly-poor farming region continues.

A CGTN story on the conference emphasized that Africans view poverty reduction and the Belt and Road as mutually necessary. CGTN interviewed one attendee, the Regional Administrative Secretary of Tanzania’s Morogoro Province, Clifford Tandari, who spoke of the necessity of building projects which can help expand Africa’s economy through trade with China. Tandari spoke eagerly of the benefits of the Bagamoya Port project and its accompanying Special Economic Zone in Tanzania as exemplary of how to connect Africa to the great Belt and Road transport corridor.

Introducing modern agriculture technology in Africa was another topic of discussion, CGTN reported. The report by China’s International Poverty Reduction Center that farmland in Africa expanded by nearly 3%, but production only increased by 1.5%, exemplifies that program. CGTN cited another attendee, Josefa Leonel Correia Sacko, the African Union’s Commissioner of Rural Economy and Agriculture, on how “transforming agriculture in Africa demands empowering the poor farmers with technology. Value addition to agricultural produce is also an element that needs urgent attention.”

This is the 133rd poverty reduction seminar China has held, involving 133 different countries and regions (including all 52 African nations), Liu Yongfu, Director of the State Council’s Office of Poverty Alleviation, reported to the opening session.

Tibet as Rail Hub for China-Nepal-India Development Corridors

Aug. 14 (EIRNS)—Plans are now being discussed to build multiple rail lines into Tibet from Sichuan, Yunnan, and Xinjiang, while also connecting Lhasa by rail to Nepal and on to India. There is already one rail connection into Tibet, from Qinghai to Lhasa, completed in 2006.

Global Times reports that Tibet is planning this extensive rail grid, writing: “When all of these railways are built, Tibet will become a pragmatic bridgehead for China’s opening-up toward South Asian countries.”

The daily continued: “China’s vision of a railway network on the Tibetan plateau will encourage exchanges between Tibet and other parts of the country. The railways will bring coal, oil and gas, as well as business and job opportunities, into Tibet. In recent years, the economy in Tibet has grown more quickly than the rest of China. The rail links will provide fresh impetus for Tibet’s economic take-off.”




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