FRIDAY, SEPTEMBER 27, 2019

Volume 6, Number 192

EIR Daily Alert Service

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

• Democrats’ Impeachment Effort Will Not Cover Up Their Complicity With British and Ukraine in Coup Attempt
• House and Senate Move Anti-China Bill on Hong Kong, Sabotaging U.S. China Policy
• Fed Hikes Revolving Loans to Risky Banks
• Deutsche Bank Officed in Frankfurt Raided Again
• Former CEO of Dankse Bank’s Estonian Branch Found Dead
• Senate Appropriations Committee Cuts Artemis Supplemental by Half

EDITORIAL

Democrats’ Impeachment Effort Will Not Cover Up Their Complicity with British and Ukraine in Coup Attempt

Sept. 26 (EIRNS)—The course of world history changed dramatically at 5:00 p.m. on Wednesday afternoon, Sept. 25, when House Speaker Nancy Pelosi wrapped herself in the flag and announced her apparently sudden decision to support impeachment of President Donald Trump, based on the notion that the President’s Constitutional duty to conduct foreign policy is hereby null and void, and that the Constitutional role of the Justice Department to investigate crimes is equally null and void.

As has been made public over several years in great detail in the pages of EIR, the regime placed into office in Ukraine in 2014 through an openly U.S. (Obama Administration) coordinated and funded violent coup against the elected government, spearheaded by openly Nazi followers of Hitler’s ally Stepan Bandera, then proceeded to work directly with British intelligence (Christopher Steele) and the Obama intelligence team (Brennan and Clapper), with near total backing in the corrupt press, to feed lies about Trump connections to Russia, aimed at stopping his election, and then to bring him down when elected. Having failed, they are now manufacturing a new lying narrative, believing that the population is so brainwashed that they will swallow it.

But there is another reason. The U.S. Attorney General William Barr and his team are prepared to expose the criminality of the entire “Get Trump” operation, including the British intelligence leadership in that treasonous action, as well as the Ukrainian role. The fact that then-Vice President Joe Biden was the Obama Administration point man on the Ukraine coup and the puppet government put in place, is even more damning than his vile corruption in arranging for his drug-addicted son to run off with millions of dollars from Ukraine, and Sleepy Joe’s bragging about his successful threats to the Kiev government, to fire the prosecutor going after his son or lose a billion dollars in aid. Trump’s lawyer Rudy Giuliani, in investigating the Ukrainian side of the criminal conspiracy, came upon Biden’s direct role. The Democrats and the press today are repeating ad nauseam that Trump wanted the new Ukraine President Volodymyr Zelensky to dig up “fake dirt” on Joe Biden—but there is nothing fake here, and the Democratic decision to launch this crazy impeachment means that they have now thrown the already-discredited Biden under the bus.

Rep. Devin Nunes, ranking member, who has been fighting the coup-plotters from the beginning, opened today’s House Intelligence Committee circus, where the Acting Director of National Intelligence Joseph Maguire testified on the “whistleblower” story, by saying: “Welcome to today’s ‘information warfare’ operation against the President.”  That was a very accurate characterization, because that is what we are experiencing—the tools of military full-spectrum information warfare have been turned against the population of the United States in the continued effort to overturn the result of the 2016 election.

Behind this staged drama is another stark reality—the U.S. and European banking system is in a state of total panic. The Federal Reserve has now increased its nightly overnight “repo” lending to banks from $75 billion to $100 billion, after finding still more unsatisfied demand for such loans over the past two weeks, and doubled its two-week lending program from $30 billion to $60 billion for the same reason. We are rapidly reaching a trillion dollars in emergency liquidity dumped into the banking system, trying to hold back the tide. As in 2008 before the fall of Lehman Brothers and Bear Stearns, some banks are seen as credit risks by the other banks, that refuse to lend to them. Deutsche Bank is just the most obvious case. It is also the case that the collateral being offered for interbank lending, other than the federally backed paper, is mostly highly-leveraged corporate debt, no longer considered risk free.

Over the course of the summer, the President fired the Director of National Intelligence Dan Coats and his hyper-active assistant Sue Gordon, along with the dangerous John Bolton. The establishment is afraid that Trump is taking charge of his own foreign policy, and they recognize that he differs with official Washington on war and peace.  They have tried to get him into one war after another, endlessly, the last being with Iran, and he has resisted.

This is the moment in history defined by Lyndon LaRouche over his long, creative life—Pandora’s Box has been opened, and no partial solutions can work. A truly revolutionary moment, in keeping with the ideas of Plato, Cusa, Leibniz, Beethoven, Alexander Hamilton, Franklin Roosevelt, and Lyndon LaRouche, is at hand, if we act on it.

U.S. POLITICAL AND ECONOMIC

House and Senate Move Anti-China Bill on Hong Kong, Sabotaging U.S. China Policy

Sept. 26 (EIRNS)—The Hong Kong Human Rights and Democracy Act of 2019, which Beijing has properly termed interference in its domestic affairs, has moved through the Senate Foreign Relations Committee and the House Foreign Affairs Committee, setting the stage for votes in both chambers in the coming weeks, South China Morning Post reports today.

The bill passed the House committee in a unanimous vote, said Jeff Sagnip, policy director for Rep. Chris Smith, a New Jersey Republican who sponsored the legislation in that chamber. An identical version of the bill, sponsored by Senator “Little” Marco Rubio, Republican of Florida, was approved by the Senate committee shortly afterwards.

“Getting out of the committee is the big step,” said Sagnip, who added that a floor vote in the full House of Representatives will take place sometime in October, most likely shortly after Monday, Oct. 14, when Columbus Day is celebrated

The legislation is intended to act as an amendment to the U.S.-Hong Kong Policy Act of 1992, which kept U.S. business and other ties to the city intact after its 1997 handover from Britain to China. If passed, the act would, among other mandates, require the U.S. to sanction Chinese officials deemed responsible for undermining basic freedoms in Hong Kong.

Chinese Foreign Ministry spokesman Geng Shuang said in a statement today that the bill was an attempt to wantonly interfere in China’s domestic affairs, and had shown the malicious intention of some in the U.S. Congress to contain China’s development.  Passing the bill will only encourage the radical and violent forces in Hong Kong, and send Hong Kong further into chaos, Geng said. It will harm not only China’s interests, but also U.S. interests.  China will hit back forcefully at any U.S. action that aims to hurt China’s interests.

A separate statement from the State Council’s Hong Kong and Macao Affairs Office said the bill was intended to support anti-China forces and rioters in Hong Kong, which would pour oil on the flame. It described the Hong Kong people who demanded the passage of the bill as traitors.

ECONOMY

Fed Hikes Revolving Loans to Risky Banks

Sept. 26 (EIRNS)—The Federal Reserve has now increased its nightly overnight “repo” lending to banks from $75 to $100 billion, after finding still more unsatisfied demand for such loans, and doubled its two-week lending program from $30 billion to $60 billion for the same reason.

The financial press is trying to maintain the idiotic fiction that “no one knows” what is happening, beginning with the Fed.

Some have suggested that the reason for the lack of willing private bank lenders is risky collateral, but EIR’s Paul Gallagher and other sources report that the collateral for these overnight and 14-day loans between banks is overwhelmingly Treasuries, while the balance is mostly Fannie Mae and Freddie Mac securities, which are also effectively guaranteed by the Federal government. These are not risky.  Private securities comprise only a small part of this collateral.

The true explanation must be as in 2008 before the fall of Lehman Brothers and Bear Stearns—namely, that some banks are seen as credit risks by the other banks, that refuse to lend to them. These at-risk banks are the ones that are going to the Fed window to borrow, when no one else will lend to them.  As in 2008, the Fed knows who they are, but sedulously keeps their names secret, because it would be the kiss of death for them if they were known to be going to the Fed window.  (But this is not to imply that other circumstances are necessarily the same as in 2008.)

Deutsche Bank is one obvious candidate.  There are probably others which are known to be exposed to highly-leveraged corporate debt. Shale-oil debt is piling up to the rafters, for example.  As are highly-leveraged retail chains, auto dealerships and many other categories.

The $100 billion the Fed is pumping into the repo market is only the tip of the iceberg of the rotten financial system. There is a whole range of toxic paper out there, from corporate bonds to consumer credits. An estimation published last February said that the corporate bonds bubble was at $7.5 trillion: $1.3 trillion in leveraged loans, $1.2 trillion in junk bonds and $3 trillion of investment grade corporate debt just one notch above junk.

Deutsche Bank Offices in Frankfurt Raided Again

Sept. 26 (EIRNS)—German authorities have raided Deutsche Bank’s Frankfurt headquarters in search of information related to Danske Bank and a money-laundering scandal, Frankfurt prosecutors said Sept. 25. They are investigating whether Germany’s biggest bank facilitated money laundering and whether it failed to alert authorities about suspicious transactions quickly enough, the prosecutors said.

Danske Bank is under investigation in several countries, including the United States, Denmark, Britain and Estonia, over suspicious payments totalling €200 billion ($220 billion) moved through its tiny Estonian branch. Deutsche Bank acted as a correspondent bank for Danske.

The search, which began on Sept. 24 and concluded in the evening of Sept. 25, involved three prosecutors and nine agents from Germany’s Federal Criminal Police, BKA. Deutsche Bank said it was cooperating.

Prosecutors said the period in question is between 2014-2018, and that there is a suspect who worked at the bank during that period. Deutsche Bank had alerted authorities to no less than 1.1 million suspicious transactions, prosecutors said. Prosecutors also said that a double-digit number of transactions, with a volume of €12.5 million, were either registered too late by Deutsche Bank with authorities, or that the bank should have blocked them from the start.

Former CEO of Dankse Bank’s Estonian Branch Found Dead

Sept. 26 (EIRNS)—Estonian police found the body of Aivar Rehe in not far from his home on Sept. 25, two days after he had disappeared. The body was found after a search operation was launched involving sniffer dogs, drones and volunteers, around Rehe’s home near the capital, Tallinn.

The disappearance of the former head of Danske Bank’s Estonian operations had fueled speculation about links to a 2007-2015 money-laundering scandal that engulfed the bank. However, police had said earlier that no third parties were suspected in his disappearance. Estonian media suggested that everything at the scene where the 56-year-old was found points to death by suicide.

In Estonia, police last year detained ten former employees of the bank who were later charged with money laundering. However, Rehe was apparently not considered to be a suspect in the case. In an interview with the Estonian newspaper Postimees in March, Rehe said he had believed the bank’s mechanisms to prevent money laundering were adequate at the time. Despite this, he said, he felt responsible.

SCIENCE AND INFRASTRUCTURE

Senate Appropriations Committee Cuts Artemis Supplemental by Half

Sept. 26 (EIRNS)—Senate Committee staff reported to EIR’s Marsha Freeman today that the full committee had voted to approve the vote of its relevant subcommittee, to cut the supplemental appropriation in half, from the needed $1.6 billion to $744 million.  This will go to the Senate floor, probably quickly, to be voted on, and must then be reconciled with the House version in conference. The full House had erased the supplemental entirely in May.

As reported earlier, these capricious actions by the legislature may possibly prevent the first woman from landing on the Moon in 2024 as planned by President Donald Trump and NASA.

Further updates and directions will follow.

Reach us at eirdailyalert@larouchepub.com or call 1-571-293-0935