E.I.R.STRATEGIC ALERT WEEKLY NEWSLETTER Volume 31, No. 47-48 - November 23, 2017

E.I.R.STRATEGIC ALERT WEEKLY NEWSLETTER
Volume 31, No. 47-48 - November 23, 2017

Donald Trump Calls His Asia Trip “Tremendously Successful” The 12-day visit the U.S. President paid to Asia has potentially opened up a new era in strategic relations globally. Most notably, he did not attempt to impose the failed neoliberal model on other countries, but rather sought common grounds for cooperation and war avoidance. To the horror of the coup plotters in the “British empire” faction, who disparaged him accordingly, he stressed on many occasions his intention to maintain positive relations with Russia and with China. Speaking to reporters on Air Force One upon heading back to the States, Donald Trump said of his Asia tour: “I think the fruits of our labor are going to be incredible, whether it’s security of our nations, whether it’s security of the world or whether it’s trade.” Altogether, he added, some $300 billion in trade deals had been reached, of which $253 with China alone, a figure he predicted would soon triple. The most important leg of the presidential tour was his historic visit to China, which we reported last week. While Trump did not explicitly mention the Belt and Road Initiative, the deals struck go in that direction. That was recognized in China, as reflected in an op-ed in the Global Times on Nov. 13. by Prof. Wang Yiwei of Renmin University, who believes U.S. participation in the BRI is “inevitable”. Prior to that, he was in Japan and South Korea, where the leaders discussed a solution to the crisis in North Korea. Contrary to previous statements he had made and to the widespread media predictions of an imminent nuclear war, he did not provoke the Pyongyang regime. While in the Philippines for the ASEAN and East Asia summits, Trump had private discussions with India’s Prime Minister Narendra Modi, Australia’s Prime Minister Malcolm Turnbull, Philippine President Rodrigo Duterte (whom Barack Obama sought to overturn) and others. Before Manila, Trump was in Hanoi for an official state visit to Vietnam. There, in addition to economic and security discussions, he struck a special theme, referring to the fact that it was Veterans Day in the U.S.. He pointed out that, “out of war and conflict, we have achieved a deep friendship, partnership and we have achieved peace.” He spoke of the horrors of the Vietnam war, and expressed deep respect for independence, which is a “sentiment that burns in the heart of every patriot and every nation.” The President’s other theme throughout his entire trip, was
“fair” trade. Commercial deals were signed in Vietnam and other places, besides the raft of $253 billion worth of commitments announced between Chinese and U.S. companies on Nov. 10 in Beijing. Millions of Americans are very much looking forward to the investments pledged. Business deals, in themselves, do not add up to a new economic era, but they do signify a great potential. High-Tech Manufacturing in China  Is Growing at 13.4% Per Year The year-on-year overall growth rate in China for the first three quarters of 2017 was higher than expected, at 6.9%, as presented by Zhang Liqun, a researcher with the State Council’s Development Research Center. Growth rates for GDP are measured in monetary terms, but in the case of China these numbers undoubtedly track closely with actual physical economic processes -- which is definitely not the case in the transAtlantic sector, where GDP includes all forms of speculative instruments, as well as drugs, etc.. The most interesting aspect is that “the high-tech and equipment manufacturing sectors posted stellar growth in the first three quarters, with output up 13.4% and 11.6% respectively,” Xinhua reported. Investment in high-tech manufacturing rose even more dramatically, by 18.4%, up from 11.7% for the same period in 2016. Job creation is correspondingly strong. The first three quarters of 2017 saw nearly 11 million new jobs created, i.e., 300,000 more than in the same period last year. Official unemployment in Chinese cities now stands at 3.95%, the lowest level since 2008. The Xinhua article cites the chief economist at the Bank of China, Cao Yuanzheng, who said that it is of vital importance to contain financial risks, including “countering debt, shadow banking and asset bubbles.” Even Moody’s had to admit, in a recent research note, that “a stronger policy focus on financial sector regulation should continue to restrain the growth of shadow banking activities, help mitigate asset risks for the banks, and address some key imbalances in the financial system.” After the recently-concluded CPC Congress, the government set up a new super-agency for financial regulation responsible for major reform of the financial sector, to further curb speculation. On poverty reduction, which is the central concern of President Xi Jinping and the entire national leadership, Vice Pre
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mier Wang Yang presided over a meeting of the State Council’s group on that theme on Nov. 13. Wang emphasized that they needed to be focused on “enhancing a sense of mission and crisis awareness, and targeting problems to fulfill the Party’s promise to the Chinese people and the international community,” to quote Xinhua . (The fact that Wang presented this policy as a commitment to ‘the international community’ is especially notable.) He added that to meet these goals, it was necessary to train local authorities, “stressing the importance of carrying out research and investigation, and averting formalism.” Russiagate: New Investigation Needed  into the FBI and Comey on Russia Dossier During his trip to Asia, President Trump took on the American intelligence community more directly than ever before, for their efforts to sabotage his presidency through such vehicles as former FBI Director Robert Mueller, who is now heading the investigation into alleged meddling by Vladimir Putin in the U.S. Presidential election in order to favor the defeat of Hillary Clinton. (Let us recall that his investigation which began in May 2017, and numerous others that have been carried out since well over one year have not produced a shred of evidence.) After Donald Trump called the former directors of the CIA (John Brennan), the DNI (James Clapper)  and the FBI (James Comey) “political hacks”, meaning their agenda was political and not based on actual intelligence (cf. SAS 4/17), the first two appeared jointly two days later, on Nov. 13, on CNN to accuse President Trump on putting the nation “in peril” because of his seeking good relations with Russia, branded as an immortal enemy. Likewise, he is accused by the same circles of selling out national interests by pursuing collaboration with China. Slowly, however, the push-back to the “deep state” attempts to topple Donald Trump is gaining strength. The entire “Russiagate affair” was spawned on the basis of a “dossier” on Trump’s Russian connections put together by one Christopher Steele, a “former” British MI6 agent, with the help of his sources in Russian intelligence (collusion, anyone?). That dossier has since been thoroughly discredited. In an interesting twist, Guardian journalist Luke Harding reveals in his new book ( Collusion: How Russia Helped Donald Trump Win ), that the same Christopher Steele had also been providing intelligence reports on Ukraine that led to the Maidan coup in 2014, which was supported, if not orchestrated, by the U.S. State Department. The head of the Senate Judiciary Committee Charles Grassley has repeatedly underscored the lack of any evidence of collusion between Trump and Russia provided to him, in spite of his numerous requests for any such material to the intelligence agencies. The leading Democrat on the same committee, Senator Dianne Feinstein, reiterated Nov. 5 on CNN that she has as yet seen no evidence of collusion. Moreover, two Republican representatives, Jim Jordan of Ohio and Matt Gaetz of Florida, released a letter on Nov. 13 calling on Attorney General Jeff Sessions to appoint a Special Counsel to investigate the mounting questions on Hillary Clinton, former FBI Director James Comey, the Fusion GPS Russia dossier, and more. They raise pointed questions as to why the FBI, rather than the Justice Department, dropped the charges against Hillary Clinton on the use of her personal email account, as to why and how the FBI used the Steele dossier “to spy on Americans associated with Donald Trump’s campaign”, for obvious political reasons, why Robert Mueller was nominated Special Counsel, or why Attorney General Jeff Sessions is refusing to get to the bottom of this affair.
German SMEs Move to Ensure Exports  to Russia and China Sending a clear message to the new government in Berlin, whatever it turns out to be, entrepreneurs in the German Mittelstand (small and medium sized entreprises) are taking steps to secure crucial export markets in Russia and China. In a ceremony at the Russian Embassy in Berlin on Nov. 16, Mario Ohoven, the chairman of the German SME association BVMW and the Governor of the Kalinigrad oblast Anton Alikhanov signed an agreement on cooperation which also envisages increased direct investments by German companies in the Russian enclave. The German association will establish an official representation  in Kaliningrad, which will be its second after the one already working in Moscow. “We want to build a bridge to Russia in times of political tensions,” Ohoven told the 300 entrepreneurs attending. “I am convinced that German-Russian economic relations will experience a new upswing after the end of the sanctions. Our agreement with Kaliningrad is a first step in this direction.” Despite the unconstructive approach to the New Silk Road taken by the past government and the EU, China’s booming market contributed to making 2016 the best year in five years for German SMEs. Their exports increased by 3.9% and their net revenue by an even more impressive 7.3%. The Germany Trade and Invest (GTAI), a government agency, is now encouraging SMEs to become more active in China, in particular in the new industrial cluster regions which the Chinese government is building up. Among them, according to a paper published by GTAI’s Shanghai representative Corinne Abele said in a paper published in early Nov, are the Bohai Region, the Yangtse Delta and the Pearl River Delta, which produce nearly half of the Chinese GDP. Moreover, 60% of German firms “in the key branches of machine-building, automobile production and chemical production are located in the Yengtse Delta near Shanghai.” She also points to the opportunities developing in Chengdu and Chongqing. Abele’s paper is only the first of an entire new series of GTAI publications that respond to reiterated requests from entrepreneurs to receive more constructive information on the potential offered by China’s New Silk Road strategy. European Free Press Not So Free After All Former German State Secretary of Defense Willy Wimmer harshly denounced the iron-fisted control of public opinion imposed by Western ruling institutions and carried out by their media, in a commentary in the Nov. 15  liberal German journal Freie Welt headlined: “Against the ‘Mainstream Fascism’ in Germany, the EU and NATO”.Anyone who does not toe the line put out by the government or Brussels or Washington, he charges, is ostracized and his political career ended. Wimmer, who was a member of the Bundestag for 33 years, has been a leading critic of western geopolitics and NATO for years now. No independent thinking is allowed anymore, he regrets. It’s only allowed to attack “the current U.S. President Trump, who has been banned from making contact with his Russian counterpart Putin.” Banned because it is feared they could reach an understanding on crucial issues for all mankind. Wimmer then asks where the German Chancellor and President and all the others who shun President Trump today were, “when the previous U.S. Presidents exclusively and alone pushed the world into its present misery? Including the coup in Ukraine, which can be blamed on those who wanted to justify a military escalation against the Russian Federation in one way or another.”
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In respect to the propaganda job carried out by BBC , CNN , as well as the main German media, Wimmer concludes, Nazi propaganda minister Josef Goebbels would be delighted “if he could see the EU and NATO and their ‘mainstream fascism’ today.” Interestingly, media control and manipulation is the implicit theme of an exhibition now taking place in Berlin on the history and activities of the “Congress of Cultural Freedom” launched in Berlin in 1950. It has been publicly known for decades now that that operation was set up and run by the CIA for cultural warfare purposes, to counter the influence of the Soviet Union in the post-war period. An article in the Nov. 12 edition of the Frankfurter Allgemeine Zeitung notes that what is “unsettling” about it, is that the CIA was promoting the “left-wing liberalism” which to this day is “the mainstream standard of Western intellectuals”. In other words, what is considered politically correct today is the result of a CIA secret propaganda operation! Mario Draghi’s Duplicitious Role in the Italian Banking Crisis Finally Comes to Light In 2008, the Bank of Italy, then headed by Mario Draghi, authorized the Monte dei Paschi di Siena bank (MPS) to take over Banca Antonveneta from Banco Santander for a total cost of EU17 billion. That leveraged purchase, and the derivative contracts bought by MPS to cover the ensuing losses, is the largest single cause of its subsequent bankruptcy, which led the Italian government to nationalize it de facto last year. For his role in the MPS crisis, Draghi should be called as a witness in front of the Italian Parliamentary Investigating Committee on the Banking Crisis, which began to deal with the MPS issue last week. At the time Draghi authorized the totally unsound Antonveneta deal, he was also head of the Financial Stability Forum, and was therefore on top of the world central banks’ efforts to bail out the collapsing financial system, “whatever it takes”, as he put it. Antonveneta deal was part of the scheme. To back up somewhat, the largest banking bailout ever in Europe took place in 2008, when the Dutch megabank ABNAmro was “rescued” by a consortium made up of the Royal Bank of Scotland, the Belgian Fortis and Spain’s Santander. The effort avoided a chain-reaction, but Santander faced its own banking crisis thereafter, requiring a major capital increase. But then, through the sale of Antonveneta at a totally fraudulent price, Santander was given EU17 bn. Making the capital increase superfluous. Draghi authorized the Antonveneta deal although its own supervisory desk had warned against it, and pushed MPS to finance the operation with a series of actions, including derivative operations. Indeed, the head of ADUSBEF consumer association, former Senator Elio Lannutti, told the Parliamentary Committee on Nov. 15 that Draghi had authorized the takeover on the condition that MPS raise €9 billion through various means, including by issuing “hybrid and subordinate instruments”. A flagrant violation of his “institutional responsibility to protect ‘the healthy and prudent management’ of Italian banks.” Additionally, an official paper produced in court on Oct. 3, but revealed only now by Bloomberg , shows that in 2010, then Bank of Italy head Mario Draghi covered for an MPS derivatives scam with Deutsche Bank. The paper, produced in the ongoing Milan trial against 16 former MPS and Deutsche Bank managers, is a Bank of Italy document dated Sept. 17, 2010 that shows that the bank was aware of the fact that a derivative sold by Deutsche Bank to MPS aimed at covering the losses of
a previous derivative it had sold to MPS. The Italian bank was losing about €370 million on the earlier transaction, dubbed Santorini, as of Dec. 2008. The new transaction posted a gain of roughly the same amount and allowed losses to be spread out over a longer period, the document shows. At a court hearing on Oct. 3, a Bank of Italy official confirmed that the central bank was aware of the fraud. Zimbabwe Military Preempts Regime Change Made in London On Nov. 18, one million people from across the political spectrum enthusiastically and peacefully took to the streets of Zimbabwe to support the country’s Defense Forces, who had taken over the government a few days earlier. That military operation was aimed at pre-empting a British-orchestrated scheme to destroy the ruling Zanu-PF party, which is led by veterans of the long and bitter war of independence against the British Empire in what was then called Rhodesia. Zimbabwe has a unique strategic role in Africa. It is one of the most solid and long-standing allies of China, which is also its largest trading partner and foreign investor. It has also been a close collaborator of South Africa, since the time of their liberation struggles against the British-imposed apartheid regimes. An anti Zanu-PF regime change in Zimbabwe could seriously weaken South African President Jacob Zuma and his pro Belt and Road policy. For such reasons, Zimbabwe has long been a target of the “regime change mafia” in the West. London and its allies carried out a policy of isolation and sanctions against the country for nearly two decades for so-called human rights issues, before deciding, in 2015, to initiate a “re-engagement”, which began with a commitment to pay its arrears to the IMF. From there, “re-engagement” was gradually transformed into regime change. On Sept. 6, 2016, Her Majesty’s Chatham House in London published the report: The Domestic and External Implications of Zimbabwe’s Economic Reform and Re-engagement Agenda, which stresses the need for “depoliticizing” the economy and “political reform” of the Zanu-PF, including finding a successor to the now 93 year old President Mugabe.  Two days later, Alex Vines, the head of the Africa Program at Chatham House, presented the report to the U.S. Institute of Peace in Washington (financed by the U.S. government), no doubt with the intention of it becoming policy if Hillary Clinton was elected President. In Oct. 2016, former Zimbabwean vice president Joyce Mujuru, who had her European travel sanctions lifted after leaving the Zanu-PF and forming the Zimbabwe People First party, was invited to Chatham House. One month later, Chatham House hosted a conference with a gaggle of opposition figures and the SAPES Trust, which is backed by George Soros’ Open Society Initiative for Southern Africa and has been identified by the ZANU-PF as a “regime change” organization.  According to their own statements it was discussed at the conference that “reform” is being blocked by the older guard in the military and Zanu-PF who are the veterans of the liberation struggle. In Oct. 2017, then vice president Emmerson Mnangagwa, who is part of the “old guard”, informed Mugabe of the individuals in his cabinet and entourage, who were collaborating with the Chatham House policy. But rather then removing those identified as traitors, Mugabe removed Mnangagwe, thus prompting the military which is the core of the Zanu-PF to launch its military operation. The Parliament initiated an impeachment procedure against President Mugabe on Nov. 20.
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Syria Peace Process Moves Forward,  Despite Numerous Obstacles Presidents Trump and Putin, during their brief informal talks in Vietnam, agreed on enhanced cooperation in Syria and endorsed an important trilateral memorandum, signed by the United States, Russia and Jordan on Nov. 8, concerning collaboration on the cease-fire (cf. SAS 46/17). While significant differences remain between Washington and Moscow over the future shape of a Syrian government, both parties have reiterated their commitment to ending the fighting, securing the situations for neighboring states (Jordan, Israel, Iraq, Lebanon), and overseeing the withdrawal of all foreign fighters. What remains to be resolved is the future role of Iran in Syria, and that issue is tied to broader questions of regional stability. In principle, both Washington and Moscow agree that all foreign forces, including Iranian Quds Brigade fighters, Hezbollah, and Saudi and other Gulf state-backed insurgents, must leave and must be excluded from deciding the future of Syria. How that will come about is still unsettled. In a briefing at the State Department on Nov. 11, it was made clear that Washington would not work with Damascus or with Iran on the Syria or Iraq peace process, but would work through Russia to achieve the ultimate goal of a diplomatic solution in the Geneva format. Iranian-backed forces play a significant role in the Assad government’s control over major portions of the country; however, Jordan has been concerned, along with other Sunni states and Israel about the emergence of an Iranian corridor, running from Tehran through Baghdad and Damascus up to the Mediterranean coast of Lebanon. The U.S. and Jordan have built up military posts on both sides of the Syria-Jordan border to block such a corridor. Israel is a wild card in the Russian-American efforts to bring about a political solution to the Syrian war. Israel’s goal, shared with Saudi Arabia and the UAE, seems to be to draw the United States directly into a war with Iran. However, President Trump’s national security team is not, for now, about to be sucked into such a broader regional war, which might pit the United States against Russia. At the same time, the Israeli security establishment is aware that they cannot conduct a war with Hezbollah and hope to wipe out the organization, short of conducting a strategic bombing campaign that effectively levels all of Lebanon. After the disastrous 2006 war, which Hezbollah fought to a standstill, Israel has enjoyed more than a decade of relative quiet. Saudi efforts to upend the political system in Lebanon have jeopardized that uneasy stalemate, and the fact that the Saudis ordered Lebanese Prime Minister Saad Hariri to resign and placed him under de facto house arrest further contributed to the danger of a new Lebanon crisis. Subsequently, Hariri and part of his family flew to Paris, and it was announced that he would return to Lebanon soon, but what will then happen remains unclear. LaRouche Representative Explains  American Politics to Swiss Public Harley Schlanger, a well-connected long-time spokesman for Lyndon LaRouche in the United States, was invited to Zug, Switzerland, on Nov. 17., to address a meeting of the citizens group Impulswelle. In front of 60 members and guests, Schlanger reported on the crisis in the United States and more particularly on the “Russiagate” coup attempt against President Trump, in which the CIA, NSA and FBI intelligence services are
fully implicated. In the entire history of the United States, no President has ever been so massively attacked and vilified. This reflects a desperate attempt by the elites to “save their skins” just as the bankruptcy of the financial system threatens their power and as the population is fed up with their perpetual wars and their lies! As President Trump made clear during his visit to Asia, he is committed to change those same policies, by engaging a dialogue with the leaders of Russia and China, and rebuilding the US economy and infrastructure. On that point, Schlanger noted that the decrepit infrastructure in the United States is a bad joke, compared to what is being built in China. Hence, the need for great projects to jump-start the economy, and for an end to the wars. That is what all great leaders want for their nations, that is the New Paradigm. Schlanger’s presentation was very well received, with spontaneous applause breaking out at several points. Impulswelle suggested launching a study group on Confucius to bring the Spirit of the New Silk Road to Switzerland. The Role of the Schiller Institute  in the Silk Road Featured in Vienna “The New Silk Road – Confrontation or Cooperation of the Superpowers?” was the theme of a round table discussion organized on Nov. 15 in Vienna by the Austrian-Belarus Association (ÖWG) and the Urania Adult Education Center. The speakers were Prof. Dr. Sergei Kizima, Head of Department of International Relations of the Academy of Public Administration in Belarus, and Alexander Hartmann, Editor-in-chief of the German weekly Neue Solidarität as representative of the Schiller Institute. In opening the event, ÖWG President Peter Bachmaier noted that Belarus is actively involved in both the Eurasian Economic Union and in the New Silk Road project. Alexander Hartmann went through the tremendous scale and the global nature of the Silk Road project as well as the Schiller Institute’s decade-long campaign for just such a policy. While the Institute’s ideas were welcomed in China, they fell on deaf ears in the West. The New Silk Road is acting as a locomotive for the world economy, he said, but for geopolitical reasons, Europe has cut itself off from the locomotive. Prof. Kizima stressed how Belarus has profited from close economic relations with China, including in the form of direct investments. Moreover, while the EU sanctions against Russia indirectly hit his country too, the trade flows between China and the EU going through Belarus doubled in one year thanks to the Belt and Road Initiative. Belarus aims at becoming a hub of the BRI. Note to Subscribers The Strategic Alert will not be published next week as the editorial board will be attending the international conference of the Schiller Institute. The next issue will be dated Dec. 7.
E.I.R. STRATEGIC ALERT        www.eir.de  Published by: E.I.R.GmbH,  Bahnstr. 9a, 65205 Wiesbaden Tel.: 0611/73650, Fax: 0611/7365101, Email:  info@eir.com Verantwortl. f. d. Inhalt: Dean Andromidas, Claudio Celani Subscription: EUR 3000/ ISSN  0936-7527 © E.I.R. GmbH  Alle Rechte vorbehalten, auch die des Nachdrucks von Auszügen, derphotomechanischen Wiedergabe und der Übersetzung, Printed in Germa