E.I.R.STRATEGIC ALERT WEEKLY NEWSLETTER
Volume 30, No. 48 - December 1, 2016
Beware the Last Swipes of the Dinosaur’s Tail As Lyndon LaRouche stated in his Nov. 19 interview with Roger Stone, Hillary Clinton’s defeat “has so far saved the world from deadly war on a global scale” (cf. SAS 47/16). While the danger is now less, it has not gone away, as seen in the latest, desperate moves of the Obama Administration. * UN Ambassador Samantha Power, hysterical as usual, launched a fit at the UN Security Council on Nov. 21, accusing Syria and Russia of crimes against the population of Aleppo. She named the names of a series of Syrian generals whom she called criminals who should be brought to justice, although she has already found them guilty without a trial. “Russia and the Assad regime’s merciless attacks must end... and one day, they will be held accountable.” Russian Deputy Ambassador to the UN Vladimir Safronkov aptly responded by demanding that Power similarly name the terrorists who have committed crimes against Syrian civilians. Or is the U.S. protecting them? Moscow’s Foreign Ministry spokeswoman Maria Zakharova also suggested that in speaking of war crimes, Samantha Power should direct her question to US generals “who have caused the death of dozens, hundreds or even hundreds of thousands people from the NATO bombing of Yugoslavia to the hostilities in the Middle East.” * The situation in Ukraine remains on a hair trigger. On Nov. 25, the Ukrainian government announced it would be closing certain airspace on Dec. 1-2, to conduct missile tests, including over Crimea, which the putschist Kiev government does not recognize as Russian airspace. Following Russian official protests, Oleksandr Turchynov, the Secretary of Ukraine’s National Security and Defence Council, called the Russian protests “hysterics and provocations”. The region encompassing southern Ukraine, the Crimean Peninsula, the Black Sea and the adjacent Russian region is a major transit corridor for commercial aircraft flying between Europe and Asia. * Although very much a lame duck, the Obama Administration continues to make key changes in US strategy. The Wash ington Post reported on Nov. 28 that the White House has given the Joint Special Operations Command (JSOC) “expanded power to track, plan and potentially launch attacks on terrorist cells around the globe.” This will shift JSOC from being mostly an anti-terrorism tool of regional commanders, into functioning more as a global combat command. In some parts of the world, JSOC will work with U.S. allies, but in “other parts of the world, with weak or no governments, JSOC could act unilaterally.”
In addition, Obama is apparently plotting to initiate a major restructuring of the National Security Agency, and plans to fire its current head, Adm. Mike Rogers. A coincidence? Rogers recently met with Donald Trump... Despite the presidential election, these moves and provocations show that the danger of war persists as long as Obama runs free for two months more. Wall Street Establishment Panicked over Trump Presidency It is still premature to make any definitive claims about what a Trump presidency will mean for the U.S., and for the world. As long-time political activist Roger Stone, a Trump insider and adviser, acknowledged in a recent interview, on Salt Lake City radio station KTKK , “The only predictable thing about Trump is that he is unpredictable.” What is unmistakable, however, is that the Wall Street establishment, which backed George W. Bush, Barack Obama and Hillary Clinton, is in a state of panic over the direction the President-elect may go. Trump’s discussions with Russian President Putin and China’s Xi Jinping were an explicit repudiation of Obama’s warlike provocations against both nations. He agreed with both leaders that direct dialogue is essential, and told Putin he hopes the U.S. would soon join with Russia to crush the jihadists in Iraq and Syria, which have benefited directly from Obama’s anti-Assad policy. Moreover, in a brief announcement last week, Trump affirmed that he will kill the Trans-Pacific Partnership, Obama’s anti-China free trade agreement, while Trump adviser James Woolsey said Obama’s rejection of China’s offer to the U.S. to join the Asian Infrastructure Investment Bank was a big mistake. The fear that Trump might break out from under the control, which the Wall Street/London globalists have maintained over the last two administrations, is evident in the coverage the “mainstream media” give of his transition team. They run daily stories that Trump is turning his back on his voters, by returning foreign policy control to the neocons, and economic policy to Wall Street insiders, as in the short-lived rumor that JP Morgan’s Jamie Dimon would be named Treasury Secretary. In the Salt Lake City interview, Stone said that what Wall Street fears most is that Trump “can’t be bought, he can’t be bullied...he is his own man.” He added, for example, that he would be greatly disappointed if Trump does not implement Glass Steagall, and repeal Dodd-Frank, since he favors community banks over the Too Big to Fail universal banks.
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When asked if Trump’s “America First” rhetoric means he favors isolationism, Stone said “Trump is not an isolationist, but a non-interventionist.” If true, and if Trump can be pressured, by a mobilization of citizens, to break with the last sixteen years business-as-usual, the fears of the establishment will be justified. Trump’s Discusses Syria Policy in Surprise Meeting with Anti-Interventionist Tulsi Gabbard On Nov. 21, Donald Trump held what for many was a suprise meeting with Representative Tulsi Gabbard, a Democrat of Hawaii, who served two tours of combat duty in Iraq before running for Congress. On the agenda: Syrian policy and other foreign policy matters. Gabbard has been an outspoken opponent of the Bush-Obama permanent war, regime-change policy. She backed Bernie Sanders in the primaries, because he “understands the cost of war”, and blasted Hillary Clinton’s call for a “no fly zone” in Syria. In fact, she even resigned her post at the Democratic National Committee in protest over its dictates on behalf of Clinton. Tulsi Gabbard, a staunch supporter of re-enacting GlassSteagall legislation, is phenomenally popular in Hawaii, where she was just re-elected with 81% of the vote. After her meeting with the President-elect, she released a statement on her website, saying they had discussed, in particular, the Syria policy and the fight against terrorist groups like al-Qaeda and ISIS. “I felt it important to take the opportunity to meet with the President-elect now before the drumbeats of war that neocons have been beating drag us into an escalation of the war to overthrow the Syrian government -- a war which has already cost hundreds of thousands of lives and forced millions of refugees to flee their homes in search of safety for themselves and their families.” While she disagrees with Trump on many issues, she wrote, “I never have and never will play politics with American and Syrian lives”. Gabbard expressed to Trump “my grave concerns that escalating the war in Syria by implementing a so-called no fly/safe zone would be disastrous for the Syrian people, our country, and the world. It would lead to more death and suffering, exacerbate the refugee crisis, strengthen ISIS and al-Qaeda, and bring us into a direct conflict with Russia which could result in a nuclear war. We discussed my bill to end our country’s illegal war to overthrow the Syrian government, and the need to focus our precious resources on rebuilding our own country, and on defeating al-Qaeda, ISIS, and other terrorist groups who pose a threat to the American people.” ECB Warns of Financial Crisis Its Own Policies Have Produced The Financial Stability Review , published by the ECB Nov. 24, warns of a possible large financial crisis caused by four risks: a stock market collapse; a banking crisis; a sovereign debt crisis and an investment fund crisis. “As they are intertwined, if they were to materialise, they would have the potential to be mutually reinforcing. A common trigger for all of these risks could be weaker nominal growth than currently expected across the euro area”, the report states. Whereas those risks are real, the ECB comes to conclusions that would be amusing, were the consequences not so serious. In fact, the ECB describes the situation as follows: “Subdued economic growth and the associated low interest rate environment have dampened banking sector profitability prospects in the euro area and other advanced economies. In the euro area,
volatile stock market developments over the past six months contributed to an increase in banks’ cost of equity which may constrain banks’ ability to support the real economy via higher lending volumes.” In other words, the ECB says that banks are generating no profits and accumulating losses (non performing loans -- NPL) because of 1) the ECB-induced economic depression and 2) the ECB-induced regime of negative interest rates. But it fails to call for a change in policy. The former chief economist of an international institution told EIR that in his view, neither banks nor governments will take up a serious approach to the debt crisis, for fear that writing down NPLs will bankrupt them. Since 2008, the failure to do any serious debt forgiveness, or write-off of worthless debt, meant that the whole system has been committed to sustaining zombie banks. Derivatives trading is an example, the source said. The lack of transparency is deliberate, to hide what they are doing, to protect the zombie banks, they know that their pricing of assets is fake, and that their leverage is even worse than what is showing up in stress tests. No one on a policy level seems to have realized that years of easy money have induced significant structural changes in banking, this economist told us, and in the way bankers and traders think. The structure is complex, and no one knows today what effects an increase in interest rates on one point or half a point will have. The biggest danger therefore, in his view, is to cling to false axioms, based on past “experience.” To prevent the next crisis, a package with Glass-Steagall, debt write-off and an investment policy is necessary, he said. However, the latter must avoid the model of Private-Public Partnership, which allows monied investors who are looking for a quick return to determine what projects should be done, and then, to maximize profits, they will do a shoddy job. FDR showed that large-scale government spending could be done successfully, but “Trump is not FDR, and neither was Obama.” Merkel Represents the Old No-Future Paradigm, Germany Needs the Silk Road Helga Zepp-LaRouche issued a new appeal on Nov. 26 to the German population to help her bring the country into the “new paradigm”. She begins by evoking Heinrich Heine’s famous concern “ When I think of Germany in the night”, to ask “where is Germany headed, or rather, where is it drifting?” Angela Merkel’s decision to seek a new term, she notes, is really not reassuring. “Contrary to the impression she is attempting to create, four more years of a Merkel government are no promise of stability, but the opposite.” Both the Brexit and the election of Donald Trump are expressions of the rejection of the entire paradigm of neo-liberal “globalization”, “which is just a synonym for the Anglo-American empire”, Zepp-LaRouche writes, with its monetarism and wars. “Chancellor Merkel and the shocked Ursula von der Leyen represent this losing paradigm, and the idea of four more years – with no change in policy and with absolutely no vision for the future – does not mean stability, but escalating political divisiveness in Germany and the disintegration of an EU in rebellion. With the next financial crisis which is bound to come, the Merkel-Schäuble duo is sure to foist the costs on the citizens once again, and risk chaos by so doing. The fragility of the abominable refugee deal with Erdogan and various governments in Africa promises that it will only be a matter of time before this crisis explodes again.
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“Merkel represents this paradigm, which is irreversibly sinking. Just like the 304 members of the European Parliament who just voted for a resolution accusing Russia of conducting massive anti-European propaganda, she supports an EU and NATO policy which does exactly what they accuse Russia of doing. We must put an end once and for all to the logic of the Cold War.” The next U.S. President has already said he wants to improve relations with Russia and China, and he might be brought to cooperate with China’s Silk Road policy, which Zepp-LaRouche goes on to outline. This is the policy she and her husband have been fighting for for over 25 years, and that she asks the Germans to support. “To create a real perspective and alternative for Germany, we don’t need an AfD which has no solutions to offer, but together with me, you can put cooperation with the U.S., Russia and China in building the New Silk Road on the agenda. It is only through such cooperation that we can develop the Middle East and Africa with a New Silk Road-Marshall Plan, and thus solve the refugee crisis humanely.” This is the policy for peace Germany should commit to, while contributing to the needed dialogue of cultures, on the highest level. Finally, Helga Zepp-LaRouche calls on all citizens to fight with her in ensuring that this extraordinary opportunity is seized in and for Germany. Huge Win for François Fillon in Conservative Presidential Primary in France Former French Prime Minister Francois Fillon smashed his opponent in the Nov. 27 second round of the presidential primary organized by Les Républicains (right wing and center parties) taking 65.5% of the vote to Alain Juppé’s 32.5%. The vote, however, only involved a small sample of the French political spectrum, some 4 million people, essentially made up of wealthy and elderly voters. If Fillon wants to win the presidential election next Spring, he will have to enlarge his voter base, something difficult to do given his domestic program. To put it in a nutshell, he is called the “French Thatcher”. Nonetheless, on foreign policy, Francois Fillon intends to reestablish a certain national independence, freeing France from “too strong a dependency on the United States”, and has called Sarkozy’s decision to bring France back to NATO a “stupidity”. At the same time, he is open to collaborating with Russia to solve the Middle East crises and is in favor of lifting the EU sanctions. He developed a close contact to Vladimir Putin at the time when both were Prime Ministers, and has attended the Valdai Club meetings since then. That position is a welcome relief from President Hollande’s obsequiousness to the Anglo-American elites and their war and “regime change” policy. But the “shock therapy” that he proposes is explicitly modeled on Thatcherism. Thus, he proposes to eliminate 500,000 jobs in the public sector (10%) and to raise the civil servants’ work week from 35 hours to 39 hours, but with less pay. He also intends to extend retirement age from 62 to 65 years. His “fiscal shock” which he thinks will boost employment and consumption, includes €40 bn cuts in employers’ contributions and €10bn in income taxes. Moreover, he has not once addressed the issue of a needed financial reform, nor said a word about bank separation, or a Rooseveltien-modeled economic recovery. On European issues, Sarkozy’s former PM, is not for a full reform, although he does call for creating a Euro-zone govern
ment. He would maintain the Maastricht criteria, but calls for the ECB to expand its mission to promote economic development. On immigration, he proposes that the EU set up border guards to prevent migrants from entering. While Fillon’s victory was a big surprise for the media and the polling institutions, it cannot really be seen as part of the ongoing wave of international change, such as the Brexit or the Trump surge, against the paradigm of globalization and for industrial and infrastructural reconstruction. His candidacy could lead to a reshuffle of all the cards of the presidential campaign. Fillon’s rabid “shock therapy” approach will likely strengthen the Socialist Party, which is almost dead today. And his calls for more independence, his alliance with the conservative Catholic traditionalist right, and his relatively pro-Putin stance, will likely drain a good part of the support that had contributed to the rise of Marine Le Pen and the Front National. The only positive future-oriented policy being proposed is that of Jacques Cheminade, with his defense of a strong GlassSteagall reform, and peace through mutual development with Russia and with China’s New Silk Road. Swiss Referendum: Voters Defeat Early Exit from Nuclear Power In a national referendum held on Nov. 27, 54.2% of Swiss voters rejected a plan to accelerate the phase-out of nuclear energy. That came as a surprise to those who believed the pollsters who were putting the “yes” faction ahead shortly before the vote. Had the plan, which imposed the shutdown of power plants after an operational age of 45 years, gone through, three of the five Swiss nuclear power plants (Beznau I and II; Mühleberg) would have had to be taken off the grid already in 2017, a fourth in 2024 and the last in 2029. These five plants cover about one third of the national energy supply today. One of the key networks campaigning against the Greens, the “Carnot-Cournot Network for Policy Consulting in Technology and Industry”, had unmasked the unfeasibility of the green pipe dreams, and done so effectively, as the outcome of the referendum shows. In particular, the Network pointed out that replacing the nuclear power sector would not only require tens of billions of Swiss francs but also take decades, leaving the country without secured energy supplies in the near future. And even with the most drastic energy-saving measures, the country’s needs are expected to increase according to expert forecasts. Against the Green position, Irene Aegerter, the “grande dame” of atomic development, played a leading role as a voice of reason, provocatively declaring: “I am a real Greenie. If you care about the climate and the environment, nuclear power is the only possible solution.” A few days before the referendum was held, she voiced optimism that the technology would not be abandoned but return as an attractive option sooner or later, as new generation systems are developed. It is worth noting that the “no” vote against the Greens’ views was comparably higher in the German-speaking cantons of Switzerland than in the French-speaking ones. That makes a double slap in the face for the German Greens, who were expecting the Swiss Germanophones to join the radical antinuclear front. Unlike the German government, the Swiss government, which is pursuing a strategy of replacing nuclear with other sources, relies mainly on hydropower, rather wind and solar, which so far, only account for 4.3% of the national power sup
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plies. Moreover, it has not set a fixed date for the final exit, which in Germany, has been set for 2022. China Aims for a “Community of Common Destiny” with South America During Chinese President Xi Jinping’s state visit to Ecuador, Peru, where he also attended the APEC summit, and Chile, tremendous progress was made toward coordinating the development strategies of those countries, which are to benefit from even greater Chinese investments (cf. SAS 47/16) At the Asia Pacific Economic Summit in Lima on Nov. 19-20, the Chinese President focussed on his hope to see the Free Trade Area of the Asia-Pacific (FTAAP) quickly implemented. This agreement is open to all countries that wish to participate, while President Obama’s hapless Trans-Pacific Partnership was explicitly aimed at excluding China, and at allowing the United States to lay down the rules of the game in the area. That is not about to happen. The declaration issued at the end of the 21-nation summit reiterates the leaders “commitment to the eventual realization of the... FTAAP as a major instrument to further deepen APEC’s regional economic integration agenda.” The TPP, on the other hand, was not even mentioned in the main declaration but relegated to a brief mention in an annex on the FTAAP. This is not the first time Xi has used the annual APEC summit to further major global initiatives. In 2014 in Beijing, where he first proposed the FTAAP, he also announced the New Silk Road initiative and urged the U.S. and other nations to join in. In 2015 in Manila, he announced the formation of the Asian Infrastructure Investment Bank, again announcing that it was open to the entire world. Coinciding with the conclusion of Xi’s tour of Ibero-America, the Chinese Foreign Ministry issued a broad-ranging policy paper on Latin America and the Caribbean on Nov. 24, describing it as a “blueprint for the future” based on “new ideas, proposals and initiatives.“ The Foreign Ministry’s last policy paper on this subject was issued in 2008. As the world is undergoing “unprecedented historical changes, with multipolarity and globalization gaining momentum,” the document states, China stands ready “to promote the construction of a new type of international relations with win-win cooperation at the core, and forge a community of shared future.” And, it adds, China’s relations with Latin America and the Caribbean are in “the new stage of comprehensive cooperation.” The document goes through how China plans to contribute to the economic development of these countries, with projects involving manufacturing, engineering, infrastructure building, science and technology and aerospace, to name just a few. In the latter area, it undescores the importance of space technology „as a driving force for the scientific, technological and industrial development of Latin American and Caribbean countries.” Cooperation in science and technology innovation includes nuclear energy, civil aviation, building R&D centers, high-tech parks and joint laboratories, among others. Congress of Peruvian Economists Shares Zepp-LaRouche’s Development Perspective The Peruvian Association of Economists held its XXIII national congress on Nov. 17-19 in the Amazon city of Pucallpa. The event was keynoted by Helga Zepp-LaRouche via a pre-taped video on the New Silk Road (cf. SAS 47/16). Her presentation and the ensuing discussing were very well received, as we reported. That was confirmed in the document summarizing the results of the three-day event, which was sent to all 24
regional Economists Associations in Peru, which have some 20,000 members. Point number one of the document states: “1) That, analyzing the keynote address presented to us by Dr. Helga ZeppLaRouche, we share the perspective on world development that her message presented...” The document goes on support a “new financial architecture directed at developing nations’ physical economies,” applying science, technology and innovation to achieve development, and as a first paradigmatic example, to urge the Peruvian government to realize the transatlantic rail corridor linking the Atlantic and Pacific oceans, from Brazil to Peru. Scientists Wanted in China and Russia Chinese Political Leadership Bolstered by Researchers : In view of the expected changes in the Chinese Communist Party leadership next year, President Xi Jinping has begun not only to bring in people loyal to him and his program, but also to reach out to technically qualified people with backgrounds in science and engineering to fill important government posts, in line with his push to encourage an economy based on innovation. Thus, the former head of the China National Space Administration, Xu Dazhe, was appointed the head of Hunan province, after spending his entire 32-year career in the space agency. Ma Xingrui, who had preceded Xu in the CNSA post, was named head of Shenzhen province in the South. Li Guoying, the vice president and chief engineer of the Ministry of Water Resources, was appointed acting governor of Anhui province. Lu Xinshe, who was vice-minister of land and resources, was appointed party chief in Jiangxi province. Xi is also tapping officials who have been working with the grass roots and in hardship areas rather than those who have simply worked their way up through the party bureaucracy.
Russia to Become Magnet for Best Researchers : Russian President Valdimir Putin told a meeting of the Council for Science and Education on Nov. 23 that Russia needs to be able to attract the best scientists from around the world, in particular by setting large-scale and interesting scientific tasks, and longterm research projects, to make Russia “a magnet for the best researchers from around the world.” Back in 2010, Russia launched the “mega-grant program” to attract world-famous researchers , including Russians who had left the country, to go to Russian universities and encourage young people to enter science, education, and high-technology fields. Putin noted that under this program, 200 laboratories conforming to international standards have been created.” After the fall of the Soviet Union, through the 1990s, Russia suffered an unimaginable brain drain, in which thousands of scientists left the country, many going to the United States, and many from the nearly-destroyed space program. The current effort is similar to the campaign by China to repatriate that nation’s scientists from aboard.
