MONDAY, AUGUST 19, 2019

Volume 6, Number 163

EIR Daily Alert Service

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

• We’re Not ‘Racing China’ to Mars; We’re Racing Against a New Financial Crash
• New York Times Admits ‘Trump Is a Racist’ Narrative Is Phase II of the Coup Against Him
• Kudlow Deluded, Wants ‘Technological War’ To Be Won on Wall Street!
• Trump Addresses New Hamshire Rally; ‘We’re Investing in Future Human Spaceflight’
• Hawks Putting Intense Pressure on Trump To ‘Get Tough’ With China on Hong Kong
• President’s Executive Order Seeks to Expedite Progress on Alaska-Canada Rail Link Project
• Olli Rehn Announces the New ECB Bazooka for September
• What the Central Banks Have Wrought and Are Wreaking
• What the Central Banks Have Wrought, and Are Wreaking
• Climate Blog Runs Zepp-LaRouche Article on Moneybags Backing For Extinction Rebellion
• Greta Thunberg Learns About Wind Power, as Yacht Is Becalmed
• Congressional Research Service Issues ‘Russia’s Nuclear Weapons: Doctrine, Forces, Modernization
• UN Security Council Meeting on Jammu and Kashmir Has No Result, as Tensions Remain High

EDITORIAL

We’re Not ‘Racing China’ to Mars; We’re Racing against a New Financial Crash

Aug. 18 (EIRNS)—The evidence is now clear and plentiful (more is below) that there is a global industrial, manufacturing and trade recession underway which is not sparing the United States. As it deepens, the central banks of the major Trilateral countries have attained an unprecedented global monstrosity of below-zero interest rates. Their 11 yearsof continuous money-printing “stimulus” is finally producing the paralysis of an opium high turning into an overdose death. Productive investment is shutting down and another, terrible financial crash lies somewhere ahead.

In this crisis the only real stimulus is masses of credit by leading governments for crash investment programs developing frontier technologies and their accompanying industrial spinoffs. In other words, the only real stimulus is full-speed-ahead funding of missions, “science-driver” missions epitomized by the Moon-Mars space exploration mission and the development of fusion power and plasma/laser technologies.

If started immediately these can revive both scientific thinking and the industrial muscle which has been atrophying, grow productivity and productive wealth enough to prevent the crash followed by economic collapse which occurred a decade ago. They will also alleviate poverty as China’s revolutions of new infrastructure have done in that country; such things as abandoning space missions to “help the poor down on the Earth” have never helped them at all.

The Trump Administration has bravely started with “Project Artemis,” its accelerated Moon-Mars mission. Russian President Vladimir Putin one month ago proposed a “international crash program” to develop fusion power. These are not yet funded—and they will not be unless the leading nations carry them out together. The return to the Moon and its development in preparation for Mars travel—which involves developing fusion power for space propulsion—is a 15-year all-out mobilization of hundreds of billions of dollars in investments, a task for all the leading spacefaring powers.

Such statements as came Aug. 16 from NASA’s Chief Financial Officer Jeff DeWit, that “This is a race to Mars, and we want to get there first,” is the worst kind of advice President Donald Trump could get. What he needs is a true picture of what an international scientific crash program is, and can accomplish.

Schiller Institute President Helga Zepp-LaRouche put it in its true, broader scope in a just published article: “success in controlled nuclear fusion and other fundamental tasks would only be possible if there were broad international cooperation and exchange between governments and industry, where all researchers could contribute their various scientific schools and expertise. Technological progress must really become global and should not be monopolized. It is about creating better living conditions and opportunities for all humanity that could unleash their creative potential. Key to this is the mastery of new technologies that relate to actual processes in the universe, as is the case with the imitation of the nuclear fusion in the Sun.

“Another field of research that can only be truly successful through international cooperation is space exploration, which uniquely establishes the true identity of humanity, its dignity as the only creative species known to date, and its potentially unlimited intellectual and moral capacity for perfection.”

U.S. POLITICAL AND ECONOMIC

New York Times Admits ‘Trump Is a Racist’ Narrative Is Phase II of the Coup against Him

Aug. 16 (EIRNS)—In an Aug. 12 “crisis” meeting with staff, New York Times executive editor Dean Baquet openly admits that his paper has now moved into phase two of the coup attempt against President Donald Trump, which for the next two years, leading into the 2020 presidential elections, will focus on “Trump the racist” narrative. Baquet’s statements were published today in the Washington Examiner, citing the transcript of the meeting leaked Aug. 15 by Slatemagazine.

For the last two years, Baquet said, the Times was immersed in what he called “Chapter I of the story of Donald Trump.” That is, “did Donald Trump have untoward relations with the Russians and was there obstruction of justice?” The Times really worked that story, he said, even won Pulitzer Prizes for its coverage, and did a great job.

But, “then came the Mueller report” which failed to establish that the Trump campaign conspired or coordinated with Russia to fix the 2016 elections. In his Congressional testimony, July 24, “The day that Bob Mueller walked off that witness stand, two things happened,” Baquet said. “Our readers who want Donald Trump to go away suddenly thought, ‘Holy shit. Bob Mueller is not going to do it.’ And, Donald Trump got a little emboldened politically.”

So begins Chapter II. Now “the story changed,” Baquet explained, since the Russia conspiracy story “turned out to be false,” and Congressional Democrats pushing for obstruction charges are getting nowhere. “I think that we’ve got to change,” he intoned. The Times has to “write more deeply about the country, race and other divisions.” To the sometimes irate staff, Baquet described the saga behind the Timeschanging the headline on its coverage of Trump’s speech following the shootings in El Paso and Dayton, writing that the original headline—“Trump Urges Unity vs Racism”—was deemed by the “left” to be insufficiently anti-Trump.

People care too much, and they depend on the Times for the truth, Baquet insisted. “It’s a very scary time. How do we write about race in a thoughtful way? … that, to me, is the vision for coverage…. But I think that’s what we’re going to have to do for the rest of the next two years.” The Examiner state that the headline controversy “was a preview of a new 2019-2020 New York Times. If Baquet follows through, the paper will spend the next two years, which just happen to be the run-up to the 2020 presidential elections, building the Trump-is-a-racist narrative.”

Kudlow Deluded, Wants ‘Technological War’ To Be Won on Wall Street!

Aug. 18 (EIRNS)—President Donald Trump is presently getting indefensible advice from his economic team, based on “Fox News Sunday” interviews with National Economic Council Director Larry Kudlow and trade advisor Peter Navarro. Both thought that lower and lower interest rates from the Federal Reserve, plus winning “technological war” with China, were all the “booming” U.S. economy needs to keep booming—when it is actually already in industrial and manufacturing decline and 2018 wage gains have disappeared in 2019.

“I don’t see a recession at all,” said Kudlow. Why? He repeated several times: “Economic growth forecasts on Wall Street were marked up last week.”

His speech seeming somewhat slurred, as if he might have fortified himself for this early Sunday morning performance, Kudlow said “We’re in a kind of technological war with China,” and that “winning” it—along with trade deals with North America and Europe—was the way to “keep the boom going.”

But Kudlow made no mention of what rapid technological progress requires: Strong investments in science- and technology-driver crash programs in frontier areas, space exploration, nuclear and fusion energy, laser and plasma technologies, hypersonic flight and high-speed rail travel, and so forth. China has not only invested heavily in these breakthroughs, but offered to work jointly with the United States on them.

The Hill on Aug. 17 published a “Manufacturing Shrinks” article, noting what is plain for most people to see. “The risks of an economic recession are on the rise, but the country’s manufacturing sector is already there,” was its opening. “The manufacturing sector [by this, the author meant factory and mine output—ed.] shrank by 1.9% in the first quarter of the year and another 1.2% in the second quarter. In July, it is estimated that it contracted another 0.4%.” The Hill quoted the head of the National Association of Manufacturers, Chad Moutray, “It’s pretty clear, not just in the U.S. but globally, that the manufacturing sector is contracting right now.”

The Commerce Department on Aug. 15 reported the figures on industrial production and manufacturing output. U.S. industrial production dropped −0.2% in July and is now up just 0.4% over the past year. Manufacturing output dropped -0.4% and is down −0.5% from a year earlier. Mining, auto/parts production, and machinery were the sectors that fell. The CASS Freight Shipments Index for the United States had dropped −5.9% in the year to July.

And the Sunday Washington Post lead article on “waning” American consumer power points out that current consumer debt, at $14 trillion, is “more than a trillion dollars above the prior peak, reached just before the 2008 financial crisis.” Just what will hold that debt up much longer?

Trump Addresses New Hampshire Rally, ‘We’re Investing in Future Human Spaceflight’

Aug. 16 (EIRNS)—Seven LaRouchePAC organizers attended the Trump rally in New Hampshire yesterday, greeting the long lines waiting to get in with signboards for the exoneration of Lyndon LaRouche and the LaRouchePAC petition “We Commit to the Moon-Mars Mission.” They met with very wide recognition of native son LaRouche and enthusiastic support for the revival of the U.S. space program, although most people were not familiar with the urgent need for a fast-track fusion program, essential for human space travel to Mars.

The President addressed the crucial issues space program with New Hampshire and other voters, telling them:

“We’re investing in the future of human spaceflight and someday soon, American astronauts will plant the Stars and Stripes on the surface of Mars.

“And I told my guys at NASA—you know NASA when we took it over, it was exhausted, the runways and the grounds that are all weeds growing through the cracks in the concrete. You wouldn’t recognize it now, it’s beautiful, it’s the best place anywhere on Earth. And I also said that you know, I hear all these rich guys for some reason they love space. ‘So they’re rich.’ I said, ‘Let them send the rockets up.’ Why the hell do we have to do it, right? So I see Jeff Bezos and Elon Musk, they’re putting rockets up, I think ‘it’s great and they pay us rent.’ They use our facility. That’s great.

“But we’re also doing it and NASA has some of the greatest plans we’ve ever had. These are great people, great scientists, but we also let the private sector put up rockets, the one which recently went up and you see the engines coming back down and … there’s no wings, no nothing. It’s almost like ‘what are we watching? Is this fiction?’

“And they come down and they save all of the propellants. All of the really—themost expensive parts, they’re able to save it by bringing it back right to where it took off. Who would think they could do this? I never saw this before six months ago, but they’re doing it now more and more. They’re saving a lot of the most important and expensive parts of rockets.”

Hawks Putting Intense Pressure on Trump To ‘Get Tough’ with China on Hong Kong

Aug. 16 (EIRNS)—President Donald Trump is under attack for not defending the so-called “peaceful demonstrations by peace-loving citizens of Hong Kong” against Beijing. The New York Times and Hong Kong’s South China Morning Post published similar stories Aug. 15, pointing to Trump’s so-called “political isolation” from his top White House advisers, the State Department and European allies for failing to denounce alleged Chinese “authoritarian” repression of the Hong Kong protesters.

The Times references two anonymous high administration officials, who complained that Trump is not paying attention to his “top foreign policy advisers,” key among them China hawk John Bolton, who “have pressed him to take a more forceful public stand on Hong Kong as the pro-democracy protests have escalated.” Trump, the Timesauthors lament, has “conspicuously avoided” the tough language used by Bolton and others. Worse, Trump’s language “shows little connection to his administration’s stated intolerance for China’s political repression.” Perhaps, the authors intone, he’s forgotten the December 2017 national security strategy document, which labels China a “strategic competitor?”

The Times also complains that the President is far too friendly with Russian President Vladimir Putin, who, they allege, is also repressing “pro-democracy” protesters in Moscow.

The South China Morning Post provides details of the “Hong Kong Human Rights and Democracy Act” introduced in Congress by Sen. Marco Rubio (R-FL) and Rep. Jim McGovern (D-MA). Originally presented as an amendment in 2016, it would require the White House to perform an annual review to determine whether Hong Kong’s special trade status can be justified. The special status allows Hong Kong to be recognized as a separate customs territory to mainland China. Hong Kong, the bill demands, “must remain sufficiently autonomous from the People’s Republic of China to justify a different treatment under a particular law of the United States, or any provision thereof, from that accorded to the People’s Republic of China.”

The “high degree of autonomy” for Hong Kong the bill insists on includes open and free elections by 2020 for Legislative Council members and the free nomination and election of the city’s Chief Executive, who otherwise is considered to be just a “puppet” of Beijing. The bill envisions sanctions against those considered to be responsible for the “arbitrary detention or abuse” of individuals from Hong Kong. McGovern is also demanding the U.S. to halt all sales of weapons and riot-control equipment to the Hong Kong police force.

President’s Executive Order Seeks To Expedite Progress on Alaska-Canada Rail Link Project

Aug. 17 (EIRNS)—As of the end of this year, design specifics are expected to be completed for the new 2400 km rail line to supply the missing link between Alaska and the North American rail grid. This time frame was given by officials of the two collaborating entities at the June announcement of their plans—the A2A (Alberta to Alaska Railway Development Corp.), and the Alaska Railroad Corp. The whole project is expected to cost $13 billion, and would be the largest rail project on the continent.

In the run-up to the June announcement, lawmakers and President Donald Trump took actions to expedite the long-overdue rail link. A joint resolution was passed by Alaska’s Senate and House, SJ 11, which listed many benefits of the new rail line. It also pointed out that, whereas the Alaska Railroad was commissioned by Congress in 1914, over a century has now passed and no link with Canada and the Lower 48 states has ever been built.

After receiving the legislative initiative, Alaska Gov. Michael Dunleavy, in early April, wrote to President Trump, asking for Federal support of the rail plan, which requires Executive Branch approval for implementation.

On April 10, Trump issued Executive Order EO13867, “On the Issuance of Permits with Respect to Facilities and Land Transportation Crossings at the International Boundaries of the United States,” which clears the way for speedy approval of the railroad by the White House directly, without procedural delay. The text of the order identifies that the permitting process for cross border infrastructure—rail, highway, pipelines, bridges—has grown to be “unnecessarily complicated,” and lays out measures to speed up the permitting process. The purpose of this remediation of delays, is for the United States “to foster goodwill and mutually productive economic exchanges with its neighboring countries.”

The geography of this goodwill can easily extend to Russia, in crossing the Bering Strait.

COLLAPSING WESTERN FINANCIAL SYSTEM

Olli Rehn Announces the New ECB Bazooka for September

Aug. 17 (EIRNS)—In an interview with the Wall Street Journal, European Central Bank board member and Finnish Central Bank Governor Olli Rehn declared that the ECB should go beyond expectations on rate cuts and quantitative easing in order to have an effect. Such a statement has put a mortgage on the ECB: If the ECB decisions at the next board meeting Sept. 12 don’t exceed expectations, there will be a selloff, financial analysts say.

Rehn is considered a member of the hawkish faction and close to German Bundesbank President Jens Weidmann. His dovish statement is seen as motivated by the slowdown of the German economy but especially with the crisis of Deutsche Bank and Commerzbank.

Deutsche Bank shares hit a new low at €5.78 yesterday. Its market capitalization is €12 billion and the derivative assets on balance €22 billion. Its Bad Bank is supposed to absorb seven times as many assets as its capital. Commerzbank’s capitalization dropped below €6 billion.

Whereas $15 trillion assets are traded at negative rates globally, Deutsche Bank subordinate bonds (CoCo Bonds) offer a yield of 13.5%!

What the Central Banks Have Wrought, and Are Wreaking

Aug. 18 (EIRNS)—As of Aug. 15 the global pile of bonds with negative interest rates had climbed to nearly $17 trillion, 30% of the universe of bonded debt, and growing faster with each week. In particular, in the “Trilateral” world there is almost no sovereign government debt remaining which bears interest, except that of the United States. And U.S. Treasury rates are being pushed toward zero interest, as the Federal Reserve cuts rates and as investment funds exit from negative-interest bonds elsewhere and pour into Treasuries, where interest, for a little while longer, can still be earned.

This is approaching the end-state of a decade of money-printing and zero and/or negative interest-rate policy by the major central banks of the U.K., United States, Europe, Japan and Switzerland. Lending at interest now characterizes an increasingly “subprime” world of corporate leveraged debt (lending to already super-indebted companies and “zombie companies), consumer rotating credit such as credit cards, auto loans, etc. and cash-strapped local agencies. Above all, lending at interest characterizes speculative trades and instruments, etc., including those derivatives contracts which enable profits to be made by lending at negative interest!

This apparently unprecedented situation created by the central banks since the 2008 financial crash—in order to bail out and advantage the trans-Atlantic world’s biggest banks—makes normal banking, productive investment and lending to productive activity, quite unprofitable. It prioritizes securitization and speculation more and more, and is now looking toward another crash of unsupported and unpayable “subprime” debt of various kinds—the “everything bubble.”

But it could point to another effect. In a world of negative-interest sovereign debt, investor demand for governments’ sovereign debt could, in the very near future, drop significantly. This would leave the primary dealer banks holding sovereign debt which didn’t sell, to be bought by the central banks. And in a second step, leave the central banks to simply print the whole amount which governments once borrowed.

SCIENCE AND INFRASTRUCTURE

Climate Blog Runs Zepp-LaRouche Article on Moneybags Backing for Extinction Rebellion

Aug. 16 (EIRNS)—The Neue Solidarität lead article for Aug. 15 (No. 33) by Helga Zepp-LaRouche was run in English translation under the headline “The Richest People on Earth Are Financing ‘Climate Protectors!’ ” on the “Climate Change Dispatch” science news website.

Moreover, the exposé which Cicero magazine founder Wolfram Weimer wrote for The European on Aug. 14 on the business interests behind Greta Thunberg, has been reprinted also in Germany’s Focusmagazine and on the N-TV website.

Greta Thunberg Learns about Wind Power, as Yacht Is Becalmed

Aug. 18 (EIRNS)—“Climate protection” poster child Greta Thunberg is learning more about wind power every day. After a choppy start to her voyage across the Atlantic, her racing yacht Malizia II is now becalmed in a windless patch of the Atlantic. The planned two-week voyage may need a big wind boost not to take three or four weeks—but not too big, of course.

And perhaps the boat’s becalming was a relief to Thunberg, after a rough start to supposed two-week trip, according to the Observer’s Seth Jacobson. She was still 2,500 nautical miles from New York, where she has been invited to address the United Nations next month, as of Aug. 17. Worse, late summer is hurricane season in the Atlantic, as the water temperature seasonally warms. Of course, hurricane winds are not what Thunberg, her father, who is aboard the Malizia II, and her backers are ready for.

Boris Herrmann, the captain of Thunberg’s solar powered racing yacht, has found the bright side of the slowdown: “It gives some time to slow the boat, have a wash, and play some games.”

This is, after all, what it was like to cross the Atlantic in the 15th century. It could only be done safely during certain times of the year then—as now—and could take a month or more, despite the best plans. As most 15th-century girls did not go to school, neither does Thunberg, so she can spend the time becalmed at sea.

But today, it turns out that Thunberg’s trip across the Atlantic will generate more emissions than it ostensibly saves. Two of the crew, the captain and team founder Pierre Casiraghi (nephew of Prince Albert of Monaco), will fly back from the United States, and two replacement crew will fly to America to sail the boat back to Europe, according to the Mail Online yesterday, citing The Times of London. Then there are the planes flying overhead at times to check on her progress. In all, a lot less carbon dioxide emissions had she flown by herself, but that wouldn’t be 15th century.

Meantime, Extinction Rebellion founder Gail Bradbrook, who said in an interview that she, too, eschews flying, made an exception to fly to Costa Rica to experience the wonderful hallucinogenic drugs and mushrooms available there. Psychotropics are improved in the 21st century, so it’s justified to fly to get high, seems to be Bradbrook’s claim.

STRATEGIC WAR DANGER

Congressional Research Service Issues ‘Russia’s Nuclear Weapons: Doctrine, Forces, Modernization’

Aug. 17 (EIRNS)—On Aug. 5 the Congressional Research Service issued a new report, on Russia’s nuclear arsenal, entitled “Russia’s Nuclear Weapons: Doctrine, Forces and Modernization.” The 41-page document takes note of several elements of reality that are often ignored in Defense Department official statements about Russian nuclear doctrine.

The report observes, in particular, two developments from the U.S./NATO side that provide context for Russian nuclear policy. The first is the expansion of NATO right up to Russia’s borders. “Russia has long feared that an expanding alliance would create a new challenge to Russia’s security, particularly if NATO were to move nuclear weapons closer to Russia’s borders,” writes author Amy F. Woolf. “These concerns contributed to the statement in the 1997 doctrine that Russia might use nuclear weapons if its national survival was threatened.”

Secondly, the report cites the 2002 U.S. withdrawal from the ABM Treaty as the factor behind Russia’s new classes of nuclear delivery vehicles, including the Avangard hypersonic glide vehicle which is very close to deployment, and quotes from Russian President Vladimir Putin’s March 1, 2018 annual address to the Federal Assembly to this effect.

Otherwise, the report’s “Summary” attempts to address ominous matters of threat, and what the U.S. should do. It states that Russia’s evolving doctrine “seems to indicate that Russia has potentially placed a greater reliance on nuclear weapons and may threaten to use them during regional conflicts.” The report then theorizes, “This doctrine has led some U.S. analysts to conclude that Russia has adopted an ‘escalate to de-escalate’ strategy, where it might threaten to use nuclear weapons if it were losing a conflict with a NATO member, in an effort to convince the United States and its NATO allies to withdraw from the conflict. [This is approximately a mirror image of NATO’s nuclear doctrine during the Cold War, since NATO believed that its conventional forces would be quickly overwhelmed by the Soviet Union’s massed armor formations in a conventional attack, but Woolf’s report doesn’t make that point—ed.]. Russian officials, along with some scholars and observers in the United States and Europe, dispute this interpretation; however, concerns about this doctrine have informed recommendations for changes in the U.S. nuclear posture.”

UN Security Council Meeting on Jammu and Kashmir Has No Result, as Tensions Remain High

Aug. 17 (EIRNS)—On Aug. 16 the United Nations Security Council (UNSC) met on the situation in Jammu and Kashmir, in closed door session. It was the first meeting in 50 years on the issue but no apparent result came out of it. The meeting was requested in a letter to the UNSC by Pakistan Foreign Minister Shah Mehmood Qureshi over the lockdown conditions India imposed on the residents of the India-controlled part of the region.

India’s envoy to the UN Syed Akbaruddin claimed after the meeting, that the restrictions in Kashmir were reasonable and aimed “to stop terrorists bleeding our people,” according to the Press Trust of India (PTI). Akbaruddin also said that India’s Aug. 5 decision to change the status of the state of Jammu and Kashmir, making it into two Federally Administered Territories, was a matter internal to India and did not have external ramifications.

Pakistan’s UN envoy Maleeha Lodhi was quoted as saying after the meeting that “this is the first and not the last step,” by the Hindustan Times.

India and Pakistan were excluded from the closed-door session of the council which met on the initiative of UNSC permanent member China. Russia’s Acting Permanent Representative to the UN Dmitry Polyanskiy told reporters after the meeting that the issue should be resolved bilaterally between India and Pakistan. “We are in favor of a bilateral track between India and Pakistan,” the diplomat stressed, stating that Moscow was very much concerned about the potential escalation.

There has been heavy weapons firing across the Line of Control in Jammu and Kashmir, in which one Indian soldier has been killed, AFP reported yesterday. On Aug. 15, the Pakistan Army said in a statement that four of its soldiers had been killed over 24 hours in clashes with Indian soldiers.

TASS reports the Indian Armed Forces deployed in Jammu and Kashmir have been put on high alert, citing India’s Asia News International (ANI). “All Indian Army, Air Force and security forces’ bases in Jammu and Kashmir asked to be on high alert against possible attempt by Pakistan-backed terrorist groups to carry out attacks in view of Pakistani efforts to create disturbances in the Kashmir valley,” TASS quoted ANI as reporting.

The tension has led to some nuclear rhetoric between the two nuclear powers.  On Aug. 6, Pakistan Army Chief Gen. Qamar Javed Bajwa made a statement that the “Pakistan Army firmly stands by the Kashmiris in their just struggle to the very end. We are prepared and shall go to any extent to fulfill our obligations in this regard.” India’s Defense Minister Rajnath Singh, while visiting Pokhran in western Rajasthan on Aug. 16, where India had conducted its first nuclear test, said: “Till today, our nuclear policy is ‘No First Use.’ What happens in future depends on the circumstances.”

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