EIR Daily Alert Service, MONDAY, SEPTEMBER 17, 2018

MONDAY, SEPTEMBER 17, 2018

Volume 5, Number 185

EIR Daily Alert Service

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

EDITORIAL

A Critical Week for World History

Sept. 16 (EIRNS)—With the U.S. midterm elections seven weeks away on Tuesday, the LaRouche Political Action Committee’s intervention into the elections with its “2018 Campaign To Win the Future,” is now most critical. If LaRouche PAC’s campaign succeeds, then the British-spawned threat to the Presidency can be thwarted and defeated, and key American political layers can be won over to LaRouche PAC’s program, so that it becomes U.S. policy under this President.  Then President Trump can approach the Presidents of China and Russia, and India’s Prime Minister, for an agreement to initiate talks on a New Bretton Woods system. But if that fails, a “Democratic”-controlled House will impeach the President, leading to chaos, and then probably to war.

Historically, midterm elections in the U.S. have been determined by turnout, rather than by public (or pubic) opinion, since turnout for midterm elections is usually only around 33%. These elections are not won by the side which is more numerous, but by the one which actually comes out to vote. Thus, LaRouche PAC’s campaign to inspire Americans to vote to defend the Presidency and ensure the United States joins the majority of humanity in building the future now taking shape around the New Silk Road, can prove decisive in securing the margin required for victory.

The forces coming together around this LaRouche movement campaign were seen in last week’s Manhattan Schiller Institute Sept. 11 concert and conference two days later. We recommend people see for themselves the seriousness of the discussion which took place at that conference on how to win the battle within the United States, for the benefit of all humanity. The full conference is now available on the LaRouche PAC and Schiller Institute websites.

As the U.S. election approaches, it is reported that President Donald Trump is preparing to declassify key documents which show that “Russiagate” is a hoax, and this week the House Intelligence Committee will release about 70 transcripts of witness testimony to its hearings on the same, Chairman Devin Nunes announced today.

We still have the spoiler-factor to contend with, which is that the British may still launch a false-flag chemical attack in Syria to provoke a U.S. attack as part of their campaign to destroy President Trump. That exposure must get out—calls from Americans must keep coming into the White House.

This week could be the turning-point in the whole, long, battle, and action must reflect that.

ENDING THE STRATEGIC WAR DANGER

Putin Praises Trump’s ‘Courage and Innovative Approach’ on North Korea

Sept. 15 (EIRNS)—As part of a Q&A session after his keynote address to the Vladivostok Eastern Economic Forum on Sept. 12, Russian President Vladimir Putin was asked about North Korea.

“Indeed, President Trump has shown, as he said, an innovative approach to dealing with North Korea. I agree, this actually shows a certain amount of courage and an innovative approach, all right. But after all, North Korea was promised security guarantees in exchange for its denuclearization efforts…. What guarantees could be offered [to North Korea]? International guarantees. We have the format of six-party talks. And the international community can give such guarantees, including those secured by the presence of nuclear powers in these agreements. China and Russia are parties to these talks. If North Korea is satisfied with U.S. guarantees alone, that is also fine with us, but it is probably unlikely to happen, we have to be realistic. It seems to me that international guarantees would be more relevant in this case, and we can talk about it…. I spoke about President Trump’s actions without any skepticism or irony. I really think it is an innovative approach, and that he showed courage, political courage.”

Putin also focused on the role of joint development of the region. “Of course, I cannot fail but to highlight once again trilateral projects in infrastructure, energy and other spheres involving Russia, the Republic of Korea, and the Democratic People’s Republic of Korea. Normalizing the situation around the Korean Peninsula is a key prerequisite for achieving progress on these projects. All in all, in order to ensure steady development, we need stability, peace and security in the Asia-Pacific Region. It is essential that we prevent new conflicts from emerging and resolve old ones in the spirit of dialogue.”

Zakharova Warns of Global Danger from U.S. Policy in Syria

Sept. 15 (EIRNS)—Russian Foreign Ministry spokeswoman Maria Zakharova delivered a sharply focussed statement on the situation in and around Idlib province, Syria during her regular briefing on Sept. 13, beginning with what’s happening on the ground, but ending with the global threat presented by the failure so far for the U.S. to change policy towards Syria. She reported that the terrorist groups occupying the province are centralizing their command and control, preparing for a long-term defensive campaign, “getting rid” of anyone inclined to accept reconciliation with the government, and considering staging offensive operations against Hama and Aleppo. The Russian military, she said, is also reporting a rising number of shelling attacks by the terrorists against communities in areas controlled by the government. And, the terrorists are also still at work preparing their chemical weapons provocation.

“At the same time, the so-called international coalition led by the U.S. has started military exercises in eastern Syria using the Al Tanf military base, and let me remind you that it has no right to be present in Syria,” Zakharova said. “The purpose of these exercises is to practice moving and deploying rapid response forces, as well as attacking terrorists from the air as well as from the ground.”

On the international side, Zakharova accused the U.S. of using a broad range of media tools “in what seems to be a bid to prepare the international public opinion to a new aggression against Syria,” which she called a matter of serious concern. “The true purpose of these actions can be hardly concealed, consisting of diverting Syria from the path toward settlement and stabilization that has prevailed over the past 12 or 18 months,” she continued. “We view these actions by Washington as an attempt to artificially prolong hostilities and the fratricidal bloodshed in Syria by saving terrorists affiliated to al-Qaeda from a definitive defeat. What they want is to justify their illegal military presence in Syria. It does not matter to them that there will be more bloodshed and suffering from millions of Syrians. Those guided by this vision have no misgivings when it comes to paying such a high price for aligning the outcome of the conflict that has been going on in Syria for eight years with their geopolitical goals, so that they could claim their victory in the protracted and epic Syrian conflict which has brought suffering to civilians.”

From here, Zakharova went on to further accuse the U.S. of using Syria as a testing ground for “a new mechanism for ensuring its global dominance,” one based on using military means to “solve” any problem around the world. “This policy undermines the existing world order based on the UN Charter. It is clearly aggressive. Russia strongly believes that an approach of this kind can put the world on the verge of a precipice and presents a dangerous challenge that is not limited to Syria,” she concluded.

“We need to show our resolve and firmness in countering this vision by combining the efforts of all right-minded members of the international community.”

Pakistan May Allow India and Afghanistan To Trade Over Land Via Its Territory

Sept. 16 (EIRNS)—Pakistan had approached Afghanistan earlier this year and indicated its willingness to discuss resumption of trade between Afghanistan and India via Pakistan through the land route, U.S. Ambassador to Afghanistan John Bass told the Indian financial daily Economic Times in an interview published today. This is a major positive shift in Pakistan’s attitude towards India vis-à-vis Afghanistan, and when implemented, Pakistan’s gesture will vastly improve India-Pakistan relations.

Bass said the Pakistani government had approached Afghanistan after looking at two developments. “We have seen an increase in exports from Afghanistan to India (through air cargo). It is obviously one part of the export strategy, but it is an important part, and I think part of the reason why, in addition to the economic relationship between Afghanistan and Uzbekistan, a couple of months ago, for the first time, the Pakistani government expressed a willingness to start talking with its Afghan counterparts for parameters to enable trade between India and Afghanistan through Pakistan,” he said.

Bass did not mention what role the United States may have played in bringing about this positive environment. However, in early September, Secretary of State Mike Pompeo had been in Pakistan meeting all its top leaders, including the Pakistani Army chief.

Ethiopian and Eritrean Leaders in Jeddah, Saudi Arabia To Cement Their Peace Treaty

Sept. 16 (EIRNS)—In Jeddah, Saudi Arabia, in the presence of UN Secretary-General Antonio Guterres and Saudi King Salman bin Abdulaziz Al Saud, Ethiopian Prime Minister Abiy Ahmed and Eritrean President Isaias Afwerki signed an accord today to cement their recently established peace along the borders, the Washington Postreports.

Abiy and Afwerki had signed a “Joint Declaration of Peace and Friendship” on July 9, ending 20 years of enmity, and formally restoring diplomatic relations between Ethiopia and Eritrea. “This is a further agreement helping to cement the positive relations between them,” UN deputy spokesman Farhan Haq said Sept. 14.

China’s policies, seen most recently in the Beijing Forum on China-Africa Cooperation (FOCAC), have facilitated the progressive coming-together of all the countries of the Horn of Africa.

Landlocked Ethiopia fought a bloody war with Eritrea from 1998 to 2000 over a border dispute, and that conflict had ended in an uneasy peace with Eritrea, which earlier fought a decades-long war of independence from Ethiopia. The signing ceremony today in Saudi Arabia also highlights the growing importance Arab Gulf nations put on East Africa, AP stated.

COLLAPSING WESTERN FINANCIAL SYSTEM

Economist Sapelli: Lesson of Lehman Brothers Is To Get Rid of Universal Banks and Derivatives

Sept. 15 (EIRNS)—In an interview posted yesterday with Euronews, Italian economist Giulio Sapelli warns that the financial system is today more overblown than in 2008 and that the lesson from Lehman Brothers is that bank separation must be reintroduced. “The lesson to be drawn today is that self-regulation and good governance in the company as well as in the state is the rule to avoid crises, together with the separation between investment and commercial banks, with the termination of universal banks. Period,” Sapelli said.

The so-called subprime crisis “never ended,” he asserted. “Today we have several trillions of derivatives. The capitalization is dozens time higher than the world GDP, and therefore collateralization, what [former Bank of England Governor] Sir Mervyn King … characterized as a marvelous alchemy by which banks—not central banks—but any bank or financial operator, create money, has never ended. But what kind of money is it?

“It is the over-the-counter, is the derivative, is the instrument of mass destruction, which makes it possible to write a debt as an asset because you sell the debt through collateralization and financial leverage.

“Therefore it is much worse today than when Lehman Brothers failed, including because I do not think that a massive central bank intervention could avoid, as in the past, a collapse. Because governments had to intervene. And it seems to me that all states are enormously weak, especially when the U.S.A. is so divided.

“What would happen in such a state, so split among the deep state, the President, the old pro-financial oligarchy, and the Republican side, which has destroyed America: the Clintons, the Obamas, and the Bushes? It would be the end.”

So-called post-2008 regulations and QE have worsened the problem.

“The only solution is an agreement to eliminate universal banks and derivatives. But this is a political choice and I think nobody … or better all political parties in one way or another are influenced by the soft power or sharp power of the large investment banks. Just look where the prime ministers end up, throughout the world: They end up getting a job there.

“…Even a not extraordinarily talented person, a former Portuguese Maoist, quite a worrisome figure, who spoke only some strange languages, like Barroso, what did he do after he left as European Commissioner? He goes to work for Goldman Sachs. Where did Romano Prodi, Blair, Clinton end up?”

China, Russia, Others Discuss Possible New Global Crash, Move To Trade in National Currencies

Sept. 15 (EIRNS)—A Sept. 14 op-ed in China Daily by Zhang Monan, a senior fellow and professor at China Center for International Economic Exchanges, argues that the “structural problems” that led to the 2008 global financial crisis have not been eliminated, and that as a result the world is “moving toward a multi-currency system.” He takes note of the fact that “the Bretton Woods system itself collapsed after the U.S. terminated convertibility of the dollar to gold in 1971, ushering in the era of free-floating currencies and making the dollar a reserve currency…. [Now] there is also widespread concern that the United States might use the reserve currency status of the dollar to impose new sanctions on some countries.”

A Business article on Sept. 13 in Global Times also sounds the alarm about a potential new financial crisis. Rising debt in the West is “fueling fears of a new crisis that could plunge the world economy into recession once again…. Any external factors, including a dollar crisis, are likely to be a turning point for the markets. The U.S. financial system poses one of the biggest risks to global financial stability, and emerging economies should remain vigilant…. The risk of a global recession is real, and countries need to take immediate action to strengthen their defenses,” writes Hu Weijia.

Both articles point to a very real problem that is clearly under discussion at the highest levels of China, Russia and other countries, but neither article presents anything resembling an actual global solution—specifically Lyndon LaRouche’s detailed proposal for a New Bretton Woods bankruptcy reorganization of the current system—limiting themselves instead to reporting on the various defensive policies (such as trading in national currencies) that are under consideration.

Putin Raised Transactions in National Currencies at the Vladivostok EEF Meeting

Sept. 15 (EIRNS)—After his keynote address to the plenary session of the Vladivostok Eastern Economic Forum on Sept. 12, Russian President Vladimir Putin took questions from moderator Sergei Brilev, who asked about “a serious matter, transactions in national currencies.” Putin’s response, posted to the Kremlin website, was quite carefully constructed, which began by changing the subject to infrastructure:

“Allow me to say a few words about infrastructure. It is a very important matter. First, we fully support President Xi Jinping’s idea regarding linking the infrastructure development ideas, the One Belt, One Road cooperation and our integration within the EAEU [Eurasian Economic Union]. Here we are also linking the China-proposed One Belt, One Road initiative and our EAEU efforts, this time in e-commerce. As concerns the infrastructure, it is just as important to us. I have already spoken about this many times and mentioned today the development of the Trans-Siberian Railway Network and the Baikal-Amur Mainline.”

Only then did Putin turn to the question posed: “Settlement in national currencies. Of course, all experts understand that we must proceed step by step. And this is how we will proceed. Today the ruble and the yuan are traded at the Moscow Exchange. Some goods are more often traded in U.S. dollars…. For example, the ruble is being actively used to settle with the CIS [Commonwealth of Independent States] and EAEU countries…. Given the situation we have to face when settling in U.S. dollars, more and more countries want to trade in national currencies. There are limitations…. But developing bilateral trade in national currencies is also right. It is right from the position of sustainability of global finances and the global economy. We will proceed step by step.”

Brilev then pressed the issue: “Does the Central Bank of Russia have a political task to sign agreements with the corresponding central banks in other countries to transfer trade to national currencies?” To which Putin responded: “This concerns the settlement day and the exchange rate: how this issue should be resolved, first at the level of central banks. These mechanisms are being tested. Are there risks? Yes, there are risks everywhere. Are there no risks with the U.S. dollars? The United States national debt is $20 trillion. This entire burden falls on the U.S. dollar, by the way. What will happen next? Nobody knows; there is no answer. There are risks everywhere and they must be minimized. What should we do to minimize them? We should diversify our payments and activities. For example, we diversify our foreign-exchange reserves, as we do the national debt of the Russian Federation, which is denominated not only in U.S. dollars but in other currencies as well. All this is important. I believe it provides for the sustainability of our financial system and the entire global financial system, as well.”

THE NEW GLOBAL ECONOMIC ORDER

More Ibero-American Leaders Travel to Beijing To Sign On to Belt and Road Initiative

Sept. 15 (EIRNS)—The President of Venezuela, the Vice President of Uruguay, and the Foreign Minister of Chile were all in Beijing at the end of this week to sign agreements with China on the Belt and Road Initiative. More than the domestic situations in each country, what this reflects is the sea-change underway involving the entire Ibero-American and Caribbean region’s strategic reorientation towards the world’s #1 economy—China—much as Africa has done. It is the same process that led tiny El Salvador, the Dominican Republic, and Panama to each break with Taiwan and establish diplomatic relations with China over the last year, standing up to withering attacks and threats from the State Department and Wall Street, the standard-bearers of a bankrupt and dying world order.

The embattled (and incompetent) Venezuelan President Nicolas Maduro held talks with President Xi Jinping on Sept. 14, on his tenth visit to China, and signed an MOU on the Belt and Road Initiative. “China always views and develops Sino-Venezuelan ties from a strategic and long-term perspective,” Xi stated, according to Xinhua. Xi called on the two sides “to take the signing of a memorandum of understanding (MOU) on building the Belt and Road as an opportunity to forge ahead on synergy and implementation of bilateral cooperation consensus, enhance the independent development capability of Venezuela, and promote the sustainable development of cooperation between the two countries.” Maduro replied that “Venezuela is willing to actively participate in the construction of the Belt and Road, explore effective financing methods, strengthen cooperation in such areas as energy and production capacity, and expand people-to-people exchanges.” Xinhua added that “Maduro said he highly agrees with Xi’s concept of advocating to build a community with a shared future for humanity.”

Uruguayan Vice President Lucia Topolansky, who is also president of the bicameral General Assembly and president of the Senate, met with Li Zhanshu, the Chairman of the Standing Committee of China’s National People’s Congress, on Sept. 14, who observed that Uruguay was the first country in Mercosur (Southern Common Market) “to sign a Memorandum of Understanding with China to jointly promote the construction of the Belt and Road Initiative,” according to Xinhua. Topolansky replied that “Uruguay was willing to actively participate in the Belt and Road construction and promote bilateral ties.”

Also on Sept. 14, State Councillor and Foreign Minister Wang Yi and Vice President Wang Qishan met with Chile’s Foreign Minister Roberto Amparo, with Wang Qishan stating that China is ready to have closer ties with Chile, “deepen political mutual trust, strengthen synergy of strategies, and jointly construct the Belt and Road, so as to achieve win-win cooperation.” Amparo said Chile “admires China’s development achievements, expressing the hope to enhance Chile’s cooperation with China, and make continuous achievements in the Belt and Road construction and people-to-people exchanges.”

Russian Finance Minister and U.S. Energy Secretary Share Areas of Agreement

Sept. 15 (EIRNS)—The official Sept. 13 visit to Moscow of U.S. Energy Secretary Rick Perry had some positive results. The spokesman for Russian First Deputy Prime Minister and Finance Minister Anton Siluanov said the meeting with Perry came to an agreement to continue the Russian-U.S. energy dialogue at both the political and business level. “Anton Siluanov and Rick Perry noted the need to continue dialogue between Russia and the United States at the level of state and businessmen, despite the current difficult period in the two states’ relations,” Siluanov’s spokesman said.

Siluanov also said that possible tightening of U.S. sanctions against Russia was not on the agenda of his meeting with Perry. “No, we did not touch upon the issue of sanctions,” he responded to reporters who asked.

Perry also met Russian Energy Minister Alexander Novak, after which Novak said that Russia and the United States may establish a joint investment fund to support energy efficiency and new technologies, with the possible participation of Russia’s Direct Investment Fund.

Following the meeting Perry tweeted: “Just concluded a productive meeting with Russian Energy Minister Alexander Novak. I look forward to continuing our dialogue within the current constraints of our bilateral relationship.”

In a statement released after the talks, the U.S. Department of Energy said the two officials discussed “ways in which America and Russia, two of the world’s top producers of natural gas and leading producers of oil can work together to ensure world energy market stability, transparency, and sustainability.”

U.S. POLITICAL AND ECONOMIC

Kesha Rogers’ Opponent Al Green Insists To Impeach President Trump, Although He Broke No Laws

Sept. 15 (EIRNS)—At a panel session titled “Impeachment: A Necessary Remedy for Bigotry in Policy,” at the Congressional Black Caucus Foundation’s Annual Legislative Conference, Rep. Al Green (D-TX) not only insisted President Donald Trump be impeached, but argued he should be impeached whether or not he had broken any laws, the Daily Signal reported on Sept. 13. Lifting his leg to urinate on the Constitution, Green pronounced: “The people who say, ‘What law did he break? What rule did he break?’ they are perpetrating upon you a belief that is totally inaccurate.”

Green’s approach to Constitutional law was seconded—and then some—by Allan Lichtman, professor of history at American University and another panelist, who stated: “Impeachment is the appropriate remedy for a runaway, rogue president who endangers our national security, our liberties, our freedom, our great traditions like an independent judiciary, a free press, tolerance among different groups in the country. And don’t get hung up on whether it is a technically indictable crime under the statute law.”

Those Americans still “hung up” on their Constitution should probably be voting for Green’s Independent opponent, who has the endorsement of LaRouche PAC, Kesha Rogers.

SCIENCE AND INFRASTRUCTURE

Algeria-China To Join Together Building Phosphate Plant, Producing World-Class Fertilizer

Sept. 16 (EIRNS)— Algeria will cooperate with China to build a phosphate plant worth $6 billion in Algeria’s northeast, Algerian Minister for Industry and Mines Youcef Yousfi said, according to Xinhua. The plant, when built, will enable Algeria to export $2 billion worth of fertilizers annually, becoming one of the largest fertilizer exporters in the world.

The project will be spread over four areas of Algeria: the eastern province of Tebessa with an investment budget of $1.2 billion; the eastern province of Souk Ahras with $2.2 billion; the northeastern province of Skikda with $2.5 billion; and the port of the northeastern province of Annaba with $200 million. Algeria has rich high-quality phosphate.

The project will be completed in partnership between two Algerian companies—energy giant Sonatrach and state-run fertilizer manufacturer, Semidal-Manal—and two Chinese companies, CITIC and Wengfu Group, Yousfi said.

OTHER

The Swedish Election Leaves Country Ungovernable

Sept. 14 (EIRNS)—The outcome of the Sept. 9 general election in Sweden leaves another European country in an unstable situation, and also without any discussion whatsoever of any solution to the breakdown of the economy and the general welfare. In the run-up to the election, much media attention focussed on the right-wing Swedish Democrats who managed to be in the center of discussion everywhere. The Red-Green coalition (the Social Democrats, Greens and Left Party) won 144 seats in the parliament; the Alliance (the Moderates, the Center Party, the Liberals, and the Christian Democrats) won 143 seats; and the Sweden Democrats won 62 seats. This leaves the parliament with two blocs with nearly equal mandates, but without an absolute majority, and in the middle are the Sweden Democrats. After the election, all the parties said they would not work with the Sweden Democrats.

The question remains how the new government will actually be formed. The wheeling and dealing among the parties has just started. Under Sweden’s peculiar procedure for forming a government, the Speaker of Parliament, not the head of state, proposes who will be prime minister. The current Speaker of Parliament, however, must automatically resign when the new Parliament meets on Sept. 24, to elect a Speaker and a Vice Speaker. Even that vote may be difficult because of the Speaker’s influence on the election of prime minister, and Sweden’s “negative parliamentary system.” The Sweden Democrats have promised to vote against every government that will not give them political influence. No solution in sight.

The election demonstrated that the party system is not functioning and the voters have lost all trust in the establishment. The burning of over 100 cars in August, and the daily shooting and killings in some areas of Malmo, Gothenburg, and Stockholm have made the economic crisis and breakdown of the system obvious, but in many cases foreigners became the scapegoats. In reality, it is the hostile attitude of the government and the political institutions against China and the BRICS, the doomsday syndrome of the old system, which is sinking the country.

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