EIR Daily Alert Service, THURSDAY, APRIL 25, 2019
|THURSDAY, APRIL 25, 2019|
Volume 6, Number 81
EIR Daily Alert Service
P.O. Box 17390, Washington, DC 20041-0390
EIR Daily Alert
April 24 (EIRNS)—The most important question in the world today was posed by China’s Ambassador to the United States Cui Tiankai: “Why the U.S. Shouldn’t Sit Out the Belt and Road Initiative,” in an op-ed today in Fortune.
Indeed, how can the head of any great power sit out the Second Belt and Road Forum for International Cooperation which starts in Beijing April 25? What voluntary economic/cultural development event can gather leading figures from 140 countries including 37 heads of state and government, comparable to what Franklin Roosevelt’s United States itself could summon to Bretton Woods in 1944 to fashion a new credit and monetary system?
Those Western European and U.S. think-tanks and media—beginning three years ago with London’s Royal Institute of International Affairs and Cambridge and Oxford Universities—which have been claiming the Belt and Road will hyper-indebt and collapse the world economy, have no answer for this event in Beijing. Have 140 nations’ leaders—and last year all African heads of state but one who attended the Forum of China-Africa Cooperation—all been snookered into a “debt trap” at the same time? Have they all been seized by a perverse compulsion to have China steal their technologies or their ports?
Quite the opposite. There obviously is a new and very important, optimistic commitment which has taken hold over the past six years, to develop through modern basic infrastructure-building and high-technology new industry and communications. A new paradigm.
It’s thinking as FDR thought about development, about the Bretton Woods system and the United Nations. Donald Trump the candidate, and before that the politically interested businessman, was drawn to such ideas: the Strategic Defense Initiative; Moon-Mars missions; sweeping new infrastructures; he even spoke of China’s Belt and Road in these terms early in his Presidency. The British intelligence “Russiagate” attack and the resulting new McCarthyism against Russia and China, have ruined that for two years.
Now that British attack has failed in its objective—a coup—and has been thoroughly exposed. The President himself in a Twitter message this morning arraigned “United Kingdom Intelligence” for the whole attack on his Presidency. The world has taken note. Now the British Queen, as Schiller Institute President Helga Zepp-LaRouche proposed yesterday, must apologize to the President during his state visit June 3-5. And the myth among the remains of Mueller’s report—that Russiaattacked the U.S. election process—stands still to be debunked.
And Trump’s Presidency is still to be restored from the infestation of neo-conservatism and neo-McCarthyism.
One figure over the post-World War II period thought of international development on a still higher level: Lyndon LaRouche, whose World Land-Bridge concepts led to the Belt and Road itself. LaRouche combined developing-country investment and infrastructure great projects with the irreplaceable “science drivers” of space exploration, fusion power development, laser and plasma technologies. He conceptualized a New Bretton Woods credit system and worldwide “Glass-Steagall” bank reorganization from that standpoint. And he fought London’s financial and geopolitical empire with every breath for 50 years.
With Trump’s blast against British intelligence today, the door is clearly open to restore the Presidency. It will be done only by winning full appreciation and respect for LaRouche’s extraordinary ideas and accomplishments.
U.S. POLITICAL AND ECONOMIC
April 24 (EIRNS)—Less than 24 hours after the triumphal announcement that President Donald Trump had accepted the Queen of England’s invitation to pay a state visit to the U.K., the President torpedoed frantic efforts to portray the infamous U.S.-U.K. “special relationship” as being as good as ever. Trump did so with a single tweet issued early this morning:
“Former CIA analyst Larry Johnson accuses United Kingdom Intelligence of helping Obama Administration Spy on the 2016 Trump Presidential campaign. @OANN. WOW! It’s now just a question of time before the truth comes out, and when it does, it will be a beauty!” He was referring to an interview yesterday Johnson gave to One American News Network on how British intelligence helped the Obama Administration “dodge the Fourth Amendment” by spying on the Trump campaign. At least one individual responded to the President’s tweet: “Ask the Queen about this on your state visit.”
Hysterical headlines appeared almost instantly on both sides of the Atlantic. “Trump Promotes Conspiracy Theory that U.K. Helped Obama Administration Spy on His Presidential Campaign,” moaned the London Independent. “Following State Visit News, Trump Falsely Accuses U.K. of Spying Scheme,” protested the failing MSNBC.Newsweek’s headline wins the prize: “ ‘Utterly Ridiculous’: Donald Trump Tweet Claiming U.K. Intelligence Helped Obama Spy on Campaign ‘Should Be Ignored,’ GCHQ Says.”
GCHQ, or the General Communications Headquarters, is the U.K.’s equivalent of America’s National Security Agency—and its partner in the “Five Eyes” global surveillance network that includes the U.S., Britain, Canada, New Zealand and Australia. Queried by media for a response to the explosive promise by the President of the United States that “the truth will out,” GCHQ gave exactly the same arrogant response it gave in March 2017, when then-White House Press Secretary Sean Spicer had raised the U.K. role in illegal spying on the Trump presidential campaign: “The allegations that GCHQ was asked to conduct wire tapping against the then-President Elect are nonsense. They are utterly ridiculous and should be ignored.”
LaRouche PAC took the lead in ignoring that order from the British monarchy’s spy agency back then, and far, far more has come to light on the British Empire role since that time. LaRouche PAC drove the exposure of the British role with its mass-circulated pamphlet, “Robert Mueller, Amoral Legal Assassin,” released in September 2017, and its follow-up, January 2019 dossier, “British Role in the Plot Against the President Is Now Exposed. Will You Act Now To Save the Nation?”
It’s now time to drive the British Empire out.
April 24 (EIRNS)—One America News Network’s April 23, “WOW!” news story referenced by President Donald Trump, titled “U.K. Spied on Trump Campaign, Passed Info to Obama Team,” opens with that statement of intent. Former CIA and State Department analyst Larry Johnson “told OANN that now that the Mueller probe is closed, it is time for the American people to learn the truth about how the British government helped the Obama Administration dodge the Fourth Amendment by spying on the 2016 Trump campaign for them,” reporter Neil W. McCabe announced at the outset.
It is recommended watching. Johnson, a prominent member of the Veteran Intelligence Professionals for Sanity (VIPS), details that the “Five Eyes club” for intelligence sharing “without attracting undue attention,” was the channel used to set off the Russian collusion hoax.
Former Pentagon official Evelyn Farkas admitted to CNN early in 2017 that Obama officials were very concerned to keep the Trump team from finding out “how we knew what we knew about the Trump staff dealings with Russians,” ostensibly because “they would compromise those sources and methods,” OANN reminded its viewers.
And why did the British do this? “The British did this in part, I am given to understand by people familiar with what was up, because they were concerned about Trump’s policies on NATO and Syria, and they wanted to make sure they could start understanding what he’s up to,” Johnson told OANN.
Enter Papadopoulos. How was he singled out by intelligence? His first communications from the U.K. to the United States were by email, and a couple of phone calls—and “those were intercepted,absolutely they were intercepted by the United Kingdom through its GCHQ, and that information was passed back to the U.S. through intelligence channels,” Johnson explains.
Then Papadopoulos was steered towards U.S.-Russia relations, sought out by “U.S. intelligence asset” Mifsud (in OANN’s description), who then offered Papadopoulos an introduction to Russian President Putin.
And thus, OANN’s McCabe concludes, “the Russian collusion hoax was born.”
Johnson’s interview, “Former CIA Analyst: U.K. Spied on Trump Campaign, Passed Info. to Obama Team,” is posted to OANN’s YouTube channel.
April 24 (EIRNS)—The Democratic Party is splitting during a two-week Congressional recess which ends April 29. As more members of its “Resist” faction seize on shards of the Mueller report which they say are a guide to impeachment proceedings against President Donald Trump, the party’s senior leaders are warning that Americans will not sit still for such a divisive campaign.
House Speaker Nancy Pelosi announced, during an “issues” summit April 23, a forthcoming meeting with President Trump to discuss collaborating on infrastructure legislation, and secondarily to arrest pharmaceutical prices. “We’ll be meeting with the President next week when we come back,” Pelosi said, referring to herself and Senate Minority Leader Chuck Schumer, “to talk about what the prospect is for the size [of an infrastructure bill], in terms of resources and scope of what that might be.” The meeting will be Tuesday, April 30. It does not appear that the Democrats will go into it with a funding idea beyond the Federal gas tax increase; but they will talk about a commitment of $1-2 trillion in new funding for basic economic infrastructure over 10 years.
In a national party conference call last night, where she discussed this meeting with Trump, Pelosi may have kept the lid on impeachment regarding the key House Committee chairs, but not the presidential candidates. Kamala Harris of California came out for impeachment after the conference call, joining candidates Sen. Elizabeth Warren and former San Antonio Mayor Julian Castro. And House Financial Services Committee Chair Maxine Waters, after appearing to defer to Pelosi during the conference call according to the Washington Post, returned to publicly demanding impeachment this morning. Worse, Waters publicly called out Judiciary Committee Chair Jerrold Nadler for not conducting impeachment proceedings in Judiciary Committee. Nadler appears ready to do it, but accepting Pelosi’s leadership.
The currently leading Democratic presidential candidate, Sen. Bernie Sanders, spoke against moving to impeachment at a campaign rally April 23, saying it would distract from economic issues. But the party division looks to be widening.
THE NEW GLOBAL ECONOMIC ORDER
April 24 (EIRNS)—Hong Kong’s South China Morning Post just can’t understand why the Belt and Road is advancing, when “China’s Flexible Belt and Road Approach Leads to Ambiguity.” The April 22 article cites numerous furious Aristotelian “experts” complaining that the Belt and Road Initiative is not based on rigid treaties, but memorandums of understanding which can be changed as needed. The MOUs and related agreements on projects are mostly non-binding, so “there are no legal ramifications for the host countries or China if either withdraws from the agreement. … [T]he lack of institutions, protocols and norms creates huge ambiguities, which could lead to poor outcomes!”
China “prefers broad, principles-based arrangements that have wide latitude so as to enable flexibility on subsequent particulars,” a “specialist” at Washington D.C.’s Institute for China-America Studies whined.
How can this “unprecedented non-binding soft law network” [sic!] be seen as “an unstoppable juggernaut”?
Chen Fengying, former head of the World Economy Institute of China’s Institute of Contemporary International Relations, patiently explained to SCMP that the “Belt and Road is an idea and a platform instead of a treaty-based organization. While the rule-based Western approach is scrupulous, the China way is realistic, given its target partners are mainly developing countries which may not meet the requirements of strict treaties or other high standards.” Look at China’s BRI contracts with Malaysia; changes in Malaysia’s internal situation required changes in the contracts. “China has to be flexible while working with developing countries,” Chen pointed out.
This is precisely how American statesman Lyndon LaRouche said that the new paradigm among nations would come into being, not by recipes, but by agreements on principles and projects reflecting common interests. LaRouche emphasized that point in discussing the momentous steps taken by the BRICS nations at their July 2014 summit in Brazil.
April 24 (EIRNS)—Going into the Second Belt and Road Forum for International Cooperation, the ChinaWatch supplement, sponsored China Daily for publication in various major U.S. newspapers, leads with a report that China’s largest sovereign wealth fund is seeking to create a Belt and Road development bank with international partners. The article, originally run in China Daily on March 18, was highlighted by an April 14 tweet by Schiller Institute President Helga Zepp-LaRouche urging U.S. President Donald Trump to “put it on the agenda.” (See EIR Daily Alert, Monday, April 15, 2019.)
China Investment Corporation (CIC) “is seeking global partners to jointly establish a special cross-border investment instrument that will further finance Belt and Road projects, a senior [CIC] executive said,” according to the China Daily story, “BRI funding in the pipeline.” Tu Guangshao, CIC’s vice-chair and president, is quoted: “We call it the Belt and Road cooperation fund.” The joint venture’s scale and the currency in which it will invest are “too early to be determined,” he said.
China Daily’s description of the methods of operation and governance foreseen for this fund makes it sound like a second Asian Infrastructure Investment Bank (AIIB); but its investment targets will be all Belt and Road cooperating countries, and its “potential shareholders may cover international organizations” as well as countries. Tu says, “The fund will be a new way to inject capital into BRI projects, facilitate international cooperation and share mutual benefits.”
“Through the fund, analysts said, China may convince more global investors to join long-term and high-cost BRI projects such as ports and railways.” The China Daily article states that as BRI construction advances, there is a growing need for third-country financing which China and its banks alone cannot meet.
This is clearly another opening to America among other countries (Japan, Russia, Germany) to get involved in the BRI through public agencies and/or major banks.
In a perhaps similar direction, Xinhua reported April 24 that China Development Bank (CDB) and “seven developmental financial institutions” in Ibero-American countries set up a “multilateral financial cooperation mechanism.” CDB has already offered $100 billion in project loans in 18 countries and regions there. The development funds participating with CDB are in Argentina, Ecuador, Mexico, Peru, Panama and Colombia.
April 24 (EIRNS)—Yasir Masood, Deputy Director of the Pakistani Ministry of Planning, Development and Reform’s thinktank, the Centre of Excellence for the China-Pakistan Economic Corridor, told the April 22 South China Morning Post that “no initiative which is near to the Belt and Road has ever been introduced to support Pakistan with an inclusive, comprehensive, self-supporting and long-standing aim to uplift Pakistan’s economy independently.” Masood was referring to the China Pakistan Economic Corridor (CPEC), one of the first Belt and Road major projects, extending from Xinjiang in western China to the port of Gwadar on the Arabian Sea.
Pakistan has received some financing from a few foreign NGOs concerned with human rights or interested in some specific socio-economic project, he said, but “In the past, hardly any sincere efforts have been initiated in Pakistan from other countries which were supposedly meant to self-sustain Pakistan’s economy.”
Yes, some Western banks may have provided money, so the country could keep paying its “debt burden … but with mounting interest rates coupled with a borrowing cycle which subordinates the economic structure on them,” he said.
Masood pointed out that the repayment period for the BRI debt owed to China is stretched out to 20 years or more, with payments starting in 2021.
STRATEGIC WAR DANGER
Apr. 24 (EIRNS)—Russia’s newest nuclear submarine, the Belgorod, was floated out of its slipway at the Sevmash shipyard on Severodvinsk, yesterday, opening a new chapter in the development of Russian strategic capabilities. The Belgorod is important because it is the first Russian submarine designed to carry the Poseidon nuclear-powered, nuclear-armed torpedo drone. The Poseidon is one of the new generation of Russian strategic weapons that Russian President Vladimir Putin revealed during his famous March 1, 2018 nationally televised address to the Federal Assembly.
Construction of the submarine is not yet completed, but the work is to be finished at dockside. The Belgorod is scheduled to undergo sea trials in 2020 and then be delivered to the Russian Navy by the end of that year. A source in the defense industry told TASS that the new submarine would be able to carry six of the Poseidon drones.
A separate report in TASS states that the Belgorod originally began construction in 1992 as an “Antey”-class cruise missile submarine, called Oscar II by NATO. The Oscar IIs are the second largest submarines in size, exceeded only by the Typhoon ballistic missile submarines, and are armed with 12 supersonic P-700 Granit anti-ship missiles with a range of 550-600 km. Construction of the Belgorodwas suspended in 1997 and not resumed until 2010 when the decision was made to redesign it as a special purpose submarine, which would be capable of a range of missions, including deep-water survey and special operations, as well as being the carrier for the Poseidon drone. TASS writes that Izvestia reported on April 21, 2017, citing the Navy’s command, that engineers had redesigned the sub’s central section, replacing the missile compartment was a new and longer hold for special equipment and airlock chambers for divers and the crews of deep-water submersibles.
COLLAPSING WESTERN FINANCIAL SYSTEM
April 24 (EIRNS)—In one of many reports of the U.S. economic and human failure represented by homelessness, the Los Angeles TimesApril 22 reported an alarming death rate among homeless in the city, one of the national centers of the growing problem. “A record number of homeless people—918 last year alone—are dying across Los Angeles County, on bus benches, hillsides, railroad tracks and sidewalks. Deaths have jumped 76% in the past five years, outpacing the growth of the homeless population, according to a Kaiser Health News analysis of the coroner’s data.” This very disturbing news was explained: “ ‘It is a combination of people who are living for a long time in unhealthy situations and who have multiple health problems,’ said Michael Cousineau, a professor at the Keck School of Medicine of USC. ‘There are more complications, and one of those complications is a high mortality rate. It’s just a tragedy.’ ”
Homelessness is estimated (very roughly) now at about 600,000 Americans, of whom 63,000 are in New York City and 90,000 in California. The U.S. housing sector’s derangement since the 2008 financial crash, combining with opioid and other drug addiction in which it is a factor, has directly created homelessness.
In 2006 there were 76.5 million homeowning households in America, and 34.1 million renting households. In 2018, with 9 million more households overall, there were 73.9 million homeowning households (2.6 million fewer), and 45.6 renting households (11.5 million more), report Pew Research figures. In the crash nearly 8 million homes went into foreclosure; 7 million households, with 11 million people, lost their homes. Financial institutions then removed, by 2012, some 5 million homes from the ownership market, converted them to rental homes, and securitized their rents, adding an extra “profit layer” and pushing rents up.
Home prices themselves rose dramatically in a stagnating economy, by an average 6% per year, pricing new homes out of range. The median new home price reached $319,000 in 2018. It has now been forced, by an “unaffordability crisis,” to fall to about $307,000. Existing home prices are still rising, but slowing down, at a $3.8% annual rate this year. Overall home sales are stuck at a level only about 60% of that of 20 years ago, because homes are unaffordable.
The result: Since 2009, the U.S. average rent has risen by 5.1% annually for a decade. This makes a cumulative 63% increase in average rent, while 2% per year wage increases during that time make a 22% wage increase over that decade. So rents rose three times as much as wages. The “fair market rent equivalent” relationship—whereby, during most of the postwar period, renting a certain apartment cost less than owning the same space with the same characteristics in the same county—reversed itself, and renting the same place costs significantly more.
Homelessness results from this, particularly since home building for low-cost range housing (less than $200,000) has virtually stopped over the decade. A six-year study 2011-17 by Zillow real estate firm found that when the rent share of income reaches 22%, homelessness starts rising; when it reaches 32%, homelessness jumps dramatically. Already in 2015, some 38% of renting households paid more than 30% of their income (twice the share in 2001), and 17% paid more than half their income.