EIR Daily Alert Service, Saturday, March 14, 2020
SATURDAY, MARCH 14, 2020
Volume 7, Number 52a
EIR Daily Alert Service
P.O. Box 17390, Washington, DC 20041-0390
- Two Steps Forward on Zepp-LaRouche’s Summit Call: Follow LaRouche Movement’s Alert Service
- Urgent Physical Economic Requirements for Defeating COVID-19
- Federal Reserve’s Endless Bailout Continues, With Market or Bank Holiday Possibly Next
- Lagard’s Brutal Statement on Italy Causes Financial and Political Storm
- National Intelligence Estimate Confirmed LaRouche’s 1973 Biological Holocaust Forecast 20 Years Ago
- Milan Wants to Build an Emergency Hospital in Six Days
- President Trump Declares National Health Emergency; Washington and Private Sector Join for Immediate Action
- Italy Withdraws From NATO Defender-Europe 20 Exercise
March 13 (EIRNS)—President Donald Trump’s state of emergency press conference on the coronavirus will be followed by a videoconference Monday, March 16 among the heads of state of at least the G7 nations, to discuss joint scientific research on viral pandemics as well as actions to counter the economic impacts of the COVID-19 epidemic. The summit teleconference will include at least the G7 leaders, and was announced today by President Macron of France.
As regular readers following these alerts know, Helga Zepp-LaRouche on Jan. 3 called for a U.S.-China-Russia summit on means to peace and reconstruction in the Mideast, which was quickly followed by Russian President Vladimir Putin’s call for a five-power summit (the UN Security Council permanent members) on peace and security, and the others’ agreement. Now, with the world facing a spreading pandemic and an unfolding deep economic recession, twice in the past three weeks Helga Zepp-LaRouche has circulated appeals for a summit on a new international system of credit for development projects and “crash programs” of scientific research. This, she said, must include the leaders of the United States, China, Russia and China, but also others.
In addition, international circulation of Helga Zepp-LaRouche’s March 9 call for cancellation of NATO’s massive “Defender-Europe 2020” war exercises in the midst of a pandemic crisis, has been followed by breaks. Today Italy withdrew from those maneuvers, after the exercises had been scaled back and the northern component involving the Nordic countries cancelled.
These victories are partial steps. Follow them up with wider and more rapid mass circulation of the March 8 Zepp-LaRouche call for the summit on a “New Bretton Woods” credit system—including to heads of state themselves, as on March 12 it was personally given to Mexico’s President Andreas Manuel López Obrador. (See “Zepp-LaRouche Updates Appeal World to Leaders Trump, Xi, Putin and Modi To Urgently Implement LaRouche’s Four Laws,” EIR Daily Alert, March 9, 2020.)
What we are advancing toward, in this deep economic and social crisis, was organized for by Lyndon LaRouche over the last two decades of his life. He wanted a decision by the leaders of the most important industrial and scientific nations to end the 50-year misery of the City of London’s “floating-exchange-rate” system of financial speculation and austerity, with all its financial crashes. He called for returning to the credit and monetary system it replaced, Franklin Roosevelt’s Bretton Woods system, to foster development loans and capital goods exports to develop the underdeveloped nations. LaRouche always specified that these nations would best develop their capacities to help develop others, if they worked together on aggressive space exploration, space sciences, and breakthroughs to fusion energy and plasma technologies. These “science drivers” are one of his “Four Economic Laws” which must be implemented in this crisis.
Why absolutely necessary now? Because LaRouche, 50 years ago when Roosevelt’s Bretton Woods system was destroyed by the London bankers, immediately forecast so much austerity against the developing countries that pandemics—new, and returned diseases—would spread from them. He made that forecast of “biological holocaust” in 1974 (to be republished next week in the Executive Intelligence Review dated March 20), some 26 years before the CIA, in a 2000 report, discovered that this was happening and would continue.
Helga Zepp-LaRouche is absolutely right to insist on the end of “Defender-Europe 2020.” Here—even as the President bars travel of Europeans to the United States—20,000 American troops have already gone to Europe, without masks, (9,000 were already there), to practice a war against an adversary which is not attacking us. They should come home and aid in the public health fight against the enemy which is.
THE NEW GLOBAL ECONOMIC ORDER
March 13 (EIRNS)—Just as the outbreak of the global coronavirus pandemic is a direct consequence of a half-century of destruction of the global physical economy, which has reduced the planet’s potential relative population-density in precisely the manner foreseen by Lyndon LaRouche, the war plan for defeating COVID-19 requires a global alliance of forces to immediately reverse those suicidal policies, rebuild the economy, and launch a crash program to produce the necessary weapons to do battle against the disease. Every competent medical expert has stressed that the battles must be waged on a continuum of fronts, in order to win the war: from early detection kits; to quarantine and other protective measures and gear; to advanced hospital facilities with necessary equipment; to the qualified medical personnel with adequate training for these wartimeconditions.
The United States, and almost every country on the planet, is woefully deficient and unprepared in all these areas—a deficiency that is not solved by lowering the standards of care, as has been demanded of the CDC, but by gearing up production massively to address the problem. It’s what Franklin Roosevelt did to turn the U.S. into the arsenal of democracy to defeat fascism, along with the Allies; it is what must be done today.
President Donald Trump has to take action, and drag the Congress along with him if need be, to forge a New Bretton Woods credit system agreement with China, Russia, India and other nations. Such a working alliance would act as follows:
• The big Wall Street and City of London-centered banks must be put through bankruptcy reorganization, not bailed out. Bailouts to these banks and their holding companies would again, as in 2008, only be passed along to their thousands of speculative units, client hedge funds, investment banking units, and so on. The big banks’ deposit base would also be looted to keep the speculative bubble—all $2 quadrillion of it—afloat. Instead, restoring the Glass-Steagall Act will put these speculative units out in the cold, while protecting useful commercial banking activity. The large banks will have to sell off their speculative units quickly, stop lending to them, and let them fail. Retirement funds will have that short time to get out of these speculative investments.
• Create a capital budget for new infrastructure construction, including building new hospitals and other public health facilities, and the additional electricity capacity and clean water supplies they need. There is plenty of other new infrastructure needed as well. New Federal bonds, construction bonds, have to be issued for this capital budget, whether by an emergency nationalization of the Federal Reserve or simply by creating a Reconstruction Finance Corporation backed by the Treasury. This infrastructure credit corporation or national bank will cooperate with those of the other founding powers in the New Bretton Woods system, to fund critical projects worldwide and capital goods exports. The projects directly related to COVID-19 include:
Test kits must be produced on a massive scale, and advanced testing stations must be established—including using drive-through testing facilities such as those employed successfully in South Korea and elsewhere. There is also a grave shortage of RNA extraction kits needed for performing the tests, as the Centers for Disease Control and Prevention’s Director Dr. Robert Redfield has warned.
There are insufficient N95 respirator masks for healthcare workers, let alone the public. Other components of the required PPE (personal protective equipment), such as gowns, goggles, boots, gloves, and other protection, are also not available in the necessary quantities. Production must be increased by orders of magnitude, with the government charting the course for the private sector.
New hospitals must be built, with isolation and intensive care capacity, both in the U.S. and all over the world. The COVID-19 virus is extremely contagious and has much worse mortality than influenza. Moreover, virology experts forecast its return over 2020-2021. Modern care ratios of beds per thousand residents must be observed to determine the total number of acute, intensive care and isolation (negative pressure) beds to be built. Similarly, advanced treatment capabilities, such as ventilator units, must also be produced and provided. Consider: China has 60% more hospital beds per thousand inhabitants than the United States. (Most other countries are in much worse shape, and have only minimal capacities.) Yet China added 16,000 beds in the city of Wuhan in just one month. Remember that the United States Army Corps of Engineers did the same thing, just as fast, in Liberia in the Ebola epidemic in 2014. New hospitals with millions of beds can be built by 2020-2021 if a summit of the major industrial and scientific powers determines to do so.
Build sufficient electric power supply for the new hospitals. Based on electricity use in American hospitals, for 1 million new hospital beds about 6 GW of new electricity capacity would be needed around the world, in about 100 new electric generating units, each of the size of a gas turbine plant or, as soon as possible, a modular nuclear reactor.
Provide the scientific research needed in the coronavirus pandemic: Scientists have to know much more about COVID-19, even as vaccines are being tested. This demands a cooperative effort of many countries using frontier biophysics, nuclear biology, and space medicine from major spacefaring nations. CDC Director Dr. Robert Redfield proposes 12 research centers around the world.
Saving human life, and improving human life, is the most important economic mission.
COLLAPSING WESTERN FINANCIAL SYSTEM
March 13 (EIRNS)—The U.S. Federal Reserve continued its bailout operations today after Treasury Secretary Steven Mnuchin told CNBC that he’s in constant communication with Federal Reserve System Chairman Jerome Powell, and “There will be liquidity available—whatever we need to do, whatever the Fed needs to do, whatever Congress needs to do, we will provide liquidity. There will be a massive amount of liquidity.” The New York Federal Reserve Bank injected about $90 billion into the interbank lending market first thing this morning; then proceeded after breakfast to buy $37 billion in Treasury securities from the banks, known as quantitative easing or “QE.” In other words, QE is no longer on its $60 billion/month schedule any more; rather it can be $37 billion a day. This strongly inflationary money-printing will continue next week at least until Wednesday, March 18, when the Fed clearly intends to lower its key interest rate to zero.
A credit crunch has gripped the U.S. Treasury securities market, supposed to be the biggest, deepest, most guaranteed liquid market in the world for more than a century. This result eventually had to come from more than 10 years of constant money printing by all the world’s big central banks to support the City of London- and Wall Street-centered giant private banks, finally crushing credit for the real economy entirely.
Add the attack of the novel coronavirus pandemic, and we are entering a severe recession. The Organization for Economic Cooperation and Development (OECD) says world economy may lose $2 trillion in product, and grow at only 0.5% in 2020. Global machine producer Caterpillar reported its North American sales dropped −11% in January and another −12% in February; its Asia sales fell −2% drop in January and then plunged −17% in February, CEO Jim Umpleby said the drop was continuing in March. Bloomberg today published an estimate that China’s economic activity is now at 80-85% of previous years’ level at this point in the year. Electricity plants’ consumption of coal has reached about 80% of that previous level. But China now also faces phase II: demand shock in Europe, its biggest trade customer, and depressed demand in China itself. Trade volume through the port of Hamburg is 40% below 2019, and that is through the first week of March, according to Axel Mattern, CEO of Port of Hamburg Marketing. The same is true for Europe’s largest dry port, Duisburg, which is also a key Eurasian Land-Bridge rail terminus from China.
As for Wall Street, it threatens the economy now. The financial site Zero Hedge reported the evening of March 12, “Today’s total liquidity injection, … the Fed has injected a total of $276.5 billion in liquidity. [But] what is ailing the market is not access to the Fed’s balance sheet, but an overall recession that will collapse revenues, profits and cash flow, and which the Fed’s liquidity injections are powerless to prevent…. Absent another emergency bailout attempt, we may very soon have a market—and bank—holiday.”
March 13 (EIRNS)—Answering a journalist during the European Central Bank press conference March 12, on whether the ECB is going to support Italian bonds in the current coronavirus emergency, ECB President Christine Lagarde said, “We are not here to close spreads.” The spread between the Italian and German bonds immediately jumped by 49%, to 262 basis points, and the Milan stock market plunged 16%.
If it remains so, it means that Italy will pay €10 billion more on its debt at the end of the day. This is all the more remarkable as the Italian government just announced a major increase in indebtedness in order to provide financing for the coronavirus emergency.
The Italian government was forced to respond to Lagarde’s statement, and even Italy’s President Sergio Mattarella remarked that “Italy expects solidarity, not obstacles” from EU institutions. Senate Finance Committee Chairman Sen. Alberto Bagnai remarked in a release that “Lagarde’s statement is probably the most unfortunate statement ever spoken by a central banker. European citizens are sick and tired of institutions that harass them in normal times and cause injury in times of crisis. The European Union has missed the umpteenth opportunity to demonstrate its usefulness.”
Here are some headlines by media critical of the EU: “Europe Helps Us … To sink!” (La Verità); “Coronavirus: Europe Stabs Italy” (Il Tempo); “Coronavirus: Italy Has Already Been Isolated by the EU. Truly, We Are Already Out of Europe” (Libero); “A Tsunami on Schengen: Coronavirus Splits Europe” (Il Giornale), referring to Austria and Slovenia implementing border controls.
If the EU pulls the rope too much, even a comprador government such as Giuseppe Conte’s second one might find a soupçon of dignity and walk out. Eyes are now cast on the March 16 Eurogroup meeting of euro area finance ministers, in which the EU wants to enforce the European Stability Mechanism (ESM) reform. Prime Minister Conte yesterday phoned German Chancellor Angela Merkel, apparently in the attempt to change the agenda. According to reports, Conte asked Merkel to put the coronavirus emergency on top and not at the bottom of the agenda. What is needed, however, is a rejection of the ESM reform tout court.
SCIENCE AND INFRASTRUCTURE
March 13 (EIRNS)—Soon after Nixon pulled the plug on the dollar and the Bretton Woods system on Aug. 15, 1971, Lyndon LaRouche forecast a depression, the threat of global war, and a biological holocaust. All would result from the intentionally imposed decline in living standards, including especially nutrition and public health delivery access. In 1974 he formed a Biological Holocaust Task Force to develop likely results and the means to reverse the pending disaster.
In the late 1990s, the National Intelligence Council (NIC) took it upon itself to do some real intelligence—namely, a study which resulted in the January 2000 report: “The Global Infectious Disease Threat and Its Implications for the United States,” under the auspices of David F. Gordon, National Intelligence Officer for Economics and Global Issues. The primary drafters were Lt. Col. (Dr.) Donald Noah of the Armed Forces Medical Intelligence Center and George Fidas, Deputy National Intelligence Officer for Global and Multilateral Issues, NIC. The report fully confirmed LaRouche’s dire forecast, but ignored his proposed solutions, leaving us to face a Dark Age.
This National Intelligence Estimate took as its frame of reference the coming 20 years—i.e., to the current time—and reflected back to 1973, the precise year of LaRouche’s forecast. The “Key Judgments” included:
“Twenty well-known diseases—including tuberculosis (TB), malaria, and cholera—have reemerged or spread geographically since 1973, often in more virulent and drug-resistant forms. At least 30 previously unknown disease agents have been identified since 1973, including HIV, Ebola, hepatitis C, and Nipah virus, for which no cures are available…. Acute lower respiratory infections—including pneumonia and influenza—as well as diarrheal diseases and measles, appear to have peaked at high incidence levels.”
The authors did not state that this confirmed the unheeded 1973 warnings of LaRouche. Their explanation for the crisis and escalating threat is not far off, although they provide no cause for the phenomenon they describe: “The dramatic increase in drug-resistant microbes, combined with the lag in development of new antibiotics, the rise of megacities with severe health care deficiencies, environmental degradation, and the growing ease and frequency of cross-border movements of people and produce have greatly facilitated the spread of infectious diseases.”
Interestingly, they note: “The doubling of U.S. food imports over the last five years [i.e., globalization, and NAFTA (1994) in particular] is one of the factors contributing to tens of millions of food-borne illnesses and 9,000 deaths that occur annually, and the trend is up.”
The authors acknowledge the extreme danger to the poor nations, and that advanced sector nations are also threatened—but, without addressing the root problem of forced backwardness, deindustrialization, and globalization: “Developing and former communist countries will continue to experience the greatest impact from infectious diseases—because of malnutrition, poor sanitation, poor water quality, and inadequate health care—but developed countries also will be affected.”
As LaRouche identified from the beginning, Malthusian depopulation was the intention of the destruction of Bretton Woods and the related “post-industrial” policies.
March 13 (EIRNS)—The Lombardy regional administration wants to build an emergency hospital which will have capacity for 500 intensive care beds plus 200 acute care beds. The hospital should be built on the premises of the Milan Trade Fair, whose management will pay part of the costs.
The structure will have special containers with beds and the necessary equipment. The hospital will need 500 medical doctors and 1,200 nurses, who are being recruited also from among pre-licensed personnel.
Initially, it was announced that the hospital will be built in six days, but today the administration backtracked. It looks like the Civil Protection Department had initially promised to provide the equipment, but now they say that they don’t have enough. A first stock of ventilators sold by China arrived yesterday with the task force of medical doctors and nurses from Shanghai, led by Chinese Red Cross Vice President Yang Huichuan and by senior respiratory care physician Liang Zongan from West China Hospital in Sichuan, but the ventilators were given to the Red Cross. Lombardy Regional President Attilio Fontana said they will try to buy the equipment on the international market and if the equipment is not found, the hospital will not be built.
The new hospital is crucial, among other facilities, to sufficiently expand intensive care beds in order to manage the peak of contagion which should be reached in about four weeks.
U.S. POLITICAL AND ECONOMIC
President Trump Declares National Health Emergency; Washington and Private Sector Join for Immediate Action
March 13 (EIRNS)—At a Rose Garden press conference this afternoon, President Donald Trump declared a national health emergency, conferring expanded authority on agencies of the federal government—Health and Human Services—and enlisting the cooperation of the private sector (pharmaceutical companies and retailers) in order to aggressively address the expanding novel coronavirus crisis threatening the country.
“The federal government will use every tool at its disposal” to ensure success, the President vowed, and also pointed to the excellent team work he would establish with state governors—he named New York’s Andrew Cuomo and California’s Gavin Newsom in particular—as well as with the private sector, several of whose representatives stood beside him. Director of the NIH National Institute for Allergy and Infectious Diseases (NIAID) Dr. Anthony Fauci was also present.
The declaration of emergency will allow for the following:
• release under the Stafford Act up to $50 billion for states, territories and localities to be deployed
• every state will be asked to set up emergency stations, and hospitals to activate emergency preparedness plans, “to meet the needs of Americans everywhere”
• freeing up resources from military reserves of equipment
• broad new authority will be conferred on Secretary of Health and Human Services Alex Azar, allowing him to waive revisions of applicable laws and regulations, so that doctors, hospitals and healthcare providers “may have maximum flexibility to respond to the virus and care for patients”
• that “flexibility” includes waiving laws to enable telehealth (used so successfully in China). Certain federal licensing requirements will be waived so that doctors from other states can provide services in states in greatest need.
• testing will be accelerated, through a new partnership with the private sector, to ensure that those who need a test can get it safely and quickly. Discussions with pharmacies and retailers underway to make drive-through tests available—automated high-throughput systems—“in the critical locations identified by public health professionals.” A special website is being set up by Google to allow people to find a convenient drive-through testing location, and these locations will be set up around the country, Trump said, with cooperation from retailers such as Walmart, Walgreens, Target, CVS, and others. He referenced the fact that the Food and Drug Administration (FDA) had just granted emergency approval for a new high-speed coronavirus test developed by Roche Holding, which can provide results in four hours.
Asked about his previous criticism of the CDC’s lag in COVID-19 testing, Dr. Fauci said that what the President had outlined was an example of a proactive effort to stay “ahead of the curve,” removing constraints while simultaneously applying containment and mitigation. He didn’t play down the dangers or the likelihood of many more cases emerging, but emphasized that “this is a big step forward.”
Throughout the conference the President was relentless in praising China’s response, President Xi Jinping, and trade with China.
STRATEGIC WAR DANGER
March 13 (EIRNS)—The Italian government is not going to participate in the NATO Defender-Europe 20 military maneuver, Italian Defense Minister Lorenzo Guerini announced. “The men and women in the military are deployed to face, in this delicate moment, the health emergency and to guarantee the implementation of the major measures decided by the government,” Guerini says in an official statement. “Although supporting the strategic value of the exercise, I considered to be opportune to keep the maximum input by the Armed Forces in this situation,” the note says.
In its coverage, the online daily Formiche wrote that the United States itself has scaled down the size of its troop deployment engaged in the exercise, as EIR Daily Alert reported yesterday.
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