E.I.R.STRATEGIC WEEKLY NEWSLETTER ALERT Volume 33, No. 40, October 3, 2019

E.I.R.STRATEGIC WEEKLY NEWSLETTER 

ALERT Volume 33, No. 40, October 3, 2019 

Bank of England Head Announces Bankers’ Ecofascist Agenda Although overshadowed by media coverage of the rage-filled theatrics of Greta Thunberg, a plot by central bankers for a global “regime change in finance” was unveiled at the United Nations General Assembly Climate summit last week. Bank of England Governor Mark Carney, in his address, laid out how central bankers intend to use the fear-mongering to impose a banker’s dictatorship, to save the presently-collapsing system. 

Carney, speaking shortly after Greta Thunberg, delivered the warning that the world’s most powerful central banks, and the private financial interests they serve, will tolerate no alternative to eco-fascist investments which shift industry “from brown to green”. He opened his talk on Sept. 23 by asserting, “A new, sustainable financial system is being built.” The key to this, he said, is bringing “climate risks and resil- ience into the heart of financial decision making,” as “sustain- able investing must go mainstream.” 

Over the course of the summit, Carney and other speak- ers emphasized that, by “sustainable”, they mean phasing out energy production which provides the largest percentage of power in today’s economy, including coal, oil and gas, and nuclear production, and replacing them with sources with low or zero CO2 output. None of them spoke of what the result of such a transition would be, i.e., moving to an inefficient global power grid based on decreasing the energy flux density of the system, which would be incapable of sustaining the levels of manufacturing, transportation, construction or agricultural production required to actually sustain seven-plus billion lives on the planet. The result will be no significant electricity sup- ply for the developing countries, increased global infant mor- tality, shortened lifespans, and depopulation. 

On Sept. 22 in New York City, on the eve of the UN Climate Summit, executives of 130 global banks representing $47 tril- lion in assets – led by 30 of the biggest – signed a “compact” called “Principles of Responsible Banking”, committing them to make the policy of the Paris Climate Accord, their invest- ment policy. That 2015 Paris Accord called for three-quarters of world coal power production to be eliminated by 2030. 

This compact follows Carney’s pronouncement from Aug. 22, at the annual Jackson Hole Federal Reserve conference, that the era of the dollar has ended (cf. SAS 35, 38/19). He 

proposed replacing it with a virtual, digital currency, controlled by central banks. Specifying that nothing physical would back the new currency, he said this new “financial architecture” would allow for the expansion of credit as needed, adding that he is proposing what former Federal Reserve Chair Ben Bernanke called “helicopter money”, that is, distribution of funds produced by central banks, as though dropped from he- licopters, to “stimulate” the economy. In reality, this new cur- rency would be directed, by the central banks, to flow into the endangered speculative bubble, and to create new bubbles, such as the Green Financial Initiative boondoggle. 

To enforce this new regime, Carney announced that a task force has been established which would require mandatory disclosures which affirm that future investments will go only to low or zero-carbon projects. “Firms that align their busi- ness models to the transition to a net zero world will be re- warded handsomely. Those that fail to adapt will cease to ex- ist.” In other words, they will be denied credit, which would make their continued existence impossible. 

European Council Rejects EU Anti-Nuclear New Green Deal The European Council of the European Union gave the green light on Sept. 25 to a proposal to create an EU-wide classifica- tion system, or “taxonomy”, to provide investors with a list of what economic activities are to be considered environmen- tally sustainable. To the horror of various and sundry Green movements, and due to the opposition of the majority of EU member states, it does not exclude nuclear energy projects from the list. 

The European Parliament, the European Commission and the Technical Experts Group (TEG) set up by the Commission argue for the exclusion of nuclear energy from the sustainable projects. But 25 of the 28 countries in the EU, which are rep- resented in the Council, rejected that position. Only Germany, Austria and Luxembourg issued a statement opposing the de- cision. The Greens in Germany were were particularly scan- dalized by the decision. In addition to France, most of eastern and southeastern Europe countries view nuclear power as a “clean” energy source, and in Finland, even the Green Alliance coalition partner in the government, explicitly accepts a 30% share of nuclear in the national energy mix. 

In another defeat for the Green lobby, the implementation of the new standards (taxonomy) has been postponed for two years. It was initially slated to be approved right away to provide the platform for the New Green Deal of the new EU Commission President Ursula von der Leyen, who takes office on Nov. 1. But the Council just decided it should only be established by the end of 2021 and then fully implemented by the end of 2022. 

The World Nuclear Association welcomed the Council’s deci- sion, with its director general, Agneta Rising, commenting: “Nuclear energy is an integral part of several European Union member states’ climate mitigation efforts. It has shown - be it in France or Sweden - that it has the potential to deliver sustainable energy transitions. Excluding nuclear energy from our future would be a disastrous decision for the climate.” https://www.world-nuclear-news.org/Articles/Foratom- urges-fact-based-approach-to-sustainable-f 

The Association stresses that nuclear energy, as a low-carbon technology, is important for tackling climate change. “Several international organisations have already pointed out nuclear energy’s contribution to sustainable development, such as the International Energy Agency, United Nations Intergovernmen- tal Panel on Climate Change, OECD Nuclear Energy Agency, and World Energy Council.” 

While the resistance is to be welcomed, nuclear power, as we reported in issue No. 35 of our newsletter, should not be understood as a substitute for fossil energy sources, but rath- er as an additional source. To guarantee the development of a growing world population, it is estimated that some 10,000 Gigawatts of energy will be needed by 2045, and that can only be met by expanding production of both nuclear and fos- sil sources through developing new generations. 

Looming Explosion of Corporate Debt Sows Panic When the Federal Reserve says they are in control of interest rates, the expression “SNAFU”, made famous by film director Frank Capra in 1942, comes to mind: “Situation Normal, All Fucked Up” is in fact a good description of the fact that since Sept. 16, the Fed has no control whatsoever over the interest rate, which is instead dictated by the current liquidity crunch on the money markets. 

Usually the Fed rates determine the rate on the repo mar- ket, which is where banks get overnight liquidity in exchange for collateral. But on Sept., 16 this did not work. Suddenly, the rate shot up to 10%. At that point, the Fed intervened with a liquidity injection, repeating it each and every following day, increasing it first to 75, then to 100 billion. Were the Fed to interrupt the current daily injections, the rate would skyrocket and the system would collapse. 

Experts are divided on the explanation for what is going on, with two main opinions: a) it is a counterparty risk; b) it is a collateral risk. A counterparty risk means that one or more banks are in such bad shape that lending money to them is an unsustainable risk. Collateral risk means that the collateral offered by the bank for overnight loans is no longer accepted. Actually what generated panic on the repo market could be a combination of both. 

The Federal Reserve loans overnight money to primary dealers only against state or state-guaranteed bonds, whereas transactions among bank themselves occur on the basis of 

different kinds of collateral, many of which are junk or worse (see the case of the British Metro Bank, which went belly up after admitting last January it had falsified the value of the assets on its balance sheet). 

Banks refuse liquidity loans to each other when they smell insolvency — if not of the borrowing bank itself, then of its corporate clients. They clearly are sensing the decay of the immense trans-Atlantic corporate debt bubble — whose “junk debt” parts alone total $3.5 trillion — and the securitized “everything bubble” around it including subprime auto loans, credit card debt, student debt, etc. 

One superindebted corporate sector in trouble is oil and gas. As reported by OilPrice.com, the Dallas Federal Reserve Bank’s latest (third quarter) survey of the shale oil/gas indus- try in the Southwest and West found an overall contraction of -7% in oil/gas drilling activity from the second quarter to the third, with drillers’ costs nonetheless having risen by 5.6% — although they rose much more quickly in the second quarter. Giving drugs to a drug addict does not solve the problem, which is the bankrupt state of the financial system. Bankers the governor of the Bank of England Marc Carney know that and that is the reason why they have launched another mega- bubble, the socalled Green Finance. This means more auster- ity for the population and destruction of European industry. The solution is not refinancing the bubble with another bubble but pricking the bubble while at the same time protecting the commercial side of the banking system. This is what a Glass- Steagall reform is all about. Shut down Wall Street and the City of London, as Lyndon LaRouche used to say. His advice should be taken now, before it is too late. 

Thomas Cook Bankruptcy: The First of Many to Come The bankruptcy of the Thomas Cook travel agency, announced on Sept. 22, is the result of a credit-crunch phenomenon that is similar to the 2008 financial crash. Companies with large debt, which were able to have their loans rolled over until now, have become too great a risk for the banks. While it was first announced that the travel agency had £1.7 billion in debt, court documents later revealed balance sheet showing a deficit of £3.1 billion. 

The negative interest-rate policies of the national banks have added a hitherto unknown element of unpredictability in the credit markets. The normal connection between risk and interest rates seems to be decoupled. 

On Sept. 25, one of Northern Ireland’s largest employ- ers, Wrightbus, collapsed, threatening 1,300 jobs. Similar to Thomas Cook, it was in negotiations with prospective buyers, including the Chinese engineering group Weichai, which then pulled out of the talks. The Brexit crisis is a factor here, since a significant number of the parts for its buses, including chas- sis and engines, are sourced from companies in the European Union. 

In the same week Metro Bank, a relatively small British Bank failed to find buyers for a £250 million bond issue bear- ing 7.5% interest. The bank needed the funds in order to ful- fill the minimum requirements under the new bank resolution rules of the Bank of England and EU regulators. The bank, which has £21 billion in assets, saw its share price collapse from £40 to 175 pence in the last 18 months, following the bank’s announcement in January that it had allocated £900 

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million of loans to the wrong risk bracket, which prompted a regulatory investigation. While it was able to raise £350 mil- lion from shareholders, analysts now openly question whether it will be able to come up with the necessary funding. 

This wrongly estimated value of its assets is exactly what the ECB stress tests have systematically failed to assess, by re- lying on data produced by the banks’ own models. Metro Bank is a smaller financial institution, but these days, confidence is a rare commodity on financial markets, and contagion could be easily triggered. Metro had put a low risk-weighting on its commercial loans (50%), and has now corrected it to 100%. A closer look at the books shows that there is little “commer- cial” in those loans. For instance, one borrower was Crispin Odey’s fund which bet £19 million against Metro’s shares. Odey took a short position on Jan. 16 and today has a gain of £75 million, which is 2.7% of the entire capital stock. De facto, Metro Bank has financed its own larger short-seller. 

Aston Martin, manufacturer of James Bond’s favorite sports car, is also in trouble. It just barely managed to raise $150 million with a 12% interest rate on 3-year bonds. Cash is needed to complete the launching of its new DBX SUV in De- cember. That will require another $100 million, which would have a 15% interest rate! One catch is that they have to come up with 1,400 pre-orders of the DBX, which will have a start- ing price of £140,000. 

Hedge funds have been taking short positions in Aston Mar- tin’s debt and equity since its stock sank 75%. Standard & Poor’s has cut Aston’s credit rating by one notch to CCC+, which is deep into junk territory. 

The Impeachment Drive against Donald Trump Driven by Desperation First, there was the phony story, concocted by British intelli- gence networks in conjunction with Obama’s intelligence team, of “Russian meddling,” and “Trump collusion and obstruc- tion,” which dominated the first two-plus years of the Trump presidency. Second, when the collapse of the prolonged inves- tigation by Special Counsel Robert Mueller made abundantly clear that Russiagate was a fraud, and the American public didn’t buy it, they tried the “Trump is a white nationalist rac- ist” line, accusing the President of responsibility for a series of deadly gun incidents, which had been going on since long before his term in office. This line of attack also failed to gain much traction with the public. 

In addition, the failure of any of the potential Democratic Party opponents to Trump in the 2020 election to demon- strate they were generating the level of passion among voters needed to defeat him, left them fearful that they were facing the prospects of a second term for Trump. 

Therefore, despite the lack of a “smoking gun”, and the emergence of a growing body of evidence of illegal actions by the intelligence agencies running a regime change coup, ef- forts to remove Trump by leading Democrats have persisted, with full support of media. They became even more desperate over the past weeks when Trump re-asserted his authority as President by firing the war hawks Dan Coats as Director of National Intelligence and John Bolton as National Security Adviser, while taking renewed initiatives to work with Russia and China, and refusing to thrust the U.S. into a war with Iran. This is the actual background to the latest effort to remove 

him. Trump’s alleged attempt to pressure Ukrainian President Zelensky into releasing damaging evidence on former US Vice President Joe Biden in order to facilitate his own reelection is just another ploy. But the furor created led House Speaker Nancy Pelosi to reverse her previous stance of discouraging impeachment efforts, and endorse an immediate inquiry, which will soon draw up articles of impeachment. A telling point is that Pelosi admitted that she had read none of the documents which purportedly demonstrate his violations of the law, when she made the dramatic announcement of her support for an impeachment procedure. 

There will be a plethora of documents from both sides proving that the Ukrainian government, before and after the 2014 coup on the Maidan, has been a center of corruption. (In fact, the role of then VP Joe Biden in the staging of a de facto fascist putsch in Kiev is much more serious than his al- leged attempt to end a corruption investigations into his son’s business dealings.) But that is not the point. The coup itself, and the subsequent use of Ukraine in running the fraud of Russiagate, served the purpose of the anti-Trumpers, to keep the U.S. and Russia at odds, to prevent the collaborative re- lationship that Trump promised as a candidate, and moved to consolidate, in spite of fierce opposition, as President. 

The efforts to remove Trump have led to a worsening of that relationship. It is now clear that those involved in the Get Trump campaign had as their ultimate goal keeping the U.S. on a course determined by the geopolitical interests of the City of London, and that is why they continue in their farcical, but potentially deadly efforts. 

The Democratic-controlled House can pass a bill of impeach- ment, but it is highly unlikely that enough Republicans could be convinced to convict Trump in the Senate. However, the inquiry and trial will be used to continue to disrupt Trump’s strategic intent. 

Backlash Grows against Doomsday Climate Cult The staged performance of the young Greta Thunberg at the UN Climate Summit on Sept. 23, her scripted denunciation of world leaders, and the shameless pandering of many of the world leaders to her claims, arguably did more to discredit the popular campaign of the climate change lobby than to bolster it. 

From the scientific standpoint, renowned British astrophys- icist Piers Corbyn, who is known for his straight talk, made the point on Twitter: “Listening to an ignorant brainwashed child is deranged. I am an actual scientist of physics, meteor- ology, astrophysics, and climate and say @GretaThunberg is wrong and suffers mental abuse by manipulative adults.” (See more from scientists below.) 

As other rational observers have pointed out, the views of Greta Thunberg and her backers are typically those who have grown up in the comfort of the modern world, who need only turn on a switch to have electricity, who take state-of-the-art medical care for granted, and have plenty of free time. The irony in the zero emission lobby’s campaign is flagrant, when one considers that to get to the UN in New York with zero emissions, Greta Thunberg travelled on the racing yacht of a millionaire sponsored by the Yacht Club of Monaco. Then to get from New York to Canada, she rode in a Tesla electric auto, generously provided by Arnold Schwarzenegger. These 

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are luxuries only afforded by the progress of industry, agricul- ture and infrastructure that the Fridays4Future demonstra- tions denounce. 

Greta Thunberg said at the UN that she should be in school, not protesting at the UN and elsewhere around the world. But how many of the world’s poor dream of being able to go to school every day and to receive an education? She claimed that her generation has been robbed of their dreams and their childhood. But in fact, life expectancy for children has increased tremendously over the past century, and who would undo that fact or prevent it from happening in the Third World? 

Governor Matt Bevin of the coal-mining state of Kentucky made the point on Sept. 25 at a conference on “Low Cost Energy: Foundation of a Manufacturing Renaissance.” When visiting Africa, he said, one is struck by the pollution, the degradation of air and water quality suffered by people who don’t have the technology and resources we have. “Nothing has done more to lift people out from poverty than cheap, reliable energy,” he concluded. 

A hard-hitting commentary came from Brendan O’Neill, editor of spiked online magazine, on his website on Sept. 24. While failing to the financial powers behind the “Gre- ta-mania”, he takes up the argument already made by our newsletter: “If you really must have a child speaking at the UN, how about a teenager from Africa or India who believes economic growth is not a fairytale, but absolutely essential to their liberation from poverty? We’ve all heard enough from middle-class Westerners who think economic growth is oh- so-horrible. Let’s hear from someone in the teeming billions around the world who profoundly disagree with this down- beat, anti-human, Western-centric crap.” 

Thunberg’s speech at the UN Climate Summit was a “deeply disturbing spectacle,” O’Neill continues, revealing a young girl “who is in the grip of terror, of a morbid debilitating belief that life as we know it is coming to an end.” One “could not have asked for firmer proof that the green ideology is seri- ously screwing up the next generation by pumping them with fear and panic and a deranged belief that the end of the world is nigh.” 

The irrationality of the campaign was underscored, albeit unwittingly, by UN Secretary General Antonio Guterres, who commented (apparently in all seriousness) that “nature is an- gry” about pollution. One is reminded of the ancient pagan cults that “to allay the anger of the gods” demanded human sacrifice... 

Indeed, as Helga Zepp-LaRouche has pointed out, the worst aspect of the doomsday message is that it denies man’s in- herent creative ability to solve problems that arise through breakthroughs in science and technology. That principle has been proven throughout history. 

Appeal of 500 Scientists to UN: “There Is No Climate Emergency” In a letter addressed to UN Secretary General Antonio Gu- terres, more than 500 leading scientists throughout the world declare that “There is no climate emergency.” The letter grew from the Petition on Anthropogenic Global Warming delivered to Italian government agencies by leading Italian scientists in June 2019, then circulated across Europe and the US (cf. SAS 19/19). 

The cover letter states: “The general-circulation models of climate on which international policy is at present founded are unfit for their purpose. Therefore, it is cruel as well as im- prudent to advocate the squandering of trillions on the basis of results from such immature models. Current climate poli- cies pointlessly, grievously undermine the economic system, putting lives at risk in countries denied access to affordable, continuous electrical power. 

“We urge you to follow a climate policy based on sound science, realistic economics and genuine concern for those harmed by costly but unnecessary attempts at mitigation.” 

The signatories also ask the UN “to organize with us a con- structive high-level meeting between world-class scientists on both sides of the climate debate early in 2020. The meeting will give effect to the sound and ancient principle no less of sound science than of natural justice that both sides should be fully and fairly heard. Audiatur et altera pars!” 

The scientists, professionals, and researchers from around the world who have signed the European Climate Declaration plan to form a “Global Climate Intelligence Group,” in order to coordi- nate an aggressive international campaign around the issue. The group is the brainchild of Prof. Guus Berkhout, emeritus profes- sor of Geophysics in the Delft University of Technology and a member of the Royal Netherlands Academy of Arts and Sciences, according to U.K.’s Lord Christopher Monckton. The latter, an outspoken signer of the European declaration, posted a report on wattsupwiththat.com indicating that the group will publish papers, organize conferences and provide speakers to “balance the one-sided and militantly wrong pseudo-science that now holds sway.” https://wattsupwiththat.com/2019/09/28/global- climate-intelligence-group-founded/ 

Reminder: Schiller Institute Conference Scheduled for Nov. 16-17 We invite our readers to attend the international Schiller Insti- tute conference, which will take place in the Frankfurt, Ger- many, area on November 16-17. 

Speakers from around the world will discuss the urgency of a just new world economic order in line with the principles of physical economy outlined by the recently deceased Lyndon LaRouche. The program will be announced soon. 

To register for the conference and for more information, you are welcome to contact our newsletter, and we will gladly forward the message to the Schiller Institute. 

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EIR STRATEGIC ALERT WEEKLY NEWSLETTER 4 N° 40 / 2019