THURSDAY, OCTOBER 17, 2019 Volume 6, Number 206 EIR Daily Alert Service P.O. Box 17390, Washington, DC 20041-0390

• Waiting Beyond a Trump Impeachment: Deep Recession, Financial Crash, and a Green New Deal
• IMF Warning Is Serious on Financial Crash, But the New Managing Director Is Not
• Uh-Oh! Financial Squeeze on Banks Tightened Again on Wednesday
• Grayzone Bombshell on Identity of Biden’s Ukraine Regime Change in 2014 and Impeachment Now
• Trump Demonstrates How ‘Sanctions Work Better Than Fighting’
• Turkish President Erdogan Will Meet With Putin in Russia
• Impeachment and the Moon-Mars Mission Cannot Co-Exist
• UNCTAD Endorses Global Green New Deal
• Carney Explains to House of Commons, Computer Models? You Ain’t Seen Nothin’ Yet
• China Built Railway Extension Opened in Kenya

EDITORIAL

Waiting Beyond a Trump Impeachment: Deep Recession, Financial Crash, and a Green New Deal

Oct. 16 (EIRNS)—If Americans demand that the basics of Lyndon LaRouche’s economic laws be implemented now—from a Glass-Steagall Act to break up Wall Street, through to crash programs in space exploration and fusion power development—we can power our way past the deep recession and financial crash which is threatening.

Without that it’s coming now. The International Monetary Fund just made a very strong warning: 40% of all corporations’ debt is ready to explode inside the Wall Street and London banks as soon as we hit economic recession—which they said is heading toward the whole world economy. The Federal Reserve has been trying to stop a “liquidity crunch” in the banking system by pumping $50-100 billion in short-term loans into the big banks every morning for a month. Wall Street keeps demanding more and more; there is big trouble there, and the divisions of the banks specializing in speculations have to be split off, fast, so the lending banks can be protected. This requires bringing back the Glass-Steagall Act.

We need much greater productivity growth, credit for new infrastructure projects coming from a national bank, a mission to the Moon and Mars to drive the economy. We can return to rapid technological growth and scientific progress. Lyndon LaRouche formulated these policies as the basis for cooperation of the United States with other high-technology, space-faring nations: yes, China, Russia, India.

The United States remains committed to industrial development and technological progress because Donald Trump is its President. Every impeacher, every enemy of his now wants the so-called Green New Deal: spending trillions to send energy technology backwards, close down industry, mortify human beings to “save the planet.” The media impeachers are run by the British and U.S. intelligence war party—they use “Green New Deal” as a weapon against Russia and China as well as Trump. The green billionaires like Michael Bloomberg and George Soros want to see the human population reduced. Every Democrat, virtually every European or UN official talking about “infrastructure spending” means the wretched Green New Deal.

President Trump is not only, as he said, “an island of one” for ending the wars in the Mideast and Afghanistan; he is also standing in the way of the anti-industrial rampages in the name of “climate change.” In that way he was telling the truth when he tweeted today, “Our record Economy would CRASH, just like in 1929, if any of those clowns became President!”

If we allow impeachment to succeed, it will cost all of us very dearly. Understand LaRouche’s Four Laws and his proposed New Bretton Woods credit system, the mode of cooperation with those other space and scientific powers. We can go beyond anything mankind has had the powers to do until now; and the impeachment coup will be defeated.

COLLAPSING WESTERN FINANCIAL SYSTEM

IMF Warning Is Serious on Financial Crash, But the New Managing Director Is Not

Oct. 16 (EIRNS)—The IMF’s “Global Financial Stability Report 2019” just released includes a very serious warning from the IMF staff of what will soon happen on Wall Street and in London. This week’s new eruptions of liquidity crisis on the U.S. banking system’s “repo” market underline the seriousness of the warning. The new IMF Managing Director’s treatment of it in an interview is absurd, however—suggesting that the deepening global industrial/manufacturing recession has been caused by bad weather!—and should be dismissed as Green New Deal propaganda.

As financial columnist Larry Elliott cites the report in the Guardian Oct. 16, it places the level of corporate debt in U.S. and European economies at $19 trillion, encouraged by low and even negative interest rates, and calls this a timebomb. Why? It risks becoming a $19 trillion debt bomb precisely in a global recession. “the IMF said that almost 40% of the corporate debt in eight leading countries—the U.S., China, Japan, Germany, Britain, France, Italy and Spain—would be impossible to service if there was a downturn half as serious as that of a decade ago.”

To stress again: A global recession with −2% or −3% contraction in these major economies, will explode more than one-third of their corporate debt bubbles in waves of defaults, the report forecasts. That will blow up banks. Rather than a financial panic causing deep economic recession, even mild economic recession will lead to a financial panic. And that recession has already gripped industry andmanufacturing of many major nations whose current savior—the services sector—can go south at any time.

“Officials at the Washington-based organization fear that the buildup of debt makes the global financial system highly vulnerable and are telling member states not to repeat the mistake of the early 2000s, when warning signs of a possible market meltdown were ignored.”

But global media, including the Guardian, are ignoring the liquidity crunch in the Wall Street banking/hedge fund sector. (See “Uh-Oh!” report on the Wednesday morning squeeze, just below.)

And the IMF report does not predict the recession, but rather says a “global slowdown” is underway, “affecting 90% of the world’s nations” said new IMF Managing Director Kristalina Georgieva in a Euronews interview, published Oct. 9. But then “business editor Sasha Vakulina, also asked what other threats—aside from trade tensions, protectionism and Brexit—the world should be paying more attention to?” Georgieva replied: “If I have to single out what we should pay attention to, it is the risk of the changing climate. … We have seen how economies can be dramatically impacted by force of nature, and we have to brace for more of those shocks to occur.”

Uh-Oh! Financial Squeeze on Banks Tightened Again on Wednesday

Oct. 16 (EIRNS)—In the IMF’s new “Global Financial Stability Report October 2019,” the senior IMF officials responsible for it, Tobias Adrian and Fabio Natalucci, warn that “A sharp, sudden tightening in financial conditions could unmask these [corporate debt bubble] vulnerabilities.”

That “sudden tightening” became visible Sept. 16 in the overnight repurchase (“repo”) interbank lending market in the United States banking system. And on Oct. 16, the emergency liquidity lending operation started on Sept. 17 by the New York Federal Reserve Bank, had more liquidity demand from banks than it could meet. This is the first time this has happened since Sept. 24, and was not supposed to recur. The banks’ demand for overnight loans reached $80.35 billion, against the New York Fed’s lending limit of $75 billion in overnight “repo” loans.

This means that in addition to notable hedge fund liquidations which have been happening in recent weeks, one or more banks remain “liquidity-constrained” in spite of constant injections.

These repo lending operations have now been extended for the fourth time, now “at least until January 2020.” On Oct. 17 there will be offered: overnight liquidity loans, $75 billion; two-week loans, $35 billion; and outright purchases of securities by the Fed, called “not quantitative easing” at Fed insistence, $7.5 billion.

U.S. POLITICAL AND ECONOMIC

Grayzone Bombshell on Identity of Biden’s Ukraine Regime Change in 2014 and Impeachment Now

Oct. 16 (EIRNS)—In a piece published on Oct. 13th in his Grayzone website, and reprinted in Consortium News, Max Blumenthal has dropped a grenade into the ongoing impeachment process. (See “D.C.’s Atlantic Council Raked in Funding from Hunter Biden’s Corruption-Stained Ukrainian Employer While Courting His VP Father.”)

His topic: Some of the actual reasons why the regime change operation in Ukraine in 2014, and the continuing regime change operation in the United States from 2016 forward, are one continuous operation involving the same individuals and institutions. Blumenthal concentrates his piece on the central NATO/British infiltration institution in the United States, the Atlantic Council. As part of the public relations cleansing of the very, very dirty Ukrainian corporation Burisma, on which the cocaine-addicted Hunter Biden and his partner, Devon Archer, were awarded board seats, the Atlantic Council is receiving $250,000 a year from Burisma to support “anti-corruption” and governance initiatives in Ukraine, and regime change operations directed at Russia’s Putin.

In 2014, Joe Biden, one of the Atlantic Council’s favorite mandarins, appeared at the Council to underline one of the primary reasons for the Ukraine coup: The intention to capture Ukrainian gas supplies for American companies through fracking, and to end one of the primary sources of revenue for the Russian economy. Biden’s speech focused on supplying Europe with non-Russian sources of natural gas which Biden deemed a “game changer.” Capturing Burisma, which held most of the land in Eastern Ukraine targeted for U.S. and other fracking efforts, and papering over its more-than-apparent criminal reality, was a primary goal of Biden’s efforts. In addition, conducting a proxy war against Eastern Ukraine—the target, again, for these fracking activities—was also a primary goal of the Atlantic Council and Joe Biden. They famously used neo-Nazis followers of Stepan Bandera both in the coup and in their war in Eastern Ukraine to accomplish this.

Blumenthal highlights examples of the pay-for-play nature of the Atlantic Council, in which strategic policies can be dictated to Washington’s elites for a price, provided the petitioning country or its overlords are willing to pay up. In the past ten years, the quango’s revenues have grown from $2 million to over $20 million a year. The anti-tank Javelin missiles which Biden and the Atlantic Council have advocated for years should be the “lethal assistance” awarded to Ukraine’s former corrupt and far-right regimes, are made by Raytheon and Lockheed, both major funders of the Atlantic Council. In addition to Burisma’s nominal owner, Mykola Zlochevsky, the Atlantic Council also receives major funding from Ukrainian oligarch Victor Pinchuk, who has also donated millions to the Clinton Foundation.

Blumenthal documents how Hunter Biden’s appointment to Burisma’s Board was a widely known and controversial appointment back in 2014, attracting substantial media scrutiny well before Rudy Giuliani’s investigations on behalf of his client, President Donald Trump. He contrasts the decimation of Ukraine’s economy with Joe Biden as viceroy, to his ne’er-do-well son reaping $50,000 a month or more for PR efforts on behalf of a rightfully disgraced oligarch.

After the U.S. effort succeeded in temporarily clearing Burisma of all criminal charges in 2017, Burisma inked its deal with the Atlantic Council, represented by former U.S. Ambassador John Herbst. Herbst heads the Council’s Eurasia Desk, which has been central to regime-change operations in the region. Although Blumenthal does not mention this, Herbst is a mentor to fired U.S. Ambassador to Ukraine, Marie Yovanovitch.

Despite the Bidens and the Atlantic Council, whose efforts to whitewash Burisma continue, Blumenthal demonstrates that Burisma is still considered a criminal entity by Ukrainians and institutional financiers. The chief attack dog defending Joe Biden’s corruption and war crimes, is Michael Carpenter, Joe Biden’s former lead foreign policy advisor and now—hold your breath—a Fellow at the Atlantic Council. Carpenter and Blumenthal have had a continuing confrontation over Carpenter’s attempt to whitewash the neo-Nazi nature of the Azov Brigade and many of the key participants whom Joe Biden and Victoria Nuland used to conduct the Ukraine coup.

Trump Demonstrates How ‘Sanctions Work Better than Fighting’

Oct. 16 (EIRNS)—In a very feisty press conference today, in the form of a discussion in front of press with Italian President Sergio Mattarella in Washington on a state visit, President Donald Trump made frank comments to the effect that the U.S. would not be drawn into any further fighting or wars for other nations. President Trump delivered, in a deadly serious, thoughtful manner, these comments as his policy:

“Sanctions work better than fighting.” Speaking of one war, he said, “But we were supposed to be there for 30 days; we stayed for 10 years. … Actually, a couple of the Democrats—I won’t say which ones—but a couple of the more competent Democrats actually understood what I was doing and what the plan is.

“But, really, the plan is to get out of endless wars, to bring our soldiers back home, to not be policing agents all over the world.  If you look at other countries—Russia, China—they don’t have countries to take care of.  We have … close to 90 countries, in one form or another.  We’re in 90 countries all over the world….

“So I view the situation on the Turkish border with Syria to be, for the United States, strategically brilliant.  Our soldiers are out of there.  Our soldiers are totally safe. … Syria is protecting the Kurds. … Every player hates ISIS. … Syria more than us.  Russia more than us. … They can handle it, and they should handle it.  We can fight our own battles on our own territories.”

STRATEGIC WAR DANGER

Turkish President Erdogan Will Meet with Putin in Russia

Oct. 16 (EIRNS)—Russian Foreign Minister Sergey Lavrov told reporters today that that a political settlement in Syria, including in light of a Constitutional Committee meeting, will be discussed during Turkish President Recep Tayyip Erdogan’s upcoming visit to Russia.

Lavrov told TASS today, “Of course, it is primarily the situation in Syria, the tasks related to ensuring Syria’s sovereignty and territorial integrity and an uncompromising fight against terrorist units remaining [in the country]. Of course, efforts aimed at facilitating the political process by convening the first meeting of the Constitutional Committee [will be discussed] parallel with that.”

On Oct. 15, Russian President Vladimir Putin and Turkish President Recep Tayyip Erdogan discussed Turkey’s operation in Syria during a telephone conversation, where both stressed “need to prevent conflicts between the Turkish army and the Syrian government armed forces,” stated the Kremlin. Putin invited the President Erdogan to visit Russia soon, and Erdogan accepted the invitation. Afterward, Kremlin spokesman Dmitry Peskov said that the visit will take place on Oct. 22 in Sochi, reported TASS.

“Both Presidents reaffirmed their commitment to protecting the territorial integrity of the Syrian Arab Republic. … The Presidents of Russia and Turkey called for continuing the process of political settlement in Syria and expressed their resolve to promote the convocation of the UN-sponsored Constitutional Committee in Geneva in late October,” the Kremlin said.

Putin considered it unacceptable for terrorists guarded by the Kurds to take advantage of the current situation in Syria, and stressed that the terrorists are already attempting to break free and flee from Syria to neighboring countries. He also said Syria should be freed from any foreign military presence.

SCIENCE AND INFRASTRUCTURE

Impeachment and the Moon-Mars Mission Cannot Co-Exist

Oct. 16 (EIRNS)—Democratic Congressman José Serrano from the Bronx, has stated at a committee meeting today that he will not allow the Trump Administration’s Moon-Mars mission, Project Artemis, to be funded at the level requested and required to get it done. Serrano is chairman of the House Appropriations subcommittee which marks up NASA’s budget.

The White House and NASA have requested extra “manned space exploration” funding of $1.6 billion in Fiscal Year 2020 to start the acceleration of Project Artemis toward a human return to the Moon in 2024. The Senate Appropriations Committee has marked up three-quarters of that increase thus far.

But the Houston Chronicle reported that Serrano “dismissed” that effort today. “ ‘It is better to use the original NASA schedule of 2028,’ said U.S. Rep. José Serrano, a Democrat from New York and chairman of the House Appropriations subcommittee for commerce, justice and science. This, he continued, would allow for a safe, cost effective and successful program…. ‘We all want to return to the Moon, but we want to do it in a responsible way,’ Serrano said. ‘I’m extremely concerned about the additional cost to move the date up to 2024.’ ”

The paper did not point it out, but there has never been a “cost-effective” space mission, nor one “done in a responsible way.” Space missions like the Apollo Program or the new Project Artemis are productivity-effective by virtue of the science “driver” they provide for rapid technological innovation, and thus they pay for themselves multiple times but at a later time period than their launch.

As for the “original timetable of 2024,” Serrano’s vanilla “talking points” would take it back where it was until Trump took office: nowhere. NASA Watch website pointed out that this is waiting an administration out “until after an election.” One President’s NASA programs are typically gutted by an incoming President.

But more, Serrano is a Democrat committed to President Donald Trump’s impeachment. If he thinks impeachment could succeed, he will want to give the President nothing that could redound to his credit with the American people.

UNCTAD Endorses Global Green New Deal

Oct. 16 (EIRNS)—In a release on the occasion of the 75th anniversary of the creation of the Bretton Woods system as set out by U.S. Treasury Secretary Henry Morgenthau in 1945, the UN Conference on Trade and Development (UNCTAD) endorses the Green Finance agenda. The Oct. 15 statement, titled “To Salvage Multilateralism We Need a Global Green New Deal,” argues that “money still talks and governments have apparently lost their financial voice. The rules of the economic game have remained largely intact and in a dramatic reversal of fortune, the overlords of mass financial destruction are not only back to their old rent-seeking ways but are now being asked to avert mass environmental destruction and deliver the SDGs [Sustainable Development Goals]….

“What is needed is a Global Green New Deal that combines environmental recovery, financial stability and economic justice through massive public investments in decarbonizing our energy, transport and food systems while guaranteeing jobs for displaced workers and supporting low carbon growth paths in developing countries—which is where the climate battle will be won or lost—through the transfer of appropriate technologies and sufficient financial resources….”

Carney Explains to House of Commons, Computer Models? You Ain’t Seen Nothin’ Yet

Oct. 16 (EIRNS)—Bank of England Governor Mark Carney testified to the House of Commons Oct. 15 about computer models so fantastic that they can do a direct conversion of economic investment into temperature Centigrade, on any scale desired! The Guardian’s report of his remarks does not make clear where Carney got the model or models, but it is evident that they put Prof. Michael Mann’s notorious “hockey stick curve” completely in the shade.

Carney reportedly started by explaining “that the global financial system is backing carbon-producing projects that will raise the temperature of the planet by over 4°C.”  He “said the multitrillion-dollar international capital markets—where companies raise funds by selling shares and bonds to investors—are financing activities that would lift global temperatures to more than 4°C above pre-industrial levels.” Associated global sea level rise is some 40 feet. Count on it, says Carney.

Then for the real special sauce: “Carney told the committee that the GPIF [Japan’s Global Pension Investment Fund] analysis showed it held assets consistent with 3.7°C heating, and that the fund was now trying to manage this down. He said that AXA, the French insurance group, priced U.S. government bonds at 5.4°C, to reflect the carbon-intensive nature of the American economy. The U.K. is much lower, he said.” This gives us an idea of just how wonderfully powerful the “taxonomies” of companies, compiled about them by Wall Street financiers, must be.

All this the paper described as a “stark warning,” although “stark naked warning” might be more apt. It has still not been established by any public pronouncement, that Mr. Carney personally knows anything about climate science or Earth’s temperature record. The total rise in temperature since the often-cited 1880 “start” of the industrial age is 0.4°C in 140 years. Computer models claiming escalating temperature rise after 1990 have consistently proven wrong.

THE NEW GLOBAL ECONOMIC ORDER

China-Built Railway Extension Opened in Kenya

Oct. 16 (EIRNS)—The second phase of Kenya’s Standard Gauge Railway (SGR) leading towards Uganda, part of the future East-West Africa Railway corridor, was opened today, with passenger services expected to begin from Oct. 17. President Uhuru Kenyatta is expected to attend the launch ceremony alongside Chinese Ambassador to Kenya Wu Peng.

The extension connects the capital, Nairobi, to Naivasha town, where the Kenyan government intends to build a dry port for inland cargo services. The 120 km railway line has been built by the China Communications and Construction Company (CCCC), and is mainly funded by the Chinese government.

The SGR is billed as the biggest project in Kenya since independence, and is part of an ambitious government plan to connect the coastal city of Mombasa to the western city of Kisumu. The Mombasa-Nairobi phase of the project was built at cost of $3.8 billion, with China Exim Bank providing 90% of the financing, and the remaining 10% was contributed by the Kenyan government.

Ahead of today’s launch, CCCC has been conducting test runs over the past two months with a focus on safety and service delivery.

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