E.I.R.STRATEGIC ALERT WEEKLY NEWSLETTER Volume 31, No. 45 - November 9, 2017

E.I.R.STRATEGIC ALERT WEEKLY NEWSLETTER
Volume 31, No. 45 - November 9, 2017

Asia Moves Center Stage,  As Donald Trump Pursues Major Trip Strategically this week, all eyes are on the visit Donald Trump is conducting in Asia, starting with his arrival in Tokyo on Nov. 5, and his meetings with Prime Minister Shinzo Abe, with whom he has developed a close relationship, followed by a visit to Seoul, where the North Korea crisis was on top of the agenda. The most important leg of his diplomacy, everyone agrees, will be his trip to China as of Nov. 8. Trump is the first foreign head of state to visit Beijing since the 19th Congress of the Communist Party of China, during which President Xi Jinping was able to unite the party behind his Belt and Road Initiative (BRI), based on win-win cooperation internationally (cf. SAS
 43, 44/17). Underscoring the importance of the bilateral relations, Chinese diplomats have called this a “state visit-plus”, featuring a military honor guard, official talks, a formal banquet and other “special arrangements”, to reciprocate the hospitality Trump showed Xi at the Mar-a-Lago meeting in Florida in April. Both sides have set a positive tone for the upcoming summit. At a speech at Tsinghua University on Nov. 1, Xi reiterated his commitment to “win-win” relations between the United States and China, and said “China is willing to work with the United States side to look far ahead and to aim high; to establish a community of shared future for mankind.” In addition to North Korea, bilateral trade will be a crucial part of the talks. Hopefully, Trump will fully commit the U.S. to participating in the BRI, and will take up the offer to let the Chinese help rebuild infrastructure in the United States, as the failing economy remains Trump’s weakest flank. When asked by Fox News on Nov. 5 whether he would demand from China greater access to its financial markets and major trade concessions, Trump replied that he was not going to Asia to make such demands, because his great interest is in solving the nuclear crisis around North Korea, and because of his extremely good working relationship with President Xi. On another occasion, he stated: “I’ve become very, very close to President Xi of China. I think a lot of good things are going to happen [on this visit].”  Defying his neocon foes on another front, Trump also make known on Nov. 4 that he would meet Russian President Putin on the sidelines of the APEC (Asia-Pacific Economic Cooperation) summit in Vietnam. That event, it was just confirmed, will be keynoted by Xi Jinping, reflecting the great interest in the BRI and the Maritime Silk Road in the entire area. 
Significantly, Trump decided on Nov. 4 to extend his visit to Asia by one extra day, in order to attend the East Asia Summit on Nov. 14 in the Philippines, the day after the ASEAN meeting. He will undoubtedly appreciate being outside of Washington and the unprecedented hostile environment built up against him by the infamous Wall Street-deep state nexus. White House Chief of Staff:  China Is Not an Enemy Most of the trans-Atlantic media like to huff and puff against the threat posed by China, and its alleged designs to take over the world and crush the west, as reflected in the recent ahistoric comparisons of President Xi to Chairman Mao. But those same media and the political interests they serve refuse to acknowledge that their system has failed and to resolve to change it. One exception to that is the White House Chief of Staff John Kelly, who expressed an unusually reasonable view in an interview to Laura Ingraham of Fox News on Oct. 30. After he had stated the “great hope we all have that China,” and Russia, too will help solve the crisis in North Korea, Ingraham asked him how President Trump could congratulate Xi Jinping, the president of “a communist country”. “As Americans we cannot accept a government like that, but that is not up to us to pass judgment on,” Kelly replied. “I think working with people no matter who they are is better than not talking to them. They have a system of government that has apparently worked for the Chinese people.” On the question of whether China is friend, a foe, or a trading partner, Kelly replied: “They’ve beat us pretty badly in terms of trade. That doesn’t make them an enemy. They are, to say the least, a world power. That doesn’t make them an enemy. They probably in many ways have been smarter than we have in terms of business and trade.  President Trump is committed to changing that relationship on a collegial basis . The disparity between what we buy and sell from them is pretty great... but I wouldn’t even consider them a competitor, just another world power.” As for America’s huge trade deficit, the White House chief of staff asked: “Whose fault is that? I mean, that’s our fault. My hat’s off to them for taking advantage of whatever they’ve been able to take advantage of to have that trade relationship. This president is committed to changing that relationship, but to do it in a collegial way.” A Nov. 3 editorial in Global Times welcomed Kelly’s remarks, 
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noting they were “frank, but not what many U.S. and Western elites wish to hear from a senior U.S. government official... they cannot understand the new world order at all and still measure relations between the two nations with an old yardstick. The old way of thinking is stubborn....” The EU Drops Even the Pretense  of Serious Bank Reform As the financial system piles up levels of toxic bonds larger than in 2008, the EU Commission has just slammed the door to a clean-up of the financial system, by withdrawing the draft bill for a separation of banking activities, which had been stalled in the European Parliament since 2015. On Oct. 24, the Commission presented its “Work Programme 2018” in which, along with its new priorities, “withdrawals” of a few previous initiatives are announced. Among the latter, the so-called “Bank Structural Reform” which included a proposal for ring-fencing commercial banking activities. As justification for the “withdrawal”, the Commission paper cites “no foreseeable agreement”, complaining that “the file has not progressed since 2015” and arguing that “the main financial stability rationale of the proposal has in the meantime been addressed by other regulatory measures in the banking sector and most notably the entry into force of the Banking Union’s supervisory and resolution arms.” In fact, the Commission proposal was a fake scheme, as we wrote at the time. It merely would have isolated the risky activities within the same institution, and not even made it mandatory for all, but only in cases where the risk level is higher than the level established by “harmonized metrics”, i.e. the same models used to conduct stress tests which are universally considered to be a fraud (cf. SAS 23/15). Vanessa Mock, a spokeswoman for the European Commission, said that the reform was no longer necessary because banks’ trading operations were now smaller than before the crisis! Just the day before, the Wall Street Journal had documented how trading in one of the most toxic financial products, Collateralized Loan Obligations, is at record levels. This year’s rate of issuance of CLOs amounts to $247 billion for the first three quarters, higher than the former peak year 2006, which was $136 bn. For leveraged corporate loans, CLOs are the equivalent of MBS (mortgage backed securities) and CDS (credit default swaps) for mortgage loans. “The demand for things like CLOs is extraordinary,” according to a BlackRock, Inc. officer, quoted by the Wall Street Journal . And just as in 2005-07, the rapid increase in CLOs is creating the demand for an explosion in leveraged loans to stuff into them. Leveraged loan issuance this year will approximate $350 bn, thus exceeding the record set in 2007. Much of this loan activity is for leveraged buy-outs (LBOs ). The main investors are pension and mutual funds, that have bought $206 bn in CLOs this year so far. An Open Letter to President Steinmeier  from Helga Zepp-LaRouche Helga Zepp-LaRouche wrote an open letter to German President Frank-Walter Steinmeier on Nov. 4 under the title “The number of refugees worldwide has reached 66 million: Our planet’s next 50 years”, prompted by the speech that he had given two days earlier at the Singapore Management University. On that occasion, Steinmeier mentioned a lecture series that 
six universities in Singapore are co-organizing called “Imagining the Next 50 Years”, and then added: “I think that’s a bold approach – and it’s something that we in Germany should do more often. We should look through a telescope into the future, rather than just looking at the very next day, the next annual balance sheet or the next election.” Helga Zepp-LaRouche welcomed that part of his statement: “To hear that from you is a breath of fresh air, and one can only hope that it is strong enough to blow over to the negotiations on a government coalition in Berlin.” “Given your your Singapore speech, I would like to send you the book my husband wrote in 2004, “Earth’s Next Fifty Years”. In this book, he anticipated the entire, currently visible, shift of the strategic dynamic to Eurasia and defined the higher level of thinking, on which the peaceful cooperation of mankind can take place. This book is moreover very popular in many Asian countries.” Zepp-LaRouche further reports in her open letter on the alarming figures given by the UN High Commissioner for Refugees Filippo Grandi on Nov. 2: from 2009 to today, the number of displaced persons has grown from 42 million to nearly 66 million. The crucial question, Zepp-LaRouche notes, is how to find a “humanist solution to the refugee problem and establish peace”. Addressing Steinmeier directly, she notes that this is a personal challenge for him, “as former Foreign Minister and current President of a major country”. On the same occasion in Singapore, Steinmeier recognized that “many people look at the European Union or the United States and say: ‘Well, this doesn’t look very harmonious.’ And many people look at China and see stability and economic growth – without a movement towards greater political freedom. So China poses a challenge to the West – not only an economic and geopolitical challenge, but also an ideological challenge.” It’s true there is a challenge, Zepp-LaRouche notes, but not for the reasons generally believed in the West. In fact, China’s model of development has produced amazing results worldwide, as well as growth and stability, while the EU has so far refused to examine why it has created such a lack of harmony. The ideological challenge posed by China, Zepp-LaRouche explains, is its emphasis on improving the general welfare, as opposed to what is happening in the EU. And if the EU simply attempts to roll back China’s influence in the world for geopolitical reasons, it is doomed to fail, in Helga Zepp-LaRouche’s view. “Because ‘the spirit of the New Silk Road’ is contagious, while insistence on bureaucratic rules, that only cover up the geopolitical intentions behind them, is not.” The Prospect of New Elections  in Germany Draws Nearer Six weeks after the legislative elections in Germany, the negotiations on the formation of a new government coalition among the four parties (CDU, CSU, FDP, Greens) have moved into a deadlock, due to unbridgeable differences over several outrageous demands of the Greens. Among them, a total exit from coal and gas power starting in 2020; shutting down the manufacturing of conventional cars by 2030, and abandoning traditional farming in favor of “bio” agriculture, just to name a few. The vice chairman of the liberal FDP, Wolfgang Kubicki, has issued a clear warning: if the Greens fail to make substantial 
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concessions by Nov. 9, “this is the end of it... then there will be new elections.” The head of the FDP parliamentary group Marco Buschmann said the FDP, whose popularity is on the rise, does not fear new elections, although they might result in even more votes for the right-wing populist Alternative for Germany than the 13% they received on Sept. 24. But it might also mobilize voters to “come to a constructive decision on how to vote,” so as to allow a new government to be formed that will function. What that means is one without the Greens, who suffered substantial losses on Sept. 24, and would have the most to fear from new elections. What the FDP leaders do not say, is that such a new government may also be one without Angela Merkel. One of the top CDU candidates for the post of new chancellor is Jens Spahn, an austerity hardliner who served in the past Merkel government as assistant finance minister. If the coalition talks fail, the current Chancellor will be most to blame, since she is the one most favorable to the Greens. Another Grand Coalition (CDUCSU and SPD) would be another possibility but both Merkel and the social democrats’ party chairman Martin Schulz have categorically ruled it out. Therefore new elections are the only way out. Merkel’s pro-Green orientation has prompted prominent protest throughout Germany, across party lines. For example, the CDU governor of Saxony, Stanislaw Tillich, sent the Chancellor a memorandum urging her not to give in to the Greens’ demand for the total exit from coal power beginning in 2020, which was signed by his counterparts from Mecklenburg, Manuela Schwesig of the SPD, from Thuringia, Bodo Ramelow of The Left, and from Brandenburg, Dietmar Woidke of the SPD. The memo letter charges that the shutdown would invalidate billions of euros of investments in the sector, which in the east is primarily brown coal, while eliminating thousands of jobs, creating an uncertain power supply, and destroying a long tradition of mining in Germany’s east. Russiagate to Turn against Its Perpetrators? While the anti-Trump media are reveling over the first indictments handed down by special counsel Robert Mueller, the broader fabric of his investigation is unraveling, challenged by a series of revelations. First, as to the indictments, those against Paul Manafort, a former Trump campaign chairman from June to Aug. 2016, and his associate Richard Gates have nothing to do with Russian meddling or the Trump campaign. Even opponents of the current President are forced to admit that they should be seen as a club, designed as a typical prosecutor’s bullying to force a witness to testify against his target, in this case President Trump. A close look at the indictment shows little of substance, and Manafort’s friends say he will “not bear false witness”, regardless of personal threats. As to George Papadapoulos, an insignificant member of the foreign policy advisory committee, which was largely ceremonial, he was offered a plea for “lying to the FBI” about a meeting. But his story is being exposed as a wild set of lies, which makes him not credible as a witness. In fact, his case appears to be a textbook example of a BritishFBI sting. Second is the continuing investigation of the Fusion GPS dossier, written by an “ex”-MI6 operative Christopher Steele, which among other fabrications, accuses Trump of cavorting with prostitutes in a Moscow hotel, while being filmed by Putin agents! It was revealed last week that the dossier was paid 
for by the Clinton campaign and the Democratic National Committee (DNC). Congressional investigators are now seeking to discover if it was used by the FBI to obtain FISA warrants to conduct surveillance of Trump campaign officials (cf. SAS
 44/17). They are also looking into connections between Papadopoulos and the Steele dossier, as one of his Russian “friends” he wanted to introduce to Trump officials has been outed as an indirect source for Steele’s allegations. Third, Mueller himself is coming under fire. His history of prosecutorial misconduct, the subject of a LaRouchePAC dossier, Robert Mueller is an Amoral Legal Assassin , is now a focus for Congressional investigators, who are looking into a variety of issues, from his present thug tactics against Trump, to his conflict of interest as a long-time friend of former FBI director Comey, to charges that he covered up previous efforts by foreign entities to bribe officials, including Uranium One’s large contributions to the Clinton Foundation to curry favor with Hillary Clinton. Fourth, there is the book written by former DNC chair Donna Brazile of the Hillary Clinton takeover of the DNC (see below). These revelations undermine the whole narrative of Russian meddling in the U.S. elections, which was invented to prevent President Trump from seeking cooperative relationships with Russia’s President Putin and also China’s President Xi Jinping on counter-terrorism, global infrastructure projects, etc. Donald Trump, to his credit, has not given in to the threats, as can be seen in his trip to Asia. New Book Exposes How Hillary Clinton Rigged the Democratic Campaign On Nov. 2, Politico published an excerpt from a new book written by long-time Democratic Party operative Donna Brazile, which brings back to the forefront one of the stories that “Russiagate” was designed to cover up: That the Clinton campaign engaged in systemic dirty tricks against Bernie Sanders to win the Democratic Party’s nomination for President. The excerpt, headlined “Inside Hillary Clinton’s Secret Takeover of the DNC”, reveals that the Democratic National Committee (DNC), deeply in debt from Obama’s 2012 campaign, reached an agreement with the Clinton campaign, to have her campaign committee help pay off the debt. (see https://www.politico.com/magazine/ story/2017/11/02/clinton-brazile-hacks-2016-215774) In return for $10 million for that purpose, the “Joint FundRaising Agreement” gave the Clinton campaign control over the DNC’s finances, strategy and staff decisions. It also created a channel to launder money raised by state parties into the Clinton campaign, to evade the legal limits on how much individuals may contribute to a candidate. The agreement was signed in Aug. 2015 -- nearly one year before she “won” the party’s nomination. Donna Brazile took over as interim DNC chief when her predecessor, Debbie Wasserman Schultz, resigned over the scandal which ensued after July 22, 2016, when Wikileaks published DNC internal emails, which proved that there was a concerted effort by officials to undermine Sander’s challenge. A second batch of incriminating emails, this time from Clinton campaign manager John Podesta, was released by Wikileaks on Oct. 7. Instead of addressing the obvious corruption of a rigged campaign, the Clinton camp changed the subject and launched an hysterical attack on Russia, claiming that Russian hackers broke into the DNC server and stole the emails, to get Donald Trump elected. Their narrative was backed fully by the Obama 
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administration and its intelligence chiefs. And it fit perfectly the other part of the story, which was Clinton’s repeated claim that that Vladimir Putin favored Trump because he would submit to Russia’s aggressive, unlawful intentions. Brazile’s book follows immediately the revelation that the Clinton-run DNC funded the fraudulent sex dossier produced by “ex”-MI6 operative Christopher Steele for Fusion GPS (cf. above and SAS 44/17). When one combines Clinton’s support for the neo-con, unipolar globalist threats against Russia, with her campaign’s control over the DNC, which funded the dossier used to target Trump, the whole fraud behind Russiagate comes into sharp focus. It also explains the ongoing collapse of the Democratic Party, which has invested its future in anti-Trump actions. Brazile charges that the party has been in disarray due to “three titanic egos”, of Obama, Clinton and Wasserman Schultz, who “stripped the party to a shell for their own purposes.” The revolt inside the party is just starting, and has been addressed by Senator Elizabeth Warren and very forcefully by Representative Tulsi Gabbard. Argentine President Macri Escalates  Judicial Attacks against Opposition Early on the morning of Nov. 3, in a scene reminiscent of the modus operandi used in Brazil in the infamous Lava Jato or Operation Car Wash, a large number of armed security operatives barged into the Buenos Aires apartment of Amado Boudou, former Vice President and Economics Minister in the government of Cristina Fernández de Kirchner, and arrested him on the dubious charge of “illicit association.” As former President Fernández de Kirchner immediately tweeted, Boudou’s arrest, which followed the recent arrest of her former Planning Minister Julio De Vido using similar methods, signifies that “Argentine democracy is at risk.” This has nothing to do with any crime committed, but rather, she warned, “Macri is using the Judicial Branch to persecute opposition leaders…This is clearly a maneuver of intimidation and extortion whose goal is to discipline labor and opposition leaders, especially legislators, who might attempt to oppose, or stop” the draconian labor reform and austerity measures Macri recently announced, intended to eliminate workers’ rights and destroy living standards to please foreign investors. The Argentine President is on a wild flight forward, claiming that the results of the Oct. 22 mid-term legislative elections, in which his coalition won a plurality of votes, has given him a mandate to ram through his reforms. But, while local and international media crowed that Macri “smashed” Fernández in the elections — she ran for Federal Senator from the politically-important Buenos Aires province -- the reality is that she lost to Cambiemos’s oligarchical candidate by only 4 percentage points and will still take a seat as Senator on Dec. 10, as Argentine election law allots the runner-up party one of three Senate seats from the province. On Oct. 29 call, Macri called on Argentina’s justice system to emulate Brazil’s Lava Jato methods to investigate corruption charges in public companies and among government officials, methods that have wrecked Brazilian institutions and created a reign of police-state terror. The immdiate result were the arrests of Boudou and De Vido, neither of whom has been tried or convicted of any crime. As a Federal Senator, Cristina will enjoy parliamentary immunity, but it’s not clear for how long. De Vido, a Federal dep
uty, was stripped of immunity at record speed. Federal judge Claudio Bonadio, who is leading the legal investigation of the former President, said on Nov. 2 that he “doesn’t rule out, but won’t confirm” whether he will request that her parliamentary immunity be lifted as soon as she is sworn in, in order to arrest her. Cabinet members are also threatening to file corruption charges against the still-powerful former head of the CGT labor federation, Hugo Moyano, should he mobilize the labor movement against the announced labor reform. New Attempt from Brussels to Sabotage Russian Gas Pipeline to Europe The European Union is unhappy with the Nord Stream 2 pipeline, that is to transport Russian gas under the Baltic Sea to Germany. Therefore, it has reportedly proposed to renegotiate the principles of the project in such a way that its own “rules”, which apply to the onshore part of the pipeline, would also apply to the offshore portion, although that would infringe on Russia’s most basic right of the sea. Speaking in Moscow on Oct. 31 to a meeting of the Association of European Businesses, Russian Foreign Minister Sergei Lavrov said the EU plan “is absolutely groundless. There is no reason to apply the extraterritorial law of the European Union in the Baltic Sea.” Nord Stream 2 is jointly financed by Gazprom of Russia and five European companies (Engie of France, OMV of Austria, Uniper and Wintershall of Germany and Royal Dutch Shell) and is to complement the existing trans-Baltic Nord Stream pipeline with a second one having an annual capacity of 55 billion cubic meters of natural gas. The President of the European Council Donald Tusk, known for his rabid anti-Russian stances, has often spoken out against the construction of the Nord Stream 2, claiming it does not serve the interests of Europe. Barring a complete cancellation, he has called for much stricter regulations. Recall that in August, the U.S. Congress passed a bill providing for new sanctions against Russians, which explicitly states that U.S. policy is to oppose Nord Stream 2, “given its detrimental impacts on the European Union’s energy security, gas market development in Central and Eastern Europe, and energy reforms in Ukraine.” As for Sergei Lavrov, he proposed at the same meeting, that the Turkish Stream pipeline that Russia is building to Turkey could also be extended to deliver natural gas to “other European countries,” but only after obtaining “solid legal guarantees” from Brussels, i.e., from EU headquarters to avoid the problems now arising in the north. The Turkish Stream project itself is a replacement for the South Stream pipeline, which was to deliver gas under the Black Sea to Bulgaria, then on to Serbia, Bosnia, and Croatia, but was cancelled by Bulgaria under pressure from the EU.
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