EIR Daily Alert Service, WEDNESDAY, March 4, 2020

WEDNESDAY, MARCH 4, 2020

Volume 7, Number 45

EIR Daily Alert Service

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

  • Take It From the Top: A New Paradigm, A New System
  • At Least 77 Nations Report COVID-19, While Trump Gets Briefed at NIH by Virology Researchers
  • U.S.-Israeli Military Exercise Cancelled, as Concerns Intensify Over U.S. Logistics Supply Lines
  • Now Have Americans Had Enough of the Federal Reserve?
  • Indonesia Takes Emergency Measures To Stop Capital Flight
  • Putin and Erdogan To Discuss Implementation of Idlib Agreements
  • U.S. Staate, Defense Department Officials in Major Visit to Ankara and to Turkey’s Border Provinces
  • Ukraine Probe of Biden Heats Up in Kiev, Just as Democrats Try To Rally Behind Him
  • Trump Meets Top Pharma Execs; Excited About Work-in-Progress
  • Pentagon Examining Defense Industrial Base for Hypersonic Technologies Capability
  • Argentine President Boasts, ‘We’re a Nation of Scientists, not CEOs’

EDITORIAL

Take It from the Top: A New Paradigm, A New System

March 3 (EIRNS)—Today there are many dangers converging into one extraordinary picture, but at the same time, we have a unique chance to focus active attention on what will work—the principles and policies presented for decades by Lyndon LaRouche. Without panic-mongering, it is accurate to say that we are at a boundary condition of the world economy and security and that we must bring about a New Paradigm.

That is the view elaborated today by Helga Zepp-LaRouche, founder and President of the Schiller Institute, in discussion with her associates: “The present establishment, at least the liberal establishment in Europe and in the United States, has absolutely shown an incapacity to even reflect why the world is in this crisis.” In Germany, the Christian Democratic Union candidates for party chairman can say nothing but just keep bashing Russia. In the U.S., the Democratic Party presidential candidates outdo each other in bashing China as well as Russia. Such was the case in the countdown to today’s Super Tuesday, 14-state Democratic primary elections for presidential nomination.

Given what is happening in the world—COVID-19, the economic problems, the financial crack-up, the war threat—we have an incredibly open situation for getting across the needed programmatic ideas. The watchword is, to not go by preconceived notions about how people will or won’t respond. Consider a few leading elements of the immediate situation.

COVID-19 is now playing out such that the daily number of new cases around the world are far higher than those inside China, which are dropping significantly. New cases are reported in at least 73 nations as of this morning, and the hotspots in many nations are spreading in number and extent. Ukraine is the latest nation to confirm a novel coronavirus case. In the United States, there have been 9 deaths, all in Washington State; Florida has declared a state of emergency, in order to activate full response. Today in New York City, at least two schools are closed, in the vicinity of the recent case identified in the Bronx.

In terms of the virus, what is required is mobilization for in-depth capacity to track, contain and mitigate as much as possible—with international assistance wherever needed—and meantime to fast-track the applied science for vaccines and treatments. The features of this coronavirus so far, show that fortunately, it does not seem to be radically mutating; but, unfortunately, it ranks high in asymptomatic transmission. That means a long haul.

It is notable that today President Donald Trump personally visited the National Institutes of Health, and its unit for viral pathogens, to give support to the R&D involved in dealing with COVID-19. Yesterday China’s President Xi Jinping visited scientists and medics at Tsinghua University on the same theme.

Big financial tremors have struck the Wall Street/City of London system, already teetering on the edge, due to decades of casino economics. Early today the Group of Seven’s finance ministers and central bankers, including Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell, had an emergency conference call, in the name of response to COVID-19, and issued a boring G7 statement suggesting no specific actions. Then a few hours later, the Fed announced an emergency 0.5% interest rate cut, putting the rate in the range of 1 to 1.25%. Powell, who gave a 10-minute press briefing, displayed what EIR’s Paul Gallagher called a “steering wheel came off in my hands” moment.

This morning’s overnight repo (repurchase lending) system was a liquidity riot. There was the highest daily demand for Fed injection ever—$180 billion in liquidity loans; Fed loans actually came in at $120 billion. There is turmoil in other nations, e.g. Indonesia, as financial operators try to “take their money and run” in capital flight. The U.S. long-term government bond interest rates fell this afternoon to a record low of barely over 0.9%.

Zepp-LaRouche emphasized that we need to implement “the full package” of Lyndon LaRouche’s ideas, with a return to sovereignty by all nations as the touchstone. His Four Laws will end the casino economy. Every country must establish their own nation-serving banking institution. They then can make treaties for mutual investment in long-term infrastructure and other projects, and collaborate on urgent measures such as disease outbreaks.

Zepp-LaRouche’s Feb. 28 “Urgent Appeal to President Trump, President Xi, President Putin, Prime Minister Modi and Leaders of Other Countries for the Emergency Implementation of the Four Laws of Lyndon LaRouche” is now circulating in Russian, as well as many other languages.

THE NEW GLOBAL ECONOMIC ORDER

At Least 77 Nations Report COVID-19, While Trump Gets Briefed at NIH by Virology Researchers

March 3 (EIRNS)—As of today, more than 77 nations are reporting cases of COVID-19, with 12 nations on the list over the last 36 hours, and Ukraine being the latest. Numbers of experts are issuing the same caution as Dr. Anthony Fauci did last night to MSNBC, that we now are in a situation of pandemic-like proportions, where there are multiple locations of sustained transmission of the highly infectious agent. Fauci is the Director of the National Institute of Allergy and Infectious Diseases (NIAID) at the National Institutes of Health (NIH).

The occurrence and spread would hit hard throughout Africa and much of South and Central America, where there are no adequate public health and medical defenses, but also in places like Greece, where, because of the liberal economics dictates for budget control, enforced by the EU and IMF, the healthcare system was cut by a third in the last decade.

Today President Donald Trump participated in a round table at the National Institutes of Health (NIH) in Maryland. Dr. Fauci gave Trump a short history of the class of microbes called the coronaviruses (for its crown-like configuration), including of Severe Acute Respiratory Syndrome (SARS), with mortality of 9-10% and of Middle East Respiratory Syndrome (MERS), which first spread from a bat to a camel. And some other coronaviruses that showed up, sometimes just jumping from an animal to a few people, and not spreading anywhere. But with COVID-19 it did.

Fauci ended by summarizing what the NIH infectious disease people are doing about the virus: basic research, including into the animal; diagnostics; therapeutics; vaccines.

Trump was appreciative. He thanked all the officials and staff, including for dealing with other nations that have been badly hit. He said that the U.S. is making decisions on travel and other things. Trump volunteered that his uncle, Dr. John Trump, was a big fan of the NIH researchers: “The world is extremely happy” about what you are doing. On funding, Trump referred to the fact that even more than the $2.5 billion he asked for may come from Congress. “I asked for X and they might give more than X, and that is all right.”

A few updates:

In Africa, Senegal reports a case, adding to that of Nigeria Algeria, and Egypt.

In South America, Argentina has confirmed its first case, in an individual who had traveled to Italy. Chile has also confirmed its first case in an individual who had traveled first to Southeast Asia and then to Spain. One additional case has been confirmed in Ecuador, bringing the total number in that country to seven.

The United States now has cases numbering at least 108 in 15 states, with the death toll at 9, all in Washington State, with 8 in King County (Seattle) and 1 in Snohomish County. The governors of Washington and Florida have declared states of emergency, in order to mobilize public health and medical response. Two COVID-19 cases were confirmed in Florida on March 1.

U.S.-Israeli Military Exercise Cancelled, as Concerns Intensify over U.S. Logistics Supply Lines

March 3 (EIRNS)—Chairman of the Joint Chiefs of Staff Gen. Mark Milley, during a Pentagon press briefing yesterday, said that the operational impact of the coronavirus outbreak on the U.S. military has so far been minimal, with very few cases among the military.

An exercise that has been called off is “Eagle Genesis,” a joint U.S.-Israeli exercise that was to include paratroopers from the 173rd Airborne Brigade based at Vicenza, Italy. The Lombardy region of northern Italy has become an epicenter of the novel coronavirus in Italy, and Israel has been blocking travelers from that country. However, Juniper Cobra, a joint U.S.-Israeli air defense exercise did kick off today.

Otherwise, two big exercises, Cobra Gold in Thailand and Defender-Europe 20 are still on track, Milley said.

While it wasn’t a topic raised at yesterday’s briefing, which also included Defense Secretary Mark Esper, concerns are also being raised about the possible impact of quarantines and travel restrictions on the military’s global supply chains and logistics networks. “It’s not hard to see the potential problems that the U.S. military could experience from a sudden lack of availability of a wide array of resources and processed items across supply chains,” observed the War Zone’s Joseph Trevithick in an article posted yesterday. “This would not necessarily be limited to military-specific items, such as weapon systems or ammunition, but could also impact the availability of critical day-to-day items, including food, water, fuel, and especially medicine and medical supplies,” he writes.

COLLAPSING WESTERN FINANCIAL SYSTEM

Now Have Americans Had Enough of the Federal Reserve?

March 3 (EIRNS)—According to all-knowing financial media this morning, the Federal Reserve Board’s “emergency” decision at 7:30 a.m. to cut the Federal funds rate by one-half percent, was both “expected” and “a surprise.” That’s the expert side of it.

The Fed governors, as usual, were pursuing very mysterious remedies for ailments that, since the financial crash of 2007-08, chronically afflict the stock and bond markets, the big City of London and Wall Street banks, and their “shadow banking” partners. These remedies are Greek to the rest of us—they are poisons, in fact—and today they didn’t even work on seasick Wall Street; but they did manage to make the dangerous plunge in U.S. Treasury interest rates even worse. The Fed found itself besieged by banks and shadow banks demanding emergency liquidity loans at 8:30 a.m., a historic $180 billion worth. It provided $120 billion, but the rates at which the banks will trust each other with a loan for a day—supposed to drop half a point in obedience to the Fed’s decision—actually went up.

The “coronavirus emergency” statement which started all this came at 7:00 a.m., by the finance ministers and central bank governors of the G7 countries—all honorable women and men. But no one should believe that the Federal Reserve actions which followed, had to do with fighting the coronavirus or “supporting the economy.” They had to do with fighting the plunge in stock markets, supporting the most speculative units of the big banks and Wall Street investment firms, and fighting off the grim danger of an “inverted yield curve” on the bond markets.

For American citizens? Their businesses will have an even harder time getting loans from the local banks, which don’t make commercial loans with interest margins this low. Home prices and rent increases, far outstripping wages for a decade now, will rise even faster. The little remaining interest income on their savings—if they have any—will disappear, just when it looks like the stocks in their 401K and pension plans are heading south again. If they work for a large business—say, a hotel chain—that gets whacked by the coronavirus epidemic, that business will be encouraged by the Fed’s actions to go deeper into debt to buy its own stock and keep it from swooning.

This is what Fed chair Powell at his press conference today called “supporting households and businesses.”

The monetary scheme in which the Federal Reserve is playing its part, does not work, and hasn’t worked for 50 years except to deindustrialize the country. Unless we nationalize the Fed right now to create a Reconstruction Finance Corporation or national infrastructure bank, it will ruin, not support the economy.

What would work, is a Roosevelt-style RFC issuing credit to build and equip many new hospitals, bring steel blast furnaces to life, advance nuclear and plasma technology research, create full-time productive jobs, work with the EximBank to provide cutting-edge healthcare facilities to developing countries, and similar productive activity.

After this morning, we should be Fed up with what we have.

Indonesia Takes Emergency Measures To Stop Capital Flight

March 3 (EIRNS)—Immediately after the first two cases of COVID-19 hit Indonesia on March 2, Bank Indonesia (BI) and the Indonesia Stock Exchange issued a number of emergency measures to stem the capital flight which was already undermining the value of the rupiah. The central bank lowered the reserve requirement ratio on U.S. dollars held by BI from 8% to 4%, and a smaller amount for the rupiah reserve requirement, increasing liquidity in the banking system by over $3 billion. BI also intervened in the forex market and bought over $7 billion in government bonds on the secondary market.

According to the Jakarta Post: “Last week, foreign investors sold a net Rp33.6 trillion ($2.36 billion) in both Indonesian stocks and bonds…. The stock market fell by 7.3% and the rupiah fell 4.1%, even before any COVID cases appeared in the country.”

The stock exchange halted all short sales.

All ASEAN countries are being hit by capital flight due to the spread of the coronavirus. The Philippines’ stock market fell 7.9% last week, followed by Indonesia (7.3%), Vietnam (5.5%), Singapore (5.3%) and Malaysia (3.2%).

STRATEGIC WAR DANGER

Putin and Erdogan To Discuss Implementation of Idlib Agreements

March 3 (EIRNS)—Ahead of the meeting between Russian President Vladimir Putin and Turkish President Recep Tayyip Erdogan, on March 5, Russian Foreign Minister Sergey Lavrov said that the topic of the talks for Russia is the implementation of Idlib agreements between the two in September 2018 in Sochi. “Regrettably, [the Russian-Turkish agreements on Idlib] are not being implemented. I hope the meeting between Presidents Putin and Erdogan later this week will make it possible to change this situation and begin to move along the path of the implementation of what has been agreed,” he told a news conference today, reported TASS.

Russia has officially accused Turkey of fighting alongside the terrorists it had agreed to separate from the legitimate Syrian opposition.

Aside from the clear support for Damascus that the Russian military is providing on the ground, the Russians landed a ship, which transited the Bosporus Strait yesterday, heavily laden with military equipment for the Syrian army, which was unloaded at the Syrian port of Tartus.

Moreover, in a Feb. 29 phone call, Iranian President Hassan Rouhani offered Russian President Vladimir Putin to host the next summit for the Astana format in Iran, according to Iran’s Ambassador to Russia Kazem Jalali, who met today with Chairman of the Federation Council’s Foreign Affairs Committee Sen. Konstantin Kosachev. “Several days ago, Presidents Rouhani and Putin talked over the phone. During the phone conversation, President Rouhani invited President Putin … suggesting that the next summit in the Astana format in the near future should be held in Iran,” Jalali said. The Astana format, of the three guarantor states for peace in Syria—Russia, Iran, and Turkey—first met in January 2017 in the Kazakhstan capital, Astana (now Nur-Sultan).

U.S. State, Defense Department Officials in Major Visit to Ankara and to Turkey’s Border Provinces

March 3 (EIRNS)—U.S. State Department Special Representative for Syria James Jeffrey and U.S. Ambassador to Turkey David Satterfield met with Defense Minister Hulusi Akar and Deputy Defense Minister Yunus Emre Karaosmanoglu and other senior officials in Ankara. They discussed bilateral and regional defense and security issues, particularly Idlib, according to the state-run Anadolu Agency. Jeffrey is expected to hold talks with Deputy Foreign Minister Sedat Önal.

Hurriyet Daily News raised the fact that Turkish President Recep Tayyip Erdogan had demanded the U.S. to deploy the Patriot air defense system on Turkish soil. Politico reported over the weekend that the Pentagon did not back Jeffrey’s proposal for the Patriot deployments with concerns that it could drag the U.S. into a conflict with global ramifications.

The latest reports on the Jeffrey’s visit is that he is offering Turkey humanitarian aid for the refugees and “ammunition.” At a press conference in Hatay province today, Jeffrey told reporters “We’re willing to provide—for example the President [Trump] mentioned this—ammunition,” Jeffrey said, according to Reuters. “Turkey is a NATO ally. We have a very, very big foreign military sales program, much of the Turkish military uses American equipment,” he said. “We will make sure that the equipment is ready. As a NATO partner we share information intelligence…and we are going to ensure that they have what they need there.” He was accompanied in Hatay and Gaziantep provinces by U.S. Ambassador David Satterfield and U.S. Ambassador to the United Nations Kelly Craft.

Al-Monitor reports that Defense Secretary Mark Esper said today in Washington that the administration has ruled out retaliatory airstrikes in Syria in support of Turkey, while Chairman of the Joint Chiefs of Staff Gen. Mark Milley commented that the United States “doesn’t have clear, unambiguous intelligence on who was flying which planes.”

U.S. POLITICAL AND ECONOMIC

Ukraine Probe of Biden Heats Up in Kiev, Just as Democrats Try To Rally behind Him

March 3 (EIRNS)—Investigative reporter John Solomon, author of many exposures on how the Clinton machine flooded the press with Trump-Russiagate stories, is now exposing the candidate the Democrats wish to rally around for the Presidency—Joe Biden.

Solomon posted on his Twitter account @jsolomonReports, yesterday, his article for justhenews.com website, headlined, “Ukrainian Court Throws Wrench into Joe Biden’s 2020 Election Plans,” with the kicker “Judge orders legal probe of former VP forcing ouster of prosecutor investigating gas firm employing his son Hunter Biden.”

Fox News reported Feb. 28 that Ukraine investigators launched a probe into Joe Biden over allegations that he pressured Ukrainian officials to fire the country’s top prosecutor in 2016, according to a report that Fox News reporter Dom Calicchio.

The probe was opened in response to a court order, after the ousted prosecutor, Viktor Shokin, made an appeal for action on it. Shokin’s attorney, Oleksandr Teleshetsky, told the Washington Post: “They need to investigate this. They have no other alternative. They are required to do this by the decision of the court. If they don’t, then they violate a whole string of procedural norms.”

Ukraine’s State Bureau of Investigations confirmed a probe was underway, the Washington Post reported, but told the daily that in Ukraine, anyone may seek such a court order, thereby claiming that Shokin’s attorneys made the Bureau of Investigations launch the case. Shokin has objected to his removal since his ouster, claiming that Biden, now the Democratic frontrunner for U.S. Presidential candidate, pushed for his firing because the prosecutor tried to investigate Burisma Holdings, the Ukrainian gas company where Biden’s son, Hunter Biden, was a highly paid board member, reportedly receiving $83,000 per month, wrote Calicchio.

While both Bidens have denied wrongdoing, in a video from a Council on Foreign Relations event in 2018, Biden is heard bragging about using his influence to get Shokin fired, including threatening to call back a $1 billion U.S. government loan guarantee to Ukraine unless Shokin were fired. Biden conveyed to the CFR his conversation with the Ukrainians: “I said, ‘I’m telling you, you’re not getting $1 billion…. I’m leaving here [Ukraine] in six hours. If the prosecutor’s not fired in six hours, you’re not getting the money.’ Well, son of a bitch—he got fired,” the Vice President laughed.

Trump Meets Top Pharma Execs; Excited about Work-in-Progress

March 3 (EIRNS)—President Donald Trump met with top pharmaceutical executives yesterday, which, he had said on Feb. 28, was aimed to pressure the industry to bring drug prices “way down,” suggesting that it had only later morphed into a “convenient” opportunity to discuss the development of a coronavirus vaccine with pharmaceutical executives from Gilead, Johnson & Johnson, and Pfizer.

Lev Facher writes in STAT magazine March 2 that the meeting showed a striking shift in Trump’s view of the pharmaceutical industry. After years of slamming drug companies’ “ripoff” prices, Trump appeared stunned by the executives’ progress reports, Facher writes.

Tony Fauci, Director of the NIH National Institute of Allergy and Infectious Diseases, interrupted at one point, saying “A year to a year and a half,” is how much time it would take to deploy an effective vaccine to large populations.

The President kept coming back to timing, and the executives told the him that for both therapies and vaccines, companies could begin early testing within months, with the aim of reaching the market in a year’s time.

“It was: Tell us how fast you can go, but let’s keep safety in mind, and let’s make sure we create something manufacturable,” Dan Menichella, CEO of CureVac said. The company, headquartered in Germany and Boston, uses messenger RNA to produce effective antibodies inside patients’ bodies to prevent infection. CureVac expects to start testing its coronavirus vaccine in healthy volunteers by June, then go to further trials if the injection proves safe.

Fauci and Health and Human Services Secretary Alex Azar interrupted to caution that most therapies and vaccines were not ready, but Trump remained excited. Fueling Trump’s optimism, when the President questioned them, company representatives often labored to differentiate between projections for bringing drugs to late-stage trials and bringing them to market, so much so that Fauci became a de facto referee, STAT reports. The President “got it,” and at one point responded to Stephane Bancel, CEO of Moderna with the clarification: “You won’t have a vaccine—you’ll have a vaccine to go into testing.” But referring to Regeneron’s CEO Leonard Schleifer, Trump said, “But Lenny is talking about two months. I mean, I like the sound of a couple of months better.” Azar interjected, however, that Schleifer’s aggressive projection was for a Phase I trial, not a market-ready vaccine.

In a press briefing on their meeting later yesterday, Vice-President Mike Pence acknowledged that confirmed community spread of novel coronavirus is happening in limited areas in California and Washington State. Azar said that federal officials had spoken with state counterparts about strategies to mitigate contagion, including potential suspending of school. Pence also said American authorities would begin screening passengers coming from Korea and Italy.

SCIENCE AND INFRASTRUCTURE

Pentagon Examining Defense Industrial Base for Hypersonic Technologies Capability

March 3 (EIRNS)—The Pentagon has launched a “deep dive” examination of the defense industrial base in order to understand the weak spots in America’s drive towards the high-speed offensive and defensive technology, reports Defense News. Mark Lewis, the Pentagon director of research and engineering for modernization, told reporters yesterday that the Defense Department has set up a new “hypersonic war room,” led by him and Assistant Secretary of Defense for Acquisition Kevin Fahey, in order to identify “critical nodes” in the supply chain for hypersonic technologies. “It’s production capabilities, manufacturing capabilities, high-temperature materials,” Lewis said. The new study group is to produce a report in the next few months, but Lewis said he expects that there will be “ongoing activity” that evolves as the hypersonic strategy and development process becomes clearer.

The Pentagon doesn’t seem to really know what industry is capable of providing and where the gaps are. Lewis used the example of an air-breathing hypersonic cruise missile which could require a supersonic combustion ram-jet engine. The department does not currently know for sure if it has the materials—or know how to get them—for such a capability within the industrial base. Defense News writes that a series of Pentagon reports in the last two years have raised serious concerns about the defense industrial base, particularly when it comes to high-end materials and design knowledge for missiles. Some critical materials are only available from China, but China, under the National Defense Strategy, is one of the countries the U.S. is supposed to be prepared to go to war against.

Argentine President Boasts, ‘We’re a Nation of Scientists, not CEOs’

March 3 (EIRNS)—The above remark perfectly captures the tone of Argentine President Alberto Fernández’s March 1 speech to open the Legislative Assembly session—in effect the Presidential state of the nation speech. In his 90-minute presentation, Fernández documented in shocking detail the utter devastation of the nation’s economy and social fabric carried out by previous neo-liberal President Mauricio Macri, whose cabinet was filled with business cronies, speculators and technocrats who wantonly dismantled Argentina’s productive capabilities and burdened it with an unpayable foreign debt, fully backed by the IMF.

Argentina’s proud history of scientific excellence will be revived, Fernández said, to demonstrate the government’s conviction “that knowledge is key for public policies and development.” Many scientists have been brought into government, he proudly announced.

The wreckage Macri produced between 2015-2019, Fernández reported, included the elimination of 240,000 private-sector jobs; industry operating at 40% of installed capacity; utility rates increased by between 2,000-3,000%, and the complete removal of any type of regulation. He related that according to the UN’s Food and Agriculture Organization, food insecurity in Argentina, one of the world’s premier agricultural producers, had risen by an incredible 71% in that four-year period. Hunger and poverty are at unprecedented levels.

Fernández outlined his initiatives to begin rebuilding the economy, creating jobs promoting productive investment, rebuilding scientific capabilities, and giving a new focus to foreign policy. Austerity, he said, is not an option. “There is no worse alternative than fiscal austerity in a recession. More austerity leads to more recession … more poverty, inequality and exclusion.”

To highlight, on foreign debt, which he described as “the greatest obstacle we face,” he said the Central Bank is investigating how it was that Macri indebted the country by $100 billion, and yet $90 billion of that left the country as capital flight. “Never again [will there be] a revolving door of dollars that enter through indebtedness, and then flee leaving a scorched earth in their wake,” Fernández said. “This is the most damaging speculation a society can face: indebtedness only for the benefit of speculators and the lender.”

Furthermore, Fernández has ordered a complete revamping and cleaning out of intelligence agencies and the justice system, both weaponized by Macri to prosecute and jail political opponents, using tactics well known to the LaRouche organization. “We’ve come to put an end to the…political use and manipulation of justice,” he said.

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

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