EIR Daily Alert Service, TUESDAY, DECEMBER 18, 2018


Volume 5, Number 251

EIR Daily Alert Service

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



London, Wall Street Can’t Survive to 2020, So They Attack a Chinese Leadership Thinking Decades Ahead

Dec. 17 (EIRNS)—If we are to succeed in redirecting President Donald Trump from his current obliviousness to the financial crash coming at the United States, the outrageous attacks on China, in particular, by neo-con members of his administration and clueless European “leaders” must be shut up.

What is causing these figures, like National Security Advisor John Bolton, to rush forward like Alcibiades passionately seeking a new “Thucydides Trap,” is that same financial crash, coming to take down the London and Wall Street megabanks and the “neo-liberal” order along with them. They don’t share President Trump’s belief that strong economic progress and great-power cooperation are possible; but only the pessimism of the Wall Street and City of London elite facing yet another, and bigger, collapse. And the people of more and more Western nations have revolted against their neo-liberal order since the Brexit referendum in mid-2016.

Nothing could prove this extreme “no-future” pessimism more completely, than the vicious “psych-attack,” entitled “The World According to Xi Jinping,” a full-length program of the French and German governments’ joint public TV channel, ARTE. This babbling “psychoanalysis at a distance” to slander a leader whose proposals for cooperative economic progress have won the respect of scores of nations, is a new low in behavior which will be suicidal for Western nations if tolerated.

President Xi, especially in his diplomacy in bringing the Belt and Road Initiative of great projects into the development of Africa, and the gradual eradication of rural poverty there, is clearly thinking ahead to the potential human future of 2050 and beyond. The more and more shrill attacks on Xi and the New Silk Road, come as U.S. and European debt markets are freezing, stock markets are plunging, real estate markets are shrinking, European economic growth is once again negative.

The trans-Atlantic banks’ “everything bubble” will crash very soon; thus their attitude toward China, and Russia. President Trump still believes he can potentially cooperate with those great powers, both for peace and for rapid economic development, and believes that humanity’s technological advance is not under the boot of “climate change.”

But that takes a long-range vision of human progress which the President hasn’t yet developed, or he wouldn’t be letting financial calamity come at the United States, unaware and unprepared.

It takes, as Schiller Institute President Helga Zepp-LaRouche emphasized today, the full 50-year vision of human progress which Lyndon LaRouche has described in his books, such as Earth’s Next Fifty Years. And it requires immediate steps, like the re-instatement of the Glass-Steagall Act to wall off productive banking and economy from London’s and Wall Street’s crash.

An idea of that vision would enable Trump to put down the new Cold Warriors’ attack on him, and work with Xi, Putin, and Modi of India to launch a new and survivable monetary order, a New Bretton Woods.


Financial Collapse Stalks Unprepared President

Dec. 17 (EIRNS)—The Federal Reserve Federal Open Market Committee (FOMC) meets this week, and President Donald Trump is trying to stop a rate increase; but his Twitter message Monday morning showed how deep is his misunderstanding of the situation of great financial danger the nation faces, or its cause. The President tweeted, “It is incredible that with a very strong dollar and virtually no inflation, the outside world blowing up around us, Paris is burning and China way down, the Fed is even considering yet another interest rate hike. Take the Victory!”

Credit markets, stock markets, real estate markets, industrial production growth continued to fall as he wrote, and new initiatives with other nations for infrastructure projects and technological breakthroughs were urgently needed to create real economic value and higher productivity.

Sunday’s Financial Times carried a report of the first real breakdowns in the corporate debt markets. As re-reported by Zero Hedge, the Financial Times “reported that U.S. credit markets have ‘ground to a halt’…. Things are even worse in the bond market, where not a single company has been able to borrow money through the $1.2 trillion U.S. high-yield corporate bond market this month. If that freeze continues until the end of the month, it would be the first month since November 2008 that not a single high-yield bond priced in the market.”

Zero Hedge additionally reported that in this frozen condition, six leveraged-loan proffers and at least two junk-bond offerings had had to be withdrawn and “eaten” by the investment banks trying to market them, which are taking losses as a result. This phenomenon was the early-2007 harbinger of the coming failures of Bear Stearns and then Lehman.

The Bank for International Settlements (BIS) published a Dec. 10 comment by Head of the BIS Monetary and Economic Department Claudio Borio, warning that the derivatives clearinghouses set up by major banks after the 2008 crisis, known as CCPs or central counterparties, were supposed to minimize derivatives risk, have themselves become concentrations of risk and potential detonators of an explosion in derivatives markets, including that threatened by a “hard Brexit.” Daily Telegraph International Business Editor Ambrose Evans-Pritchard, writing in the Telegraph Dec. 16, headlined this warning: “BIS Fears Financial Seizure at the Heart of the World’s Clearing System.” He wrote, citing the BIS Quarterly Report, “The pillars of the global financial system are fundamentally unstable and could lead to a frightening chain-reaction in the next crisis, the world’s top watchdog has warned.

“Giant ‘central counterparties’ (CCPs) that clear much of the $540 trillion (£428 trillion) nexus of derivatives are themselves vulnerable to failure in times of extreme stress…. The Bank for International Settlements said in its quarterly report that the CCPs could cause ‘a destabilizing feedback loop, amplifying stress.’ ”


Belt and Road Can Help Ibero-America and Caribbean Industrialize

Dec. 17 (EIRNS)—In an interview in Beijing with Xinhua published Dec. 16, Alicia Barcena, executive director of the UN’s Economic Commission on Latin America and the Caribbean (ECLAC), offered fulsome praise for China’s development since the launching of its reform and economic opening 40 years ago, and expressed the hope that the Belt and Road Initiative (BRI) will play a key role in assisting Ibero-America’s industrialization.

Ibero-American’s industrial revival “is a great challenge,” she said, but emphasized that it is Chinese investment “that is invited to become part of that process. That will aid us to do what China did 40 years ago, which was to modify its productive structure.”

She offered an example of how this could happen by pointing to the example of the vast lithium reserves existing in Chile and Bolivia. Rather than just export that mineral, she asked, why not first “establish an industrial platform in the region … to produce batteries or electric cars? Chinese investment can help to add value to lithium in Latin America.”

Barcena underscored that the BRI “is fundamental,” and recalled that last January, Chinese Foreign Minister Wang Yi had invited the nations of the region to join this global development program, at the China-CELAC Forum summit held in Santiago, Chile. Now, she said, more than 10 of the region’s countries have joined. Barcena praised China’s advocacy of multilateralism and its vision “to share its technological advances with developing nations, which for us is fantastic.” At a time of great trade and technological tensions, “China’s becoming closer to many Latin American nations is very relevant.”


Intelligence Chair Rep. Devin Nunes Insists That Russiagate Documents Must Be Declassified

Dec. 17 (EIRNS)—With mounting evidence that the FBI and Justice Department will stop at no level of evidence destruction and concealment to hide the British intelligence hand guiding “Russiagate” against President Donald Trump, Rep. Devin Nunes made an urgent call for declassification Dec. 16. Nunes, outgoing Chair of the House Intelligence Committee, said on Fox News that, since President Trump has not moved to declassify these documents, the American public remains at the mercy of “swamp creatures” in intelligence positions who justify total secrecy—including tactical lying to Congress—on “national security” grounds. He proposed creation of a Transparency Office to handle declassification of documents.

“Our investigation is essentially over. We have everything that we need. What we’re lacking now is that we’re lacking the declassification by the President,” said Nunes, of the Intelligence Committee investigation into the Justice Department and the FBI’s handling of Russiagate. “For various reasons, the President or his staff doesn’t want to do it. Therefore, I think it’s important, if the President doesn’t want his hands on it, we have to have somebody, some office, that’s going to look at all of these issues and all of these documents that need to be declassified. I’m going be working with my colleagues to … send some example over to the President, of a transparency type of office, so that the Congress, the American people, others can put in requests of documents or issues that they want declassified. That way the President doesn’t have to take this full burden on, and the Congress has somewhere where we can go to try to avoid the swamp creatures from getting involved and ensuring that the American public is kept in the dark.”

Lavrov Makes Case for U.S. and Russian Intelligence Agencies To Maintain Regular Contact

Dec. 17 (EIRNS)—In an interview with Komsomolskaya Pravda radio program today, Russia’s Foreign Minister Sergey Lavrov said that despite all the problems between the U.S. and Russia, Moscow has never rejected professional dialogue with Washington in areas of common interest, in which “partners are ready to discuss the existing common threats and problems honestly and on an equitable basis.”

As TASS reported, Lavrov confirmed that the two nations’ intelligence agencies have maintained contacts. “A round of negotiations on fighting terrorism has been held after a long break,” he said, and also described how in a number of other areas, such as the Syrian situation, North Korean denuclearization, and Afghanistan peace, “we have contacts, which do not always reveal coincidences, but which are fairly regular.”

In the interview, Lavrov also recalled that Donald Trump, during his 2016 presidential campaign, had said he hoped to have better relations with Russia. He emphasized, “However, of course, the United States see us, and China as well, by the way, as competitors, regardless of who is supporting friendly relations with Russia. The Russophobic campaign has brought nothing to Washington, and in recent weeks, U.S. propagandists have actively embarked on China, making it the main hacker, who allegedly undermines the foundations of American society.”

The Foreign Minister concluded: “It is unfortunate when the interests of the international community, global strategic stability and international security fall victim to domestic political strife. But we will be ready for dialogue even in these conditions.”


Integrity Initiative’s Donnelly Urged Ukrainian Military Mobilization in 2014

Dec. 17 (EIRNS)—On Friday, Dec. 14, Anonymous hackers released documents revealing that, in the days just prior to the Crimea’s reunification with Russia, Institute for Statecraft director Chris Donnelly, founder of Integrity Initiative, urged escalation of the situation, including provocative military actions.

As revealed in Sputnik, Donnelly (who, they note, is “a special advisor to the House of Commons Defense Committee”) lays out six options, in an e-mail titled “Military measures,” starting with “[setting] up a cordon sanitaire across the isthmus of Crimea [the eastern end leading toward Russia] with troops and mines,” and “[mining] the Sevastopol harbor/bay” on the west side of the island. Donnelly further urges launching whatever “air force” they can, and activating, “all their air defenses.” Indicating his close knowledge of Ukraine’s defenses, Donnelly’s fourth point reads, “Ukraine used to have some seriously important weapons, such as a big microwave anti-satellite weapon. If they still have this, they should use it.” The Ukrainian government “needs a Strategic communication campaign,” he adds, “Without it, what have people to fight for?”

Other documents reveal that, two years later, in July 2016, the Institute for Statecraft hosted a unit of “Ukrainian Reserve Officers,” who, Sputnik claims, were “from the Ukrainian special services” to the U.K.—fully paying for their expenses—in order to “counter Russian disinformation about the conflict with Ukraine.”

In their release, Anonymous cautioned the Brits to carry out a serious investigation of the Integrity Initiative, threatening to release more documents, otherwise.

“This is only a part of the documents that we have on Christopher Donnelly. If the investigation into the Integrity Initiatives illegal activity in the U.K. turns out to be nothing more than a farce, we will publish more documents proving close connections between Donnelly and U.K. secret services which he often employs to mislead MPs and bring his agents to meetings of various committees in the House of Commons.”


How Soon Will Humans Be Back on the Moon? U.S. Official Says China Will Be First

Dec. 17 (EIRNS)—Undersecretary of Defense for Science and Technology Michael Griffin, a former NASA Administrator, is quoted forecasting that China has the ability to be first to restore the human presence on the Moon, in the website Ars Technica.

The Dec. 10 article, “Here’s Why China’s Launch to the Moon’s Far Side Is a Big Deal,” briefly covers the implications for space technology and science of the first landing on the far side when China’s Chang’e-4 comes down softly in early January. These aspects were discussed in depth on LaRouchePAC’s “Fireside Chat” by science team member Megan Beets on Dec. 13.

Griffin, according to Ars Technica, said at a recent National Space Council Users Advisory Group meeting, that China could “pretty easily” land taikonauts on the Moon within six to eight years with its Long March 5 rocket if its space leadership made such a decision. This, in Griffin’s view, would anticipate America’s return to the Moon with its increasingly commercial company-oriented approach.

“They [China] never seem to be in a rush. They seem to be playing the long game,” Griffin is quoted. “I’m not saying they will be on the Moon in six to eight years, but if they wanted to be, they could.”


Frenzied Anglophile Attacks on Nord Stream 2 Target Russia, Germany

Dec. 17 (EIRNS)—The Anglo-American establishment has gone into a flight-forward mode in recent weeks against the Nord Stream 2 gas pipeline project to bring natural gas from Russia to the EU, alleging that the project is a Russian plot to divide Europe and establish Russian energy dominance over it, to the detriment of Western “allies.” Russia’s Gazprom has partnered with five European energy firms in Nord Stream 2: Uniper and Wintershall (Germany), OMV (Austria), Engie (France), and Anglo-Dutch Shell.

According to the geopolitical script, Nord Stream 2 is also a threat to Ukraine’s security and economic wellbeing. Practically every statement issued by these groupings on the matter takes pains to reference “Russian aggression” in the Kerch Strait—when, on Nov. 25, three Ukrainian naval vessels violated Russian territorial waters—as justification for getting the project cancelled.

On Dec. 11, after the U.S. House of Representatives had passed a non-binding resolution attacking Nord Stream 2 and demanding that sanctions be applied, the European Parliament passed its own non-binding resolution, calling for Nord Stream 2 to be cancelled altogether. The European Parliament resolution was passed following the presentation of a report on implementing the EU-Ukraine Association agreement.

The U.S. State Department has been hyperactive in this regard. Assistant Secretary of State for the Bureau of Energy Resources Francis Fannon toured Europe a week ago, railing against Nord Stream 2 and Russia, threatening sanctions against firms that participate in the project. On Dec. 15, State Department spokesman Robert Palladino welcomed the Euro Parliament resolution, as well as the Dec. 13-14 European Council summit decision to extend economic sanctions against Russia for another six months. Palladino called on Germany, the European terminus of the pipeline, to “heed the concerns of the many neighbors whose security will be damaged by this pipeline.” Today, the Wall Street Journal published an opinion piece by Richard Grenell, the neo-con U.S. Ambassador to Germany, who charges that Nord Stream 2 will “open the door to increased aggression against Kiev.” Grenell demands that Germany “join the chorus of nations that view Gazprom’s Nord Stream 2 pipeline project … [as] an affront to Europe’s energy and national security goals.”

Not to be outdone, Agnia Grigas of the Anglophile and NATO-loving Atlantic Council Eurasia Center, claimed in a Dec. 16 column for the Atlantic Council that opposition to Nord Stream is building “on both sides of the Atlantic,” pointing to “hardening of Brussels’ stance” against the project. She welcomes demands being made on President Donald Trump to act more aggressively to stop it, as well as “other forms” of increasing pressure on Moscow.

French Intelligence Can Find No Evidence of Russian Involvement in Yellow Vest Protests

Dec. 17 (EIRNS)—An unnamed source in French intelligence cited by the weekly Journal du Dimanche said that there was no evidence of Russia’s involvement in the Yellow Vests protests.

“As of today, no evidence of their [Russia’s] involvement in the movement [of Yellow Vests] has been found,” the source said, who also stated that these are only interim results of the probe.

While the source was also quoted as saying it’s certain that Russia could support opposition forces and nationalists in the elections to the European Parliament due to be held in May, there is no evidence to substantiate allegations that the Russian Federation has or plans to do so.

The Russophobic allegations were made by France’s Foreign Minister Jean-Yves Le Drian, who had said earlier that the country’s Directorate for Defense Protection and Security was probing into media reports hinting that Russia demonstrated increased cyber activity in social networks during the street protests.

In response to Le Drian, Russia’s Foreign Ministry raised a protest over media reports that the British Broadcasting Corp. was seeking evidence of Russia’s alleged involvement in the French protests, which broke out against increased environmentalist taxes on gasoline and diesel. Foreign Ministry spokeswoman Maria Zakharova said a complaint over the British media allegations will be referred to the Organization for Security and Cooperation in Europe.




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