E.I.R. STRATEGIC ALERT www.eir.de Published by: E.I.R.GmbH

The “Belt and Road Symphony” Has Sections for Europe and the United States The Chinese government has launched a global organizing drive to ensure that the upcoming Belt and Road Forum for International Cooperation (BRF), to be held in Beijing on May 14-15, consolidates a “broad, international consensus on the Belt and Road Initiative,” in the words of State Councilor Yang Jiechi. Noting that “the global economy is yet to emerge from the profound impact of the international financial crisis,” Yang emphasized in a March 10 interview with China Daily that “we hope the BRF will help drive away the clouds of the economic doldrums,” and that already “in countries around the world, priority is given to the real economy, the manufacturing sector, industrialization and economic diversification.” Yang, who is in charge of preparations for the Forum, described the new spirit: “The Belt and Road Initiative was proposed by China. Yet it’s not going to be China’s solo show. A better analogy would be that of a symphony performed by an orchestra composed of all participating countries.”  It is noteworthy that Yang Jiechi was the Chinese official who was sent to the U.S. for discussions with the Trump administration in late February. Chinese officials have repeatedly made it clear that the Belt and Road Initiative is open to all nations in the world. Chinese Foreign Minister Wang Yi had stated on March 7 that China, Russia and the U.S. should work with each other to pursue “win-win, rather than zero-sum outcomes... We believe the three countries can develop healthy and positive relations so that jointly we can fulfill our responsibilities for world peace and development.” “The New Paradigm is becoming the dominant, defining dynamic on the planet,” Helga Zepp-LaRouche told associates on March 12. “And since we are less than 100 days away from the May Belt and Road Forum, I think we should use that time to really make sure that we get the United States and European nations to join.”  We have to proceed quickly, she added, because the entire trans-Atlantic financial system is a powder keg (cf. below) Trump Spokesman Reaffirms Support  for Glass-Steagall As the puppets of the City of London and Wall Street financial establishment continue their vicious attacks against Donald Trump, the fear is increasing among them that the President
will support legislation to restore Glass-Steagall banking separation, which has been recently re-introduced in the U.S. Congress. The House bill (H.R. 790) now has 38 sponsors, six of them on March 8 alone, while the next day, Glass-Steagall was a topic again at the White House press briefing. And once again, the President’s press secretary affirmed Trump’s support for it. John Gizzy, a reporter from Trump-friendly Newsmax , asked Sean Spicer if the President would reach across the aisle to Senator Bernie Sanders, who supported restoring Glass-Steagall during his campaign, to collaborate to get it passed. Sean Spicer replied that he would work with Sanders, “where we can find common ground”, to “improve the financial industry.”  Gizzy then asked, “Are you still committed to restoring Glass Steagall?”, to which Spicer replied, “Yes.” Some media blamed the sharp drop of the stock market that day on that exchange, as the stock bubble has been pumped up by the huge volume of money issued at low interest rates, which is then loaned by the large banks to “blue chip” corporate clients, who buy their own stock -- a common practice in the deregulated banking system set up as Glass-Steagall was repealed.  An end to the corrupt relationship between the Federal Reserve and the Too Big to Fail (TBTF) banks would threaten to pop the stock market bubble, along with the much larger derivative bubble, bringing about a financial collapse bigger than 2008. Stoking those fears was a “listening session” held by Trump with CEOs of small and regional banks, in which he said he would follow up his initial steps against the Dodd-Frank financial reform pushed through by Barack Obama, to free them from that regulatory nightmare. Under Dodd-Frank, the TBTF banks have grown by over 40%, as nothing was done to halt or even slow down the rampant speculation which had led to the crash seven years ago.  At the same time, the community banks, which Trump correctly identified as playing “a vital role in helping create jobs”, in particular because they provide about half of all loans to small businesses, have been cut off from access to liquidity, which flows almost entirely to the TBTF banks. The establishment bankers know that if Trump wishes to create an industrial revival in the U.S., he must have GlassSteagall re-enacted and ensure issuance of productive credit, and that is why they are intent on driving him out of office.
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American and Russian Military Leaders  Meet in Antalya, Turkey The Chairman of the United States Joint Chiefs of Staff Gen. Joseph Dunford, his Russian counterpart Gen. Valery Gerasimov, met with their Turkish counterpart Gen. Hulusi Akar, in Antalya, Turkey on March 7 and 8. Confirming the Trump Administration’s intention to cooperate with Russia in the fight against ISIL, this unprecedented meeting thus brought together the strongest combination of countries which could potentially bring peace to the region. It is the combination which the “British Empire” has feared would come together for the last 200 years. Yet, it was virtually blacked out of the Western media, while widely reported in both the Russian and Turkish press. In comments to journalists en route from Turkey and reported by the Pentagon’s news service, Gen. Dunford said Moscow and Washington had agreed to set up a communications channel at the level of a U.S. Lieutenant General and a Russian Colonel General. Thus, the conditions are to be set “where now the three-stars-channel dialogue will take place to actually get to the details of deconfliction,” he said. By law, any funding for US-Russian military-to-military cooperation was barred under the 2015 National Defense Authorization Act, until Russia returns Crimea to Ukraine. Nonetheless, Gen. Dunford stressed , the discussion aimed at setting “a common understanding of the situation in Syria as it is unfolding -- it is very dynamic.” To ensure safe operation, he added, “enhanced deconfliction” is important. “First and foremost, I want to mitigate the risk of miscalculation. In the event of a crisis I want to have an open line of communication so we can talk in real time about what is actually happening and try to address it properly. I think we all know through history that miscalculation and miscommunication can take us in the wrong direction.” Under President Obama, no such steps were taken, and the last meeting between the top military leaders of Russia and the U.S. took place in 2013. Just a few days later, Russian President Vladimir Putin received Turkish President Recep Tayyip Erdogan on March 10 in Moscow, on the occasion ot the bilateral  High-Level Cooperation Council, where wide-ranging discussion took place on cooperation in resolving the Syrian civil war. Following talks with Erdogan, Putin expressed his “cautious optimism over the possibility that by joining efforts and involving other reputable players, including the United States, we will succeed in effectively contributing to the strengthening of the ceasefire and switching on this ground to full-fledged political settlement.”. Erdogan stressed the need for military cooperation, and for “joint efforts to end bloodshed in Syria”, but also for improving economic relations. British Intelligence in Center  of Witch Hunt in Washington The “narrative” of the Establishment media in the United States (and in Europe) has not changed much over the past months. To simplify, it goes that Donald Trump won the election because of “Russian hacking” of Democratic Party computers, therefore his presidency is illegitimate, and he must be impeached (the more radical suggest assassination). But that is just the public line. The real reason for the witch hunt against Donald Trump -- whatever one might think of him as a person -- is his stated intent to improve relations with Russia and China, putting an end to the policy of “permanent
war” in the Middle East and Africa, and to reform the banking/ financial system through re-enacting Glass-Steagall bank separation (cf. above). Even if it were true that Russians hacked the Democrats – and not of shred of evidence has been presented to prove it – how could that be considered as “undermining the core of democracy” in the United States? As investigative journalist Robert Parry pointed out, this was not “fake news” or “allegations”, but facts about party politics that should lead to strengthening democracy. Then, new leaks surfaced that the Obama Administration had ordered Trump’s campaign headquarters to be wire-tapped, to search for any possible links to Russia – in a Watergate-like operation. And that, in turn, put the spotlight on the role of British intelligence in the effort to bring down Trump’s presidency. It was the MI6 that began “investigating” Trump’s purported links to Russia almost one year ago, a task picked up by then-CIA director John Brennan in April 2016. Then, in August, according to some sources, British intelligence apparently provided the leads that finally got a U.S. court to issue warrants to wire-tap Trump and Russian diplomats, under the foreign espionnage act. That allegation was first covered in Oct. 2016 by former British MP Louise Mensch in an article in the London Guardian . And it was “former” MI6 agent Christopher Steele who had put together the dossier full of lies on Trump’s alleged ties with prostitutes in Moscow, which was later propagated by US intelligence agencies. For Col. Lawrence Wilkerson, the former Chief of Staff of Secretary of State Colin Powell, it may well be that the CIA, which is prohibited from spying on Americans on national territory, went to MI6 and asked the Brits to do the dirty work for them. Now, the tables have begun to turn on the operation against Trump, in particular with the latest leak of CIA documents by Wikileaks March 9,  code-named “Vault7”. These CIA documents show not only how the intelligence agency was able to carry out spying operations on all Smart phones, tablets, computers, electronic TVs, but also to run hacking operations “under a false flag”, i.e., to make it appear that computers were being hacked from a foreign country, when in reality, the CIA was doing it. Which brings us back to the “Russian” hacking. The question now is, who and what is undermining democracy? Ambassador Matlock Fears Emergence  of Police State in U.S. The former US Ambassador to the USSR Jack Matlock, who is also a leading scholar on Russia, reviewed in a March 4 post on his website, the falseness of the assumption by the media and many politicians that contact with Russian Ambassador Sergei Kislyak and other Russian diplomats is questionable or even illegal. “I have been taught that in a democracy with the rule of law, the accused are entitled to a presumption of innocence until convicted,” he wrote. “But we have leaks that imply that any conversation with a Russian embassy official is suspect. That is the attitude of a police state, and leaking such allegations violates every normal rule regarding FBI investigations.” His post continues: “As one who spent a 35-year diplomatic career working to open up the Soviet Union and to make communication between our diplomats and ordinary citizens a normal practice, I find the attitude of much of our political establishment and of some of our once respected media outlets quite incomprehensible. What in the world is wrong with
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consulting a foreign embassy about ways to improve relations? Anyone who aspires to advise an American president should do just that.” Matlock also points out that “brou-ha-ha over contacts with Russian diplomats has taken on all the earmarks of a witch hunt. President Trump is right to make that charge.” Improving relations with Russia, he concludes, is of vital importance, not least in order to avoid nuclear war. ECB Narrative Cannot Hide  the Looming Financial Disaster As Mario Draghi was claiming at the ECB press conference on March 9, that his quantitative easing policy has worked, new figures on the Eurozone showed, on the contrary, that it is creating growing and dangerous financial imbalances. Draghi boasted about GDP growth in the Eurozone and about the “four million jobs” created over the last three years. But in fact, the figures for growth begin with 0. something, while the millions of jobs belong to the “post-truth” realm. The ECB’s own data, as reported by Bloomberg March 5, show that 1) most of the ECB new money goes back into the ECB vaults; 2) the APP (Assets Purchase Program) of the Frankfurt-based bank has resulted in a net capital flow from southern banks towards northern European banks and 3) the interbank lending market is down 50%, mainly due to the cutoff of credit from northern banks cut to southern banks. Since June 2014, when the ECB cut rates below zero, bank deposits at the ECB have increased by EU1.1 trillion, in spite of the negative interest rate, while lending to non-financial companies has increased by only EU169 billion. The insane budgetary policies and economic austerity throughout the entire Eurozone have eliminated the demand for credit. Furthermore, northern banks which sold bonds of southern European countries to the ECB (or more precisely, to the Euro system), did not invest that money into those countries, resulting in a net capital outflow. That is reflected in the Target2 figures, which showed in March a new increase of Germany’s surplus to EU814.3 billion, and a new increase of Italy’s liability to EU386.1. That means that the Bank of Italy, on ECB orders, purchased that amount of Italian government debt from banks in the Eurozone or in the City of London (represented by the Bundesbank in the Eurozone). If the Bundesbank or its City of London customers ever want to cash that money in, the Bank of Italy will either have to pay by borrowing euros or to default. (Contrary to propaganda from Brussels and Frankfurt, this would not be a default of the Italian government, but of the “independent” Bank of Italy.) At the same time, as we mentioned, interbank lending has decreased by EU400 billion, with northern banks cutting by half their lending to southern banks. At the end of the day, despite the EU1.8 trillion so far received by the ECB, and the ca. EU800 billion of additional customer deposits since 2014, the income of the 20 largest Eurozone banks fell 5% in 2016 and their net profits dropped by 50% to EU33 billion combined. That is the critical problem, which could lead to Deutsche Bank’s huge derivatives bubble exploding at any moment. Mario Draghi, Who Are You  To Say the Euro Is “Irrevocable”? That question was posed to Mario Draghi at the March 9 ECB press conference by Johanna Treeck from Politico , after Draghi had answered a question about possible threats to the euro
arising from the upcoming political elections in several European countries. In reply, Draghi repeated his mantra that “the euro is irrevocable,” quoting opinion polls ostensibly showing that 70% of European citizens are in favor of the single currency. Mrs. Treeck confronted the president of the ECB  with his arrogance: “You pointed out yourself earlier that the central bank has quite a narrow mandate. But it seems to me that the statement to say that the euro is irrevocable is quite a political statement. Or do you consider it as part of your mandate to keep the currency union or the euro alive?” Draghi ducked the question. “As you may imagine,” he began, “this question was asked at the time of the OMT [outright monetary transactions], at the time of the London speech in 2012. No, the mandate of the ECB stays what it is; namely pursue price stability and make sure the conditions in which our work to pursue price stability is going to be successful, not more than that.” French Elections: Jacques Cheminade in the Final Stretch to Bring in 500 Presentations On March 10, shortly after the Constitutional Council had posted its bi-weekly update of the number of presentations for each Presidential hopeful, 500 of which are required, Jacques Cheminade issued the following communique. “Today, the Constitutional Council validated my 397 presentations. Some fifty more have been sent in, and another thirty or so have been promised. We are in the home stretch. Now is the time for everyone to join the fight to make our candidacy possible.” Jacques Cheminade’s supporters are fully mobilized throughout the country, using the final days to convince other mayors to fill out the official form “presenting” a candidate, so that it will arrive at the CC by the March 17 deadline (cf. SAS 9, 10/17). Although over 500 mayors had pledged to sponsor his candidacy, some of them have reneged, some due to the pressure of having their name made immediately public, others because of disgust with the degradation of the political debate overall. In 2012, Cheminade had collected 538 signatures. A LaRouche Associate Addresses  Business and Military Audience in Frankfurt On March 7, Harley Schlanger, a close collaborator of American economist Lyndon LaRouche for many years, addressed an audience of some 100 businessmen and German reserve officers in Frankfurt, Germany, on the ongoing British-orchestrated coup against U.S. President Donald Trump. The event was organized jointly by the International Division of the Expert Commission of the Hessen Economic Council, a business association associated with the CDU, and the Reservists Association ( Reservistenkameradschaft ) of Frankfurt, on the theme “Who Is Out To Sabotage the ‘Trump Revolution’ and Why?” In his introduction, Lt. Col. Axel Ebbecke (res.) welcomed many of the more prominent guests, including “A special guest, Mrs. Helga Zepp-LaRouche, President of the Schiller Institute, whose husband, Mr. Lyndon LaRouche, is well-known in the United States for his presidential campaigns and the fact that he served as an advisor to the Ronald Reagan Administration on the policy of the Strategic Defense Initiative.” Harley Schlanger gave a very hard-hitting presentation on the British-orchestrated and George Soros-financed coup against President Trump, which our readers are familiar with. Many of the guests indicated their agreement with a number
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of the points, including on the coup in Ukraine and the futility of sanctions against Russia. The presentation was followed by a lively Q&A. One question which reflected what many were thinking, came from a television journalist, who brought up his theory as to why the German media give such nasty coverage to Trump: “Do you think the Germans need an image of an evil enemy so they will accept the status quo ?” Schlanger used his response to elaborate on what he had said earlier about the brainwashing of the Germans around “collective guilt.” He spoke of the role of the Bush-Harriman networks in installing the Nazis, and said it is time for Germany to break free of this, which is part of a continuing occupation of Germany. Many people approached him afterwards to thank him for that, with one noting that “we, as Germans, are afraid to tell the truth -- it is good you did!” One business professor questioned whether Bush and Obama were really responsible for the lack of good jobs, indicating that the problem is robotics and smart technologies, and that it will just get worse. In reply, Schlanger discussed how the Chinese are creating productive jobs, with the Belt and Road Initiative, which will continue to produce jobs, because of the emphasis on science in the economy. New scientific discovery is an opportunity to inspire youth for the future, he underscored, rather than something which means a larger pool of a permanent unemployable class. Yemen Foreign Minister Thanks Helga  Zepp-LaRouche for Her Concern for Yemen The Chairman of the Yemeni Advisory Office for Coordination with BRICS, Fouad Al-Ghaffari, published the following short statement on social media on March 8. “On the occasion of the International Women’s Day, the New Silk Road Lady, Helga Zepp-LaRouche, received a letter sent to her by Yemen’s Minister of Foreign Affairs, Engineer Hisham Sharaf, in appreciation of her call for making Yemen a pearl in the necklace of the New Silk Road. In response, Mrs. LaRouche has expressed her appreciation of this letter, and reiterated the Schiller Institute’s principled position of standing with the people of Yemen against this destructive war, and for the return of the national dialogue to find a political solution to the crisis in Yemen, and embark on the process of reconstruction and development and integrating Yemen in the maritime and land New Silk Roads.” EIR can confirm the receipt of a letter from Yemen’s Minister of Foreign Affairs, Hisham Sharaf Abdulah, dated March 1, addressed to Mrs. LaRouche as the “New Silk Road Lady” and Chairwoman of the International Schiller Institute. Mr. Sharaf expressed his gratitude for Mrs. LaRouche and her “international team around the world” who have taken a great stance in support of the people of Yemen against “the murderous Saudi-Emirati aggression machine.” This stance, he stressed, combined with her persistent call on Yemen to adopt the BRICS paradigm and turn Yemen into a “pearl in the necklace of the New Silk Road,” represent a powerful motivation for the Yemeni people to win the battle they are fighting, and prepare the launching of the process of reconstruction and building of the country. Mr. Sharaf is a member of the new national government cabinet in Sana’a, Yemen, which was voted up by the Yemeni Parliament last November. Since 2011, Mr. Sharaf has served as deputy and minister in several ministries. The UN does not recognize the national government in Sana’a
as the representative of the Yemeni people, but rather President Abedrabbo Mansour Hadi, who is living in exile in Saudi Arabia. Hadi was not elected by the people of Yemen, but was appointed by the Parliament for a limited term in the midst of a chaotic political situation in the country. His term had ended when he fled to Saudi Arabia, where his presence was used as an excuse to launch the genocidal bombardment of Yemen in March 2015. Chinese Cities Look to Maglev  for Optimal Urban Transportation China is actively pursuing new urban transportation systems which are based on magnetic levitation (maglev) technology. A pilot version has been in operation in Changsha successfully since May 2016, where it runs on a 19-km track  from the city to the airport with an average speed of 70 km/hour. Now, similar projects are planned in other cities of China, with a total expected investment so far of 60 bn yuan (8.7 bn dollars). One of the main advantages of the Changsha maglev is its low noise level, compared to systems where wheels need to touch the rail. where as there are no wheels which makes it much easier to win support from local residents, while allowing passengers to converse with one another without speaking loudly. Maglev systems are also far less expensive to construct: whereas 500 to 800 mn yuan have to be spent per km of track for traditional subway systems, due to the digging work involved, above-ground maglev rails cost just 200 to 300 mn yuan per km.  Moreover, much less space is needed for the rails. With these advantages, maglev train projects are increasing rapidly in China, as reported in Japan’s Nikkei business journal on March 8. China Railway Group, a major developer with former ties to the Railway Ministry, is building a 20 km maglev system to open this year in a Beijing suburb, at a cost of 12 bn yuan. In October of last year, China Railway Construction created a wholly owned subsidiary to step up maglev construction. That company has reached an agreement with the government of Qingyuan in Guangdong Province, and plans a 30 km network for a cost of 10 bn yuan, to begin operating at the end of 2018. Similar networks are envisioned for Urumqi, in the Xinjiang Uighur Autonomous Region, and to link the Sichuan Province cities of Deyang and Chengdu, the latter also being the point of departure for most of the transcontinental wheel-system freight train connections between China, Russia and Europe. A comparable maglev system has been in operation since Feb. 2016 in South Korea, at the Incheon Airport outside of Seoul. Here too, the system is a genuine nationally developed technology which will soon be offered for export to other countries that are interested in such systems for use in their heavilycongested urban regions. 
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