TUESDAY, JANUARY 21, 2020 Volume 7, Number 14 EIR Daily Alert Service P.O. Box 17390, Washington, DC 20041-0390

• Coming Financial Crash Shown in LaRouche’s ‘Triple Curve’
• U.S. ‘Defender’ Series of Military Exercises’ Aimed Against Russia and China
• German Peace Movement Leader Argues for Resolution Against NATO Exercise
• Russia Has Changed the Game in Libya
• BlackRock at Davos: The Billionaire Tell the Billions, Cut Back
• China Will break Its Space Launch Records in 2020
• SpaceX Test Success Allows U.S. To Resume Flights to ISS
• Egypt and Ethiopia Committed To Reach Agreement on Nile River Dispute Over Renaissance Dam
• Impeachers Continuing ‘A Long Train of Abuses and Usurpations’

EDITORIAL

Coming Financial Crash Shown in LaRouche’s ‘Triple Curve’

Jan. 20 (EIRNS)—If the Wall Street Journal’s report on Jan. 14 was accurate, officials of the Federal Reserve are “considering” breaking the law (the Federal Reserve Act) to print large amounts of new money and pump it directly, daily, into the super-speculative financial derivatives market, like using a military-grade flamethrower to raise a hot-air balloon. And this, not even to save banks as such, but to allow large hedge funds to cover mounting derivatives losses. It’s known that the New York Federal Reserve Bank has, since mid-September, been fighting big “liquidity holes” in the financial system by making $50-100 billion in very short-term loans to big banks every weekday morning, while keeping financial journalists and media almost completely quiet about it. For four months it has had to “fill in” for a disappeared 10% or so of the liquidity of the entire interbank lending market, to prevent chain-reaction liquidations of corporate debt and derivatives contracts leading to a financial crash.

But if the Fed is now this desperate, to think of throwing money-printing directly at big hedge funds, we have advanced well into a financial crisis leading to a crash—or, to an inflationary explosion. The situation has also made other parties desperate—the “permanent war” geopoliticians, the London financial-imperial crowd—desperate to entangle President Donald Trump in war, to distract the American people from economic peril.

That Jan. 14 report, in the words of Zero Hedge, maintained: “Fed officials are considering a new tool to ease repo market stress: namely bypassing the existing system entirely, and lending cash directly to smaller banks, securities dealers and hedge funds through the repo markets’ clearinghouse, the Fixed Income Clearing Corp., or FICC.” If the Federal Reserve starts this, it will be directly funding and rescuing the LTCMs of this crisis. Long-Term Capital Management (LTCM) was a large, 100-to-1 leveraged hedge fund speculating exclusively in financial derivatives, whose failure came close to triggering a financial crash in early 1999.

The Bank for International Settlements’ BIS Quarterly Review dated Dec. 8 found that when the interbank lending market first “froze” on Sept. 17 last year, some large hedge which were using that market to debt-leverage themselves, were on the verge of failure had the Fed not “unfrozen” it. There is no end in sight to that situation, except a crash when the Fed can’t pump enough new liquidity through the banks into the hedge funds and their speculations, to cover the losses. The Fed, in the words of Zero Hedge was “facing a constellation of multiple LTCM blow-ups.”

As always with LTCMs or London Whales, the derivatives market is where they were attempting to make superprofits, and winding up covering up losses.

The late physical economist and statesman Lyndon LaRouche’s Triple Curve, or “Typical Collapse Function,” described exactly the situation when the underlying real, physical economy is contracting, but both financial aggregates (debt) and monetary aggregates (money supply or “monetary base”) are rising rapidly and at a rapidly, increasing rate. At the point those rising curves cross, because the money supply must head for the sky to replace cascading losses in debt assets—at that point, the financial system is primed for an early collapse. It can’t be forecast precisely when, LaRouche stated, but it is coming.

He introduced the Triple Curve in 1995, before the rapid-fire series of interlinked financial crises of 1997-2001; and updated it in 2003 before his public 2006 and 2007 forecasts of the 2007-08 global financial blowout.

In 2014 Lyndon LaRouche published a comprehensive outline of what to do to stop the next, worse collapse coming at us now. Break up the Wall Street and the City of London banks with Glass-Steagall; create “Hamiltonian” national banking and credit institutions to put credit into the highest-technology, most energy-dense infrastructures, such as fourth-generation modular nuclear reactors and high-speed and maglev rail corridors; and make NASA space exploration and fusion power research crash programs, “science drivers” for the real economy. His June 8, 2014 “Four New Laws To Save the U.S.A.” is still the action plan.

STRATEGIC WAR DANGER

U.S. ‘Defender’ Series of Military Exercises Aimed against Russia and China

Jan. 20 (EIRNS)—As a result of the 2018 National Security Strategy that deemed Russia and China to be adversaries of the United States, the U.S. military has been engaged in reorienting itself away from the anti-terrorism/counter-insurgency conflicts of Southwest Asia towards “big war” confrontations against both Russia and China. Two manifestations of this reorientation are the “Defender” series of exercises, Defender-Europe and Defender-Pacific.

Defender-Europe 2020, set to run in April and May of this year, is described by U.S. Army Europe as “the deployment of a division-size combat-credible force from the United States to Europe, the drawing of equipment and the movement of personnel and equipment across the theater to various training areas.” The Washington Times reported last October that some 20,000 soldiers are expected to be deployed from bases in the U.S. to ports of arrival in Europe, including Germany and Poland, and then depart for training areas all over Eastern Europe, including the Baltic states. Lt. Gen. Chris Cavoli, commander of U.S. Army Europe, told Defense News at the time that the exercise will “test the Army’s ability to deliver a force” from the U.S. “to operational areas throughout Europe from Germany to Poland to the Baltic States and other Eastern European nations, Nordic countries and even Georgia.”

This will be the largest such exercise since the Reforger exercises of the Cold War period.

On a smaller scale, Defender-Pacific 2020 will send 5,000-10,000 soldiers at a time on short-notice exercises of as long as 45 days, focused on the East and South China Seas. Army Secretary Ryan McCarthy reported on Jan. 11 that the Army will also send two “Multi-Domain Task Forces” to the Pacific, one in 2020 and the second to follow in 2021. These are designed to “neutralize all the investments China and Russia have made,” in capabilities to keep U.S. Navy carrier task forces away from the Asian mainland, McCarthy said.

German Peace Movement Leader Argues for Resolution against NATO Exercise

Jan. 20 (EIRNS)—In a written interview with Sputnik Deutschland, Reiner Braun, co-chairman of the International Peace Bureau, calls for the German Bundestag to pass a resolution to cancel the planned NATO exercise “Defender Europe 2020.” At a time of the highest international tensions, which was aggravated by the Jan. 3 assassination of Iran’s Gen. Qasem Soleimani, the massive deployment of troops for military exercises, which treat Russia as the enemy, is the one thing which the world does absolutely not need, Braun stressed.

The United states will transfer 20,000 troops and 10,000 vehicles for this exercise to carry out war drills in Poland and the three Baltic states. The entire exercise is planned to be held over a period of several months, with most activities in terms of troops and transport on the highways of Germany and Poland during the end of February and early March.

The NATO exercise, the biggest in 25 years, is a provocation right on the eve of the 75th anniversary on the end of World War II, Reiner Braun charges, and stressing that for the first time in more than 75 years, German troops will again be at the western border of Russia, is something which the peace movement cannot and must not accept, against the background of the 27 million war victims which the Soviet Union suffered as a result of the Nazi policies.

Russia Has Changed the Game in Libya

Jan. 20 (EIRNS)—After Syria, Russia has proven to be the decisive power to stabilize another country devastated by “regime change” policy, according to EIR’s European Strategic Alert. The real architect of the Jan. 19 Berlin conference on Libya was Russia President Vladimir Putin, who dictated both the composition and the policy adopted. As Russia Acting Foreign Minister Sergey Lavrov told the press: “It was thanks to our insistence that the organizers retreated from their original plan to convene a meeting without the Libyan parties and invited the Libyan leaders to the conference. … The number of participants from among Libya’s neighbors was increased also at our initiative,” he said, and stressing that it is important to take into account these nations’ interests to ensure the sustainability of any agreements.

He explained that the conference was the result of four months of preparatory efforts, including five preliminary rounds and consultations of senior officials.

The 55-point final document signed by all foreign participants has the potential for stabilizing Libya, rebuilding the unity of the country under the auspices of the UN and for an end to all foreign interference. However, that is only a starting point. The next step is to pass a resolution at the UN Security Council as a precondition to implementing a political process.

The final document calls for “the establishment of a functioning Presidency Council and the formation of a single, unified, inclusive and effective Libyan government approved by the House of Representatives.” As is known, the current, UN-recognized government in Tripoli has not been recognized by the House of Representatives, which sits in Benghazi. This passage sounds like Tripoli’s Prime Minister Fayez al-Sarraj will have to step aside. Furthermore, the document calls for “the restoration of the monopoly of the state to the legitimate use of force,” and confirms, “We support the establishment of unified Libyan national security, police and military forces under central, civilian authority, building upon the Cairo talks.”

Although all foreign participants—including German Chancellor Angela Merkel, Turkish President Recep Tayyip Erdogan, French President Emmanuel Macron, British Prime Minister Boris Johnson, Italian Premier Giuseppe Conte, Egyptian President Abdel Fattah el-Sisi, Republic of Congo President Denis Sassou Nguesso, United Arab Emirates Foreign Minister Abdullah bin Zayed Al Nahyan, United States Secretary of State Michael Pompeo, China’s Director of the Office of Foreign Affairs of the Communist Party Yang Jiechi, and UN Secretary-General Antonio Guterres—have signed the Berlin document, neither Sarraj nor Haftar, who never sat in the same room, have underwritten it. However, it will be hard for them to withstand pressures from their main sponsors, Erdogan and Putin.

Both Haftar and Sarraj are expected to visit Moscow in the next period, Russian Presidential Special Envoy for the Middle East and Africa Deputy Foreign Minister Mikhail Bogdanov said, stressing that unlike Turkey, Russia has been able to speak with both of them, as well as with the Speaker of the Parliament Aguila Saleh Issa and head of Libya’s High Council of State Khaled al-Mishri.

It is now important to bring China into the equation, with the perspective of bringing Libya in the Belt and Road infrastructure development to guarantee that reconstruction and development take place concretely. No peace agreement can last without development.

COLLAPSING WESTERN FINANCIAL SYSTEM

BlackRock at Davos: The Billionaires Tell the Billions, Cut Back

Jan. 20 (EIRNS)—A new report by Oxfam says that the world’s 2,153 billionaires have more wealth than its 4.6 billion least wealthy people. News of this report is posted, where? On the website of the World Economic Forum, where some 120 of those billionaires are gathered. They are talking about making this “sustainable”—by making the 4.6 billion pay more in taxes and electricity bills, if they are to have electricity at all.

Multi-decabillionaire Sir Michael (“Mousolini”) Bloomberg is, unusually for him, skipping this year’s Davos. He is too busy “campaigning”: spending hundreds of millions of his huge wealth bludgeoning 325 million Americans to pay new taxes, abandon coal, forget cheap electricity, and dump their President.

BlackRock is being represented in World Economic Forum presentations by billionaire Larry Fink (CEO), and Vice-Chairman Philipp Hildebrand, one of the four (former central banker) authors of BlackRock’s “regime change” report this year at the central bankers’ annual event at Jackson Hole, Wyoming. That report not only proposed that central banks take over fiscal policy from governments and print helicopter money for governments, institutions, etc.; it also acknowledged the failure of quantitative easing over a decade. Thus BlackRock’s central banker “regime change” was not only a scheme to fund Green new deals, but a desperate attempt to print enough new monetary aggregate to rescue failing debts and save the financial system from crashing down.

Hildebrand’s “fundamental reshaping of finance” message has already been featured in a Bloomberg interview from Davos, in which he praises Bank of England Governor Mark Carney, he of the global central bank digital currency to replace the dollar. “Governor Carney has been and is at the forefront in pushing this,” said Hildebrand, referring to the green “reshaping.”

BlackRock operates funds which invest $7 trillion in assets for institutional and personal investors. A large portion are invested in stock, bond, or derivatives indexes, as requested by these investors, and therefore BlackRock cannot simply use that capital to blackmail—or greenmail—corporations into abandoning coal, oil, and nuclear, and getting into green boondoggles. But Hildebrand claimed that “The index operators are very much on board” with imposing “sustainability risk” penalties on fossil fuels. “We’ve made it clear that we expect companies to live up to their disclosure responsibilities to earn investments…. This will involve substantial changes in capital allocation and profitability.”

But there must also be the “green” stick of governments, he stressed. “There will be laws, there will be regulations.” He could have added, there will be taxes. “This is a government problem. We cannot reach the Paris [COP21] goals in the absence of coordinated, sustained government policies.”

SCIENCE AND INFRASTRUCTURE

China Will Break Its Space Launch Records in 2020

Jan. 20 (EIRNS)—China will, if things go as planned, break its record for space launches in 2020, sending more than 60 spacecraft into orbit with more than 40 launches, according to a plan released Jan. 17 in Beijing, reported by Xinhua, and picked up by Space Daily portal today. These will depend on the Long March-7A rocket, called by Xinhua the new “medium-sized high-orbit rocket”; the Long March-8 rocket sun-synchronous orbits; and the Long March-5.

The last, Long March-5 will carry the Chang’e-5 lunar sample return mission, China’s new generation manned spacecraft, and a Mars probe. Four nations in fact plan launches to Mars in July—China, the United States sample-return rover, a Roscosmos/ESA partnership, and the United Arab Emirates. July-August is the window when the relationship of Earth to Mars allows travel for the least amount of chemical fuel, which will not occur again for 26 months.

“This year will continue to see intensive launches,” Shang Zhi, director of the Space Department of the China Aerospace Science and Technology Corporation (CASC) told Xinhua. China’s space “blue book,” including future missions was released at Shang’s press conference. He said China will also be launching more geostationary satellites to complete the BeiDou-3 Navigation Satellite System in the first half of 2020, the lunar exploration, and a network of Gaofen observation satellites.

SpaceX Test Success Allows U.S. To Resume Flights to ISS

Jan. 20, 2020 (EIRNS)—SpaceX and NASA’s successful launch yesterday of the Falcon 9 rocket and “Crew Dragon” capsule (capable of carrying seven astronauts) and successful ejection of its “Crew Dragon” capsule in a simulated rocket failure, means that NASA can resume carrying astronauts to and from the International Space Station (ISS), international media reported today.

The carrier, Falcon 9, was launched from Cape Canaveral and, supported by parachutes, splashed down in the Atlantic Ocean off Florida’s coast. Though the Crew Dragon can carry seven, the test carried only two human “dummies” equipped with sensors to track the effect of acceleration on the human body.

“Congratulations to the @NASA and @SpaceX team for a successful In-Flight Abort Test! This critical test puts us on the cusp of once again launching American astronauts on American rockets from American soil. Spacecraft recovery operations are underway,” NASA Administrator Jim Bridenstine tweeted.

NASA has been sending its astronauts to the International Space Station from Russia, aboard Russian spacecraft, since NASA’s shuttle program ended in 2011. Since 2014, NASA has been working to once again use American ships through private partnerships. Then the Boeing Aerospace and SpaceX were awarded $4.2 billion and $2.5 billion respectively to develop pods for crews.

THE NEW GLOBAL ECONOMIC ORDER

Egypt and Ethiopia Committed To Reach Agreement on Nile River Dispute over Renaissance Dam

Jan. 20 (EIRNS)—While headlines tend to emphasize the enormity (and therefore the likelihood of disagreement) of the issue under discussion—utilization of water resources of one of the world’s largest rivers—participants remain committed to resolving any differences, and ultimately increasing the “utility” of the Nile River for humanity.

After discussions deadlocked in early December, the three Nile River nations, Egypt, Ethiopia, and Sudan, agreed to mediation by the United States and the World Bank, and have now met multiple times, in both the U.S. and Africa, and have made steady progress. At issue is the significant task of filling the reservoir behind the Grand Ethiopian Renaissance Dam (GERD), a necessary predecessor for starting up generators for an expected power production of a gargantuan 6,000 MW of electricity from the project.

While all recognize the transformative nature of the introduction of electrical power of this magnitude for the entire East African region, raising of the level of water from the Blue Nile behind the dam requires lowering levels downstream, where Egypt relies on Nile River water for about 85% of its water needs, including vital crop irrigation and municipal consumption.

According to the joint statement issued by the U.S. Treasury after meetings Jan. 13-15, the foreign ministers and water resources ministers have now agreed on a six-point roadmap to an agreement. The crucial point prescribes filling the dam in stages and during the wet season, with the third point reading, “The initial filling stage of the dam will provide for the rapid achievement of a level of 595 meters above sea level and the early generation of electricity, while providing appropriate mitigation measures for Egypt and Sudan in case of severe droughts during this stage.”

The ministers agreed to meet again in Washington, on Jan. 28-29, to finalize a comprehensive agreement, with additional technical and legal discussions in the interim period.

The statement’s conclusion reflects the “win-win” spirit of the New Paradigm: “The Ministers recognize the significant regional benefits that can result from concluding an agreement on the Grand Ethiopian Renaissance Dam with respect to transboundary [international] cooperation, regional development and economic integration that can result from operation. The Ministers of Foreign Affairs reaffirmed the importance of transboundary cooperation in the development of the Blue Nile to improve the lives of the people of Egypt, Ethiopia, and Sudan, and their shared commitment to concluding an agreement.”

On the sidelines of the Berlin conference on Libya on Jan. 19, Egyptian President Abdel Fattah el-Sisi and U.S. Secretary of State Mike Pompeo had also continued the discussion regarding the Grand Ethiopians Renaissance Dam.

U.S. POLITICAL AND ECONOMIC

Impeachers Continuing ‘A Long Train of Abuses and Usurpations’

Jan. 20 (EIRNS)—Exactly three years after President Donald Trump’s inauguration, we mark three years and two weeks in which there has not been a day without attacks staged by British and U.S. intelligence agencies and geopolitical war-mongers intended to force him out, or blackmail him to change his policies. Impeachment caps this “long train of abuses and usurpations.”

The President’s defense brief submitted to the Senate today accurately declares that: “House Democrats’ novel conception of ‘abuse of power’ as a supposedly impeachable offense is constitutionally defective. It supplants the Framers’ standard of ‘high Crimes and Misdemeanors’ with a made-up theory that the President can be impeached and removed from office under an amorphous and undefined standard of ‘abuse of power.’ ”

It rejected the “obstruction” of Congress charge as “frivolous and dangerous.” Sen. Lindsey Graham, on “Fox News Sunday,” said, “It’s the first impeachment in history where there’s no allegation of a crime by the President. … They’ve literally impeached President Trump because he wanted to exercise executive privilege,” since the House voted to impeach without allowing Trump’s claims of executive privilege over certain witnesses be tested in the courts.

The Fourth Amendment rights, against illegal searches and seizures without proper warrant, of Trump’s campaign officials, volunteers, and then those of his national security appointees, as well as their right to counsel, have been denied. The President’s own Sixth Amendment right to assistance of counsel for the accused in all criminal prosecutions has been abused and outright denied by the House. Speaker Nancy Pelosi and the House Impeachment Managers are now demanding he not have the Sixth Amendment right to call certain witnesses—such as Hunter Biden, or the “whistleblower” who started the charges against him, and others—to defend himself in the Senate against the charges of the House.

His Article 2 authority to “have power … and to appoint Ambassadors, other public Ministers and Consuls, Judges of the Supreme Court, and all officers of the United States whose appointments are not otherwise provided for,” has constantly been under attack by the war party and the British Empire knaves of Ambassador Sir Kim Darroch instigating that party.

Now currently, in abuse and violation of the Article 2 conditions for impeachment (“treason, bribery, and high crimes and misdemeanors”), the President is impeached for obstructing the legislative branch and exercising too much power. This, as explained by his legal team and others, makes the United States a British or “Parliamentary” system in which the House majority controls the President and removes him for policy differences. Alexander Hamilton’s warning against this in The Federalist No. 65 (March 7, 1788), “Powers of the Senate Continued,” is clear and urgent.
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