STRATEGIC ALERT NEWSLETTER
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| | | A potential shift in the strategic situation could be developing, centered on developments around the war in Ukraine and the U.S.-Russia relationship. The escalation from the Russian side, in targeting energy infrastructure, has reduced the capacities of the Ukrainian Armed Forces, while at the same time, the Russian tactical withdrawal from Kherson opens up a chance for talks, in which all parties could save face. The precondition for this, however, is that President Zelensky agree to talk and accept some concessions.
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It was evidently to sabotage any such opening that a blatant provocation was staged on Nov. 15 involving the strike of a “Russian-made” missile on the territory of NATO member Poland, just as the G20 was meeting in Bali. The incident turned out to be “fake news”, but not before Zelensky had called on NATO to act.
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On the other hand, there is an awareness of the need to avoid a devastating defeat for Ukraine and NATO, which is reflected in statements by the chairman of the U.S. Joint Chiefs of Staff, General Mark Milley. He told The Economic Club of New York on Nov. 9 that there is “a window of opportunity for negotiation”, but both Russia and Ukraine would have to reach a “mutual recognition” that a victory “is maybe not achievable through military means, and therefore you need to turn to other means”. Milley reiterated his statements in subsequent speeches and interviews, reflecting the consensus among military layers, including in Europe.
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In social and economic terms as well, the price of waging war on Russia has become unacceptably high. Thus, Washington has come under increasing pressure from European allies, beginning with France and Germany. As the U.S. edition of Politico reported “American officials based in Europe are issuing internal warnings to Washington colleagues that some countries with populations that support Russia are growing angry over sanctions and blaming the U.S. for rising costs. That sentiment could put pressure on European leaders to pull back support for the sanctions, officials said in internal reports circulated throughout the administration in recent days.”
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That said, Volodymyr Zelensky remains a captive of the hard-line, neonazi faction and of the international forces which control them, led by agencies of the British government. It is to be expected that British forces, who have orchestrated the provocations against Russia so far, from the bombing of the Crimea bridge to the attack against the Russian fleet in Sevastopol, to missile attacks on Russian territory, will attempt to sabotage peace efforts with some atrocity or further provocation.
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| However, even if efforts to bring about peace negotiations are successful, the West will still face another sort of Armageddon: the financial tsunami which is looming as a result of the irreversible economic bankrupcy, including intolerable inflation rates and contraction of the real economy. Popular resistance is breaking out in a dozen countries in Europe, while the effects on the developing sector have been most dramatic, threatening all with ungovernability. All this underscores the need for a new economic architecture, coupled with large-scale infrastructure projects. At the meeting between Presidents Biden and Xi in Indonesia one day before the G20 summit, the Chinese leader called for cooperation between the two countries to solve such global security and economic problems. |
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| | | The three hour meeting between U.S. President Joe Biden and Chinese President Xi Jinping Nov. 14 in Bali, the first ever, may have somewhat eased the tensions that have developed over the last few months. Both sides report that the discussion was quite cordial and extensive – although the readouts from the respective presidencies are quite different.
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The Chinese side notes that Xi stressed the need for the two countries to work together for the benefit of the world. He insisted that China will continue to maintain an independent foreign policy of peace and decide its own position and attitude based on the merits of the particular matter, and advocates peaceful settlement of disputes. Reiterating his commitment to a “community with a shared future for mankind”, he proposed that U.S.-China relations should be viewed from above and should not be a zero-sum game where one wins and one loses. The vast Earth can fully accommodate the development and common prosperity of China and the United States. He reiterated that China does not want to replace the United States and never seeks to change the existing international order.
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However, he made it perfectly clear that while Beijing wants to maintain peace and stability in the Taiwan Strait, “Taiwan independence” is absolutely unacceptable. He called the Taiwan issue “the first red line that must not be crossed in China-U.S. relations”.
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President Biden confirmed, apparently, that Washington does not support “Taiwan independence” or support the notion of “two Chinas” or “one China, one Taiwan” and it does not seek to decouple from China. He also said that the United States respects China’s system and does not seek to change it.
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| Contrary to the White House readout, the Chinese side did not mention the fact that Biden also broached the issues of Xinjiang and Tibet. This readout added that he raised Russia’s “irresponsible threats of nuclear use”, although Beijing is well aware that the nuclear threats have been coming from the United States, and have been directed against both Russia and China. |
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| | | The midterm election campaigns in the United States heavily featured loose talk about the “end of democracy”. For the Republicans (GOP), this referred to the pervasive censorship of opposition to the policies of the Democratic Party, and allegations of widespread vote fraud conducted by urban Democratic party election machines. For the Democrats, it was the belief that the Jan. 6, 2021 attack on the Capitol, which reflected the undemocratic, even fascistic sentiments characterizing Trump supporters in the Make America Great Again (MAGA) movement.
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Such talk, according to our American colleagues, was not simply overblown rhetoric, but partisan poison injected into the electoral process. Digging deeper, one finds something much more problematic affecting the outcome of U.S. elections. This is the long-term effect of a mental complacency among voters, which when combined with ignorance of history and real economics, compounded by sophisticated "hybrid or information warfare", have made Americans incapable of addressing the real issue confronting the nation.
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And that issue is the collapse of the unipolar order, based on the idea that America is the "sole superpower" in the world. That the unipolar order is collapsing, and the majority of nations are moving toward a new strategic and financial architecture, were not addressed by any of the major campaigns, which focused primarily on issues of "identity politics", and portrayed opponents according to profiles shaped by narrow partisan interests. This is a kind of local form of "geopolitics", of divide-and-conquer, of reducing voters to increasingly smaller constituency concerns, while demonizing all others as a "threat to our way of life".
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But what really threatens the way of life -- the danger of a nuclear war between the U.S./NATO and Russia, soaring inflation and shortages of energy and food -- were hardly mentioned during the campaign, with the exception of the two LaRouche Independent campaigns of Diane Sare for U.S. Senate in New York, and Joel Dejean for a House seat in Texas. Despite polls showing that 78% of the electorate were "dissatisfied with how the government is functioning", and a 58% disapproval rating of President Biden, the much hyped "red wave", predicting a Republican sweep of Congress, did not materialize. With votes not yet fully counted, the GOP is expected to have taken the House of Representatives by a small margin, while the Democrats have retained control of the Senate -- but neither party has a plan for the nation. Thus, a major opportunity to bring American voters into the real world, to address the transformation underway with the rejection of the U.S./NATO enforced rules-based order, was lost.
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| Some of the blame for this is being directed at Donald Trump, including from many Republicans. His insistence on focusing the campaign on his person and his future prevented many GOP candidates from addressing Biden’s war policy against Russia and his dangerously foolish “green agenda”. That may be true, but the ignorance of American voters of the information warfare waged against them, and of what is happening in the world, certainly predated Donald Trump. |
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This is the story of two Ponzi schemes, of three entities called FTX, FFT and Alameda, and of earthquake precursors. To begin with the latter, in physics, earthquake precursors are mostly little shocks preceding the big one. In finance, a “peripheral” event precedes a systemic crisis. The bankruptcy of the cryptocurrency exchange FTX, officially filed on Nov. 11, can be considered a financial precursor.
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Cryptocurrencies are the most acute form of financial insanity, a pure gambling operation based on no physical value, asset or activity. FTX had become the second largest exchange of cryptocurrencies, where a currency called FFT was traded. Both had been created by Sam Bankman-Fried, who owned the exchange on which his his company Alameda operated. US financial authorities suspect that Bankman-Fried had created a classical Ponzi-scheme, i.e., gains were paid to clients with the money from new clients. He is further suspected of speculation with money invested by clients in FTX.
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When one such client, Binance, pulled out of its investments in FFT cryptocoin, the Ponzi scheme collapsed, generating a snowball reaction on all cryptocurrency markets. Bankman-Fried lost 94% of his personal wealth in one day. While we wouldn’t lose sleep over that, the consequences of this cryptocurrency earthquake on the global financial system should be a matter of concern.
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It is no secret that large commercial banks have devolved increasing amounts of investments in cryptocurrencies. They can do so with money borrowed from central banks, thanks to the deregulated financial system following on the takedown of the Glass-Steagall separation between investment banks and commercial banks, which allowed the latter to make highly leveraged, high-risk investments in all kind of financial instruments.
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Now, we can expect calls for emergency liquidity from the banking system, as the bursting of the cryptocurrency bubble generates margin calls on the backdrop of a growing liquidity crisis generated by central banks’ “Quantitative Tightening” (cf. SAS 44/22).
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As to the latter, as we have explained, runaway inflation is a product of the hyperinflationary bubble of financial asset prices built by those central banks over the years. Even some prominent speculators have realized that. Paul Singer's hedge fund, Elliott Management, issued a report early November, warning that the world is “on the path to hyperinflation” that could lead to “global societal collapse and civil or international strife”. The report noted that “while such an outcome is not certain, this is currently the direction” in which “the world is headed”.
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Singer pins “much of the blame” for the hyperinflation “on central bank policymakers,” the Financial Times reported. Central bankers “had been ‘dishonest’ about the causes of high inflation”, blaming it on “supply chain bottlenecks” after Covid, and not the “ultra-loose monetary policy put in place at the height of the coronavirus crisis”.
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| That same monetary policy led to the creation of the bursting crypto bubble. Rising interest rates will accelerate the explosion, while returning to QE will accelerate hyperinflation. There is no way out of the crisis from inside the system; the solution is to remove the speculative cancer while protecting at the same time the real economy through a Glass-Steagall type of financial reform. |
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| | | Eight of the CEOs of major German companies who accompanied Chancellor Olaf Scholz to China on Nov. 4, published a joint statement in the Nov. 10 Frankfurter Allgemeine Zeitung, defending their cooperation with the Chinese as being in Germany's genuine interest. A pullout, on the other hand, as demanded by geopolitical adversaries would “cut us off” from industrial development perspectives.
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They begin by welcoming the “intensity of the public discussion surrounding Chancellor Scholz's trip to China”, because it will benefit the working out of the German government's new China strategy.
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Over the 50 years since diplomatic relations were established between the two countries, they continue “bilateral relations have been characterized by ever closer cooperation between the two countries, to their mutual benefit. China has achieved enormous growth, brought 800 million people out of poverty into a modern middle class, and is now the world's second largest economy.”
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Germany contributed to this development, the CEOs explain, but at the same time, it has also become “a key player in the global economy” and the presence of companies in China and elsewhere has made “a significant contribution to our competitiveness”. Greater cooperation with China now will strengthen growth in Germany and in all of Europe.
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They do note, however, the need to “diversify risks in crucial areas like semiconductors, batteries, raw materials and rare earths”, and to reduce dependency where necessary. And while there are legitimate tensions with Beijing on issues such as Taiwan and Xinjiang, they argue, they should be handled through dialogue. Today, however, “we perceive an almost exclusive emphasis on the rivalry of the systems - in words and concrete measures”.
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The eight CEOs are: Martin Brudermueller (BASF), Roland Busch (Siemens), Belen Garijo (Merck), Stefan Hartung (Robert Bosch), Nicola Leibinger-Kammueller (Trumpf), Jan Rinnert (Heraeus), Klaus Rosenfeld (Schaeffler), Angela Titzrath (Hamburg Port and Logistics).
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The commitment of these CEOs to not let geopolitics dominate economic relations with Asia comes on the backdrop of the growing realization, among leading industrialists, that the transatlantic economic-financial system offers no great perspective for German industry.
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| The dynamic in the Asia-Pacific area is very different, not only in China, but in other countries as well. That was underscored during Chancellor Scholz’s visit to Vietnam on Nov. 13. Although, from a geopolitical standpoint, Vietnam is a close ally of Russia, it has nonetheless become Germany’s leading partner in Southeast Asia, with some 350 German companies active there and solid opportunities for economic cooperation. For German exports, cooperation with such countries is a lifeline, given the state of the transatlantic partners. Hit by the dual impact of anti-industrial regulations allegedly designed to save “the environment”, and of the energy scarcity caused by the sanctions on Russia, entrepreneurs need to look to the Asia-Pacific region, or face doom if they don’t. |
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| | | A “mega political crisis over migration”, to quote deputy EU Commission chairman Margareta Schinas, threatens to break out between France and Italy over illegal migrants. After Italy denied docking to some NGO ships which then sailed to French ports, the French government accused the Italians of violating EU agreements and took a series of retaliatory measures, including the suspension of the redistribution agreement and of the Schengen agreement with Italy. From there, the quarrel quickly escalated.
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Despite efforts by Italian State President Sergio Mattarella to cool down the controversy in a phone call with Emmanuel Macron and meetings between Italian and French foreign ministers, neither of the two contenders seems willing to back down.
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Since Italian Foreign Minister Tajani has called for “a Marshall plan” for Africa in order to solve the migrant crisis at the roots and Giorgia Meloni herself proposed that Italy honor the 60th anniversary of the death of Enrico Mattei by pushing for “A Mattei Plan for Africa”, in her speech in the Parliament two weeks ago, this is what should be the focus of EU deliberations on the migration issue.
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The “Mattei Plan” exists already, in the form of the Transaqua plan for central Africa, which Italy had sponsored it in 2018 by pledging funds for a feasibility study. As Transaqua veteran co-author Andrea Mangano explained in the Nov. 12 Schiller Institute webinar (cf. below), the plan for tranferring water from the Congo basin to the Lake Chad basin would solve the existential crisis for 50 million people in the region, thus eliminating one of the main causes of the flight of refugees over the Mediterranean.
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Not only that: the jobs generated by the Transaqua project, which includes building a dozen dams in the Central African Republic alone, would attract people from regions which they are now fleeing in the hopes of finding jobs in Europe. Awareness of these factors had convinced the Italian government in 2018 to sponsor the plan at the Lake Chad international conference in Abuja, which adopted Transaqua as the only feasible solution for Lake Chad, which is fast disappearing.
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After four years of being stalled, the idea is again gaining momentum, and the Nigerian Water Minister announced an initiative to have the African Development Bankfinance a feasibility study (cf. SAS 44/22).
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| The EU is currently wasting billions of euros in financing the war in Ukraine as well as the self-destructive “green transition”. A fraction of those funds invested in Africa would help reverse the migration crisis. As Nobel Prize winning physicist Ivar Giaever told Prof. Franco Battaglia in a Nov. 8 interview in La Verità, “we should all be worried because millions of refugees who cross the Mediterranean are escaping from poverty, not from global warming. All of us should have asked for Paris agreements to help those people get out of poverty, not supplying them with almost useless solar and wind parks.” |
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| | | On Nov. 5, the head of the SPD parliamentary group, Rolf Mützenich, denounced the fact that he had been put on the infamous list of “information terrorists” of Kiev’s Center for Countering Disinformation (CDD) for advocating a cease fire in Ukraine, and that he had received threats (cf. SAS 45/22). The existence of such a list was known to the government, the political parties and the media for months, and yet they never made an issue of it. Mützenich’s remarks had the merit of breaking that silence -- at least somewhat.
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But there has still been no coverage of the fact that the very first person named on the CDD’s second list (and the second named on the first list) is Helga Zepp-LaRouche, identified as the founder of the Schiller Institute (SI). And tens of other members and associates of the SI, who have spoken at SI events, are targeted in the same way for allegedly supporting “Russian narratives”. Needless to say, there is a very real threat to the personal security of anyone who is on the CCD lists or that of Myrotvorets.
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Within the SPD, it is significant that the head of the party, Lars Klingbeil, expressed the party’s “full solidarity” with Mützenich, despite his own hawkish positions on Russia. During a Nov. 7 parliamentary group meeting, he said both SPD leaders support Ukraine, but are also favorable to taking “diplomatic initiatives”. As for Mützenich himself, a close political ally of Chancellor Scholz, he reiterated the need for talks to end the war in remarks to the Neue Berliner Redaktionsgesellschaft newspaper chain (Nov. 12): “I would like to see as much talk about diplomacy as about arms deliveries,” he said.
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| The still-timid debate around this issue may reflect the growing misgivings within ruling circles in Western Europe about the unlimited support they are giving to a regime in Kiev, which is not as “democratic” as it’s presented. |
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| | | Schiller Institute founder Helga Zepp-LaRouche participated online on Nov. 11 in a week-long international conference in Indonesia on the Non-Aligned Movement’s international struggle for global peace, justice and prosperity, in the 66 years since its founding at the Bandung Conference. Running from Nov. 7-13 in four Indonesian cities, the conference, titled “Bandung-Belgrade-Havana in Global History and Perspective: What Dreams, What Challenges, What Projects for a Global Future”, ended in Bali, two days before the opening of the G20 summit on the island.
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Helga Zepp-LaRouche, in her address, stressed that the Non-Aligned Movement (NAM) is “probably the most important force on the planet” at this time to put an end to geopolitics, and it is by stopping geopolitics that the world can avoid a thermonuclear world war, which would annihilate civilization.
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Representing over 6.5 billion of the world’s 8 billion people, between its member and observer states, the NAM clearly represents the majority of the world, she pointed out. Furthermore, its history gives it the authority to intervene globally now. The Non-Aligned was founded in 1955 in Bandung, Indonesia, by leading nations of Africa and Asia determined to end colonialism that refused to be forced into belonging to a “bloc”, and that is still the issue today, she said.
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The fundamental conflict in the world, in her view, is not between so-called democracies and so-called autocracies, but rather between those forces in the world “who want to maintain the colonial order”, i.e., the neoliberal financial system which is in its final phase of collapse now, and those countries, especially of the Global South, that fight for “their right for economic development.”
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In that light, she proposed that a group of Non-Aligned nations act together at the G20 meeting to “put on the table the need to have an immediate reorganization of the world financial system which is bankrupt”. And if the G20 fails to take that up, which is likely, then the NAM “must find a soon-to-be-created opportunity to put this on the agenda”, for example by calling for an emergency UN General Assembly or other forms of action. “But you have to raise your voice, because we have an incredible danger right now to all civilization.”
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Many other participants in this conference expressed the revolutionary mood spreading across the Global South, as the imperial “rules based order” collapses, and efforts are stepped up to build a more just economic order. While some argued that the developing sector should forget the West, and proceed on its own to build a non-dollar system, Helga Zepp-LaRouche insisted that the seeds of war will grow in any system based on blocs that is not inclusive. Therefore the NAM should help Western nations to understand that it is also in their interest to bring about a new international architecture fostering economic development for all.
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| Helga Zepp-LaRouche also contributed a lengthy article to a book that was specially produced for this conference. |
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| | | The Schiller Institute held an international (online) symposium Nov. 12, titled, “The Physical Economy of the noösphere: Reviving the Heritage of Vladimir Vernadsky” (cf. SAS 45/22), dedicated to the mission of the great Russian-Ukrainian scientist Vladimir Vernadsky (1863-1945). The two panel event featured presentations by 13 scientists, engineers and policymakers from six naitons (U.S., Russia, Italy, Germany, South Africa and Egypt) and live discussions periods.
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The first panel delved into the fundamental scientific work of Vernadsky, in particular his concept of the noösphere, or how the sphere of human thought works as a force shaping the physical domain. Examples of this were given in the second panel, on the management of water projects, with a special emphasis on Africa.
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Coinciding with the COP27 conference in Egypt, the Schiller Institute event presented conclusive refutations of the Malthusian, anti-development, and profoundly anti-human theses of the “climate change” lobby, acting in the interests of the financial oligarchy.
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| | | Die jüngsten Entwicklungen um den Krieg in der Ukraine und die amerikanisch-russischen Beziehungen könnten die strategische Weltlage verändern. Die Eskalation auf russischer Seite gegen Infrastrukturziele dezimiert die Kapazitäten der ukrainischen Streitkräfte, gleichzeitig eröffnet der taktische Rückzug der Russen aus Cherson eine Chance für Gespräche, bei denen alle Parteien ihr Gesicht wahren. Voraussetzung ist allerdings, daß Präsident Selenskyj von seiner kompromißlosen Linie abgeht und Zugeständnisse akzeptiert.
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Die Erkenntnis, daß die Ukraine und die NATO eine verheerende Niederlage vermeiden müssen, spiegelt sich in Äußerungen von US-Generalstabschef Gen. Mark Milley wider, der am 9.11. vor dem New Yorker Wirtschaftsclub erklärte, es gebe ein „Zeitfenster für Verhandlungen“, doch sowohl Rußland als auch die Ukraine müßten erkennen, daß ein Sieg „mit militärischen Mitteln vielleicht nicht zu erreichen ist und man sich deshalb anderen Mitteln zuwenden muß“. Milley wiederholte dies in mehreren Reden und Interviews und formulierte damit den Konsens in Militärkreisen, auch in Europa.
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Sicherheitsberater Jake Sullivan schlug ebenfalls vor, daß Selenskyj seine Forderungen abschwächt, und bestätigte damit frühere Berichte, wonach die Regierung Biden der unnachgiebigen Haltung Kiews überdrüssig geworden ist. Gleichzeitig gerät Washington unter Druck europäischer Verbündeter, allen voran Frankreich und Deutschland. Wie Politico berichtete: „US-Beamte in Europa warnen ihre Kollegen in Washington intern davor, daß einige Länder, deren Bevölkerung Rußland unterstützt, wegen der Sanktionen verärgert sind und die USA für die steigenden Kosten verantwortlich machen. Diese Stimmung könnte die europäischen Regierungen unter Druck setzen, ihre Unterstützung für die Sanktionen zurückzunehmen, so die Beamten in internen Berichten, die in den letzten Tagen in der gesamten Administration zirkulierten.“ Zudem kann die Regierung nach den Kongreßwahlen ohne Angst vor den Folgen für Wahlergebnisse handeln.
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Doch Selenskyj bleibt ein Gefangener der neonazistischen Hardliner-Fraktion und der internationalen Kräfte dahinter, allen voran der britischen Regierung. Es ist damit zu rechnen, daß die Briten, die die bisherigen Provokationen gegen Rußland inszeniert haben - vom Anschlag auf die Krim-Brücke über den Angriff auf die Flotte in Sewastopol bis hin zu Raketenangriffen auf russisches Territorium -, nun versuchen werden, die Friedensbemühungen durch irgendeine Greueltat oder Provokation zu sabotieren.
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