E.I.R.STRATEGIC WEEKLY NEWSLETTER ALERT

E.I.R.STRATEGIC WEEKLY NEWSLETTER 

ALERT Volume 33, No. 46-47, November 14, 2019 

Thirty Years after the Fall of the Berlin Wall, We Cannot Miss Another Great Opportunity Helga Zepp-LaRouche, chairwoman of the Schiller Institute, held a video presentation on Nov. 9 at a conference in New York City. She began by noting that there was a threefold anniversary to celebrate: that of the fall of the Berlin Wall 30 years ago, the 260th birthday of the great German Poet of Freedom Friedrich Schiller, and the founding of the Schiller In- stitute 35 years ago. She then proceeded to show how these three anniversaries are interconnected. 

Concerning the events in Berlin, Helga Zepp-LaRouche pointed out that there could hardly be a greater difference between the official narrative of what happened at the time, and the reality. The narrative was that after the victory of democracy over communism, and freedom over dictatorship, that “the entire world would embrace the Western model of democracy, of human rights, of the parliamentarian system,” and, according to the historian Fukuyama, that would be the end of history. 

“I, however, in many speeches in 1990 warned that if you would superimpose over the collapsed communist economic system, an equally bankrupt Western liberal model, that you might experience for a certain period of time a boom, but then eventually, it would come to a much, much larger col- lapse of the entire system. And I think that’s exactly where we are today,” Zepp-LaRouche explained. 

The financial system is headed once again for a total crash, while mass protests have broken out throughout the world, in Latin America, in Lebanon, in France, while the EU is falling apart. The intent of the trans-Atlantic elite after the breakup of the Soviet Union, was to impose a “unipolar world”, through regime change, color revolutions, interventionist wars, etc., but that has backfired, she said, and led to the emergence of other nations such as Russia, China, India, and to a new self-conception in Africa, as well as to new organizations and alliances. In the West, it “has increased the gap between the rich and poor in an unsustainable way, so that the middle class is disappearing.” 

For the Schiller Institute, the upheavals of 1989 and the collapse of the Soviet system presented an extraordinary op- portunity to shape a true order of peace for the 21st Century, based on mutual development and cooperation to the advan- tage of all. In that sense, the SI developed countless programs 

and proposals internationally (Productive Triangle Paris-Ber- lin-Vienna, Eurasian Land-Bridge, World Land-Bridge, etc.). 

The perspective of the SI, Helga Zepp-LaRouche stressed, later found a concrete affinity in the New Silk Road strategy adopted by President Xi Jinping, which it has fully supported. Today, 30 years after the historic opening of the Berlin Wall, and the opportunity that was missed at that time, we now have “another Great Opportunity” to implement a truly just economic order based on win-win cooperation. For that, she said, we need to implement worldwide the “LaRouche solu- tion” in the form of the Four Laws he laid out. 

But that, in turn, must be “combined with a Renaissance of Classical culture, and this is why the role of the Schiller Institute and the ideas of Friedrich Schiller are so absolutely indispensable.” We need a dialogue that brings together the best traditions of all cultures. In the United States and Europe, she proposed, we need to revive “the tradition of the Italian Renaissance, the German Classics, the music of Bach, Mozart, Beethoven, Schubert, Schumann, Verdi, and others. This is not an option: This is a necessity.... We have to recreate our civilization based on the lofty ideas of great poets, like Schiller, whose 260th birthday we celebrate today.” 

The Interbank Loan Crisis Is Not About to Stop without Glass-Steagall The New York Federal Reserve daily injections in the repo market appear to be the implementation of a plan by JP Morgan Chase, under which the Wall Street banks have with- drawn from the broader interbank market, and the Fed is providing all the liquidity demands of the non-banks (such as hedge funds) which are high and increasing. 

Since the overnight lending limit was raised Oct. 28, the liquidity demand has exceeded the old limit ($75 billion) each day, and the two-week loan demand has also exceeded the old limit ($35 billion) in two out of three operations. The total level of Federal Reserve assets has gone back over $4 trillion, at $4.02 trillion, so $280 billion of these “overnight” liquidity loans have become semi-permanent since Sept. 17. Experts are increasingly warning about this being a sign of the impending collapse of the system and the consequence of the failed reform of the financial system in 2008. 

On the Wall Street side, speculation in the gargantuan “ev- erything bubble” is increasing in pace. One example: A new 

report cites $660 billion in corporate “leveraged loans” which are now packaged in collateralized loan obligations (CLOs), arranged and funded by the big banks. Just two months ago, when the Bank of England put out a “warning” report on this, the CLOs of leveraged corporate debt totalled $420 billion. 

On the Fed side, a standing daily repo facility is a 2007-style attempt to keep the wounded and crippled alive or sell them off successfully, and keep the $15-16 trillion corporate debt bubble, in particular, from the threat of interest rates rising and blowing it out. 

The system is finished, and there is no way to rescue it, not even with the so-called “green finance” bubble pushed by the Bank of England. The intervention urgently required is Glass- Steagall style separation of the banks, Lyndon LaRouche’s “first law”. Restoring Glass-Steagall will fairly quickly create the effect of a two-tier interest rate situation to isolate and dry out speculation, whereas a Treasury or Fed “directive” could not, in this situation, do so. 

Regrettably, in the United States, Glass-Steagall has been virtually abandoned by “progressive” Democrats in this ses- sion of Congress. And of the ten members of Congress cur- rently running for President, just one — Rep. Tulsi Gabbard — is sponsoring it, and none has campaigned with it. As for Donald Trump, although he did call for re-enactment of Glass- Steagall legislation during the 2016 campaign, he has not made an issue of it during his presidency. That, together with his apparent lack of understanding of the financial dangers, could spell disaster for his legacy. 

Hungarian Central Banker: The Euro Is a Failure, an Exit Mechanism Is Needed In an intervention that found large resonance in Germany and Italy, the head of the Hungarian Central Bank Gyorgy Ma- tolcsy exposed the euro as an “ill-avised decision” and called for introducing an exit mechanism for member countries. Such a mechanism could be part of a revision of the Maas- tricht Treaty on the occasion of the 30th anniversary of that Treaty in 2022, Matolcsy proposed in an op ed in the Nov. 3 Financial Times. 

Born as a political project to contain Germany, the euro turned into the opposite, the Hungarian central banker ex- plains: “We rarely admit the real roots of the ill-advised deci- sion to create the common currency: it was a French snare. As Germany unified, François Mitterrand, then French presi- dent, feared growing German power and believed convincing the country to give up its Deutschemark would be enough to avoid a German Europe. The chancellor of the time, Helmut Kohl, gave in and considered the euro the ultimate price for a unified Germany. They were both wrong.” 

This is the first time a European central banker echoes what this newsletter and the Schiller Institute have been saying for 30 years. As Helga Zepp-LaRouche recalled in a speech on Nov. 9, after the fall of the Berlin Wall (cf. above), then British Prime Minister Margaret Thatcher launched a “Fourth Reich” campaign, French President Mitterrand demanded that Ger- many should give up the d-mark and adopt the euro; U.S. President Bush Sr. demanded self-containment of Germany through further integration into NATO and the EU, and the acceptance of the Maastricht Treaty. That led to the “austerity regime which is now leading to the detonation of the EU, the tensions between East and West, and North and South.” 

Gyorgy Matolcsy notes that the inclusion of southern Euro- pean economies in the eurozone allowed Germany to become the strongest global export machine in the EU, but the Ger- mans did not use the advantage to upgrade their infrastruc- ture or invest enough in future industries. In the end, “most eurozone countries fared better before the euro than they did with it. According to analysis by the Centre for European Policy, there have been few winners and many losers in the first two decades of the euro.” 

To get out of the trap, the Schiller Institute calls for Europe to join the New Silk Road. While Mr. Matolcsy does not go that far, he correctly calls for an exit strategy from the failed euro system: “EU states, both in and outside the eurozone, should admit that the euro has been a strategic error. The aim of building a global western currency that vies with the dollar was a challenge to the US. The European vision of a United States of Europe has resulted in both open and hidden US warfare against the EU and the eurozone in the past two de- cades. We need to work out how to free ourselves from this trap.... Members of the eurozone should be allowed to leave the currency zone in the coming decades, and those remain- ing should build a more sustainable global currency. Let’s cel- ebrate the 30th anniversary in 2022 of the Maastricht treaty that spawned the euro by rewriting the pact.” 

The Perfidious Plan to Make the European Investment Bank a “Climate Bank” A fight has broken out in Europe over the attempt to trans- form the European Investment Bank (EIB) into something called a “climate bank” which would be used to stop all in- vestments into fossil fuels and “carbon-based” technologies by next year. The move, driven by London-centered environmen- talist foundations, would put the EIB (the world’s largest mul- tilateral financial institution) in sync with the Bank of England, European Central Bank and others, that are de facto seeking to deindustrialize Europe completely by restricting credit to wind and solar farms. Even the German government, notori- ous for its decision to phase out nuclear and coal-fired power, has so far refused to back this move, as has the Italian gov- ernment. 

Former French presidential candidate Jacques Cheminade issued a statement calling for the defeat of this attempt. The Luxembourg-headquarted EIB, which identifies itself as the EU’s lending arm, has a capital of nearly €250 billion and €400 billion in outstanding loans, and has financed numer- ous infrastructure projects in Europe over the past decades. It has issued “green bonds” for the past ten years, but for projects to improve energy efficiency, connectivity and trans- portation. 

But in July 2019, a new policy was circulated to EIB direc- tors to “transform itself into the EU Climate Bank.” That was not adopted at the bank’s October meeting, due to national resistance. The environmental lobby is trying to work through EU Commission First Vice President Frans Timmermans, and European Commission President-Designate Ursula von der Leyen, to force through a decision in November. 

Jacques Cheminade noted that if the EIB does decide to radically halt all funding for fossil fuel energy infrastructures, beyond its destructive impact on the physical economy by low- ering energy density and energy efficiency, that could be the tipping point of the entire financial system It could quickly 

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lead to the depreciation of over $20 trillion in fossil-fuel re- lated assets worldwide. 

Germany Hit by Severe Political Paralysis Rather than offering yet another academic analysis of the po- litical landscape in Germany today, one of the country’s most popular comedians, Hape Kerkeling, put it this way on Nov. 8: “there has never before been so little chancellor as right now”. In other words, Germany has no effective government at the moment. Indeed, the coalition government in Berlin of CDU- CSU and SPD is doomed to inaction, as both sides paralyze the other with populist initiatives and new intrigues, and Chancel- lor Angela Merkel is simply sitting on top, without acting. 

The degeneration of politics is naturally noted by the popu- lation, but opinion polls show that their discontent is directed against the coalition parties rather than against Angela Merkel herself. The latest ZDF national television poll has 70% in favor of Merkel’s staying in office for the full term. That does not mean that she is particularly liked, but just that no other option is acceptable for the broad majority of the electorate for the time being. The closest competitor would be Friedrich Merz, the vice chairman of the influential Economic Council of the CDU whose ratings are on the rise. He is favored by 42% as potential new Chancellor, whereas Annegret Kramp- Karrenbauer, the national CDU party chairwoman, only has 19% support. Even Markus Söder, party chairman of the Bavarian Christian Social Union (CSU), is significantly ahead of Kramp-Karrenbauer, with a rating of 29%. 

The vacuum created in the CDU after the resignation of Merkel from the party chairmanship in Dec. 2018, and the paralysis of her government are accelerating the decline of the party, as seen in the Oct. 27, state parliamentary election in Thuringia. The CDU lost a third of its votes and is no longer able to form a government majority against the two winners of the election, the leftist Linke and the rightwing Alternative für Deutschland. 

On the national level, it doesn’t look any better for the CDU. The latest ARD national poll puts the CDU/CSU at 26%, were elections to be held now, which is down from the 31% it got in the last national elections. But it’s still way ahead of the Social Democrats, who are down to 14% in this ARD poll. The Merkel government’s obsession with climate change as the top and only priority of politics has substantially weakened the CDU and strengthened the Greens, which received 22% in this poll. 

In the event of national elections now, the CDU-CSU and SPD would not be strong enough to form a new Grand Coali- tion. Friedrich Merz noted last week that the paralysis in Ber- lin and in the CDU has “spread a fog over the entire country”. But there is little chance that he would offer a remedy, if he is designated the CDU’s chancellor candidate at the national party convention on Nov. 26-27. He is, after all, tightly con- nected to the leading financial elites, as active Chairman of the German branch of Black Rock, as well as being a board member Commerzbank, Axa, HSBC Trinkaus & Burkhardt, DBV Winterthur Holding, and other such locusts. 

The Conspiracy against Donald Trump Thickens Despite the failure of the many previous attempts to remove Donald Trump from power ever since his election, the appa- ratus known as the “deep state” together with the Democratic 

Party leadership has escalated the impeachment drive. The escalation is widely seen as a response to the investigation conducted by prosecutor John Durham into the origins of the Russiagate scandal, which will undoubtedly reveal the dirty role of many in the Obama Administration and the intelligence agencies. 

The ostensible grounds this time, as we reported, is his al- leged pressuring of Ukrainian President Zelensky to support an investigation into possible corruption involving his presi- dential rival Joe Biden, or else face a cutoff of U.S. military aid. This story, based on a phone call from last July, was only recently revealed by an alleged “whistleblower”, whose identi- ty has since been revealed. The person is a CIA agent who also worked with President Obama’s National Security Council. of the CIA (cf. SAS 45/19). As it turns out, his attorney Mark Zaid already began tweeting, back in January 2017, that “the coup has started” and “impeachment will follow”. 

As this person admits, he personally had no first-hand knowledge of the telephone call between the American and Ukrainian Presidents, but only “heard about it” from others. That would normally have disqualified him for the status of whistleblower, except that the rules were rewritten in Janu- ary of this year, certainly in anticipation of the Trump case, to allow hearsay evidence. 

William Binney, a founding member of the VIPS and top technical director of the NSA who blew the whistle on that agency’s illegal mass surveillance two decades ago, has much to say on the subject. Invited to the LaRouchePAC Fireside Chat on Nov. 7, he noted that this person should not be called a “whistleblower”, but a “rumor-blower”, because he did not listen to the relevant phone call himself. 

On the same occasion, Binney brought up the case of Roger Stone, a former adviser to Donald Trump, whose trial opened last week. He is accused of two counts of obstruction of jus- tice, one for alleged lies to the House Select Intelligence Com- mittee, and one for threatening a witness, in addition to the charge of making false statements to Congress. They are all related to the prosecution’s attempt to establish that Stone acted as a link between the Trump campaign and WikiLeaks and “the Russians”. However, the entire charge is bogus, as Binney pointed out, because the documents turned over to Wikileaks were not hacked, but rather leaked from the inside, and unrelated to Russians (cf. below). Binney submited an affidavit to the court in the Stone case proving exactly that point, but apparently it is being ignored, he said. 

The public hearings in the impeachment procedure are scheduled to begin on Nov. 13 and could produce some sur- prises. 

Urgent Appeal to Save the Life of Julian Assange The hypocrisy is truly breathtaking when it comes to the issue of whistleblowers. Those in the United States who are now demanding full state protection and support for officials who deliver damning evidence on Donald Trump, are the same who demand exemplary punishment for such courageous whistle- blowers as Edward Snowden, Julian Assange, Bill Binney, etc., who disclosed real anti-constitutional activities and crimes by the government. 

The case of Julian Assange is now critical, as his physical and mental health is rapidly deteriorating, due to the psycho- logical torture he is suffering during his detention in a British 

EIR STRATEGIC ALERT WEEKLY NEWSLETTER 3 N° 46-47 / 2019 

prison. If tried in the United States, he risks being sentenced to several decades’ imprisonment. On Nov. 5, the LaRouche Political Action Committee put out a statement denouncing the apparent attempt to eliminate Assange. It begins: 

“Killing the witness to a crime is the ultimate obstruction of justice, and now, just that is being perpetrated on British soil in collaboration with U.S. officials. There is one person alive in possession of the means to quickly put the lie to the entire Russiagate hoax perpetrated primarily by British intel- ligence and the British-infiltrated and -controlled elements of the U.S. intelligence community. That is Julian Assange.” On background, the CIA and other actors of the intelligence community claim that the leaked emails of the Democratic National Committee and of Hillary Clinton adviser John Pod- esta, which were turned over to WikiLeaks and Assange, had been hacked by “the Russians” in order to favor the election of Donald Trump. 

However, the Veteran Intelligence Professionals for Sanity demonstrated forensically that those DNC files were leaked, not hacked over the Internet by the Russians. 

Assange himself has repeatedly said that he received leaked files and these files did not involve Russian state actors. His offers to provide his evidence to the U.S. Justice Department were rejected. 

“Assange is presently being held in London’s Belmarsh Pris- on, her Majesty’s hole for the most dangerous criminals in Britain... awaiting extradition to the United States. Nils Melzer, the UN Rapporteur on Torture and other Cruel and Inhumane or Degrading Treatment or Punishment, warned on Nov. 1 in a statement regarding the condition of Assange: ‘Unless the U.K. urgently changes course and alleviates his inhumane situ- ation, Mr. Assange’s continued exposure to arbitrariness and abuse may soon end up costing his life.’” 

Despite previous appeals by Melzer, the U.K. has not under- taken any measures of investigation, prevention and redress required under international law, he charged. Assange “con- tinues to be detained under oppressive conditions of isolation and surveillance, not justified by his detention status,” and his “access to legal counsel and documents has been severely ob- structed.” This, he said, had effectively undermined “his most fundamental right to prepare his defense.” The LaRouche PAC statement calls for all UN states to take action to stop this political atrocity. 

Mexico : How to Defeat the Takeover by Dope, Inc. Drug cartel gunmen struck in Mexico on Oct. 17, taking Culi- acán, a city of nearly one million people and the capital of the state of Sinaloa, effectively hostage, and threatening to extend their deadly assault to the entire northwest of the country. It was a strategic attack that continues to shake Mexico, and has been followed by further narco-terrorism, including the murder of nine members of a small Mormon sect in northern Mexico. 

Most media have presented the cartel assault as a response to a poorly-prepared Mexican government move to arrest a major drug-trafficker, Ovidio Guzmán, the son of kingpin “El Chapo” Guzmán, currently jailed in the U.S. But that misses the reality behind the cartel. As Lyndon LaRouche continually stressed, the drug traffic is a trillion dollar per year business run from the top by City of London and Wall Street financial 

interests (known as “Dope, Inc.”), and is deployed as a strate- gic weapon by them. 

Mexico cannot win the war against this international impe- rial power alone. After the Culiacán assault, Mexican President López Obrador and U.S. President Donald Trump agreed to take joint action against a key vulnerability of the cartels: the flow of illegal weapons from the United States into Mexico, which provides the advanced armaments they use. Govern- ment agencies of both countries concur that some 70% of the weapons used by the drug cartel killers in Mexico come from the U.S., and the majority of them are military grade. U.S. and Mexican security officials later met at the U.S. Embassy in Mexico City on Oct. 21 to set into motion Operation Frozen. 

It is in this context that the LaRouche Citizens’ Movement of Mexico (MOCILA) issued an open letter to President López Obrador on Oct. 25 identifying the crucial additional elements needed for a successful common victory. That letter included the following four specific steps: 

1) Fire Olga Sánchez Cordero, the government minister “who is a leading proponent of Dope, Inc.’s policy of drug legalization, and a Trojan horse inside your government.” 

2) Freeze or hermetically seal the US-Mexico border to both arms flows south and drug flows north, by using ad- vanced technologies including laser detection, MRI, X-rays and more. This is a key component of LaRouche’s long-standing anti-drug plan (see https://larouchepub.com/eiw/public/2019/ eirv46n12-20190329/42-48_4612.pdf ) 

3) Negotiate an agreement with China to cooperate on 100% stopping the flow of fentanyl into Mexico, and espe- cially the state of Sinaloa, from where it is increasingly being cut to lower concentrations for trans-shipment to the United States. “This will establish effective triangular cooperation among Mexico, China, and the United States, since China and the United States have already reached a significant bilateral agreement to stop the fentanyl scourge.” 

4) Pursue further triangular cooperation to bring major in- frastructure and other development projects to Mexico and Central America, in the context of the Belt and Road Initiative (BRI). This will offer productive employment for the region’s youth, to free them “from enslavement to the drug trade and its terrorist gangs, and from the desperate need to migrate to the United States to ensure simple survival for themselves and their families.” 

The open letter notes that a global paradigm shift toward the BRI would also “entail the bankruptcy re-organization of the entire trans-Atlantic financial system, which is the driving force of the international drug trade.” 

Note to Subscribers This is a double issue. Your next issue of the Strategic Alert will be dated November 28. 

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EIR STRATEGIC ALERT WEEKLY NEWSLETTER 4 N° 46-47 / 2019