E.I.R.STRATEGIC ALERT WEEKLY NEWSLETTER-Russia and China Outflank the West’s War Drive

E.I.R.STRATEGIC ALERT
WEEKLY NEWSLETTER
Volume 28, No. 28 - July 10, 2014
Russia and China Outflank
the West’s War Drive
A deadly flanking assault against the British Empire has been
launched by Russia and China without firing a single shot.
While London and Washington continue to press for strategic
confrontation with Moscow through their own direct longrunning
operations in Ukraine, Moscow and Beijing are moving
to create a new economic and monetary order free from the
shackles of the British system of free trade looting and radical
Malthusianism.
The coordination between the two countries will be on display
next week, when both Vladimir Putin and Xi Jinping travel
to South America to participate in the BRICS summit and a
series of bilateral meetings. At the BRICS event, two new financial
institutions are expected to be established: a BRICS
development bank and a collective fund to counter currency
assaults on the member states.
At the same time, China is spearheading the creation of an
Asian Infrastructure Investment Bank (AIIB) before the end of
the year (cf. below). One of the projects planned is a direct rail
link between Beijing and Baghdad.
That project points to the qualitative difference between the
approach taken by Beijing and the policy of permanent war and
chaos promoted by the current British Empire, in particular Barack
Obama’s White House. Iraq is now under siege by the barbarian
forces of the Islamic State of Iraq and Sham (ISIS), which
is financed by NATO’s major allies in the Middle East (cf. below).
President Obama has violated the Constitution already
by dispatching 1,000 American troops to Iraq as “advisers,”
“trainers” and “intelligence liaisons”, without Congressional approval,
despite the numerous warnings not to do so.
At the same time, Washington and London are escalating the
provocations against Russia via the Poroshenko government in
Ukraine. Obama’s hostility toward Vladimir Putin is so flagrant,
that he has been frozen out of efforts to negotiate a solution to
the crisis. However, the German, French and Russian governments
have been actively engaged in discussions with Poroshenko,
which were were indeed advancing, until Kiev abruptly
ended the ceasefire and resumed military operations with a
vengeance. Russian Foreign Minister Sergei Lavrov blamed
the sudden shift in Poroshenko’s posture on pressure from an
unnamed outside force -- an implicit reference to London and
Washington. Poroshenko is also being pressured by the outright
neo-Nazi, Russophobe forces in Ukraine, who are in turn
supported and financed by the West.
The good news is that there is a brewing bipartisan revolt
against the current occupant of the White House in the United
States, including in the Congress. As Lyndon LaRouche has
again stressed, were Obama to be removed from office, the
immediate war danger would be vastly reduced, and the prospects
for the U.S. to participate in the new economic order
would be vastly improved.
Argentina Wins Overwhelming Support
in its Struggle against the Vulture Funds
The recent U.S. court ruling, confirmed by the Supreme Court,
to have Argentine assets seized in order to pay off two vulture
funds -- one at a profit of over 1,600! -- may prove to be
the straw that broke the camel’s back (cf. SAS 26, 27/14). As
Helga Zepp-LaRouche commented in a July 5 article, “Unlike
those many thousands of times in the past when mega-speculators
wrought suffering and death upon millions of people,
and gone away unpunished, this time the U.S. administration,
the Supreme Court, and the vulture fund have been hit with an
obviously unexpected, implacable resistance.” Indeed, not only
all of Central and South America are supporting Buenos Aires’
position, but the 133 member countries of the G77 as well,
together with China and Russia, and others.
The situation is so explosive that the foreign ministers of
the Organization of American States (OAS) held an emergency
meeting in Washington, D.C., July 3. During the course of their
meeting, Guyana’s Acting Foreign Minister Robeson Benn made
an historic call for a broad discussion across the Americas on
the reinstatement of Franklin Roosevelt’s 1933 Glass-Steagall
law (cf. below).
After Benn’s speech, the final vote was taken, with an overwhelming
majority of the participants delivering a standing
ovation in favor of a resolution supporting Argentina’s efforts
to reach “fair, equitable and legal arrangements with 100% of
its creditors,” and expressing “its full support to achieving a
solution that seeks to facilitate the broad Argentine sovereign
debt process.” Only two of the 35 member countries voted
no: the United States and Canada. In fact, two days before the
meeting, Barack Obama’s Deputy National Security Advisor Ben
Rhodes lectured Argentina to “meet its obligations,” i.e., follow
the court order and pay off the vulture funds in full.
Contrary to the White House’s point of view, many of the
foreign ministers spoke fervently of the need to defend human
beings over finance. Venezuelan Foreign Minister Elias Jaua
proposed, in his speech, that the ministers set themselves “the
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2 WEEKLY NEWSLETTER n°28 / 2014
pressing task of redesigning the international financial economic
system.” (cf. below).
Argentine Foreign Minister Jacobo Timerman concluded the
meeting by stating his appreciation for the solidarity, vowing
that Argentina would enter its negotiations with the vulture
funds the following Monday in some “luxurious office in New
York City”, armed with the knowledge that “we will not be
alone. Not only will we be accompanied by all of you, but also
by the faces, and the ghosts of all the victims of the vulture
funds -- and the countries that protect them.”
Helga Zepp-LaRouche has initiated an urgent appeal to European
governments, urging them to give a clear answer to the
question: “Do You Support Argentina or the Criminal Speculators?”
Venezuelan Foreign Minister Calls for
Redesign of the Financial System
At the July 3 OAS meeting, Venezuelan Foreign Minister Elias
Jaua began by recalling the “Drago Doctrine”, named after Argentina’s
Foreign Minister Luis Maria Drago in 1902, at a time
when Venezuelan ports were blockaded by German, Italian,
and British gunships, in an effort to collect their debt. That
doctrine, “established the principle that no sovereign State can
be forcibly required to pay a debt, let alone be embargoed.”
Today, as well, “Argentina cannot be compelled to pay under
unacceptable conditions a debt which is immoral and has clear
elements of illegality... What today is happening to Argentina
will happen to every one of us... Ministers, let us do more than
issue a call. Let us set ourselves the pressing task of redesigning
the international financial economic system.”
Jaua gave a few concrete examples of outrageous looting by
vulture funds. NML Capital, for example, is suing Argentina for
$832 million on defaulted Argentine debt it bought for $48.7
million six years ago. The owner of NML Capital, Paul Singer’s
Elliott Management, is suing Congo-Brazzaville for $400 million,
on a debt it purchased for $10 million!
“How many lives could be saved with $400 million?” Jaua
asked. “How many people could eat with that sum of money?”
He went on to list how many doses of anti-malaria, pediatric
hepatitis A, oral polio, and pediatric pneumonia vaccines could
be purchased with $400 million. He noted how many tons of
powdered milk, rice, or beef might also be purchased with
that amount “to feed the people of the world.... $400 million
would make a huge difference in world efforts to put an end
to hunger,” he said. “Who thinks they have the right to deprive
people of the right to food, health, integral development -- to
life itself?”
Another outrageous example the Foreign Minister cited is
Donegal International, which, in 1999, purchased $3.3 million
of a debt Zambia had contracted with Rumania, and then sued
Zambia in 2007 for $55 million, eventually winning a $15.5
million settlement from a British court, in addition to the $2.5
million Zambia had already paid back.
China Launching New International Bank
for Infrastructure
Chinese leaders are moving apace to set up the Asia Infrastructure
Investment Bank, with a view to to financing the exciting
New Silk Road project, among other projects. It is expected to
have a capital of $100 billion, according to the China Daily.
While many in the West complain that this is an attempt to
bypass the World Bank and the Asian Development Bank, Chinese
leaders have pointed out that the new bank will focus on
investment in infrastructure and thus economic growth, while
the World Bank almost exclusively finances green “environmental
preservation” schemes and anti-poverty projects. With its
$165 billion capital, it makes infrastructure investments of no
more than $10 billion/year, although its own estimates find
that Asia as a whole would need $800 billion/year through
2020!
According to the head of the working group for establishment
of the AIIB, Jin Liquin, China has held three rounds of
talks with some 30 interested Asian countries. As the Financial
Times noted with regret, China is also looking to extend it to
“several wealthy states” in “West Asia”, by which the Chinese
designate Middle East. One of the projects involves building a
direct rail link from Beijing to Baghdad.
The choice South Korea will make is considered fundamental.
Chinese President Xi Jinping was in Seoul July 3 and 4, where
he and President Park Geun-hye announced agreements making
their currencies directly exchangeable, so that their booming
trade relations can be carried out with their own currencies,
rather than dollars. The Chinese yuan is only the second currency
to become directly convertible with the South Korean won.
South Korea’s two-way trade with China, according to AP,
was $229 billion last year, which is more than the amount of
South Korea’s trade with the U.S. and Japan combined. Xi told
reporters after the summit that the two countries will strive to
boost their trade to over $300 billion.
The Obama Administration has strong-armed the South Koreans
not to join the AIIB, saying it could threaten the country’s
status as an ally of the United States. Washington remains wary
of Seoul, which has also insisted that it is not interested in joining
President Obama’s anti-missile defense that targets China,
and has kept out of the free-trade TPP (Trans Pacific Partnership)
for similar reasons.
Japan, on the other hand, has apparently chosen not to take
part in the new bank, claiming Asia’s needs can be covered by
the Asian Development Bank, which is dominated by Tokyo and
Washington.
Another key country is India. President Xi has indicated that
that a priority for his government is to take bilateral ties to a
“new high”, in particular to promote the construction of an
economic corridor running through China, Bangladesh, Myanmar,
and India, to bring along regional development.
Xi and the Indian Prime Minister Modi are scheduled to hold
talks on the sidelines of the BRICS summit.
New Silk Road Perspective Presented
at the Académie de Géopolitique de Paris
Christine Bierre, a representative of the Schiller Institute and
editor of Nouvelle Solidarité, was among the speakers at a July
3 colloquium on the theme « What future for Ukraine ? », organized
by the Académie de geopolitique de Paris at the French
National Assembly.
Several speakers warned that the destabilization of Ukraine,
promoted by some in the West, can only lead to world war.
“We should not pull the moustache of the Russian bear,” MP
Jacques Myard cautioned, while denouncing those who, after
the fall of the wall, felt “they could take advantage of the weakness
of the Soviet Union and Ukraine”, and even planned to
have Ukraine enter NATO, which France and Germany opposed
at the time, in 2008.
General Henri Paris (Ret.) the former commander of the 2nd
armoured division, said the West should stop meddling because
1) you don’t start a war unless your national territory is threatened,
and 2) the West does not have the military power today
to back up any such intervention, given the redeployment of
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n°28 / 2014 WEEKLY NEWSLETTER 3
forces out of Europe into the Asia Pivot. The West’s position
is further weakened, he said, by the new version of Russia’s
Topol intercontinental ballistic missile, which was shown in recent
tests to be capable of penetrating an ABM system.
Ali Rastbeen, the founder and president of the Academy,
denounced Western attempts to push back Russia’s borders,
by setting up military bases in countries in Central Asia, and
deploying color revolutions to change the mindset of the people
so that they themselves demand to be part of NATO. This “will
lead to war,” he said, as Russia cannot give into to NATO. He
called on France and Germany in particular, to redirect their
policies against the Anglo-American meddling in Ukraine and
create the conditions for a UN peace process.
Christine Bierre then introduced a larger perspective, stating
that only a change in the world order could lead to peace in
Ukraine, since the crisis there is the consequence of everything
that is wrong with the present order: the decision by the “winners”
of the Cold War, the Anglo-American oligarchic system,
to roll back Russia and block the emergence of any new power,
and the financial looting which has led Ukraine, and the rest of
the world, into bankruptcy.
While it might appear to be too late to change the world
order, she said, there are many reasons to be optimistic, including:
1) the onrushing systemic crisis which will open up the way
to real change; 2) the New Silk Road strategy of China, together
with Vladimir Putin’s Eurasian efforts and the approach of
Indian President Modi; and 3) the consolidation of the BRICS,
including in reaction to the Obama administration’s decision to
support the vulture funds against Argentina.
Glass-Steagall Watch:
Guyana’s Foreign Minister. The Acting Foreign Minister of
Guyana, Robeson Benn, who is also Minister of Transport and
Water Works, called for a broad discussion across the Americas
on Franklin Roosevelt’s 1933 Glass-Steagall law during his
speech to the OAS meeting July 3 (cf. Above). He urged American
legislators to reinstate the bill, since its revocation in 1999
had created the usurious speculative system which now threatens
to destroy Argentina along with many other countries.
“I would like to pose the question, perhaps, as to whether we
should not, out of this imbroglio, re-look at the overall question
of the repeal of the Glass-Steagall Act in 1999 in the United
States, which related to the activity of the banking system, the
international financial institutions, mainly resident in the United
States and in the United Kingdom. President Roosevelt, of the
United States of America, established a banking act, signed off
on the Banking Act of 1933, which set up firewalls between
the activities of the banks, and on the questions of speculation
in the financial system. There is, perhaps, the need now to take
a look at putting back in place important sections of the Glass-
Steagall Act which was repealed in 1999.”
Given the devastation caused worldwide by the 2008 crash,
Robeson stressed, U.S. legislators should consider regulations
to prevent vulture funds, the “modern day pirates”, from ruining
national economies.
Tuscany Regional Council. On July 1, the Regional Council
of Tuscany approved with an overwhelming majority the
new Glass-Steagall draft bill submitted by Councilman Gabriele
Chiurli. The text has since been transmitted to the National
Chamber of Deputies for examination. Our sources report that
interest for the new text is rising and that some MPs could
adopt the text independently.
The bill is simple, Chiurli explains on his website. “It is based
on the assumption that banks chartered for managing family
and company savings cannot invest that money in risk operations,
jeopardizing the stability of the bank itself: See the case
of Monte dei Paschi di Siena.” The draft bill amends the Single
Banking Act of 1993, by establishing two sections in the national
charter of financial institutions, and defining duties and
bans according to the section.
“Between commercial banks and investment banks,” Chiurli
states, “there shall be no commercial or equity relationship.
Also double jobs in banks of a different category are banned.”
Also on July 1, Chiurli introduced a new motion, on the subject
of the Eurasian Land-Bridge. It says, among other things,
that “The idea of a ‘bridge’ between Europe and Asia along the
ancient Silk Road, with the opportune ‘deviations’ dictated by
modern needs, is an old one. This project was first launched by
U.S. politician Lyndon LaRouche after the fall of the Berlin Wall,
which he saw as offering the opportunity of starting an economic
and social reconstruction from the Atlantic to the Urals
and beyond, involving China, Southwest Asia, and India.”
Swiss Citizens Say No to Bail-in
and War Plans
The participants in the conference on “Switzerland in the Vortex
of Globalization” held in Zurich on June 28 manifested their
commitment to fight against the financial oligarchy which is
selling out Switzerland both to the casino economy and the
global war party. The event was organized by “Impulswelle,”
a group fighting for bank separation and an end to the bail-in
policy.
Some 60 people gathered to hear Neue Solidarität editor
Alexander Hartmann, military expert Colonel Franz Betschon,
and financial expert Prof. Marc Chesney address various aspects
of the strategic picture and discuss solutions to the political
and economic crisis. They were introduced by Impulswelle
representatives Werner Frey, Doris Honegger, René Machu,
and Ruth Frei. At the end of the day-long seminar, a draft resolution
was distributed, which will be published soon, calling for
a series of measures, starting with the implementation of a
Glass-Steagall like banking reform.
Mr. Frey opened the seminar with a short presentation of the
concept of globalization as explained by Thomas Barnett, a Pentagon
advisor who wrote a manifesto for imperial domination.
Alexander Hartmann then explained that U.S. policy as described
by Barnett and implemented by the Bush and Obama
administrations is not “made in U.S.A.” but made in Britain.
He went through an explanation of the origin of the current
economic crisis, based on Lyndon LaRouche’s famous “Triple
Curve” diagram, and showed how the global war threat is
a consequence of the unsolved economic crisis. He warned
against the “bail-in” plans of the trans-Atlantic financial oligarchy,
before describing the solution as laid out in LaRouche’s
Four Points.
Dr. Col. Franz Betschon, a former corporate executive and
Army General Staff reservist, exposed the unpreparedness of
the Swiss security apparatus in light of the strategic dangers.
The West overestimates its military superiority, Betschon insisted,
citing a few recent events where U.S. naval forces were
shown to have unexpected vulnerability to both Russian and
Chinese systems. While Dr. Betschon characterizes himself as
someone who can understand Vladimir Putin’s position, he did
lay out a possible scenario in which Russian paratroopers could
take over the strategically important locations in Switzerland in
a matter of hours.
Prof. Chesney of the Zurich University for Banking and FiEIR
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4 WEEKLY NEWSLETTER n°28 / 2014
nance illustrated the paradoxes of neo-liberal economic policies,
which even contradict their own dogmas. Bankers who ruin
their banks are rewarded with huge bonuses, the setting of the
Libor (interest rates) is manipulated from A to Z, banks with a
“too big to fail” status are given hidden subsidies, which distort
the market, etc. We need clear and simple rules, such as the
original Glass-Steagall was, Prof. Chesney said. Complicated
rules are inapplicable.
In the ensuing discussion, many questions were asked, such
as the example of Iceland’s response to the financial crisis, the
status of the banking separation debate in Switzerland, the
BRICS as an alternative to the dollar system, how to handle
bank reserve regulations, and many more.
A representative of the “Plain Money” (Vollgeld) initiative,
which is currently collecting signatures for a referendum, also
asked the speakers about their view. Prof. Chesney gave a diplomatic
answer, but clearly indicated that he thinks a 100%
reserve system is wrong. Alexander Hartmann argued that the
essential point is to make sure the money created is used for
productive purposes.
Special German Inquiry on NSA Spying
Opens Hearings
After several months of delay, mostly due to the Merkel government’s
attempts to suppress any public debate in Germany
on the issue, the NSA Investigative Committee of the Bundestag
held its first hearing in Berlin on July 3, with testimony
from William Binney, the former technical director of the NSA,
and Thomas Drake, a former senior executive of the NSA.
Attempts by the committee to hold a hearing with Edward
Snowden in Moscow have failed so far.
The BND, Germany’s foreign intelligence agency, has claimed
that it was unaware of the NSA activity in Germany, a claim
Thomas Drake dismissed as “beyond any credibility”. It is rather
an attempt to throw “cryptologic sand” (sic) into the eyes
of people, in order to conceal their secret collaboration. The
restrictions on surveillance of German citizens are bypassed by
having non-Germans do it, he said, in what “has become more
or less a routine”. “Weak controls in Germany are a time-bomb
here”, he said. “You should not wait until a Edward Snowdon
takes the lid off”. As a reaction to Drake’s statements, Committee
chairman Kiesewetter announced that in September the
Committee will take up the role of the BND.
This raises the question of what type of collaboration exists
between the BND -- characterized by the two American testifiers
as a “vermiform appendix” of the NSA -- and the “Five
Eyes”, i.e., the global cooperation agreement among agencies
of the U.S., UK, Canada, Australia and New Zealand. That
agreement provides for intense spying on each other’s citizens
and institutions and the sharing of collected data, outside of
any parliamentary oversight and control.
Incidentally, just one day before the NSA hearing, another
highly sensitive item hit the news: a young BND official was arrested
on charges of working as a spy directly for the CIA.
As for William Binney, he recalled that he had left the NSA in
2001, after the Bush Administration’s decision to eliminate all
restriction on surveillance of U.S. citizens, ostensibly because of
9/11. The United States, in his view, have taken exactly the path
the Founding Fathers wanted to prevent, i.e., it has become an
oligarchical state collecting information on its citizens and using
it against them. That is unconstitutional, Binney stressed.
Concerning surveillance of foreign heads of state and government,
Binney said that that information is always useful to
“better evaluate the person”. It can also be used as “leverage” to
push the person to behave in a certain way. Binney, who praised
Snowden’s courage, said his documents are all authentic.
Iraq: The ISIS Tragicomedy
Could Turn into a Nightmare!
Southwest Asia took another step towards a new dark age last
week, with the declaration of a new world-wide Islamic Khalifate,
to which all Muslim nations must pledge allegiance, by the
leader of the Islamic State in Iraq and Syria (ISIS) Abu Bakr Al-
Baghdadi (real name Ibrahim Al-Badri). It is also a step toward
implementation of the Anglo-American plan, described by Tony
Blair as “the post-Westphalia” era, which means the end of multiethnic,
multi-religious, modern, sovereign nation states.
The ISIS, as we reported, would never have had the capability
of taking over and controlling such vast areas of land in both
Syria and Iraq without the backing of a constellation of global,
regional and local forces and states (cf. SAS 25/14). The current
ISIS is the sum of the support given by the U.S., UK, EU,
Saudi Arabia and Turkey for the so-called “revolution against
Assad” in Syria. When the alleged Free Syrian Army, which enjoyed
open support from all of them, failed to achieve its first
major offensive on Damascus and other major cities, a large
number of its forces defected, with their weapons, to Jabhat
Al-Nusra, the overt Al-Qaeda representative in Syria.
Now, as the ISIS, which was originally an outgrowth of the
Anglo-American policy of abolishing the Iraq state together
with its armed forces, becomes more powerful, the Al-Nusra
jihadists are defecting to it in turn. Even the training reportedly
provided by U.S. and British special forces to “Syrian rebels” in
bases in Jordan is put to good use by the ISIS. Financing for
all these groups, meanwhile, has continued from semi-official
charity groups and from wealthy Saudi, Kuwaiti, Qatar, Emirati
and Bahraini individuals under the complacent eyes of their
governments.
The immediate threat is that Iraq would be divided into at
least three fighting ethnic and sectarian states, with the Kurds
expanding their control to the oil-rich Kirkuk and threatening
to hold a referendum for independence in the Kurdish region.
This could further spread to Iran first, which is also composed
of a large number of different ethnic and sectarian communities,
and to Turkey, which has a similar mix of Alawites and
Sunnis, Kurds and Turks,
All these divisions are part of the infamous plan named after
Bernard Lewis, a British intelligence agent with powerful influence
over U.S. neoconservative and liberal-imperialist circles.
The Bernard Lewis Plan also includes the division of Saudi Arabia
into one oil-rich state in the east and a religious state in
Hijaz in the west. However, this is not on the agenda for the
time being. It is nations like Syria, Iraq and Iran, which have a
deep historical identity of independence and development, that
are targeted first.
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