E.I.R.STRATEGIC ALERT
WEEKLY NEWSLETTER
Volume 34, No. 43, October 22, 2020
There Is a Cure for Starvation: It’s Called Food! The Director of the UN’s World Food Program David Beasley, upon the WFP being awarded this year’s Nobel Peace Prize, has very wisely used the media attention to launch a world wide “call to action” to fight hunger. The WFP urgently needs an extra $6.8 billion in the next few months to avert the threat of a famine, that has become massively worse due to the Coronavirus pandemic and the breakdown of food supply chains (cf. SAS 42/20).
In the first nine months of this year alone, Beasley stressed on Oct. 13, 7 million people died of starvation – a truly stag gering number. In addition, one million lives have been lost due to COVID-19. But that is only the beginning, he warned, as “if we don’t sort out COVID, (the) hunger death rate could be 3, 4, 5 times that.”
In the past three years, before COVID, the number of peo ple on the brink of starvation had risen from 80 million to 135 milion – and now the figure is double that, up to 270 million. Beasley, who was proposed for the job by President Trump, noted on Oct. 9: “And quite frankly, with the billion aires making hundreds of billions of dollars with COVID, we’re facing the worst humanitarian crises since World War II. They need to step up.”
The European Union would do well to note Beasley’s warn ings of the three major consequences, if the starvation rate is not brought under control, one of which is “mass migration”. The other two he named are famines “literally of biblical pro portions” and destabilizations. “We have a cure against starva tion, and it is called food. And we need money to get it to the people that need the help.”
Helga Zepp-LaRouche fully supported the WFP’s call to ac tion in an emergency statement on Oct. 14, in which she also urged the international community to respond to the appeal launched by Ramasimong Phillip Tsokolibane, leader of the LaRouche movement in South Africa (cf. below).This crisis underlines the urgency of her own proposal for an in ternational “Committee for the Coincidence of Opposites” to contribute to the implementation of a global healthcare system. It would involve creating partnerships among health officials, retired doctors, nurses, police officers, universities, etc., in the advanced sector and those in the developing sec tor, most emphatically Africa. A major goal would be to “train
young people to help out as medical aides” in the tradition of the CCC program then carried out by U.S. President Franklin Roosevelt (cf. SAS 37/20).
Equally as important as creating teams of health care work ers, Zepp-LaRouche went on, is organizing the needed food supply. In Europe and the United States, there are many high ly skilled farmers who are losing their farms, or are prevented from producing because of the insane conditions created by the monetarist, neoliberal system.
“The only way to combat this famine is to double food pro duction and then start a tremendous shipment system to help the starving people, but at the same time, build infrastructure, a world health system, and start to develop modern agricul ture in the framework of such partnerships.” This unprec edented humanitarian crisis is a test of the “moral character of humanity”, she concluded.
As David Beasley said, there is enough wealth in the world that not one single child should have to go hungry, let alone die of hunger, but that requires a profound change in policy, away from the currently dominant neoliberal system, to one in which every human life matters.
Top U.S. Military Official Rejects Call for Intervention in U.S. Election
With the Nov. 3 presidential election less than two weeks away, the British Empire faction has kept its promise of pull ing out all the stops to try and prevent a second term for Don ald Trump. Just in the last week, Twitter, Facebook and other social media were mobilized, in addition to the mainstream media, to censure a story run in the New York Post about Joe Biden’s corrupt dealings with Ukraine.
While this is by no means the first such censure, this time it involves the fourth largest daily in the United States, not to mention the accounts of Congressional committees and those of President Trump himself – in the hot phase of an election campaign!
Meanwhile, since his recovery from COVID-19, Trump has been very actively campaigning, reiterating his refusal to be part of the “Washington swamp” and the “deep state”. He has pointed out that Wall Street is pouring tons of money into Biden’s campaign, and insists that the “military-industrial complex” considers itself more powerful than the elected gov-
ernment, which has prevented him from putting an end to the Bush-Obama “endless wars”. For nearly four years now, Trump says he has successfully fought the continuous at
tempts to impeach him on various fraudulent grounds. In their ever more desperate attempts to stop Trump, his adversaries even orchestrated an insurrection in the streets by anarchists, with unprecedented violence and destruction. Now, in the final stretch, after widely spreading the narrative that Trump would not leave the White House if he lost the 2020 election, they began calling for the U.S. military to be prepared to remove him physically.
Among those in the lead in this was Hillary Clinton, who repeatedly said she expects Trump supporters to engage in vote fraud to claim victory, and then for Trump to refuse to step down if he is defeated. Many reports are circulating citing unnamed sources saying that a military intervention is being planned (cf. SAS 38, 39/20). This was given credence when reporter Bob Woodward quoted former Defense Secretary Gen. James Mattis telling Trump’s former Director of Na
tional Intelligence Dan Coats that it “may be necessary to take collective action” against Trump, calling him “dangerous” and “unfit.”
The Aug.11 issue of Defense One online publication ran an open letter to General Mark Milley, the chairman of the Joint Chiefs of Staff, from two retired Colonels, John Nagl and Paul Yingling. It was an open call for a plan of action, stating that Trump was “threatening to remain in office in defiance of our Constitution,” meaning Milley will have “to choose between defying a lawless president or betraying your Constitutional oath.” They concluded by insisting that if Trump refuses to leave, “the U.S. military must remove him by force, and you must give that order.”
On Sept. 5, speaking at a Schiller Institute event, Col. Rich ard Black, former head of the Criminal Law Division in the Pentagon, said that such statements from retired officers are in violation of Article 88 of the Uniform Code of Military Jus tice. In subsequent interviews with LaRouchePAC, Col. Black called on the Secretary of Defense and the chairman of the Joint Chiefs to issue an official reprimand, and pursue legal action against them.
Reporters continued to hound the President, repeatedly asking him why he won’t commit to leaving office. Trump’s response was that he will follow the Constitution, but only after ensuring that the vote count is legitimate, something which has become questionable given the potential for fraud due to extensive mail-in voting. As tension was building over this, Gen. Milley finally addressed it, on Oct. 11.
He said, “We have established a very long 240 year tra dition of an apolitical military that does not get involved in domestic politics.” Members of the military, he stated, “are sworn to obey the lawful orders of our civilian leadership.” If there is a contested election, it will be handled “by the courts and by the U.S. Congress. There’s no role for the U.S. mili tary in determining the outcome of a U.S. election. Zero. There is no role there.”
Yet, by failing to follow Col. Black’s advice, of warning those engaged in such talk that they will face military justice, Milley has left the door open for further speculation. Given the likelihood that the election will end up being “contested”, Milley’s comments play into the narrative of a looming con
stitutional crisis.
The Paper Economy Hyperinflates, While Production Deflates
Hell is a place where you freeze and burn, according to Dante Alighieri. The descent into economic hell has already started, caused by the insane decision by central banks and govern ments to both reflate the financial bubble (fire) and deflate the economy (ice). Thus, while the monetary curve has gone exponential, the collapse of production has sent national econ omies into a deflationary spiral.
Figures and charts published by the Federal Reserve of St. Louis show the hyperinflationary potential: the rate of in crease of M1 money stock (accounts and checkable deposits) has gone from 6% prior to the Lehman Brothers crisis, to 9.6% by March of this year, and up to 65% in the thirty weeks since!.
The M2 curve (M1 plus saving deposits and money fund investments) is also skyrocketing. In the last six months, $3.4 trillion have been created, against $14 trillion over the pre ceding 40 years. https://fred.stlouisfed.org/series/M2
Before the second wave of the Covid-19 pandemic hit, Fed eral Reserve officials were calling for a quantitative easing amounting to 30% of GDP, or $6.5 trillion. Last August, Mi chael T Kiley, a senior Fed economist , wrote that about $3 trillion had been enacted between the end of February and the end of June, leaving a further $3.5 trillion to come. If we assume the full $6.5 trillion stimulus is enacted by next February, then the increase reflected in narrow money could be to more than double it.
Somewhere down the road, a non predictable point, this liquidity will spill over from the paper economy into consumer prices, but the value of physical production will be orders of magnitude inferior to the nominal financial values. The In
ternational Monetary Fund has calculated that the physical economy has already shrunk by $28 trillion due to the shut downs. The value of money can thus be expected to evaporate in 1922 Weimar style.
Wall Street Banks Rake in Deposits and Restrict Credit
Thanks to the Federal Reserve, the big Wall Street banks are stacking up the savings of not only America, but other coun tries as well. But rather than lending them out for any pro ductive purpose, they are used for speculation and “trading profits”.
The figures make it clear. According to a report by Citi group, its total deposits shot up in the third quarter 2020 to $1.26 trillion, while its loans stagnated at $719 billion. That’s a loan-to-deposit ratio of 58%, compared to 64% one year ago. In 2010, loans were $730 billion, and deposits $880 billion, putting the ratio at 82%. Prior to the 2008 crash, the ratio hovered around 100%.
As for JPMorganChase, its deposits shot up to $2.001 tril lion in 2020, while loans remained at $990 billion, giving it a loan-to-deposit ratio of only 48%! In fact, the last time it was 100% was in 2000. In the case of Wells Fargo, the ratio for 2020 is 66%.
Considering the entire U.S. banking system, the loans and leases have dropped by 3% since May (to $10.49 trillion), while deposits have risen by 3.7% (to $15.682 trillion). Even the total bank credit outstanding of the banking system, is 5.2% less than the total deposits, according to the latest Fed-
EIR STRATEGIC ALERT 2 WEEKLY NEWSLETTER n°43 / 2020
eral Reserve’s “H8” weekly form. Just one year ago, total bank credit was 6% higher than total deposits. Clearly, it is time to shut down the Wall Street system and reintroduce bank separation.
Unemployment in the European Union Set to Go off the Charts
Real unemployment in the EU, as a result of the COVID-19 pandemic, has been temporarily masked by the relief mea sures taken by governments, which allow companies to keep employees on the payroll, even though they are de facto out of work, and thus avoid outright dismissals. When those pro grams expire, the figures are expected to soar.
Given these new circumstances, a new report released on Oct. 8 by Eurostat, the European Union’s official statistical office, takes as an indicator “total labor market slack”, which includes absences from work, as well as the unmet demand for employment. In the second quarter 2020, according to that report, “a total of 40.9 million persons were absent from work in the EU, an increase of 18.6 million compared to the first quarter 2020. This increase is almost exclusively due to a sharp increase in temporary lay-offs, which rose from 2.4 million persons to 19.3 million persons.”
While there was an easing of the economic shutdown in the third quarter, if the number of cases of COVID-19 continues to rise at such an alarming rate as in the past weeks, it will have severe consequences.
Many in Europe have been counting on the German econ omy to help pull the rest of Europe out of the slump, but the prospects are dim. In the automobile sector, which is the centerpiece of German industry, layoffs are forecast in the range of 25%, or 200,000 out of 800,000 workers, Nearly 50,000 layoffs have already announced by the leading car makers and supply firms. Substantial cutbacks in car manu facturing also imply a sharp drop in the demand for steel, as the auto sector is the largest client of the steel industry. Al ready now, ThyssenKrupp, Germany’s leading steel producer, is about to sell its entire steel branch, due to heavy losses, with Britain’s Liberty Steel being the most hopeful candidate for the takeover.
Faced with the growing crisis, one would expect the Eu ropean Union, in addition to the relevant governments, to come up with a plan for an in-depth economic recovery to save the real economy. But the opposite is happening. The so called “Next Generation EU” fund is aimed to save the bank rupt banking and financial sectors, through more quantitative easing schemes, while otherwise channeling investments into “green investments” (cf. SAS 22, 29, 33/20). ECB head Chris tine Lagarde is even pushing for the European central bank to overstep its mandate by favoring green corporate bonds.
The German government, as we know, has been the most obsessed with an alleged environmental strategy. In fact, it has been counting on the steel industry to lead the way into the use of “green” hydrogen as a power source, rather than coal and gas. That policy is a dangerous illusion, as the fate of ThyssenKrupp, which is unable to support the extra costs, serves to underline.
Instead of continuing the current suicidal policy course, Europe should ensure its own economic survival by joining the “new paradigm” represented by the New Silk Road ap proach.
Europe Walks into Geopolitical “Navalny Trap” At a meeting on Oct. 12, the foreign ministers of the 27 EU member states decided to introduce sanctions against Rus sians deemed responsible for the alleged poisoning of oppo sition figure Alexei Navalny. The problem is, that they had no evidence pointing to any individuals or legal entities that should be sanctioned. Therefore, they had to ask the EU am bassadors to come up with a list at a later date.
In line with the EU decision, German Foreign Minister Heiko Maas, in an interview with Novosti on Oct. 13, accused the Russian government of failing to publicly analyze the circum stances of the case. “And the circumstances are such that a military nerve agent from the Novichok group was used on the territory of Russia, which is a serious violation of the Chemical Weapons Convention”, he said. Maas further charged Russia with floating “new and partly absurd theories” and of doing little to establish the truth.
Moscow for its part argues that before a criminal case can be opened, Berlin must provide evidence of the biological ma terials to corroborate the accusation of poisoning. According to Russian authorities, they have already sent four requests for legal assistance to Berlin, but to no avail.
Indeed, the position taken by Heiko Maas is hypocritical, to say the least. It has since been revealed that the head of the Russian State Duma Committee on Security had sent a letter to the head of the German Bundestag Wolfgang Schäuble on Sept. 24, in which he proposed the creation of a joint Russian-Ger
man parliamentary committee to investigate the Navalny case. That letter was kept secret by Schäuble, and its existence was revealed by a Bundestag member of the AfD, Hansjörg Müller, who learned of it accidentally nearly two weeks later during an interview he had with Russian TV network Zvezda.
Maas then had to backpedal somewhat in an interview pub lished on Oct. 16 by the Redaktionsnetzwerk Deutschland newspaper chain, in which he repeated his charges against Moscow, but stressed that there was “no ice age with Russia”. On the contrary he said both sides were aware that coopera tion between Russians and Germans as members of the UN Security Council would be continued on hot spots like Ukraine and Libya. (But he avoided any mention of the Duma letter...)
China Responds Quickly to Threat
of Community Infection in Qingdao While China has largely overcome the Coronavirus epidemic, it is by no means letting down its guard to the possible threat of a resurgence. The recent discovery of a cluster of cases in Qingdao created the fear that this was the beginning of a “community spread.” A major mobilization was immediately launched to test the entire population of a city of 10 million people for COVID-19 -- which they accomplished within a matter of days.
All in all, there were only a handful of cases discovered in this port on the eastern coast, which is a key hub for China’s Maritime Silk Road. Apparently, the source had been two dock workers who caught the virus when unloading goods on the docks. It seems that the clinic where they were treated was not properly disinfected afterwards, so a few more people became infected. But the magnitude of the response and the ease with which the population complied to the testing pro
vide useful lessons for other countries that are still struggling to control the spread of the virus.
EIR STRATEGIC ALERT n°43 / 2020 WEEKLY NEWSLETTER 3
The fact that China so successfully dealt with the pandemic overall attests to the strength of the system and the com mitment of the government to save peoples’ lives. While the reaction of the Chinese authorities was characterized in the West as “high-handed” and “draconian,” they have succeeded in saving many more lives than most other countries. Similar successes were seen in South Korea and in New Zealand. Had there been less attempts to “politicize” the health crisis by such cold warriors as US Secretary of State Mike Pompeo, the type of collaboration needed among nations against a com
mon enemy would likely have saved many more lives. In any event, after gaining control of the virus, China is now in better shape to continue opening up the national economy, which they are proceeding to do, while taking the necessary precautionary measures to prevent another outbreak. For ex ample, the third China International Import Expo will be held as planned in Shanghai, although much of it will occur on line. While this will no doubt cause some grumbling among those in Washington hoping that China would collapse, for the world at large this will be most beneficial. As China gears up its economic engine, this will start to put the world back on the track of economic recovery.
Another clear sign of Beijing’s intention to open up further was given by President Xi Jinping during his recent visit to Shenzhen, the site of the first Special Economic Zone in China and the home today of high-tech giants such as Huawei and Tencent. There, he assured the world that the Chinese econo
my would move on to the next stage of upgrade, and serve as a platform for reviving global development.
Turkey Escalates Conflict in Nagorno-Karabakh Toward a Strategic Crisis
After the two ceasefires negotiated by Russia and the Minsk group of mediators in Nagorno-Karabakh failed, Russian Foreign Minister Lavrov proposed the deployment of observ ers to the area, which is the only way to ensure compliance by both Armenia and Azerbaidjan. However, Turkey, which openly supports the latter, is evidently advising Azeri Presi dent Ilam Aliev not to accept observers.
Turkey is openly supplying the Azeris with Turkish-made military drones, which are likely operated by Turkish advisers. But far more dangerous is the fact that Ankara is introducing mercenaries who had been fighting the Syrian government by the thousands into Azerbaijan. This is seen by Russia as a di
rect threat, since Azerbaijan served in the 1990s as a base of operations to supply and infiltrate Chechen and other terror ists waging war against Russia in the North Caucasus. Russian President Putin expressed his “serious concern” directly to Er dogan in a telephone discussion last week. Within hours of the that discussion, the Russian Defense Ministry announced that naval exercises would be held in international waters in the Caspian Sea just north of Baku.
Another angle to the strategic constellation involves Ukraine. On Oct. 16, Turkish President Erdogan hosted Ukrainian President Zelensky in Istanbul, where they signed a military cooperation agreement between the respective defense in
dustries. It will include the joint manufacturing of the same drones that are killing people in the South Caucasus. Erdogan expressed full support for Ukraine’s demand for the return of the Crimean peninsula.
The hand of Great Britain can be seen in these agreements
as well (cf. SAS 41 / 2020) Earlier this month, during a visit to London, Zelensky signed a strategic partnership agreement, including a military and trade agreement, which included a 1 billion pound loan to build warships.
A Matter of Life or Death:
Mobilizing Food Resources for Africa On Oct. 13, Ramasimong Phillip Tsokolibane, the leader of the LaRouche movement in South Africa, launched an urgent appeal on behalf of the millions of Africans who are now starving and have no one to speak on their behalf.
“They are starving thanks to a combination of deliberately enforced underdevelopment of my continent... now intersect ing both a global pandemic and locust plagues and other natu ral disasters affecting food production on the continent”, he wrote.
While various charitable and other organizations have sounded alarm bells and have appealed for money, given “the state of infrastructure on the continent and the fact that much of this starvation is occurring in isolated, rural areas, the dis
tribution that must take place is well beyond the means of individual governments and those of relief agencies. “I believe we must mobilize the logistical capacities of the world’s most capable military forces and design a strategy to bring food supplies from such food-producing nations as the United States and Canada, and bring them directly to those who need them. Let allies and adversaries alike, join forces, in this greatest of all humanitarian efforts....
In that context, Tsokolibane appealed directly to President Trump to take up the challenge and give America’s farmers “the mission to produce the food to feed the starving, while deploying the vast resources of the U.S. military on this mis
sion of mercy to bring food” to those in need. He recalled the precedent of the mobilization of the United States at the time to bring food to “the starving people of post-World War II Europe,
This is a sufficient reason, in his view, to convene the great power summit that the Schiller Institute and Helga Zepp LaRouche have called for. Mrs. LaRouche fully supports the approach laid out by her South African associate. The appeal by Ramasimong Phillip Tsokolibane can be read at https:// schillerinstitute.com/blog/2020/10/14/a-matter-of-life-or death-call-for-international-mobilization-of-food-resources to-fight-starvation-in-africa/.
Save the dates!
The Schiller Institute will hold an international online conference on November 21-22. The event will take place just under three weeks
after the U.S. elections, and focus in particular on the role of Europe in the new geometry.
E.I.R. STRATEGIC ALERT www.eir.de
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EIR STRATEGIC ALERT 4 WEEKLY NEWSLETTER n°43 / 2020
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