STRATEGIC ALERT NEWSLETTER
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| | | Chinese President Xi Jinping’s phone call with Ukraine’s President Volodymyr Zelenskyy on April 26, at the latter’s initiative, opened up a new window of opportunity for a negotiated solution to the crisis, and with it, a step away from the nuclear brink. The Chinese President committed to sending a special envoy to the region for in-depth discussions with all parties, and his Ukrainian counterpart welcomed China’s role and the “productive conversation”.
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Less than 24 hours later, the British establishment had sent to Kyiv a delegation to squash the idea of a peaceful settlement, including among others former MI6 Chief Sir Richard Dearlove, neocon Tobias Ellwood, and former high official of NATO Gen. Richard Shirreff. Just one day later, Ukrainian Presidential adviser Mykhailo Podolyak gave an interview spouting the British line, and demanding China break with Russia, or lose its influence worldwide. Add to that the recent call by the City of London’s The Economist in favor of delivering F-16s to Kyiv, as well as the saber-rattling from the Royal United Services Institute.
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Meanwhile, there continues to be much hype around the “spring offensive” of the Ukrainian (de facto NATO) forces, and the counter-attacks from the Russian side. But the Chinese initiative is likely to have a deep, although discreet, impact.
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In that context, an April 27 editorial in the semi-official Global Times provided fascinating insight into how China’s diplomacy works and Xi’s unique capability to unravel the the confrontation between the West and Russia. The daily explains that the history behind the conflict is complex, and that a solution requires “enormous political wisdom, patience, and perseverance.” It recalls that since “the outbreak of the Russia-Ukraine conflict, China’s efforts to promote a political resolution of the Ukraine crisis have never stopped”, as reflected in Xi’s “Position Paper on the Political Settlement of the Ukraine Crisis” (cf. SAS 9/23), and that “China maintains good communication with all parties”.
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The editorial then comes to the heart of the matter: “Different from the ‘dual’ approach advocated by some in the US and the West, China provides a different path full of Eastern wisdom. It sees the Ukraine crisis as a complex and difficult-to-untangle web…. It is possible to slowly untangle the knots one by one, and ultimately achieve a comprehensive ‘escape’ from the crisis. Gradually decomposing complex contradictions, patiently and steadily reaching the core of the problem requires enormous political wisdom, patience, and perseverance….” But “as time goes by, many countries, including Russia and Ukraine, as well as others in Europe, have gradually recognized or partially accepted China's proposed solution. There is also an increasing number of voices within the US that are saying, ‘The world should listen to China's voice.’”
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| In essence, Xi’s method coheres with the tenth point of “Ten Principles of a New International Security and Development Architecture” proposed by Helga Zepp-LaRouche, which states that “man is fundamentally good and capable to infinitely perfect the creativity of his mind and the beauty of his soul… and that all evil is the result of a lack of development, and therefore can be overcome.” (cf. SAS 48/22). |
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| | | The issue of EIR’s Executive Intelligence Review dated May 5, 2023 features a lengthy expose by Gretchen Small and Carl Osgood of the obsession of Western geopolitical circles with carving Russia up into small, easily manipulable entities that pose no challenge to the modern-day extended “British empire”. A particularly dangerous example of that obsession was the conference hosted by the neocon Hudson Institute that took place in Washington April 26-28 under the title: “VI Free Nations of Post-Russia Forum”. We quote from the introduction to the EIR dossier, which is posted on https://larouchepub.com/ (click on the banner on the very top of the page).
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“As the world wavers between ‘World War III with nuclear fires,’ as Belarus President Alexander Lukashenka has so accurately warned, and the start of a serious peace process as openly urged by many within the Global South, and more quietly, but with growing insistence, by forces within the West, hardcore neoconservative Anglo-American ideologues have launched a drive for the disintegration of the Russian Federation to be officially adopted as the only acceptable outcome of the NATO-provoked and NATO-led Ukraine war on Russia. ‘Strategic defeat’, the ‘ruin’ of Russia is not enough; it is their stated intention that Russia be erased from the world map, allowing perhaps, grudgingly, a small ‘Muscovy’ to exist.
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“The breakup of Russia has been British imperial policy for centuries, whose roots and multiple facets EIR has tracked and exposed. The current operation is shaped explicitly upon the precedent of World War I-era British geopolitics, using Poland, Ukraine and the Baltic states, especially, as an external battering ram against Russia (Czarist, Soviet, or today’s Russian Federation equally), while simultaneously fomenting and arming ethnic and regional revolts inside the country. The operation is founded upon the sweeping, false premise that the Russian Federation, like the Soviet Union before it, was never and cannot be anything but an expansionist empire, oppressing its own population and threatening its neighbors....”
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“To pursue this British goal under today’s conditions — when trust and, for all practical purposes, formal relations between the world’s largest nuclear superpowers, the United States and Russia, have been destroyed — is the most dangerous policy conceivable.... The current, frenetic drive to break up Russia must be shut down now!”
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| The EIR expose cites a number of events that have been organized over the past year to promote this Anglo-American agenda. The most notorious entites involved are the Commission on Security and Cooperation in Europe (not to be confused with the OSCE), the Hudson Institute and the Jamestown Foundation. |
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| | | On May 1st, the U.S. Federal Deposit Insurance Corporation announced that it had struck a deal with JPMorgan Chase for the latter to take over the deposits and assets of the failing First Republic Bank. The FRB is the latest shoe to drop in the collection of victims of the Federal Reserve’s interest rate policies. In the first quarter, it had lost $100 billion of deposits and its stock had fallen from $120 to $8 on April 25. A few conclusions can be drawn from the otherwise expected bailout action.
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- JPMorgan was already the largest U.S. federally insured bank and the most bankrupt bank in the United States. Now it is even bigger and more bankrupt. Following a similar case in Switzerland, where UBS took over the failed Credit Suisse, the trend is that “Too Big To Fail” becomes even bigger (cf. next item).
- Similar to the Swiss scheme, the FDIC granted a loss-shared transaction on FRB assets to JPMorgan. The FDIC estimates that the entire operation will cost $13 billion in taxpayer money, but this is not credible.
- With the FRB bailout, the U.S. banking system has now experienced it own cumulative “Credit Suisse” case in terms of the combined volume of bank assets bailed out in recent weeks: $550.8 billion (Silicon Valley Bank $211.8 bn; Signature Bank $110 bn and First Republic $229 bn);
- The underlying motivation for the bailouts is the attempt to rescue the four quadrillions of derivative debt owned by “too big to fail” banks.
According to a quote attributed to Einstein, insanity is doing the same thing over and over again and expecting different results. Regardless of the author, it fits to what financial authorities have done before, during and since the 2008 financial crisis. So, expect a worsening of the problem, because the solution is not inside the system but outside. In other words, the Wall Street system of financial casino must be shut down and replaced with a credit system that finances the real economy.
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| The first step must be the separation of commercial banks from investment banks, along the lines of the 1933 Glass-Steagall Act in the U.S. Ohio Congresswoman Marcy Kaptur, who had drafted such a bill in 2009, has just reintroduced a similar one in Congress (cf. SAS 17/23). A campaign for bank separation was also begun in Switzerland after the Credit Suisse debacle, pushed by the same forces who had attempted to have it implemented after the 2008 financial crisis. |
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| | | Magdalena Martullo-Blocher, the daughter of SPP founder and herself a member of Parliament, reminded the news portal Watson (April 29) that the bank separation system proposed by the SPP and the left in 2009, after the state bailout of UBS would have prevented the Credit Suisse (CS) debacle. “The riskier part of a bank could have gone bankrupt separately”, she said. But the “too big to fail” regulation did not deal with the problem of a bank run, or with the ensuring of liquidity, which was left up to the National Bank. “CS now needs such large amounts that not even the SNB is equipped to handle it and the federal government has to step in. The federal guarantee alone corresponds to 1.5 times the annual federal budget!”
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Implementing the reform proposed at the time would have prevented losses which retail customers, pension funds and insurers have now incurred as a result of the CS liquidation. For instance, Migros, Switzerland’s second-largest retail-company (after Coop), has joined a growing number of CS clients, who are filing a court action against the decision to write off the bank’s AT1 (Co-Co) bonds. The pension fund of Migros lost CHF110 million, of which 100 million on Co-Co bonds and 10 million from the depreciation of CS shares. Under a bank separation regime like Glass-Steagall, a pension fund would be prohibited from investing in such high-risk instruments.
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| The plaintiffs' chances of rescuing their money are slim, as they signed contracts which explicitly say that their value would be totally written off in special cases, such as an imminent bankruptcy or a necessary state intervention. However, this is ultimately a political decision, dependent on whether the legal motivation for the write-off – i.e., the state of emergency declared by the government -- was legitimate or not. |
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| | | Opposition to the Green party's policies in Germany is growing in strength and boldness. The plan of Economy Minister Robert Habeck to force millions of private households who now have heating systems based on gas and oil to switch to heat pump systems has set off such a storm of protest that even the otherwise pro-Green mainstream media have been obliged to criticize it. It was taken up in a debate in the Bundestag on April 26, which featured a scathing attack by Beatrix von Storch, a vice chairwoman of the parliamentary group of the Alternative for Germany (AfD) party, not only on this particular aspect of the planned exodus out of fossil fuels, but also on the networks of international finance behind it.
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Von Storch told the Bundestag that non-parliamentary institutions, such as Agora Energy Change (AE) and the Ecology Institute that write blueprints for the Economy Ministry, are among the non-German foundations on the leash of international billionaires. “AE is financed by the European Climate Foundation, which is financed by the Children's Investment Fund Foundation; and that is financed by the British billionaire Christopher Hohn. He makes 2 million euros -- per day -- and is also the main financier of the climate extremists in Extinction Rebellion. So he spends his money on the climate agenda, but the really interesting question is: how does he make his money?”
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Hohn's fund concentrates on granting mortgages and on premium real estate, with a focus on big cities in North America and Europe, is the answer, von Storch added. This is quite relevant for Habeck’s heat pumps plan: “Homeowners have to take out mortgages on their houses to pay for the expensive heat pump and if they cannot do that, they have to sell their houses. And lo and behold, there is Mr. Hohn’s hedge fund, ready to buy their real estate. What a coincidence!”
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But he is not the only one behind Agora. There is “also the Mercator Stiftung and the billionaires of Metro, and through the European Climate Fund, there are also money flows from the Canadian billionaire John McBain”, Beatrix von Storch explained. “He, like Mr. Hohn, is a member of the billionaires club, The Giving Pledge of Bill Gates. As soon as you scratch the Green surface – billionaires, billionaires, billionaires....”
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| Another major controversy in Germany is the planned sale of Viessmann, a major German manufacturer of heat pumps, to the U.S. corporation Carrier Global. The AfD parliamentarian also raised this issue. “Real estate is one side of the coin. The other is the business with the heat pumps. The U.S. concern Carrrier Global buys the German heat pump manufacturer Viessmann for 12 billion dollars. Who owns Carrier Global? 86% of it is owned by institutional investors. That means the US financial industry. Blackrock, Vanguard, American Star, and the Capital Group. At the same time that Habeck’s ministry is forcing Germany to buy heat pumps, the global financial industry takes over the German heat pump production. Such incredible coincidences!” |
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| | | Jacques Cheminade, President of the French party Solidarité et Progrès, penned an editorial on April 26 for the monthly Nouvelle Solidarité, under the title “War and Peace”, which we quote below.
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“One question dominates all others: do we want to stop the race toward a world war? The clock is seconds away from midnight. The slightest misjudgment or absurd provocation would suffice to trigger the unthinkable. Those who would survive the first blast would experience a nuclear winter that would cause them to perish in atrocious conditions. Those who shrug their shoulders should know that doing nothing is always the wrong choice.
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“For this reason, the upcoming elections in 2024, in Europe as well as in the United States, should be focused first and foremost on nuclear disarmament and arms control covering all offensive weapons. France, as a member of the United Nations Security Council, must adopt as its mission to ensure that the voice be heard there of those countries that seek peace through a policy of mutual development, which is the majority of the world's population....
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“But much more has to be done. To take down the current oligarchy’s financial system, which needs war in order to survive, we have to change the rules of the game. To that end, we participate in the international conferences of the Schiller Institute, which catalyzes seemingly opposing forces into taking up the challenge of peace. For it is on a higher level than imperialism, colonialism or neo-colonialism, that we will find the common design needed to save humanity from self-annihilation.
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“Emmanuel Macron ostensibly promotes a ‘peace summit’. He stated in Le Parisien (April 24) that ‘we are not a party to this war’ (in Ukraine). On his return from China, he proclaimed that ‘Europe must reduce its dependence on the United States’, but added: ‘Our objective is (...) to not allow Russia to win’ and ‘the war will stop when the Ukrainians are in a position of strength’. This comes down to continuing to expose the Ukrainian people to slaughter. In reality, this is a war of NATO against Russia, in which we Europeans are being taken for a ride. Moreover, Macron does not call into question the operations of a global NATO as defined in June 2022 in Madrid.
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| “Oleksiy Danilov, of the Ukrainian presidential office, tells us that ‘a peaceful settlement, under the current conditions, would lead to a Russian peace’ and that ‘we need arms and ammunition, not negotiations’. General Ben Hodges, the former U.S. Army commander in Europe, goes one step further, saying ‘We don't need a diplomatic solution’. Experienced military men, however, say that Putin must be allowed to win because a nuclear power cannot lose. And that is probably what would happen if we continue to lead the Ukrainian people to their assisted suicide. Instead, I think our challenge is to move away from the geopolitical vision of one side against the other, and fight for a new international architecture of peace through mutual development and security. The United States has hundreds of military bases and has fought dozens of wars since 1945. They should learn the lesson now, since they have lost them all, just as we have lost our colonies....” |
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| | | The video has gone viral, with well over 15 million views within just 48 hours. It shows the intervention of Jose Vega, a young activist of the LaRouche Organization, at an April 25 event in New York City titled “Building a Democratic Press”, where he exposed the hypocrisy of the world’s leading newspaper editors, four of whom were present on stage (from the New York Times, Washington Post, Los Angeles Times and Reuters).
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“Is this the lecture hall with Seymour Hersh?”, Jose Vega stood up to shout ironically from the back of the room. “I’m looking for the one with Seymour Hersh, because it’s a policy and press hall event”. He blasted the executives present at this “free press event” for refusing to report truthfully on the expose by Hersh of the Biden Administration’s role in the Nord Stream sabotage.
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“Is there anything you’ve gotten right in the last 20 years, or am I mistaken about that?”, he challenged them. “It’s just kind of funny, because Iraq, wrong; Syria, wrong; Russiagate, really wrong, OK? I mean, the list goes on and on.” He also mentioned their refusal to cover the plans to escalate of the Zelenskyy regime (acting at Washington’s bidding). And further, “While Julian Assange rots in prison, all of you’ve got fat checks, because he’s in jail for doing your job”, i.e., informing the public. And Tucker Carlson was fired from Fox, because “he did something you guys are scared to do -- speak the truth and actually be critical of the war”.
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“None of you have actually had any relevancy, and you know what? The mainstream press is now dying!... You have no credibility with the public. The only people who care about what you have to say are elite assholes, who have nothing productive to say anymore.” Needless to say, the executives declined to answer the questions raised by Jose Vega before he was brutally escorted from the hall.
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| The three minute video was re-tweeted by numerous other websites and organizations and is circulating with subtitles in Spanish, French, Italian, Japanese, and Russian. See |
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| | | The policy of African solutions for Africa problems, fully supported by China, has put an end to the bitter civil war between the Ethiopian central government and the ruling Prosperity Party on the one side, and the regional state of Tigray and the Tigray People's Liberation Front on the other. As for the United States and the European Union, they played only a peripheral, if any, role in the process. The conflict was resolved through the African Union-sponsored negotiation that culminated in the Pretoria Agreement, which began last November with a ceasefire, followed by a peaceful agreement to fully normalize relations between the Tigray region and the central government.
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On April 23, Ethiopia celebrated the conclusion of this agreement under the theme “Enough with War -- Let’s Celebrate Peace.” Organized by the Ethiopian government, its aim was to give recognition to all those involved in making the agreement a reality, including Naledi Pandor (South African International Relations and Cooperation Minister), Olusegun Obasanjo (former Nigerian President and AU High Representative for the Horn of Africa), Uhuru Kenyatta (former President of Kenya), Moussa Faki Mahamat (Chairperson of the African Union Commission), and Workneh Gebeyehu (Executive Secretary of IGAD). In addition to Ethiopian officials, China’s special envoy for the Horn of Africa Affairs Xue Bing also attended the celebration.
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In their speeches, Naledi Pandor, Uhuru Kenyatta, and Olesegun Obasanjo praised the peace process as an epitome of the principle of finding African solutions to the continent’s conflicts. Xue Bing briefly elaborated on why the peace was won, saying it was “a victory for unity and dialogue”. In light of the international conflic in neighboring Sudan, it is significant that Xue called the Ethiopian peace process a fine example for other regions to solve internal disputes by peaceful means. It is also a victory for African autonomy, he added, and should provide important guidance for the international community’s constructive participation in Africa’s peace and security affairs.
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After being named China’s Special Envoy for the region in February of 2022, Xue made official visits to all the countries involved to put forward China's “Outlook on Peace and Development in the Horn of Africa Policy”, which led to the first Horn of Africa Peace Conference on June 23, 2022 in Addis Ababa, hosted by the Ethiopian government. It was shortly after this conference that the Ethiopia conflict began moving towards a resolution.
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| Many of the most important articles of the agreement have now been implemented, including the release of imprisoned Tigray leaders. Ethiopian troops have withdrawn from Tigray and the administration has been turned over to the local TLF authorities. The only problem remains with neighboring Eritrea, which has not withdrawn from certain areas in Tigray, which it had occupied during the conflict. |
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| | | Conventional economic theory in the West “has not been able to provide any coherent explanation for the rapid rise of China”, asserted Professor Wen Yi, a macroeconomist and former senior researcher at the Federal Reserve Bank of the United States, during Panel I of the Schiller Institute online conference on April 15 (cf. SAS 16, 17-23). He then proceeded to give his own well-informed view of the matter, which we can only summarize roughly below. (The full presentation can be viewed here, or read in Executive Intelligence Review.
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While there are many similarities between “the China model and the Western capitalistic kind of development model”, Professor Wen first pointed to three well-known “superficial differences”: 1) the scale: some 250 years after the beginning of the industrial revolution, only 15% of the world population live in industrialized societies, whereas the industrialization process in China alone would add 20% to that percentage. 2) the speed: China’s economic reform began only 70 years ago. 3) the path: Western industrialization has been “full of wars”, while China’s path has been peaceful.
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Despite these differences, Professor Wen contends that the underlying logic is very similar, and is important for developing countries to understand. In his view, the fundamental reason for poverty is the inability to mass produce. To be able to do so, a nation needs to build a unified market to make mass production profitable. But what “conventional economic theory never teaches us, is the following: The market itself is the fundamental public good. No individual peasant is able to produce it, so this kind of public good can only be created with the help of the state.”
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Wen Yi went on to discuss “three pillars” that any market needs to develop: political stability, social trust, and infrastructure (which is also a public good). Unfortunately, during the reform of the 1980s and ’90s, the Washington Consensus told developing countries to be content with weak governments and let the state collapse, and the “market will emerge by itself”. That view is false, he stated, as can be seen in the examples of Europe, the United States, Japan, etc., that “all helped to carry the market for their own enterprises”. Another aspect Prof. Wen insisted on, is the need to create the market sequentially, step by step, and not in “one single big push or shock therapy”.
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| In European history, he noted, colonization helped create a global market, but “China’s experience told us that we can also create markets peacefully, without repeating the Western style of war capitalism. That’s one of the most important lessons China is able to offer to other developing countries. The state, the government, central and local, need to play a very important role to help your economy to create a market for your own economy.” |
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