E.I.R.STRATEGIC ALERT WEEKLY NEWSLETTER Volume 34, No. 3, January 16, 2020

E.I.R.STRATEGIC ALERT WEEKLY NEWSLETTER
Volume 34, No. 3, January 16, 2020

War Avoidance Demands Involvement  of Russia and China In the wake of the U.S. drone strike that killed Iranian General Soleimani, the chairwoman of the Schiller Institute Helga Zepp-LaRouche immediately issued a call for an emergency summit among Presidents Trump, Putin and Xi to defuse tensions in Southwest Asia and create a comprehensive peace plan for the region (cf. SAS 2/20 for the full statement). The escalation toward a greater conflict has thus far been avoided, but the danger remains, as long as long as geopolitics continues to dominate international relations. That policy of permanent warfare honed by the British Empire, of pitting nations against each other to better “divide and rule”, was the trigger of all the major wars of the past century, as a Jan. 9 statement by the Schiller Institute notes. It continues: “Nowhere have the effects of that evil imperial policy of pitting nations, peoples, religions and factions against each other been more evident than in the Mideast, where that policy was codified by the Sykes-Picot Treaty established by the British and French imperial powers after World War I. “Understanding that history, Lyndon LaRouche, in a speech delivered 15 years ago, provided the framework in which to understand and act on today’s crisis. “ ‘And when you look at the possibilities for this region, like Southwest Asia, the only chance will come, not from inside Southwest Asia. We will do, and must do, what we can, for that area, to try to stop the bloodshed, the agony, to prevent the war. But we will not succeed, until we change the history, change the world in which this region is contained.’” In that spirit, Presidents Trump, Putin and Xi are urged to not only address the immediate danger of war in Southwest Asia, but to create a New Paradigm for the world, based on the principles of the 1648 Treaty of Westphalia, which ended the Thirty Years War in Europe. At the time, the statement notes, warring nations broke the cycle of retribution and revenge and agreed to act for the “advantage of the other.” The Schiller Institute’s Jan. 9 call proposes that that paradigm “must end geopolitics and imperialism, and establish a new financial and strategic architecture for the world, based on defense of the sovereignty and cultural integrity of all nations.” There have been echoes of the Schiller Institute’s proposal
for an emergency summit by former U.S. Defense Secretary William Cohen and in Germany by former government official Willy Wimmer (cf. items below). Though they did not include China in their statements, they were both explicit on the role that Russia must play. To get the message out more broadly, the Schiller Institute is organizing an international day of action on January 15. The War Party in Washington Guns for Teheran The decision by President Trump to order the killing by drone of Iranian General Soleimani (cf. SAS 2/20) set off a greater danger of escalation than he had likely expected. In his address to the American people on Jan. 8, he again asserted that he had made the right decision, based on intelligence that said an attack against Americans orchestrated by the general was “imminent”, therefore it was necessary to act immediately. However, that assessment has been seriously called into question by a number of experts. And that, in turn, has turned attention to the ongoing battle over strategic policy within and around the United States government. Coming back to Trump’s statement, he called Iran a “leading sponsor of terrorism”, which for that reason, should never be allowed to develop nuclear weapons. In that context, he urged American allies, but also Russia and China, to work with the U.S. to draft a new treaty to replace the JCPOA negotiated by President Obama. At the same time, Trump expressed satisfaction that Iran’s counterstrike, which hit two U.S.-Iraqi bases in Iraq, had produced no casualties. He even opened the door for potential future improvement in relations, stating that “ISIS is a natural enemy of Iran.  The destruction of ISIS is good for Iran, and we should work together on this and other shared priorities.” On Jan.3, he had stated clearly that “We do not seek a war, we do not seek regime change.” (However, the US President himself as well as his entourage have supported the anti-government protests in Tehran, which are openly pushed by western media. In fact, the British ambassador to Iran was even briefly arrested for “provoking suspicious acts” after participating in a “vigil” in connection with the demonstrations.) While the de-escalation of tensions seems to be holding, there is no guarantee that it will last, given that warfare and terrorism, strikes and counter-strikes, have characterized the
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strategic situation in that region since after the 9/11 attacks on the U.S. Given that Trump has been proceeding with a plan to withdraw U.S. forces now stationed in the region, it is certainly legitimate to investigate who in his administration would promote an escalation against Iran, which could precipitate another endless war. Have We Just Witnessed a “Palace Coup”  in Washington? Among the prominent experts questioning the intelligence behind the strike against Soleimani is Col. Lawrence Wilkerson (ret.), who served as chief of staff to Secretary of State Colin Powell during the run-up to Bush, Jr.’s Iraq war. (Powell is known for having used the fake dossier prepared by MI6 leader Sir Richard Dearlove, which claimed to have proof that Saddam Hussein possessed nuclear weapons, in his presentation to the United Nations that preceded the 2003 war against Iraq.) Referring in particular to Vice President Pence’s statement that Iran was involved in the 9/11 attacks, Wilkerson said “these lies are absurd”. Everything bad in the Mideast today, Wilkerson concluded, “the U.S. started when it invaded Iraq.” A similar question was posed in an article by journalist Patrick Lawrence, posted by Consortium News on Jan. 6. He asks who ordered the Soleimani assassination -- was it Trump?  Or was it “the hyper-hawks in the administration, chief among them Secretary of State Mike Pompeo and Defense Secretary Mark Esper,” who once again have usurped the President’s power “in a clear breach of the Constitution.” (https://consortiumnews.com/2020/01/06/patrick-lawrence- the-iranian-generals-intent/) (Note that Lawrence is the journalist who dared report on William Binney’s proof there had been “no Russia hack” in 2016, in an article published in the Democrat-oriented liberal weekly, The Nation , in 2017, at a time when next to no journalists would touch it, for fear of reprisals.) In Consortium News , he reviews the continued efforts by Trump to disengage U.S. forces from regime change globally, from North Korea, Venezuela, Syria and the Persian Gulf.  In each case, he writes that Trump was frustrated in his efforts by his former National Security Adviser John Bolton, who often teamed up with Pompeo, who served as CIA Director before becoming Secretary of State. Lawrence points to the failure to produce evidence of the plot attributed to General Soleimani as an indication that a “Pompeo-Esper axis” exists within the administration, which is coordinating with Joint Chiefs of Staff Chair General Mark Milley, to push the U.S. towards war.  Pompeo has long been an advocate of harsh measures toward Iran. Bolton, who was fired by Trump for sabotaging his efforts to resolve crises such as North Korea and Iran with diplomacy, responded to the Soleimani killing by offering his congratulations, saying he hopes “this is a first step to regime change in Teheran.”  Bolton remains an influential voice among neoconservatives, who oppose Trump’s intention to disengage militarily in the Mideast. Although officials at the State and Defense Departments insist Trump ordered the drone attack, Lawrence writes, but “if
we just witnessed what amounts to a palace coup led by these two departments, of what worth are these accounts?... But these assertions look very like after-the-fact efforts to put the best face on a boldly unlawful challenge to his authority. Let us not forget that Trump has long favored negotiation with Tehran rather than conflict.” Former Defense Secretary Cohen  Sees Putin as Peacemaker William Cohen is a Republican, who served as Secretary of Defense in the Clinton administration, and now heads the consulting firm Cohen Group. In comments to CNBC on Jan. 7 concerning US-Iran relations, he said, “I believe that President Putin is going to try and step in and be the peacemaker here. I think Putin is going to move in and say, ‘Let me help you solve this problem for you, Donald.’” He added that “I’m a bit more optimistic that the Russians will come in as a peacemaker.” He noted that the removal of U.S. troops from Iraq would be “something that the Iranians want and something that the Russians would be happy with.” Since Russia is now a “major player in Syria and throughout the region”, in his view, they are “going to come to the rescue at some point on Iran as well.” He believes the Russians would pressure Iran to compromise on the nuclear issue. Call from Germany for a Trump-Putin Summit in the Spirit of Westphalia Among various calls in Europe, the one made by former German government official Willy Wimmer comes closest to the approach urged by Helga Zepp-LaRouche. He presented it in a commentary for Sputnik News posted on the eve of Angela Merkel’s visit to Moscow on Jan. 11. For Willy Wimmer, a former CDU member of the Bundestag (from 1976 to 2009), the Chancellor’s meeting with Vladimir Putin only “makes sense if she brings along in her baggage a date for a summit between President Putin and President Trump, or if one develops out of her visit.” Such a meeting is all the more urgent since the assassination of General Soleimani, he explains. Wimmer concludes that Angela Merkel should make clear that in the future and in its relationship with Moscow, German policy will be defined by “the spirit of Münster and Osnabruck of 1648 [the two cities in which the Treaty of Westphalia was signed] and the 1815 Congress of Vienna”. That is, “a policy of good neighborship, of mutual advantage and effective war-avoidance under the rule of international law and its consensual development.” Wimmer however does not hide his skepticism over that prospect, since Merkel has so far failed to back Donald Trump against the coup plotters of the “Deep State and the intelligence services”, whom the US President has been fighting. The decisive question now, he continues, is whether Trump will be able to “find an understanding with other States, mainly Russia, and to implement it with deeds.” “One is amazed day after day at what is being done to prevent a meeting between Presidents Putin and Trump. You have a President who wants peace and must see how they take aim at him. On top of the European fronde alliance against President Trump is none other than the German Chancellor....” The meeting between the German and Russian leaders did
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not yield a message for a Trump-Putin summit, but they did stress their commitment to de-escalate various points of conflict. They agree that Berlin should a UN conference on the Libyan crisis, with a ceasefire as a precondition, they support the JPCOA as the basis for talks on the normalization of relations between the United States and Iran, and call support for lifting the sanctions hitting the Iranian economy. On the Nord Stream 2 pipeline, they remain committed to completing the project, and both called for the normalization of relations between Ukraine and Russia. Why the Stock Market Boom Is Very Bad News Any political analyst who does not factor the coming disintegration of the financial markets into strategic evaluations is utterly incompetent. We are very close to the implosion of the system, although nobody can forecast exactly when this will happen. Over the last four months, the financial system has been kept afloat by sheer money printing, courtesy of the Federal Reserve. During that time, the Fed’s balance sheet has increased by $413 billion, which makes an annualized rate of $1.1 trillion. This is a linear projection, that does not take into account increasing rates of QE and interbank liquidity injections. If one compares the curves of the Fed monetary expansion and of the S&P 500 index, they almost merge into one single curve, showing how the Wall Street index is totally dependent on money from the Federal Reserve. Zombie megabanks have used the stock market bubble in two ways: to purchase their own stocks and to speculate massively on the stock index. One example is JP Morgan Chase Bank, whose equity derivative bets have grown from $337 billion to $2.4 trillion dollars in the last decade alone! As in the case of Goldman Sachs, which we exposed last week, JPMCB is a federally-insured bank, which should not be allowed to trade in stocks, not to mention derivatives. Pam and Russ Martens’ website Wall Street on Parade , which is campaigning for a return to Glass-Steagall banking separation, has put the JPMCB case under the microscope. It shows that the bank is not only an outrageous example of a chartered bank taking massive high-risk bets backstopped by taxpayers’ money, but that the institution itself is one single giant liability, even among the swamp of zombie megabanks with high derivatives exposure. “According to the OCC’s report for the quarter ending September 30, 2019, all federally-insured banks in the U.S. which traded equity derivatives made $1.8 billion in revenues, of which JPMorgan accounted for $1.15 billion or 64 percent of all revenues of all banks trading stock derivatives”, the Martens wrote. “According to the OCC, for the quarter ending September 30, 2019, there was a total of $3.8 trillion in notional amounts of stock derivatives at federally-insured banks in the U.S. JPMorgan Chase accounted for 63 percent of that amount; Citibank accounted for 15 percent; Bank of America accounted for 14 percent. All other federally-insured banks and savings associations, of which there are a little over 5,000, accounted for the remaining 8 percent of stock derivatives held at taxpayer-backstopped banks.” As Lyndon LaRouche always stressed, there are only two ways in which this situation can end: through a chain-reaction bankruptcy of the system or through a hyperinflationary explosion in
the event that central banks continue with the folly of monetary expansion in the hopeless attempt to save the system. Beyond Pension Reform, French Protests Directed against Predatory Finance January 9 saw a new round of strikes and demonstrations against the French government’s “pension reform”. Nearly half a million Frenchmen took to the streets in over one hundred cities nationwide in the fourth national demonstration of that kind. The Paris RATP (metro, bus, tram) and the SNCF (national railroad system) have been spearheading the strike in the transport sector, which entered its 36th day. Over the past month, they have been joined, sporadically, by a vast array of employees from other categories: policemen, firemen, pilots and stewards, lawyers, nurses, doctors, teachers, etc. And that process is nowhere near ending. In one spectacular event, on Jan. 10, close to one hundred lawyers, whose retirement contributions are set to increase from 14 to 28 % of their income under the reform and 30% of whom say they will face closing shop, threw their robes on the floor of the Paris Appeals Court of Appeals in front of the media. On Jan. 14, 1200 emergency doctors will submit letters of resignation, since they refuse to continue operating their emergency rooms without adequate funding. Although the anger of the French population runs deeper than just the issue of pensions, the retirement scheme is more than a symbol. The reform claims to be fairer because it would do away with the favorable status of some professions, but in fact, if adopted, it would lead to a reduction of pensions by an estimated 20% because, rather than being based on a worker’s highest income years, it would take into account, not what pensioners need, but every single euro they contributed. Therefore, those with low-paid jobs or interrupted careers, especially women, will be the big losers, while the wealthy will both pay in less and be enticed to invest in private pension funds. Popular anger is thus increasingly targeting predatory finance capitalism. The world’s largest asset manager, BlackRock, which supported Emmanuel Macron’s election, has fully backed the French pension reform. And Macron regular meets with Private Wealth Managers such as BlackRock CEO Larry Fink. Adding insult to injury, from the standpoint of the population, French PM Edouard Philippe took the time, in the midst of the pension negotiations, to award the Legion of Honor to Jean-François Cirelli, the CEO of BlackRock France, who is an outspoken advocate of Macron’s proposals. Already now, given the uncertainty over the reliability of social security payouts and pensions, compounding the effects of inflation and negative interest rates, which are increasingly eroding people’s savings, life insurance schemes and deposits, many Frenchmen have turned to private insurance and pensions funds. The latest “compromise”, which was granted as a concession to one of the claims of the reformist unions such as the CFDT and UNSA, is a bad joke. The employers and employees unions are now called on to work out a financing scheme for the pensions which would lead to equilibrium in 2027, but without wage increases or reductions in pensions. In that imposed framework, they only can come up with schemes corresponding to the government’s original intention. And if they fail, the government will ram through its own plan. But
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it should be advised that closing the valves of a steam-cooker can only increase the force of its explosion. China’s Successful Model of Combating Terrorism with Development One of the most vile aspects of the campaign in the transAtlantic world against Beijing’s policy is the accusation of large-scale human rights violations of the Muslim population in Xinjiang province. If one were to believe the claims churned out daily by the mainstream media, China has created “concentration camps” in which Uighur Muslims are locked up, forbidden from praticing their religious beliefs and language, and forced to carry out slave labor, while children are holed up in boarding schools and prevented from seeing their families. The New York Times , that prominent daily which did not see fit to denounce the Bush-Obama wars that killed so many Muslims in the Middle East, is among those leading the charge. In reality, the Chinese authorities have engaged in depth efforts to develop Xinjiang province economically, as part of the Belt and Road Initiative, and to stem the spread of extremist Wahhabi terrorism there (cf. SAS 50/19). By all accounts, the development in Xinjiang province has been impressive. Extreme poverty fell from 22.8% in 2014 to 6.5% at the end of 2018, which represents 2.3 million less poor. The goal of reducing that to zero by the end of 2020 is on target. Moreover, 2,400 villages which had little or no electricity have now been fully electrified, providing electricity for 9 million people. In the first 11 months of 2019, 75,000 jobs for poor residents were created, while 180,000 people were provided with free vocational training, to learn a trade, while acquiring an overall education. These are likely the people that western media describe as “detainees” in slave labor camps! As for the alleged repression of Islam, the fact is that the number of mosques in Xinjiang since the reform and opening up has increased from 2,000 to 24,000 and the number of religious personnel rose from 3,000 to 29,000. In the boarding schools, which are free of charge, the children are not forbidden to speak minority languages,  but they must also learn the Chinese national language, which is by the way standard practice in all European countries. The “re-education” camps that do exist were set up for those young people who had been recruited, either actively or passively, to the Islamic terrorist and Wahaabite movements that spread throughout all of west and southwest Asia, in the wake of the Afghanistan war and increasingly so after the Iraq war. Most of those movements, as EIR has documented, were steered out of “Londonistan”. Since the Chinese government  launched a serious program for training and educating those young people, there have been few to no more terrorist attacks in the province. On last Dec. 9, Beijing announced that all those camps have now been closed, after successfully completing their programs. Chinese Foreign Minister Commits  to Reconstruction Efforts in Syria Chinese Foreign Minister Wang Yi began his first diplomatic tour of the year on Jan. 7, with a five-nation trip to Africa, which took him to Egypt, Djibouti, Eritrea, Burundi and Zim
babwe. High on his agenda was the expansion of the Belt and Road Initiative, which has already brought unprecedented economic activity to the continent. On the first day of his visit to Cairo, Wang Yi met with the Secretary General of the Arab League, Ahmed Aboul Gheit, where they discussed President Xi Jinping’s call for building a China-Arab community with a shared future. He also thanked Gheit for the Arab League’s support for China on the issue of Xinjiang and invited Arab officials to visit the province to see firsthand the result of the government’s deradicalization and anti-terrorism efforts (cf. below). In an interview with the Egyptian daily Al Ahram , Wang was also asked about the role that China plans to play in the reconstruction of war-torn Syria. Efforts to seek political resolution and combat terrorism, he said, must be continued “on all fronts,” but at the same time “the reconstruction process should be advanced” to guarantee lasting peace and security for the country. Wang recalled that the Beijing government has provided a significant amount of humanitarian aid to Syria and has also held training programs on reconstruction. In addition, it supports the efforts of Chinese companies involved in rebuilding the economy, which in his view requires collective efforts by the international community. Yet, he observed in an obvious reference to the U.S., “some countries have been disrupting rather than contributing to it, by setting preconditions, politicizing and even blocking other countries’ participation...through unilateral sanctions and the so-called ‘long-arm jurisdiction’.” A major effort in Syria will involve retaking those oil fields now occupied by the United States and generally revitalizing the oil production process. In that area, China has acquired a great deal of experience in neighboring Iraq. China started working with Iraqi petroleum companies in 1981, and in 2009, China National Oil Corporation purchased a 37.5% stake in the Rumaila oil fields and later in the year, China Petroleum and Chemical Corporation purchased Iraq’s Addax Petroleum for $7.2 billion. After that, China did not buy Iraqi oil properties, but rather participated in every aspect of developing Iraq’s oil industry, both upstream and downshntream, including fulfilling oil drilling contracts, building a 272 km crude oil pipeline, oilfield development, drilling and well completion. During 2018 and 2019, there was a breakout, as China developed seven different Iraqi oil- and gas-related projects, including in 2018, with PowerChina announcing plans to construct an 300,000 barrel per day oil refinery that will include a petrochemical plant. Through this, and other similar projects, Iraq went from being just a primary oil producer to a producer and processor of intermediate and finished petroleum products.
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 Germ