E.I.R.STRATEGIC ALERT WEEKLY NEWSLETTER Volume 34, No. 24, June 11, 2020

E.I.R.STRATEGIC ALERT WEEKLY NEWSLETTER

Volume 34, No. 24, June 11, 2020

 

The G7 Is Outdated and Incapable Just five months ago, no one could have imagined the situation that prevails in the world today. The Coronavirus continues to take a dramatic toll on the entire world economy, including in the developed sector, which was fully unprepared to tackle a health emergency. UN officials are warning almost daily of the hunger catastrophe “of biblical proportions” that threatens the Third World, on top of the locust plague and the spread of disease.    And now, the United States is engulfed in a wave of unrest and riots that threaten to take on civil-war proportions, spurred on by  deployment of traditional gang-counter-gang tactics. Throughout the trans-Atlantic world, protests against the lockdowns and mistrust of the political elite have grown rapidly. As Helga Zepp-LaRouche observed in opening a Schiller Institute webinar June 6, all this combined has ripped the veil off the so-called neo-liberal economic system, showing just how fragile it is (cf. below). The choice she laid out is stark indeed: either the roadmap for restarting the world economy proposed by the Schiller Institute, including Lyndon LaRouche’s Four Laws, is implemented now, or the world risks to sink into a new dark age. To deal with these issues requires international cooperation, in particular among the four major powers (U.S.., China, Russia and India), to overcome the current dangers and commit to fight for the common aims of mankind. In that respect, Donald Trump took a welcome initiative by proposing to expand the meetings of the G7 to include the leaders of Russia, Australia, India and the Republic of Korea. He said the current G7 format is “very outdated”, and does not “properly represent what’s going on in the world”.He called President Putin on June 1 to discuss the possibility that he attend the G7 meeting in September. But for whatever reasons, Trump left China out of the equation, which means it has little chance to fly. The Russian response correctly noted that without Chinese participation, it will not be possible to implement any major global initiatives. Nonetheless, the invitation to Vladimir Putin created a tremendous backlash in the U.S. But Trump brushed off the criticism, by noting June 3 on Fox News that “half of the [G7] meetings are devoted to Russia” anyway, therefore, if Putin were in the room,  “it would be much easier to solve” the 

problems discussed. But solutions are precisely what many of Trump’s adversaries in the establishment want to avoid. One area where cooperation has remained at least partially exemplary is space exploration. Following the successful launch of Dragon to the ISS, Roscomos, NASA, ESA and other space agencies are looking forward to working more closely together. European Central Bank Declares War  on German Constitutional Court On June 4, the European Central Bank took decisions which have been described as a major step, economically, in the direction of hyperinflation, and politically, towards the exit of the euro from Germany. In defiance of the warning issued by the German Constitutional Court, the ECB decided to  increase the volume of its new asset purchase program, called PEPP, and to drop all the criteria of “proportionality” still in place (cf. SAS 20, 21/20). The PEPP has been increased by €600 billion, going from €750 to €1,350 bn, and will be extended till at least June 2021. The principal of those assets will be reinvested until at least the end of 2022. In addition, the ECB decided to continue its purchases of €20 billion per month under the old APP program until the end of the year at least. That principal too, will be reinvested for an extended period of time if and when interest rates are raised. This will bring the ECB balance sheet to  €6.6 trillion, but the figure will go higher because the beast will require more meat. In fact, immediately after the ECB announcement, the “markets” demanded another money injection. In a discussion with government adviser Peter Bofinger, German economist and former IFO chairman Hans-Werner Sinn warned of the danger of hyperinflation. Once the economy recovers, all this extra liquidity should be drained, but the ECB “does not have a reverse gear”, Sinn commented. The political aspect of the ECB decisions was made clear by the head of the bank Christine Lagarde at the press conference following the board meeting on June 4, where she stated that EU law has primacy over German constitutional law: “I just want to remind you that the ECB is subject to the jurisdiction of the Court of Justice of the European Union. The PEPP has been judged by the Court of Justice of the European Union as in line with our policy mandate. We have 

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indeed taken note of the judgment, which is directed at the German government and at the German parliament, and we are confident that a good solution will be found. A good solution that will not compromise the ECB’s independence, will not compromise the primacy of the European Union law or the ruling of the European Court of Justice.” Going further in her declaration of war against the Karlsruhe court, Lagarde explained that the PEPP will be totally flexible, including the possibility to deviate from the ECB’s capital key, to counter risks of fragmentation of its monetary policy. The violation of capital key provisions by the ECB actions was a key point in the Karlsruhe ruling. Thus, the confrontation is expected to escalate, with new complaints likely to be filed. Markus Kerber, one of the plaintiffs in the recent case,  believes the new PEPP scheme could be forbidden. Speaking to Reuters , he said the ECB may have crossed a legal red line by easing two safeguards, the capital key and the one-third ceiling for each member-state, which have allowed it to buy 2.2 trillion euros’ worth of government bonds since 2015 with the blessing of the European Court of Justice (ECJ). “The programme raises a number of questions,” Kerber said. “Is this still a temporary programme? Is it compatible with the European Court of Justice’s definition of monetary financing?” European Central Bankers Prepare  «Green» Dictatorship The current governor of the Bank of England, Andrew Bailey, his predecessor Mark Carney, who is now the UN Envoy on Climate and Finance, and Banque de France Governor François Villeroy de Galhau, argued for their new green financial bubble in a June 5 op-ed in the Guardian , headlined  “The World Must Seize This Opportunity To Meet the Climate Challenge.” By “opportunity” they mean the coronavirus pandemic. The trio of bankers claim that the “effects of the climate crisis are irreversible,” so we must transition to a net-zero emission world. They note further that “a coalition of 66 central banks, and supervisors”, the Network for Greening the Financial System, “has been working to ‘green’ the financial system to reduce the costly financial risks that these developments create.” The following day, the Guardian reported that the UK and the UN had attempted to revive the stalled Cop26 climate talks on June 5, with a coalition of businesses committing to a “Race for Zero”, meaning reducing emissions to a net zero by 2050. Close to 1,000 businesses have joined the campaign, including household names such as Rolls-Royce and the food and drink majors Nestlé and Diageo. China-U.S. Relations: Economic Decoupling and War, or Trade Deal Phase II? The drive to rupture relations between the United States and China has gone into high gear in the last weeks, with some serious talk of a complete decoupling gaining credence. The aim is to bring President Trump on board by blaming China not only for the Coronavirus pandemic  but also for the deepening economic crisis in the U.S. itself, and now, for good measure, for the passage by the People’s National Assembly of a new national security law for Hong Kong. Those pushing the decoupling include leading elements of the British monarchy and its intelligence operatives, including former chiefs of MI6 (cf. below), together with Trump admin

istration officials, such as Secretary of State Pompeo, Defense Secretary Esper, and Director of Trade and Manufacturing Policy Navarro; and some who claim to be Trump’s strongest backers, such as numerous personalities at Fox News and Steve Bannon, who briefly served in the Trump administration and is running a daily podcast aimed at manipulating the President’s base against Beijing. It also includes numerous elected officials, such as Senate Intelligence Committee chair Marco Rubio,and Democrats led by House Speaker Pelosi and Senate Minority leader Schumer. Those involved in the anti-China push have been opposed to Trump’s foreign policy from the start, especially his commitment to seek cooperation with Russia and President Putin, and were horrified by the personal friendship he forged with China’s President Xi Jinping at the beginning of his presidency. Following the exposure of the fraud of the Russiagate narrative, and Trump’s commitment to continue to pursue a good relationship with Vladimir Putin, some have adopted the old Kissinger policy, of playing Russia off against China. Recently, there are signs that Trump, who faces a contested election in a highly polarized nation, is adopting elements of the anti-China push. While he initially praised the Chinese response to the Coronavirus, and reiterated the esteem he had for his “good friend” Xi, he now is giving some backing to the claims of Pompeo and others, that China’s “cover-up” of COVID19, and not the sorry state of the American health system, is responsible for the more than 110,000 deaths in the U.S. He has called for an investigation into the origins of the disease, and has said that he may call for China to pay reparations for the damage done. On Hong Kong, Trump has remained non-committal, saying he hopes things can be resolved peacefully, but he signed a memo on June 4, “Protecting U.S. Investors from Significant Risks from Chinese Companies”, which demands that Chinese companies listed or traded on American stock exchanges undergo audits by U.S. accounting firms. Since this is unlikely to be tolerated by China, if enforced, it could be a step toward economic and financial decoupling. In another unwise move, Trump called for expanding the G7 to include other nations, such as Russia, India and South Korea, but not China. He discussed this during a phone call last week with Putin, but the latter rejected the idea of excluding China. Insider View: Trump Is Not Yet  Firmly in the Anti-China Camp In a recent discussion with SAS , a top strategic analyst confirmed that the Pompeo-Esper-Navarro grouping is pushing for economic decoupling from China as part of a broader containment strategy, which includes more vigorous and open military posturing. However, in spite of recent administration White Papers and National Security statements calling China a competitor and an adversary, the top military brass opposes any military confrontation, aware that it could rapidly escalate to a nuclear confrontation, as U.S. conventional superiority can no longer be taken for granted. This analyst described the Pentagon position as one favoring “enhanced deterrence”, i.e., military build-up in the Pacific, but opposing a policy which relies on military force to enforce containment. He added that there is a third faction in the administration, one committed to constructive engagement, which recognizes that a decoupling would be a disaster for a weak U.S. 

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economy, which has yet to develop a real policy for reviving domestic manufacturing and consumer goods production to replace goods presently imported from China. This group includes Treasury Secretary Mnuchin and Trade Representative Lighthizer, and reflects the views of many corporate and farm leaders, who have supported Trump’s trade negotiations. On June 5, Lighthizer said he feels “very good” about the results of Phase One of the trade agreement, as China “is honoring the pact.” He said“I think the people with whom I negotiated this are honorable people and want it to be a success,” stating that he thinks progress is being made -- in spite of COVID19 and Hong Kong -- to move ahead with the next phase of negotiations. United Kingdom: The Empire’s Elite  Still Can’t Stomach the Loss of Hong Kong The self-styled elite in the United Kingdom is doing its best to prevent constructive relations between the West and China, using whatever pretext happens  to be making the headlines. Just to give a few examples: * The new law passed by the Chinese legislature to ensure the security and stability of Hong Kong has created an uproar (cf. SAS 22, 23/20). Prime Minister Boris Johnson himself joined the fray with a sensational, but unworkable, proposal: in an op-ed in The Times of London, he said he was ready to offer the right to live and work in the UK to the nearly 3 million Hong Kong citizens who hold or are eligible to hold a British National Overseas passport. Such visas would be for 12 months and renewable. His op-ed does however specify that such a visa would become available only if China implements the new security laws that allegedly strip Hong Kong of its “traditional freedoms”. (Those it allegedly enjoyed as a full-fledged colony and dirty money center of Her Majesty for over 150 years?) * The Telegraph ran an “exclusive” interview with the former head of MI6, Sir Richard Dearlove, in which he claims that the COVID-19 most certainly escaped from the Wuhan Virology Lab. He cites a new scientific report that suggests “the virus did not emerge naturally but was man-made by Chinese scientists.” That implies, according to the former spy master, that China may have to pay “reparations” for “the death and economic catastrophe wreaked upon the world.” However, one of the two authors of the report cited, John Fredrik Moxnes, the chief scientific adviser to the Norwegian military, asked for his name to be removed from the research. And two publications, Nature and the Journal of Virol ogy considered the research “unsuitable for publication.” But such opinions do not deter Sir Richard, whose credibility has been severely damaged, ever since he peddled the line about Saddam Hussein’s alleged super weapons of mass destruction, which led to the war against Iraq. * Seven former British foreign secretaries, from both the Labour and Conservative Parties, have just called on the British government to take the lead in coordinating the international response to China’s Hong Kong policy, i.e., to attack Beijing. The call was made in a letter to Foreign Secretary Dominic Raab. Their credentials, however, as peace-loving humanists are more than tarnished. Two of the signatories are David Miliband and Jack Straw, who won infamy for having conspired with then-Prime Minister Tony Blair to get then U.S. President George Bush to launch a war of aggression against Iraq 

in 2003. A third, David Owen, gained notoriety for his role in NATO’s war against Yugoslavia. From the conservative party side, William Hague helped oversee the ouster and murder of Libyan leader Col. Muammar Qaddafi in 2011, plunging that nation into a civil war that is still ongoing. Would You Trust the FBI?  Or Russiagate Fraud Exposed News of the investigation into the “Russiagate” affair has been overshadowed by the focus on the current wave of protests in the United States. However, crucial elements on the attempted coup against Donald Trump launched from within the FBI and the Department of Justice have now been confirmed by one of the main insiders. On June 2, the former number two of the DOJ, Rod Rosenstein, testified before the Senate Judiciary Committee. He is the person who appointed Robert Mueller as Special Counsel in May 2017, after his boss, Attorney General Jeff Sessions, recused himself from overseeing the investigation of allegations of Trump’s connections with Russia. In his testimony, however, when asked by Committee chair Senator Lindsey Graham if he would agree there was “no there there” (meaning no evidence) to support “the concept that the campaign was colluding with the Russians in August 2017,” he responded, “I agree with that statement.” The wording of the question was a reference to a text sent on May 18, by FBI Deputy Counterintelligence Director Peter Strzok, who had been in charge of the FBI investigation of Donald Trump since July 2016.  In that text, to FBI Attorney Lisa Page, he wrote of his “gut sense and concern that there’s no big there there.” That means that when, in Aug. of 2017, Rosenstein signed the memo defining the scope of the investigation led by Robert Mueller, he already believed (as did Strzok) that there was no substance to the charges! Nonetheless, that investigation went on for nearly two years before being terminated with no charges found (cf. SAS 13, 14/19). Further, Rosenstein admitted that he had not drafted the memo, but it had been prepared by Mueller’s team, largely based on the charges in the fraudulent dossier written by Christopher Steele, which had been discredited by FBI and Department of Justice (DOJ) officials at least six months earlier! That was not the only astonishing admission from the former Deputy Attorney General. He also stated that although he signed the submission to the FISA Court requesting a surveillance warrant of one-time Trump campaign official Carter Page, he had likely not “read every page” of it. Rosenstein testified that he was unaware of the numerous irregularities and errors (later revealed by DOJ Inspector General Horowitz) in the documents presented by the FBI, adding that, in hindsight, he should not have signed it. Rosenstein also admitted that he had relied entirely on the FBI in his decisions, and identified a problem with Andrew McCabe, who became acting FBI Director after President Trump fired Jim Comey. He said that McCabe was “not fully candid with me” in their discussions. McCabe responded immediately, accusing Rosenstien of lying. Unfortunately, Sen. Graham and his colleagues, while denying any collusion by Donald Trump, are continuing to adhere to the line that Russia had interfered with the election.  This, despite the recent release of interviews conducted in House Intelligence hearings, which showed that top intelligence officials, who had publicly asserted that there had been Russian 

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meddling and Trump collusion, admitted under oath that they had seen no evidence to back up these charges.  SI Webinar: “Restarting the World Economy under Conditions of the Corona Pandemic” The above title was the theme of a webinar in German held on June 6 by the Schiller Institute. The two panels of the event featured hard-hitting attacks on the dominant ideologies today, in their monetarist and environmental variants. After introductory remarks by Wolfgang Lillge of the Berlin office, SI Chairwoman Helga Zepp-LaRouche gave a keynote on the principles that are indispensable for taking the global economy out of the current depression. She raised the recent warning by the ILO that of the 3.5 billion persons worldwide working in the “informal economy”, i.e., with no dependable income, 60% are affected by the depression. This is a wakeup call to act, she said. However, the condition of the world today is not the result of a series of mistakes or misconceptions, she added. It is a product of the continuity of Malthusianism, which she illustrated with an infamous quote from Thomas Malthus in which he called for doing everything to reduce the population—including a return of the plague! The same degraded image of man, ignoring the value of every person as a creative being, is the root of both the deliberate policy of non development of the Third World today, and the racism in the United States and elsewhere. The world must be freed of this oligarchical worldview, Zepp-LaRouche urged, and the path to do so has been laid out in the new Schiller Institute program for the creation of 1.5 billion productive  jobs in the world (cf. SAS 23/20), and for implementation of a global health system. This worldview starts from the premise that the only real source of wealth is the creativity and productivity of the individual, reflected in mankind’s capability to study the laws of the universe and apply them for progress. The first panel was opened by Gerd Marks, an industrial consultant, who elaborated on the new values and innovative technologies that point the way toward a new future. Opposed to that are the green policies carried out under the banner of “climate protection”, which have significantly increased indebtedness, caused an erosion of real wealth, and generate political dictates in violation of the laws democratically passed. To defend the general welfare and economic development, Marks argued, there must be a permanent improvement in production processes, in which automatization plays a key role, as well as an abundant, cheap supply of electricity, which is independent of weather conditions. The current “green” plans, on the contrary, aim to manage scarcity, rather than create real wealth. Mr. Marks was followed by Bernhard Perschel, a farmer and hog-breeder, who spoke of  the existential crisis in agriculture today, which the pandemic and the related collapse of meat production have severely exacerbated. While refuting the outrageous “farmer-bashing” spread by so-called environmentalists, he made a plea for saving family farms from a complete collapse, which could only benefit the giant companies in the agribusiness sector, and also from the bureaucrats in Brussels and their mindless “regulations”. Rainer Apel of  EIR then provided insight into the EU Commission’s radical green agenda, and obsession with achiev

ing “emissions neutrality” in Europe by 2050. This can only lead to a worsening of living conditions for the population at large. Against that, an alternative must be posed, focussed on development of the real economy, particularly industry and infrastructure, such as modern rail corridors, maglev grids, waterways, space technologies, and in the medical sector. Why Germany Too Needs Nuclear Power The second panel of the webinar was dedicated to a discussion of nuclear energy. It began with a presentation by Dr. Armin Azima, a nuclear physicist, on thermonulear fusion. In terms of state-funded fusion projects, the EAST in China is currently the most advanced, hopefully followed soon by the ITER in France, while the FF2 design, run by the LPP Fusion team, is the most promising among privately-run projects. It focuses on a-neutronic technology, based on the generation of helium ions that can be used directly for power generation with no other mediating source. Azima stressed the importance of this technology for developing a propulsion system for interplanetary missions to Mars and beyond, which cannot be achieved on the basis of chemical propulsion. Dr. Alois Hoeld, a retired nuclear safety engineer who worked with the AEG company, debunked the fake environmental arguments about a “clean environment”, when nuclear power is needed to supply sufficient energy to a growing world population. In fact, 451 nuclear reactors are currently in operation worlwide, with several hundred more under construction or planned. As for the scare campaign around radiation, he pointed to the simple fact that there is natural radiation on the Earth all the time. Polemically, he said that the real “Fukushima catastrophe” did not happen in Japan, but in Germany, which decreed a total exit from nuclear power shortly after that accident. The final speaker of the second panel was Dr. Anton Failer of the Gundremmingen nuclear plant, which supplies 10% of the electricity consumed in Bavaria, but is scheduled to be shut down by the end of 2021! He recommended that Germany and its neighbors look beyond their own doorstep, for example at the successful South Korean example. Whereas more than 40 years ago, South Korea still imported nuclear power technology, it has consistently built up its own capacties  with 10 such reactors already built and more to follow. The South Koreans have also developed an efficient method of streamlining logistics, reducing the time needed to build a reactor to only 48 months, and also increasing the use of automatization. Dr. Failer concluded his presentation with remarks on the world’s first floating nuclear plant, the “Academic Lomonossov” which just recently begun operating in far-eastern Siberia. The videos are available at: https://www.youtube.com/ watch?v=8amrMf8GEs4.

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