E.I.R.STRATEGIC WEEKLY NEWSLETTER
ALERT Volume 33, No. 9, February 28, 2019
A “New Security Architecture” Is in Europe’s Fundamental Self-Interest As significant progress has been made in the trade negotiations between the United States and China (cf. below) and Presidents Trump and Xi Jinping are planning to meet soon to finalize an agreement, international diplomacy is marked this week by the second summit between Donald Trump and North Korean Chairman Kim Jong-un, scheduled for Feb. 27-28 in Hanoi.
At the same time, the trans-Atlantic “war party” is fully mobi- lized to try and sabotage such diplomatic moves. One potentially explosive flank they have chosen is Venezuela, where the neo-cons are wildly pushing their “regime change” operation, while the self- declared President Guaido has all but called for foreign military intervention to overthrow the current government (cf. below).
Above all, there is the very real danger of a global showdown between NATO and Russia, accelerated by the U.S. withdrawal from the Intermediate Nuclear Forces Treaty, and reflected in the sobering remarks by President Putin in his Feb. 20 address to the Russian Federal Assembly. While Donald Trump’s inten- tion may be to negotiate a new, more comprehensive, treaty, including China and other countries, the “war party” is using the withdrawal to push for installation of U.S. intermediate ballistic missiles in Europe.
Helga Zepp-LaRouche was interviewed on the matter by Sputnik International, which published her comments on Feb. 21 under the headline”Europe to Sign Own ‘Sui- cide Pact’ If Hosts New U.S. Missiles -- German Politician.” https://sputniknews.com/europe/201902211072620749- europe-suicide-pact-us-missiles/
She is quoted as saying: “Despite President [Donald] Trump’s stated intention to improve relations between the US and Rus- sia, including that he may have one idea of replacing the INF treaty with a new agreement, [Vladimir] Putin has to take into account the contrary intention of the neocons in the Trump administration and the British ‘minister of war,’ Gavin William- son, who threatens to use ‘hard power’ and also claims that the ‘boundaries between peace and war are becoming blurred.’”
(Indeed, Williamson stated on Feb. 11 that Britain must be ready to use “hard power” to combat growing aggression from Russia and China.)
Zepp-LaRouche noted that if Europe does agree to host U.S. intermediate and shorter-range ballistic missiles, it would be tantamount to signing a ‘suicide pact’ since Russia has made clear that it would target any such potential security threats.
Europe’s “fundamental self-interest,” Zepp-LaRouche is quoted as saying, is to lift the sanctions on Russia and “re- establish good relations with Moscow by creating ‘an economic zone from the Atlantic to the Pacific on the basis of integrating the Belt and Road Initiative, the Eurasian Economic Union and the EU.’” That would create”a new security architecture”, that should become the basis on which Europe builds its coopera- tion with the United States.
The Sputnik article continues: “When asked to suggest ways to overcome the rifts in the global security environment be- tween Russia and the West, Zepp-LaRouche opined that once the ‘real authors’ of ‘Russiagate” — the scandal around Mos- cow’s alleged interference in the 2016 US presidential election, which Russia strongly denies — were revealed’, most of the strategic tensions would evaporate.”
China-US Trade Talks Move Forward The second round of US-China trade talks concluded with clear signs of progress having been made, but with a full agreement still beyond grasp. President Trump met with the Chinese del- egation in the Oval Office on Feb. 22, on what was to be the final day of their stay in Washington, but feeling that more progress could be made immediately, it was decided to extend the talks for two additional days. President Trump said at the time that the negotiations were going well, but that the final agreement would probably not be made until he worked out final details in a meeting with Chinese President Xi Jinping, which he indicated would be later in March.
Vice Premier Liu He, who is leading the Chinese delegation in a higher capacity as special envoy of the Chinese President, also expressed confidence that an agreement would ultimately be reached. “We will work very hard to make it happen,” he added.
At the end of the two-day extension, President Trump tweeted that substantial progress had been made “on impor- tant structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues.” As a result, he decided to delay the rise March 1 deadline he had set for raising the tariffs imposed on $250 billion worth of Chinese goods to 25% from the present 10%. “Assuming both sides make additional progress, we will be planning a Summit for President Xi and myself, at Mar-a-Lago, to conclude an agreement. A very good weekend for U.S. & China!”
(Senior Loan Officer Opinion Survey), found that the demand for loans is weakening across all categories of bank lending. The 5,500 U.S. banks as a whole are at the same time tighten- ing lending conditions for both large and small firms, and are adding higher risk premiums for multiple categories of loans. All this indicates significant economic decline.
As or Europe, Italian Senate Finance Committee Chairman Alberto Bagnai brought up a highly sensitive issue during the “European Parliamentary Week” in Strasbourg, when confronting European Central Bank supervisory board head Andrea Enria with the bank’s blindness on derivatives risk.
“It was mentioned that we need to establish a level playing field,” Sen. Bagnai said. “So, what is the role of level 2 and 3 assets in the bank balance sheets? You did not mention them, but they are often mentioned in the debate as a potential threat to financial stability in the Eurozone.”
In response, Mr. Enria claimed that in the framework of the ECB stress tests, it had been checked whether such level 2 and level 3 assets are covered by enough liquidity. What he did not say, however, is that the models used for those stress tests are fake, and that vulture funds such as Blackrock were in charge of the assessments (cf. SAS 1,3/19).
It has been estimated that level 2 and level 3 derivatives amount to over 6 trillion euros in the Eurozone. These are as- sets that cannot be priced either because there is no market for them (level 3) or because it can only be done as on the basis of analogy with similar priced assets (level 2). To take the example of Deutsche Bank, it has more level 3 assets than capital at cur- rent market value!
All this points to the urgency of dumping the toxic assets and protecting the commercial banking sector, under a Glass- Steagall style bank separation.
German Industry Seeks a Fresh Start in Relations with Russia Leaders of the German economy are moving to revitalize coop- eration with Russia, in spite of the European Union sanctions, which are not about to be lifted. In fact, they will likely remain in place at least until after the Ukrainian presidential election in April and the election of a new European parliament in May.
Some insight into the German government’s changing view on the issue was given by Economics Minister Peter Altmaier (CDU) at the 6th Russia conference of the German Chambers of Industry and Commerce in Berlin on Feb. 2. Overall, accord- ing to our representatives, the atmosphere at the event was decidedly more optimistic than in previous years.
Peter Altmaier issued a strong call for an open dialogue on both sides, stating that for far too long, “speechlessness” had prevailed. He also spoke of the “not even rudimentarily tapped potential of cooperation” between Germany and Russia. The government is committed to implementing the Nord Stream 2 gas pipeline project from Germany to Russia, he stressed, and that despite the pressure exerted by other EU countries and the United States.
Germany, of course, is particularly interested in Nord Stream 2 because the government’s mad decision to completely exit from nuclear energy (by 2022) and from coal-powered energy (by 2038) will inevitably increase the need to import more gas, not just from Russia but from other sources as well.
According to Berlin’s Economics Minister, many German firms are in discussions with their Russian counterparts on how to deal with the expected US sanctions against the new gas pipeline. On many issues, there are similar views on both the German and the Russian sides, as was shown in Altmaier’s
The real question will be how far the two Presidents are pre- pared, or are able to go, to come up with an agreement accept- able to both sides. Many of the policy changes China is making to meet U.S. demands, are entirely consistent with what they consider necessary for the development of the Chinese econo- my at this stage of the game, but there is a limit beyond which they will not go. President Trump has made clear that he is not out to entirely dismantle China’s industrial policy, no doubt disappointing China hawks in his Administration, but is rather seeking a fair and equitable agreement and an “equal playing field”. On that basis, it should a deal can be made. But the devil is in the details. And those details may have to be worked out by the two leaders themselves.
Who’s Afraid of Huawei, and Why? During the press conference mentioned above with China’s Vice Premier Liu He, Donald Trump was also asked about the con- troversy over telecommunications giant Huawei, which was in- dicted in late January by the US Department of Justice for wire fraud and stealing trade secrets, together with the company’s CFO Meng Wanzhou.
Trump indicated that if an overall trade agreement is reached, he might ask the DOJ to reconsider the legal actions taken against Huawei. “We want fair competition with China,” Trump said. “We don’t want to block anyone out.”
Earlier in the day, President Trump had tweeted that he wants to have 5G and even 6G, technologies in the U.S. as soon as possible. Therefore, “American companies must step up their efforts, or get left behind.... I want the United States to win through competition, not by blocking out currently more advanced technologies. We must always be the leader in everything we do, especially when it comes to the very exciting world of technology!”
While the western media continue to spin scare stories on how the Chinese authorities use Huawei’s equipment to spy on everyone using it, a duplicitous rebuttal came from the United Kingdom. There, the National Cyber Security Centre just issued a finding that, as far as Great Britain is concerned, there are ways to limit the risks of using Huawei equipment, and so they will proceed to purchase it and work with the Chinese giant. In other words, Perfide Albion is again trying to play both sides...
Economic Slowdown Cannot Be Addressed by Conventional Measures The minutes of the latest meeting of the Federal Reserve Open Market Committee (FOMC) on Jan. 29-30 reveal that the Fed is discussing an end of tapering, i.e., the resumption of Quan- titative Easing sometime this year. At the same time, the Euro- pean Central Bank has indirectly signaled that it too is ready to activate the “bazooka” of monetary expansion again.
What central banks are reacting to is a dramatic slowdown of the economy in the trans-Atlantic region, for which most analysts blame the trees, and not the forest. In this case, the “trees” are the so-called “trade war”, the “shutdown” of the US government or the diesel emissions scandal which is hitting the German auto industry.
The “forest” is the tightening of credit to the real economy, as the post-2008 refinancing of the global debt bubble comes to an end. This is the Achilles’ heel of the Trump administra- tion’s economic policies. If Donald Trump fails to address the needed reorganization of the financial system as he had prom- ised during the election campaign, his efforts to re-industrialize the country are doomed.
The Federal Reserve’s latest survey of banks released Feb. 19
EIR STRATEGIC ALERT WEEKLY NEWSLETTER 2 N° 9 / 2019
meeting with Russia’s Minister for Economic Development Maxim Oreshkin before the event.
In his speech, Oreshkin spoke of “a new age of development” in Russia, as the economic and the financial situations are no longer as volatile as before. And the country is no longer as vul- nerable to changes in oil prices, due to the new emphasis given to value-added production rather than export of raw materials. Oreshkin invited German industry to take an active part in this new era of the Russian industry and to exploit the potential for cooperation.
The President of the German-Russian Foreign Trade Cham- ber, Rainer Seele, was quite upbeat in his intervention. He noted that Russia had done well after the stark economic crisis of 2014-2015, and that politicians in both countries should now use the opportunity to enable more Mittelstand companies to do business with Russia. The German business community, he noted, hopes that the conflict in eastern Ukraine can soon be solved, so that the sanctions imposed on Russia for that reason can be progressively lifted. There are now 4,500 Ger- man firms, mostly SMEs, working in Russia, that have created 270.000 jobs there. Germany, he said, is justifiedly viewed by the Russians as the most important trade partner in Europe.
Russiagate: Not a “Witchhunt”, but a Coup That the entire “Russian meddling/Trump collusion” story was concocted to stop Donald Trump from implementing his stated policies was just confirmed in an interview featured on the pop- ular American TV show, 60 Minutes, which aired on Feb. 17. In it, one of the key plotters of the putsch, former FBI Deputy Director Andrew McCabe, acknowledged that top officials of the Department of Justice (DOJ) and the FBI met to adopt a plan on how to carry it out. While the role of British intelligence in instigating and directing the coup was left out, McCabe left no doubt that Trump’s removal was their goal.
Over the next days, McCabe stepped back a bit from his story, but he stuck to the main points of the interview. These were: the belief that Trump ran for President “with the aid of the government of Russia”; that it is “possible” that Trump, as President, is acting on behalf of Russia; that this represents “a threat to national security”; and that, to cover it up, Trump fired FBI Director Comey, and subsequently criticized the inves- tigation, which constitutes “obstruction of justice”.
McCabe charged that Trump “had gone to extreme measures to...negatively impact, possibly turn off our investigation of Russian meddling into the election and Russian coordination with his campaign.” However, he seemed blissfully unaware that two-plus years of investigation into these charges, by the FBI and by Special Counsel Mueller, has turned up no evidence to back them! Further, that Trump, as President, has the right to fire the FBI director, and that he has not acted to close down the Russia investigation, despite the highly negative effect it has had on his presidency, and on the nation.
McCabe admitted that, in these meetings, concrete measures were proposed to remove Trump. One of these was to have Deputy Attorney General Rod Rosenstein wear a wire in meet- ings with Trump, presumably to gather evidence which could be used to oust him from the presidency. The other was to de- termine if it were possible to recruit a majority of the cabinet to agree to Trump’s removal under the 25th Amendment of the Constitution. McCabe said Rosenstein was “counting votes” to see if a majority to do so existed. Rosenstein has denied this.
Among those calling this “an attempt at a coup d’état” is prominent constitutional authority Alan Dershowitz, himself a liberal Democrat but a staunch defender of the Constitution.
McCabe is among the original gang involved in coup efforts against Trump, set up by Comey in July 2016, just after Trump won the Republican nomination and well before the November election. He was fired from the FBI on March 17, 2018, for lying in testimony and leaking. His revelations today are part of his efforts to sell his new book -- probably to raise money for future legal fees, as he is expected to be indicted at some point...
Venezuela, a Key Element in the Global Strategic Crisis The neo-con clique in the Trump administration has pushed hard to accelerate the Venezuelan crisis. Their flight-forward just may unleash military conflict in South America, as the head of the U.S. Southern Command said he’s ready to respond if required. If that happens, Secretary of State Mike Pompeo, Vice President Mike Pence and National Security Adviser John Bolton, among others, will have not only destroyed U.S. rela- tions with Ibero-America, but also trapped Donald Trump in a situation that could wreck his presidency, and thus hand a vic- tory to the architects of the “Russiagate” coup.
Nota bene: this flight-forward on the issue of demanding that Venezuelan President Nicolás Maduro allow humanitarian aid into his country, which is a political ploy having nothing to do with actual humanitarian concerns, occurs just as President Trump is preparing for an all-important second summit with North Korean leader Kim Jong-un in Hanoi on Feb. 27-28. This is not the first time the “war party” has acted to sabotage Trump’s peacemaking efforts.
A volatile situation arose on Sat., Feb. 23, the deadline set by the self-proclaimed “interim President” Juan Guaidó for de- livery of aid from points along Venezuela’s borders with Brazil and Colombia. Trucks carrying supplies attempted to barge their way into Venezuela, causing deaths and violence on both sides of the border. Later in the day, Maduro broke diplomatic relations with Colombia, whose President, he said, had “lent his territory for aggression against Venezuela.” As of this writing, the situation remains extremely tense and dangerous.
Mexican President Andrés Manuel López Obrador reiterated this week that dialogue and negotiation are the only option for resolving the crisis. But on Feb. 18, President Trump delivered a speech in Miami that might as well have been written by the rabid John Bolton. He repeated the neo-con line that Maduro’s “socialist dictatorship” is responsible for all of Venezuela’s ills, and must be removed as soon as possible, along with the gov- ernments of Cuba and Nicaragua. Over the past days, the Co- lombian border city of Cúcuta has been crawling with Ameri- can neo-cons, including Florida Sen. Marco Rubio and Special Envoy for Venezuela Elliott Abrams (of Iran-Contra notoriety). On Feb. 25, Vice President Pence arrived in Bogota to demand “freedom and democracy” for Venezuela.
Absent a sane U.S. approach to South America, Russia, in coordination with the Maduro government, is attempting to counter the regime-change agenda. On Feb. 22, representa- tives of 50 nations met at UN headquarters in New York to form a group to defend international law and the UN Charter and oppose any military intervention into Venezuela. Russia’s UN ambassador Vassily Nebenzia reported that the meeting was not only about Venezuela, but “about the approach to re- solving international problems and different crises.”
But it will take a defeat of the British-directed coup against Trump, of which Bolton, Mike Pence, Pompeo and others are key agents, to free Trump to seek a more constructive policy in collaboration with Russia, China and others.
EIR STRATEGIC ALERT WEEKLY NEWSLETTER 3 N° 9 / 2019
Infrastructure Projects in Africa Make Headway Pan-African Highway Opens in Egypt. Egypt has completed its part of the Pan African Road, it was announced on Feb. 3, and opened it up to travelers. The highway, when completed, will link Alexandria on the Mediterranean to Cape Town, South Africa, on the Atlantic Ocean, covering a distance of some 10,300 km and running from Egypt through Sudan, South Sudan, Ethiopia, Kenya, Tanzania, Zambia, Zimbabwe, and Bo- tswana into South Africa.
Each country is responsible for financing and constructing its section of the road, which was launched by Egypt in June 2015. According to Abdel Mottaleb Abdel Hamid, professor of economics at the Cairo-based Sadat Academy for Management Sciences, “this is one of the most important megaprojects, one that will reshape the trade and investment chart in Africa. It also falls in line with Egypt’s inclination toward Africa to restore its influential role on the continent as it assumes the presidency of the African Union.” Nile Dam in Ethiopia: The Ethiopian Electric Power has signed a $40 million contract with China Gezhouba Group Co. Ltd, which will handle the pre-commissioning activities at the Grand Ethiopian Renaissance Dam (GERD) on the Nile River. A $113 million contract has also been signed with Voith Hydro Shanghai that includes the electrical, mechanical, and various civil/structural works required to complete the construction of the generating station and spillways of GERD, which is expect- ed to be operational in 2020.
Last year, Ethiopian Prime Minister Abiy Ahmed cancelled the contract of a state-run military conglomerate, Metals and En- gineering Corporation, for building the dam’s turbines. Not a single turbine is operational, more than seven years after the company had been awarded the contract.
Russian Ambassador to UN Welcomes Schiller Institute Initiatives The Schiller Institute was honored to receive a statement from His Excellency Vassily A. Nebenzia, Russian Ambassador and Permanent Representative to the United Nations, for its Feb. 16 conference in the New York City vicinity, on the theme “Let Us Create a new More Human Epoch for Mankind” (cf. SAS 8/19). It was presented during the first panel by Counsellor Theodore Strzhizhovskiy of the Russian Mission to the UN.
The Schiller Institute, the statement began, “is known for its valuable contribution to the understanding of international political processes, and development of new approaches to the global challenges. The conferences held under your auspices are respectful platforms, where the most urgent present-day issues can be discussed without politicizing and ideological clichés.
“We were very saddened by the bitter news about the pass- ing of Lyndon LaRouche, the founder and inspirer of the Schil- ler Institute. We would like to express our deepest condolences to Helga Zepp-LaRouche, as well as to the relatives and col- leagues.
“We are convinced that the paradigm of international, politi- cal, and economical intervention that he had proposed will be further developed by his apprentices and associates.”
H.E. Nebenzia went on to outline the foreign policy of the Russian Federation. He strongly denounced the attempts of some countries to impose their will unilaterally on the interna- tional community, and interfere in the domestic affairs of oth- ers, as well as the use of sanctions to “punish” those countries that resist.
He touched on Russia’s increased involvement in the Eurasian Economic Union, the Commonwealth of Independent States, the Shanghai Cooperation Organization and BRICS. President Putin, he recalled, has proposed an initiative called the “Greater Eurasian Partnership,” which would bring together member counries of the Eurasian Economic Union, the Shanghai Coop- eration Organization, and the Association of Southeast Asian Nations.”
In addition to the joint work of the EEU and China’s One Belt, One Road policy, he stressed that the bilateral coopera- tion of Russia and China also takes on global dimension, as they coordinate their foreign policy in such venues as the UN. Another “privileged strategic partner” for Moscow is India, he said, pointing out that an unofficial summit, Russia-India-Chi- na, “took place in December in Buenos Aires after a 12-year pause.”
(That reference, we would add, is most pertinent, in light of the Four Power agreement that Lyndon LaRouche very strongly promoted over the past years, as the one strategic combination that would have the clout needed to reverse definitively the geopolitical worldview and implement a new, more just world economic order, those Four Powers being Russia, China, India and the United States.)
Concerning the U.S., Ambassador Nebenzia noted the two countries should cooperate on “shared challenges: international terrorism, military and humanitarian crises, drug trafficking, transnational crime, and others.” He expressed the hope that the “political dialogue with our American partners, based on mutual respect and consideration of each other’s national inter- ests, will be resumed.”
Lyndon H. LaRouche, Jr. (1922-2019) Executive Intelligence Review has published a lengthy obituary of Lyndon LaRouche in English, which we would encourage all our subscribers who can to read. We have chosen one passage in which LaRouche succinctly explained his worldview, during a conference on October 12, 1988, Lyndon LaRouche, at the Kempinski Hotel Bristol in Berlin:
“By profession, I am an economist in the tradition of Got- tfried Wilhelm Leibniz and Friedrich List in Germany and of Alexander Hamilton and Mathew and Henry Carey in the Unit- ed States. My political principles are those of Leibniz, List, and Hamilton, and are also consistent with those of Friedrich Schiller and Wilhelm von Humboldt. Like the founders of my republic, I have an uncompromising belief in the principle of absolutely sovereign nation-states, and I am therefore op- posed to all supranational authorities which might undermine the sovereignty of any nation. However, like Schiller, I believe that every person who aspires to become a beautiful soul, must be at the same time a true patriot of his own nation, and also a world citizen.”(https://larouchepub.com/other/2019/ lyndon_h_larouche_jr_obituary.html)
E.I.R. STRATEGIC ALERT www.eir.de Published by: E.I.R.GmbH, Bahnstr. 4, 65205 Wiesbaden Tel.: 0611/73650, Fax: 0611/9740935, 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 Germany
