EIR Daily Alert Service, FRIDAY, October 11, 2019
FRIDAY, OCTOBER 11, 2019
Volume 6, Number 202
EIR Daily Alert Service
P.O. Box 17390, Washington, DC 20041-0390
- Why the Sudden Rush to Impeach?
- Fed’s Pre-Crash Actions of 2007 Continue to Repeat in 2019
- Bank Crimes Once Stopped by Glass-Steagall Keep Getting Worse
- Behind the World’s Most Powerful Central Banker
- Unicredit Announces Negative Rates For Depositors
- Trump Takes on ‘Military-Industrial Complex’ That Sends American Sons and Daughters Home in Coffins
- Lyle Goldstein Proposes U.S., Russia, China Should Develop North Korea’s Rason Port Together
- Indictment of Giuliani’s Helpers Dominates Coup News
- Ecofascists Seeking To Green Italy’s Constitution
Oct. 10 (EIRNS)—Why the sudden, jumped-up drive to impeach this President, after years of multimillion-dollar, hostile investigations have all come up empty? Because of a telephone call? Does anyone really believe that?
The real reason would be obvious if Americans knew the truth about the world financial system—but they haven’t caught on to that just yet. Soon they will know. That coverup can’t last much longer.
The truth is that the failed megabanks of 10-12 years ago, which are fewer and bigger today thanks to the taxpayer bailout, have now failed again. The $23 trillion bailout of 2008-09 didn’t work; all of a sudden it has come unstuck. For almost a month now, the Federal Reserve has been forced to pump in $50-100 billion of short-term money into the Wall Street banks every business day, and there’s no end in sight.
The Fed pumped in $88 billion this Thursday alone.
The whores of the financial press claim that no one knows why this is happening. If you believe that, you probably believe the story of the telephone call. The truth is that there are zombie banks out there on Wall Street. The other bankers know they are effectively insolvent, either in their own right or by way of their bankrupt customers. Other banks won’t lend to them, and they secretly go to the Fed window, just as in 2008. The Fed zealously keeps the names secret, as they did then, because it would be the kiss of death for any of them if it came out.
“Astonishingly,” Pam and Russ Martens write in “Wall Street on Parade” today, “Congress has yet to call a hearing to ask these crucial questions.” Yes—seems they’re busy with something else….
“Let’s say, hypothetically,” the Martens continue “that there is a bank with a large, interconnected footprint on Wall Street that’s in trouble, and on top of that, there’s a big hedge fund taking on water and listing on its side. The New York Fed (one of the 12 regional banks in the Federal Reserve System) in that situation might be expected to call all of the big lenders on Wall Street to a secret meeting at its offices and ‘suggest’ (much like a consigliere makes a ‘suggestion’) that they bail out these entities for the good of the markets and financial system.”
They go back to autumn evenings of previous years:
“Here’s a paragraph from a Wall Street Journal report dated Sept. 25, 1998:
“ ‘Meeting Wednesday evening at the headquarters of the New York Federal Reserve Bank, 15 financial institutions agreed to chip in $3.5 billion to keep alive the Long-Term Capital Management L.P. hedge fund.’ ”
They add another Wall Street Journal report of Sept. 13, 2008:
“ ‘The Federal Reserve Bank of New York held an emergency meeting Friday night with top Wall Street executives to discuss the future of venerable firm Lehman Brothers Holdings Inc. and the parlous state of U.S. financial markets.’ ”
But yet, contrary to what these flashbacks might imply, what worked then will not work now—even if the American people were disposed to tolerate it all over again. As Helga Zepp-LaRouche has stressed repeatedly, the whole medicine-chest has been used up—$23 trillion in bailouts, quantitative easing (which the Fed has begun again), and zero interest-rates—even negative interest rates. Everything has been tried.
The present case is like that of Edgar Allan Poe’s “The Facts in the Case of M. Valdemar.” The only cure is that of Lyndon LaRouche’s proposals in his Four Laws (see EIR, June 13, 2014) and his proposal that the United States, China, Russia and India jointly initiate a “New Bretton Woods” world credit system to replace the present bankrupt world monetary system.
The real physical economy must be saved, while the financial succubus of the City of London and Wall Street is isolated off and put into bankruptcy. There is much more to it than that, for which the reader is advised to consult LaRouche’s writings directly.
President Donald Trump is being framed up for impeachment at the direction of the international financier oligarchy and its leader “Mr. Green Finance” Mark Carney, Governor of the Bank of England. Why? Because these men fear that President Trump will move in the direction LaRouche has indicated as the crisis hits over the coming days.
COLLAPSING WESTERN FINANCIAL SYSTEM
Oct. 10 (EIRNS)—However hard President Donald Trump may be working to create “trade talk optimism” for the stock market, the financial crisis facing the world sticks out, in the fact that the U.S. Federal Reserve is compelled to keep pumping emergency cash into the banking system to cover leaks in the “everything bubble” of unpayable debt. The situation continues to be one that has not been seen since the spring and summer of 2007, and to echo it strongly.
This morning the Fed made overnight and two-week “repo” loans to banks totalling nearly $90 billion. Two days ago Fed Chair Jerome Powell announced more quantitative easing “soon”—while insisting it was “not QE,” as in “this time it’s not a duck.” While some of the repo loans are repaid by the banks, the measure of the crisis the Fed faces is how much it has had to enlarge its balance sheet since Sept. 17, both by reinvestment of interest on government securities and the mortgage-backed securities it holds, and by emergency net repo lending—both representing rapid injection of liquidity into the banking system. As calculated by the “Wall Street on Parade” website, that was $176 billion in the two weeks to Sept. 30. And in the past two days, Oct. 9-10, the Fed has made “repo” loans of $118 billion more.
During spring 2007, all that was apparent to most people was that home foreclosure rates had increased around the U.S., some mortgage lending companies had imploded, and home prices had stopped rising. But the Federal Reserve began making just such liquidity loans to banks, while then-Chair Ben Bernanke pronounced that problems were “contained” in the subprime mortgage sector. When Bear Stearns had to shut down two large hedge funds that June, the Fed’s liquidity lending increased. Aided by these injections, the prices of toxic mortgage-backed securities debt held up and even rose further, as ironically dramatized in the film “The Big Short.” Vast bank and insurer liabilities in the then-$700 trillion derivatives markets were concealed; though not from Lyndon LaRouche, who announced the death of the financial system in 2007 and put out legislation that August to save homes and commercial banks from the coming crash.
When Bear Stearns itself failed in March 2008, the Fed made a very large long-term “repo” loan of $30 billion to JPMorgan Chase to take over Bear Stearns’ assets. This showed how thin was the Fed’s line between making emergency “repo” loans and buying securities at face value from banks. In the same way now, what has effectively become a “standing overnight and term repo facility” at the Fed, is now going over into QE4.
With an industrial recession worsening the corporate debt center of the “everything bubble,” we know what is coming unless Wall Street banks are broken up by Glass-Steagall legislation.
Oct. 10 (EIRNS)—Even by the standards of Wall Street banksters, the Federal charges recently lodged against JPMorgan Chase are unique. Federal prosecutors have charged that the precious metals trading desk at Wall Street’s biggest universal bank has been a criminal RICO, a Racketeer-Influenced and Corrupt Organization, its primary activity having been attempts to rig the markets for gold, silver and other precious metals.
Since Morgan was already “on probation” under non-prosecution agreements for other crimes, and this one is particularly serious, it should now lose its U.S. banking license and have to reorganize under new management to try to regain it. But that is very unlikely to happen.
Here’s what ultimately made this crime possible: Bank holding companies’ involvement in owning and trading commoditiesand/or commodity infrastructure (such as oil tankers) for their own accounts, was banned by both the 1933 Glass-Steagall Act and by the 1957 Bank Holding Companies Act. Since large banks could otherwise become very large-scale holders of commodities and commodity infrastructure, they could potentially manipulate prices in the same markets in which they were trading, even if only “for their customers.”
When Glass-Steagall was eliminated in 1999, the 1957 act still prohibited such ownership; so the Federal Reserve proceeded to issue exemptions from that act’s commodity-ownership prohibition, to all the major Wall Street universal banks by 2004.
Gold and other precious metals are commodities of course. This is not the first case of such manipulation since 2004. Morgan Stanley became one of the biggest owners of oil companies, oil refineries and tankers. JPMorgan Chase owned electricity infrastructure on the West Coast and was found to have manipulated electricity prices after the collapse of Enron’s criminal scheme. Goldman Sachs was repeatedly sued by aluminum users, for rigging aluminum supply and price in the 2000s by dominating warehouse storage capacity for the metal.
Maintaining Glass-Steagall—now, restoring it—is much more effective than prosecuting individual bankers after the fact for the crimes they will absolutely commit.
Oct. 10 (EIRNS)—President Donald Trump is concentrating his fire on the wrong central banker. Clearly, the world’s most powerful chief in central banking is Mark Carney, the Governor of the Bank of England and would-be terminator of worldwide investment in fossil fuels and “carbon-based” technologies (such as human bodies).
• Early in his career, after a dozen years with Goldman Sachs, Carney for four years was Canada’s deputy finance minister and deputy governor of the Bank of Canada at the same time!
• Becoming Bank of Canada Governor in 2008, Carney quickly introduced the zero-interest-rate policy then copied by all major central banks in the world except that of China, and which Carney admitted—at Jackson Hole this past August—was a failure.
• Carney then became Bank of Canada Governor and chairman of the Financial Stability Board—and head of the BIS Committee on the Global Financial System, all at the same time.
• By 2012 he was also Coordinator of the World Economic Forum (Davos conference) and appointed the first non-Briton Governor of the Bank of England, leaving the Bank of Canada but retaining the FSB and BIS board chairmanships until late 2018.
• Carney pushed aside Bank of England senior financial expert Andrew Haldane to become its governor, and publicly attacked Haldane for supporting bank separation.
• In 2015, around the UN’s COP21 Conference and Paris Climate Agreement, Carney initiated the central banks’ Task Force on Climate-related Financial Disclosure (TCFD) under the Financial Stability Board, which is affiliated with the BIS, and made Michael Bloomberg chairman of it. This is the vehicle through which Carney said, at the UN Sept. 23, companies which take on “shades of green” will make profits and those which don’t will cease to exist.
• In his August 2019 Jackson Hole speech Carney presumed to get rid of the dollar as international reserve currency and replace it with a digital, global central bank currency—something no other central banker would have dared, or been crazy enough, to propose.
• He’s now head of the line to be IMF Managing Director.
But is there someone more powerful? At the same time Carney spoke, at COP21, about institutionalizing climate-related risk, his wife published a big report on the same subject. Diana Fox Carney wrote a 2015 report, updated in 2016, for the Institute for Public Policy Research, entitled “Known Unknowns: The Hidden Threats That Climate Risks Pose to British Prosperity,” with one Joss Garman (Greenpeace UK, Plane Stupid, European Climate Foundation-UK, The Syria Campaign formed to support the White Helmets). Nearly every section of this report is on some aspect of the “economic risks of climate change.” Diana Fox Carney is otherwise on the Council of Ambassadors of WWF-UK, board member of the Shell Foundation, and a trustee of the “sustainable energy foundation” Ashden, and of Friends of the Royal Society.
Politico, in an Oct. 24, 2018 article, quoted a person who has known Carney for a decade, saying “his wife’s powerful influence has shaped Carney’s thinking on the matter.”
Oct. 10 (EIRNS)- Unicredit head Jean-Pierre Mustier has announced that the former Italian bank will punish large depositors with negative rates. Such rates will be applied to deposits larger than €100,000, Mustier said, but the increasing sentiment is that this is just the prelude to also hit smaller accounts.
Unicredit is not some small, insignificant bank: It operates in 17 countries—mostly, but not entirely in Europe—with more than 8,500 branches and some 147,000 employees.
The gods first blind those whom they wish to destroy. Bets are being accepted on when the run on deposits will start.
ENDING THE STRATEGIC WAR DANGER
Oct. 10 (EIRNS)—President Donald Trump yesterday threw the horror of war back in the faces of reporters and politicians attacking his decision to pull U.S. military support from the Kurdish militia in northern Syria, counterposing his commitment to end the endless wars as he had promised in his 2016 campaign, to the threat from the “military-industrial complex” which President Dwight Eisenhower, a retired general, had warned of on Jan. 17, 1961, three days before leaving office.
Given the current refusal of most so-called media to report what the President of the United States says in full, and the elementary humanity which underpins his strategic decision, we here provide the key, concluding section from the transcript of Donald Trump’s discussion with White House reporters yesterday afternoon after signing two Executive Orders on Transparency in Federal Guidance and Enforcement:
“Now, if we go on the theory that some of the folks in Washington go by—who all do very well with the military-industrial complex…. You know, the military-industrial complex. Take a look at Dwight Eisenhower; he had it figured right many years ago. It’s got tremendous power. They like fighting. They make a lot of money when they fight.
“But it was time to bring our soldiers back home…. I will tell you: The hardest thing I have to do, by far, much harder than the witch hunt, is signing letters to parents of soldiers that have been killed. And it’s not only that—in areas where there’s not a lot of upside, if there’s any upside at all, and in many cases, it’s only downside.
“And especially when that solider was killed in a Blue-on-Green attack. You know what that is, right? That’s where a solider being trained or whatever turns his gun on an American solider…. We have many of them in Afghanistan—in particular, in Afghanistan.
“The hardest thing I have to do is signing those letters. That’s the hardest thing I have to do. And each letter is different…. And sometimes I call the parents. Sometimes I see the parents. I go to Dover [Air Force Base], when I can, but it’s—it’s so devastating for the parents when they bring that boy or young woman out of the back of those big, powerful planes in a coffin, and the parents are there….
“I’ll get there early…. I said, ‘The parents seemed to be okay.’ [The military staff at Dover AFB reply:] ‘Well, actually, sir, they aren’t…. Sir, you never know until the back of that massive cargo plane opens up.’
“And they walk down holding a coffin with four or five great soldiers on each side of it, representing our various forces…. And I see people that were smiling, ‘Oh, Mr. President, thank you for being here. Thank you for being here.’ And I think they’re doing great. And then, twenty minutes later, we’ll be outside when that big plane pulls up and that door comes down, and they are walking the coffin with their boy inside this coffin with an American flag over the top. And they’re walking that coffin down this ramp. And I’ve seen people that I thought were really incredible the way they were … I didn’t even understand how they could take it so well—scream, like I’ve never seen anything before. Sometimes they’ll run to the coffin. They’ll break through military barriers. They’ll run to the coffin and jump on top of the coffin. Crying mothers and wives. Crying desperately.
“And this is on these endless wars that just never stop. And there’s a time and there’s a place, but it’s time to stop.
“And just to finish, last Friday, I went to Walter Reed [Military Hospital]. And I gave out five Purple Hearts to incredible young men—in this case, all men. And they took a beating. Beautiful people. They took a beating. One couldn’t be there because the beating was so great that he was at a totally different part of the world. He lost a leg. He lost an arm. Ryan. He had tremendous damage, beyond even what these young folks went through.
“But I’ll tell you what: For me, it’s very hard when I see that. It’s very hard. It’s easy to talk tough. You know, tough guys. All of these tough guys. ‘Let’s keep fighting. Let’s keep fighting.’ If they had to go to Walter Reed—.”
Oct. 10 (EIRNS)—Lyle Goldstein, a professor at the China Maritime Studies Institute at the United States Naval War College, has issued a proposal for the Trump Administration to take a development approach to the Korea situation, by joining forces with China and Russia in the development of the port at Rason in North Korea, which is already being developed by China and Russia.
Rason sits at the northeast corner of North Korea. China built a modern road from Jilin province, providing access from China’s northeast to the sea, while Russia reconstructed its rail connection from Vladivostok. Before South Korea’s former President Park Geun-hye shut it down under pressure from Obama, three South Korean conglomerates (KORAIL, POSCO Steel, and Hyundai Marine) were shipping Russian coal from Rason into South Korea—a model for potential cooperation among Russia, China, and South Korea with the North. EIR has strongly promoted that model.
Now Goldstein is proposing a similar approach involving the U.S., given President Donald Trump’s opening to Kim Jong Un. His article, “Could This Business Venture Create Peace on the Korean Peninsula?” on Sept. 29 in The National Interest, proposes that “Washington should embrace a little-known ‘free port’ proposal for North Korea’s northeastern border that could powerfully demonstrate North Korea’s latent potential for rapid growth.” Goldstein observes that Trump’s firing of John Bolton could free him to make such an economic proposal.
He continues: “To do so, he would obviously require the close cooperation of Beijing,” which has worked tightly with the U.S. on the sanctions policies already. And, he writes, a “recent and rather unusual article in the official Chinese journal Ocean Development and Management may point toward an unexpected—but potentially expedient—vector: The Tumen River port of Rajin (Rason)…. This is where the three countries, including North Korea, China and Russia meet. That in itself makes the location especially fascinating, but then there is the additional fact that, as these Chinese researchers explain: ‘The Tumen River is the closest location to the [Arctic] Northeast Passage in China.’ That route is now a key part of Beijing’s Belt and Road Initiative and, as it is explained in the article, “The construction of the Tumen River into the sea port has important economic driving effects and strategic significance for China.”
Goldstein concludes that China built a “costly, yet scenic, rail line” to the three-nation corner. “Beijing was sending a message to the world,” he writes, “about how to resolve the Korean issue: focus on economic development issues and put aside political/security issues. The United States and other major powers should now follow that approach to its logical conclusion by carving out an exception within UN sanctions that will allow the Rajin [Rason] Port to flourish as a completely free-trading entrepôt in a part of the world desperately thirsting for a ‘live and let live’ approach…. Attempting regime change through economic strangulation might actually yield a good result, but it’s just as likely to spark the apocalypse. Let’s continue to think ‘outside the box’ and try a different, constructive approach.”
U.S. POLITICAL AND ECONOMIC
Oct. 10 (EIRNS)—Way back on Jan. 3, 2017, Sen. Charles Schumer confided to MSNBC’s Rachel Maddow that the President was being “dumb” to go after the intelligence community because “they have six ways from Sunday at getting back at you.”
The arrest of two U.S. citizens, born in Ukraine and Belarus, respectively, and two others last night at Dulles International Airport, represents a significant unfolding and acceleration of the coup against the President. The two featured characters, Lev Parnas and Igor Fruman, have been working with Rudy Giuliani in his investigation of the Ukrainian part of the Russiagate coup against President Donald Trump, and the Bidens’ activities in Ukraine. The indictment makes clear that the doings of these two have been on the federal radar and tracked since 2018. Despite their U.S. citizenship, the media scandal machine uniformly drilled down on “two Soviet-born individuals” in their headlines.
In March 2018, the two made a $325,000 contribution to America First Action, the superpac associated with Donald Trump, and began contributing to Republican politicians using funds which, it seems to turn out, were not their own and were foreign. One of these contributions went to Pete Sessions, the former Texas Congressman and current candidate for the House, it is alleged, to engage in efforts to remove the U.S. Ambassador to Ukraine Marie Yovanovitch—efforts which the indictment says were backed by unnamed Ukrainian officials. The two also contributed to Ron DeSantis’ campaign for Governor in Florida and to House Minority Leader Kevin McCarthy. The indictment also claims that the two used funds from an unidentified Russian to attempt to buy into Nevada marijuana ventures. Attorney General William Barr was briefed on the federal investigation when he took office in February 2019 and, according to Justice Department statements, supported it. President Trump was at pains this evening to distance himself from them, saying that although there may be pictures of him with the two, he does not know them.
The indictment makes clear that none of the candidates or political action committees which received the apparently illicit contributions knew that they were foreign sourced or illicit. America First Action did not spend the money, but sequestered it, once the FEC complaint was filed.
An investigative journalism project by BuzzFeed and the Organized Crime & Corruption Reporting Project has been following and publishing the doings of the two throughout 2018 and 2019. OCCRP has also published entire parts of the faux whistleblower’s complaint well before he drafted it using their materials. OCCRP has been associated with Nellie and Bruce Ohr, Christopher Steele, and other players in the coup in the past. BuzzFeed, as most know, was the entity selected to publish Christopher Steele’s dirty dossier. The two have a trail of failed business dealings and claims of fraud, precisely the types of unsavory backgrounds favored for intelligence assets or FBI informants.
Marie Yovanovitch is scheduled to testify before the House Intelligence Committee on Oct. 11, and is still a State Department employee. It is unclear whether executive privilege will be invoked.
Volodymyr Zelensky, the new President of Ukraine, reiterated today that no pressure had been placed on him by President Trump to do anything.
This is a developing and open investigation which we will continue to pursue as the facts develop.
Oct. 10 (EIRNS)—After Italian Prime Minister Giuseppe Conte announced on the sidelines of the UN General Assembly that “we must insert protection of environment, biodiversity and sustainable development in our constitution,” the Constitutional Affairs Committee of the Italian Senate is moving to do just that. The committee has scheduled a discussion on a draft proposal “to insert protection of environment, biodiversity and animals into Article 9 of the Constitution,” said draft bill author Sen. Gianluca Perilli, a member of the Five Star Movement.
The text says: “The republic protects the environment and the ecosystem, biodiversity and animals, [and] promotes sustainable development including in the interest of future generations.” It does not specify whether “future generations” refers to human beings or animals.
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