E.I.R.STRATEGIC ALERT WEEKLY NEWSLETTER

E.I.R.STRATEGIC ALERT
WEEKLY NEWSLETTER
Volume 28, No. 30 - July 24, 2014
Malaysian Airliner Crash
Signals Escalating War Drive
While it may take days or weeks to reach a competent forensic
determination of the cause of the crash of the Malaysian
commercial airliner MH17 over eastern Ukraine July 17, the
war drums are beating for confrontation with Russia, led by
President Obama and his top aides, such as UN Ambassador Samantha
Power. Their attitude is: “don’t confuse me with facts
-- my mind is made up.’’ In this case, the determination is that
Vladimir Putin was either directly or indirectly responsible for
the incident, and Russia is to pay a heavy price.
Washington’s snap judgment was matched by British Prime
Minister David Cameron, writing in the July 20 London Times,
who similarly declared Putin guilty of the tragedy and demanded
that Europe break decisively with Russia. “We must turn this
moment of outrage into a moment of action.”
However, neither Washington nor London has provided any
hard evidence, although U.S. intelligence agencies and others
certainly have detailed satellite images of the area.
The Russian Ministry of Defense issued a statement July
19, spelling out ten questions directed at Ukrainian authorities.
Among them: why did Ukraine air traffic control steer the
plane north of the normal flight pattern into a known combat
zone, what Ukraine air force planes were in the vicinity when
the Malaysian jet was hit, and why did Ukraine have anti-aircraft
batteries in the area when the pro-Russian militias in the
east of the country have no aircraft?
The grave danger, of course, is that the Malaysian plane tragedy
does not take place in a vacuum. The drumbeat for war
has been escalating, with the continuing Ukraine crisis one of
the top flash-points, as evidenced by the fact that President
Obama, just days before the crash, announced new harsh sanctions
against Russia. And NATO has announced an expansion of
manuevers in the Baltics and Eastern Europe on the Russian
borders.
What is completely missing from the Washington and London
rhetoric is any effort to determine cui bono -- who would
benefit from such a brutal act of terrorism. From that standpoint,
Russia stands to lose the most.
Moreover, the shoot-down came at the conclusion of the potentially
historic BRICS summit in Brazil (cf. below). And at
a time when even the Bank for International Settlements has
been warning about an imminent debt blowout of the major
trans-Atlantic banks as the result of their out-of-control gambling
activities.
Mervyn King, the former head of the Bank of England, published
a book recently, documenting that the biggest financial
crash of the 20th century took place in the spring-summer of
1914 and led directly into the “Guns of August” start of World
War I. The parallels between then and now, exactly 100 years
later, are stark. The major difference is that the great powers
of 1914 did not have overkill arsenals of thermonuclear weapons,
as the United States, Russia and China have today.
BRICS Initiatives and LaRouche’s Four Laws
for Economic Recovery
The summit of the BRICS group in Brazil, preceded and followed
by intense diplomacy which brought together different
constellations of Russian, Indian Chinese, and South African
leaders with Latin American heads of state and government,
has shifted the political landscape significantly.
Most importantly, the BRICS (Brazil, Russia, India, China,
South Africa) set up the New Development Bank, explicitly to
finance development and the physical economy without the
murderous conditions attached by the World Bank and the IMF,
and they also set up a Contingency Reserve Arrangement, to
better protect themselves against currency attacks by the monetarist,
global vulture funds and banks (cf. below).
When asked about his assessment of the situation on July 18,
Lyndon LaRouche pointed to the critical issue of the “asymmetry
of value in the world” today. This comes from two distinct
systems of logic and metrics, which are totally incompatible.
In the trans-Atlantic system, financial institutions hold pieces
of paper, which they claim are worth quadrillions, because that
is the nominal value written on them. And they are prepared to
kill off populations to obtain payment of it – as shown in the
fight around Argentina today, while the Troika has demanded
as much from Southern European countries. That paper, La-
Rouche said, is absolutely worthless, it has no value.
On the other side, the BRICS are rejecting such looting
through financial instruments, and are building a market based
on real value. And real value, LaRouche said, comes from, and
is measured by, the development of the productive powers of
labor, i.e., through the introduction of scientifically created new
technologies. Productive processes are implemented which increase
the energy-flux density through the physical economy in
such fashion as to drastically increase the productive powers
of labor, and to accelerate the rate of increase. That is the sole
source of value in an economy.
That is the meaning, Mr. LaRouche emphasized in the discusEIR
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2 WEEKLY NEWSLETTER n°30 / 2014
sion, of the four principles of economics represented in the
four laws which he has presented, and which are widely circulating
internationally. Those laws are designed to define a
system, whose metric is the application of rising energy-flux
density. The introduction of Glass-Steagall is the first, most
urgent step, LaRouche said, after which the next three steps
must follow: a national bank, a Hamiltonian credit system to issue
credit to projects inducing rising energy-flux density, and a
crash science driver program of thermonuclear fusion power.
Ironically, these other countries are applying the original
American System of economics, which the United States has
now fully rejected, to espouse the monetarist, free-trade looting
policy of the British Empire. But it is definitely possible for
the United States to go back to that policy, LaRouche stressed,
and pass those four laws. However, for that, “we have to impeach
Barack Obama and get him out of the way.”
BRICS Call for «New Financial Architecture»
The heads of State of the BRICS group issued July 15 the Fortaleza
Declaration, which includes the historic announcement
that they agreed to form the New Development Bank (NDB),
which will be headquartered in Shanghai, China, with the first
(rotating) Presidency held by India, the first chair of the Board
of Governors will be a Russian, the first chair of the Board
of Directors will be from Brazil, while South Africa will host
the Africa Regional Center. The NDB will be initially capitalized
to $50 billion, with equal contributions from each of the five
countries.
The Fortaleza Declaration also announces the establishment
of the BRICS Contingent Reserve Arrangement (CRA), with an
initial size of $100 billion, to “help countries forestall shortterm
liquidity pressures.”
Importantly, it also calls for “an international financial architecture
that is more conducive to overcoming development
challenges.”
The Declaration contains a strong condemnation of unilateral
military interventions and economic sanctions, which are
against international law.
All five countries have supported Argentina in its fight with
the vulture funds, which was again laid out by President Cristina
Fernández in her speech to the July 16 meeting of the
BRICS and the Union of South American Nations (Unasur).
All in all, the strengthening of ties among these five countries,
together with numerous economic and trade agreements
with Central and South American countries, have Wall Street
and the City of London in a panic.
But they are up against a huge resistance. After all, the BRICS
group represents over 43% of the world’s population, 27% of
the total land area, and over 20% of world GDP. Commenting
on the promising potential in terms of growth, Vladimir Putin
pointed out, in his speech: “In the past ten years, the GDP of
countries with developed economics grew by 60%, while that
of the BRICS states increased increased fourfold. We have to
bear in mind, of course, that the 60% growth was in comparison
to a large volume, a large starting point, while our fourfold
growth was in regard to a smaller base; however, such are the
rates. These are all young states, and the future belongs to the
young.”
Chinese President Xi Jinping and his Indian counterpart Modi
were just as optimistic. In India, Modi pointed out, 65% of
the population is under the age of 35, and that is “our great
strength.” He stressed the uniqueness of the BRICS, which
“brings together a group of nations on the parameter of ‘future
potential’; rather than existing prosperity or shared identities.
The very idea of BRICS is thus forward-looking.... [W]
e have an opportunity, to define the future -- of not just our
countries, but the world at large.”
Nuclear Power at Center
of BRICS Vision for Growth
A number of agreements on cooperation in the field of nuclear
energy, including the construction of new power plants, were
reached during and on the sidelines of the BRICS summit and
in separate visits by Chinese and Russian leaders to Argentina
and Brazil.
During Vladimir Putin’s visit to Buenos Aires July 12, an
agreement was signed on the design, construction, operation,
and decommissioning of nuclear power plants and research
reactors as well as developing “water desalination facilities.”
There is also Russian support for the nuclear fuel cycle (which
could include enrichment and reprocessing technology), radioactive
waste management, and radioactive isotope production.
Rosatom has submitted a technical and commercial proposal
to participate in the construction of the 760MW Atucha-III nuclear
plant.
In Brazil, Russian and Brazilian representatives signed a
Memorandum of Understanding providing for a spent-fuel
storage facility, the construction of engineering and other technical
facilities at Brazil’s Angra operating nuclear power plant
site, and a “partnership” in the construction of new nuclear
plants in Brazil.
After the summit, Chinese President Xi Jinping paid an official
visit to Argentina accompanied by a delegation of 200
businessmen, where 19 cooperation agreements were reached
in a variety of fields, including nuclear energy, infrastructure,
communications, transportation, and agriculture. China is offering
preferential financing for the building of Atucha III.
On the sidelines of the BRICS summit, Bolivian President Evo
Morales had separate meetings with Putin and Xi. The Russians
offered cooperation on a “comprehensive nuclear energy program”,
while the Chinese announced they would build Bolivia’s
second satellite.
Both India and South Africa also have very active and ambitious
nuclear programs.
Espirito Santo Bank Crisis Is not Peripheral
The common denominator of the two peripheral banking “accidents”
of the past weeks, the collapse of Bulgaria’s Corporate
Commercial Bank (CCB) and the default of the Banco Espirito
Santo (BES) have a common denominator: the French bank
Credit Agricole. The CA (Credit Agricole) is both a core bank of
the Eurozone and a systemic bank. What we are seeing, therefore,
are peripheral symptoms of a systemic collapse.
In the case of Bulgaria, CA had dumped its debt on CCB. In
the case of Portugal, the French bank might have done the
same or might be in the process of doing the same with BES.
The CCB went belly up last month causing a bank run on other
banks, with its owner apparently skipping town with the millions
he took from the bank. During the run, the Bulgarian
Central Bank was authorized by the EU to inject emergency
liquidity of more than €3 billion into the banking system. It
then transferred the “good” assets of CCB to Credit Agricole
Bulgaria (CAB).
CAB was a full subsidiary of Credit Agricole France (CAF)
until a few months ago, when it was sold to CCB for 95 million
euros. So CAF got out while the going was good. Now Bulgaria,
although not a member of the Eurozone, has applied to have its
banks supervised by the new ECB control supervisor.
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n° 30/ 2014 WEEKLY NEWSLETTER 3
In other words, similar to corporations that smuggle their
industrial waste to Africa, Credit Agricole has dumped its toxic
waste in Bulgaria. However, the story started in Greece. The
CAB was the Bulgarian subsidiary of Empiroki bank, the Greek
bank which CAF owned, and then sold during the Greek debt
crisis to the National Bank of Greece, Greece’s largest private
bank, for one euro, leaving it with all the bad loans. NBG was
then, along with all the other banks bailed out, by the government
with €25 billion from the bailout funds.
Shift to Portugal. Banco Espirito Santo is 15% owned by CAF
which has been a partner of the Espirito Santo family for decades.
Last May, CAF started to pull out of BES, when it issued
a share offering to raise a billion euros in capital, in order to
pass the ECB Asset Quality Review. However, the Portuguese
regulator then “discovered” irregularities among the three holding
companies based in Luxembourg through which the family
controls the bank, and a criminal investigation was opened.
Despite the investigation, the share offering went ahead, in
effect reducing the holdings by the Espirito Santo family. But
the CAF also reduced its share from 20.12% to 14.6%, and
exited the insurance branch of BES.
In fact, these two events were accidents waiting to happen,
and the CAF connection points to the fact that the main event
will not be in the “periphery” but at the center, i.e., Frankfurt,
Paris and London.
Talk of Impeaching Obama Goes “Mainstream”
Over the past week, discussion of the impeachment of President
Barack Obama became the “talk of the town”, as one Washington,
D.C. pundit described it. Politico, a daily which circulates
widely in the capital, ran at least one article a day on moves
for ousting Obama, including one reporting his reaction, when
speaking to Democratic Party activists, who were demanding
he use his executive authority to do something to resolve the
escalating immigration crisis on the border to Mexico.
“You’re not going to get me impeached, are you?”, he asked,
clearly betraying what’s on his mind.
Even the Washington Post was forced to recognize the growing
threat to Obama. Columnist Ruth Marcus, while arguing
that impeachment would never succeed, admitted that, “...for
those who assert that Obama has grievously abused his executive
authority, impeachment is the proper course of action.”
That is in reference to Speaker of the House John Boehner’s
decision to file a suit in federal court, rather than go for impeachment.
What is ringing alarm bells in the White House is that it is no
longer just Republicans who are criticizing the President. As La-
RouchePAC organizers discovered in their blitz of Congress last
week, an increasing number of Democrats are warning that he
is treading on dangerous ground.
Other Democrats are looking beyond partisan concerns to
the damage that has been done to the nation by Obama thus
far, and to the likelihood that things will worsen, if he is not
challenged. Two leading Democrats in the House, Barbara Lee
and Jim McGovern, joined Republican Walter Jones in a hardhitting,
hour-long presentation, arguing that, should Obama use
offensive military force in Iraq, without approval of Congress,
he would be violating the War Powers Act. Implicit in their
presentations is that acting without Congressional approval, as
he did in Libya, would be an impeachable offense.
With a growing number of scandals crying out for limitations
to be placed on the power asserted by Obama, the broader
crisis may become a tipping point. As more than 55,000 children
from Central America are being held in detention centers
nationally, which is straining the resources of immigration authorities,
focus is shifting from the immediate humanitarian
concerns to a deeper problem: the disintegration of governments
in that region, and the growing power of drug cartels,
strengthened by the Obama administration’s increasingly open
pro-drug policy.
U.S. Senate: Sponsors of Bill To Re-Establish
Glass-Steagall Seek Urgent Support
Senator Elizabeth Warren and her original three co-sponsors of
the 21st Century Glass-Steagall Act of 2013 -- John McCain,
Maria Cantwell, and Angus King -- published on opinion piece
July 17 on CNN’s website, which said in its concluding paragraph,
that five years after the bankruptcy of Lehman Brothers
and the severe economic downturn that followed, “with another
financial crisis a very real possibility, why isn’t this a more
urgent issue? We urge our colleagues to support our bill.”
The article says at the outset that “The chances of another
financial crisis will remain unacceptably high as long as there
are financial institutions that are ‘too big to fail ...’ But over five
years after the crash, the big banks are more concentrated and
more interconnected and their appetite for excessively risky behavior
is unchanged. The biggest banks are substantially bigger
than they were in 2008. In fact, the five biggest banks now
control more than half the nation’s total banking assets.”
The Senators say that their bill, which they introduced a year
ago last week, takes a “proactive, structural approach to reducing
bank risk [that] should be far preferable to risk-management
through over-regulation.” They note, “It’s been four
years since Congress passed, and rulemaking began on, the
Dodd-Frank Act. The regulators have so far missed more than
half of their statutory rule-making deadlines and many rules
remain unwritten.”
They also point to a report by the Federal Reserve Bank of
Dallas which estimated that “the financial crisis cost us as much
as $14 trillion. That’s $120,000 for every American household
-- more than two years’ worth of income for the average family.”
Finally, they call on Congress to step in to address the problem,
and urge support of their bill.
Blatant Manipulation of Internet
by British Secret Services
Journalist Glenn Greenwald has released another batch of
the files leaked by Edward Snowden, focused on the role of
the British General Communications Headquarters (GCHQ)
in controlling and running dirty operations on the Internet
and in “social media.” These revelations take on a particular
importance in the context of the wild stories and outright
propaganda surrounding the downing of the Malaysian airline
in Ukraine, that are circulating on Internet (cf. above).
Greenwald wrote in The Intercept July 14: “The tools were
created by GCHQ’s Joint Threat Research Intelligence Group
(JTRIG), and constitute some of the most startling methods
of propaganda and internet deception contained within the
Snowden archive. Previously disclosed documents have detailed
JTRIGs use of fake victim blog posts, false flag operations,
honey traps and psychological manipulation to target online activists,
monitor visitors to WikiLeaks, and spy on YouTube and
Facebook users....
“[A] newly released top-secret GCHQ document called JTRIG
Tools and Techniques provides a comprehensive, birds-eye view
of just how underhanded and invasive this unit’s operations are.
The document -- available in full here -- is designed to notify
other GCHQ units of JTRIG’s weaponised capability when it
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4 WEEKLY NEWSLETTER n°30 / 2014
comes to the dark internet arts, and serves as a sort of hackers’
buffet for wreaking online havoc.”
Greenwald lists some of the capacities, including the following:
* Change outcome of online polls,
* Mass delivery of email messaging to support an Information
Operations campaign and mass delivery of SMS messages
to support an Information Operations campaign,
Disruption of video-based websites hosting extremist content
through concerted target discovery and content removal,
* A tool to permanently disable a target’s account on their
computer,
* Ability to artificially increase traffic to a website and ability
to inflate page views on websites,
* Amplification of a given message, normally video, on popular
multimedia websites (Youtube)
Ability to spoof any email address and send email under that
identity.
Ukraine: Willy Wimmer Hits
the “Moral Depravity” of West
Willy Wimmer, former Assistant Defense Minister under
Helmut Kohl and CDU member of Parliament for 33 years,
wrote a new opinion piece on the Ukraine crisis on July 14,
the day after rockets were fired onto Russian territory from
inside Ukraine. It was published on NachDenkSeiten and other
websites under the title “Red Alarm”.
Wimmer, who is also a former vice-president of the OSCE,
blasts the “moral depravity” of the West, in turning a blind
eye to the massacres on the Maidan at the time, and to what
President Poroshenko is now doing in the East of his country.
“This is war against his own population, with a new ‘national
guard’, which was created out of fascist groups, mainly from
West Ukraine,” the same forces who caused so much suffering
in those areas in the past. “Europe should be ashamed to give
even a shimmer of understanding to such figures,” he wrote.
In Wimmer’s view, the aim of Washington now is to “throw
Russia out of Europe” and establish “complete control” over
Western Europe. Even though there are traditionally positive
economic relations between Russia and Germany. The situation,
Wimmer correctly warns, will become much worse if the trans-
Atlantic free trade agreement (TIIP) goes through. “Arbitration
courts working in the interest of U.S. law firms will completely
do away with parliamentarian democracy in our countries,” he
notes, after it has been eroded for years by Brussels.
What Wimmer does not say, however, is that this free-trade
scheme is no way in the interests of the American people or
the state. On the contrary, it only serves the interests of the
financial oligarchy of the British Empire, which runs, in turn,
the various banks and multinationals operating globally, outside
any commitment to a national cause.
People’s Daily Covers Zepp-LaRouche
on Human Rights and Development
The online edition of the Chinese language People’s Daily ran
Helga Zepp-LaRouche’s opinion piece denouncing the West’s
hypocrisy concerning “human rights”. The article, first solicited
by the daily, has since circulated to other Chinese websites.“
China has done more for human rights than any other country
on the planet. Ever since 1978 with the ‘reform and opening
up’ policy, a large part of the population has been able to shake
off poverty and today can enjoy a comfortable life. The fact is
obvious to everyone that not only have the people in the coastal
regions and in the south enjoyed the fruits of an economic miracle,
admired by the whole world, but also poverty in the rural
areas and in the inner and western regions has been significantly
reduced. With the intended New Silk Road Economic Belt of
President Xi Jinping and the 21st century Maritime Silk Road
being a strategy to be implemented, China has every chance to
eradicate poverty in the not far distant future....
“It’s not difficult to see that the Western notion of “human
rights” is greatly distorted, mixing up the individualistic and
egoistic ‘freedom’ with the notion of the common good. During
a recent period there appeared in the northwest of China
‘street revolts,’ similarly to what has occurred in Ukraine,
Thailand, and other places, which were antagonistic to society
and encouraging revolt, well financed by western NGOs, who
manipulated them, using the catchwords of ‘pluralistic society’
as a cover, and raising the banner of ‘democracy’ and ‘human
rights’. In reality all of this was the Western countries’ policy
of regime change, motivated by Western political interests in
the region. Their declaration of a ‘pluralistic society’ is merely
a synonym for the right to subvert a country which disagrees
with the position of the West.
Australia Leads the Way
out of the Global Warming Hoax
The climate change cabal worldwide is in a tizzy. On July 17,
a majority of the Australian parliament voted up the government’s
plan to repeal the climate tax law of 2011. That law
had been hailed by aggressive ecologist groups as the most
advanced globally, following the Climate summit in Copenhagen
of 2009. Indeed, the “carbon emission levy” – at 24 U.S.
dollars per ton of mining or industrial product – was three
times that of the average tax in Europe, and the highest in
the world.
The Australian move will have a decisive impact on the agenda
of the next meeting of the Group of 20 nations, to be hosted
by Australian Prime Minister Tony Abbott, as Europe and the
United States wanted to climate policy to be on top of the agenda!
Abbott won the national elections last year after promising
to repeal the “toxic tax”, which burdened private households
with 550 Australian dollars each annually, and which slowed
down investments in the mining industry in particular.
During the election campaign, the now PM called the climate
debate “absolute crap” and urged a return to sound scientific
foundations of meteorology. Repeal of the carbon tax has
been welcomed in a joint statement by the Australian Industry
Group, the Business Council of Australia and the Minerals
Council of Australia.
Not so in the European Union, which “regrets the repeal of
Australia’s carbon pricing mechanism,”EU Climate Commissioner
Connie Hedegaard stated. The EU had planned to link
its emissions trading system, the largest worldwide, with the
one that was to be launched next year in Australia. Not only do
those plans have to be scrapped, but other countries may soon
follow Australia’s example.
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Verantwortl. f. d. Inhalt: Dean Andromidas, Claudio Celani
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