STRATEGIC ALERT NEWSLETTER
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| | | The war unleashed between Israel and the Palestinians, if allowed to continue, could quickly escalate out of control, involving the entire Arab world, Iran, and well beyond. Therefore, the priority must be to stop the bloodbath, neutralize the “crazies” on both sides, and protect the civilian population in Gaza that is now threatened with “ethnic cleansing”.
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However, most Western media, acting on behalf of the powers that be, are promoting vengeance and war as the only solution, forcing people to believe they have to choose sides -- either the Israelis or the Palestinians, either black or white.
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The so-called “democracies” are fully on that line, contrary to the African Union, Arab nations, China, Russia and others, that have called for an immediate cease-fire and international efforts to achieve a two-state solution. U.S. Secretary of State Antony Blinken rushed to Israel, where he declared that “Israel has our back” no matter what, while Chancellor Scholz called the security of Israel our “reason of state”, before making the trip to Israel himself, following on the heels of the superfluous EU Commission President Ursula von der Leyen. Pro-Palestinian demonstrations have been banned in Germany and France and severely restricted in the UK, while the U.S. State Department instructed a group of U.S. diplomats to refrain from using the phrases “restoring calm,” “end of violence/bloodshed,” or “ceasefire/de-escalation”, when referring to the conflict in Gaza.
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To understand the situation, a very different viewpoint is needed. As Lyndon LaRouche once explained in 2009, during a presentation at Central Connecticut State University, it is an error to talk about a conflict in the Middle East, “we should talk about the Middle East as a conflict, and a conflict that is largely global”. Ever since the British took over the Middle East, it has been used as a tool in the geopolitical “great game”. And that continues to be the case today.
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Just consider that the violence erupted there, just as NATO’s proxy war against Russia in Ukraine was stalling, and support for it in the United States and Europe was dropping dramatically. Thus, the focus of the “great game” has shifted to a different venue, to South-West Asia. Part of the reason is that the ominous “military-industrial complex”, made up of corporate cartels, makes tons of money from wars. But even more importantly, war is used to reshape policy, and the objective today is to ensure there will be no break with the “unipolar order”. That also implies stopping the efforts of the BRICS and the Global South more generally to effectively establish a new paradigm of international relations, as proposed by the Schiller Institute.
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| Coming back to the situation in Israel and Gaza, there has been a 75-year period of conflict and strife. But the cycle of revenge has never brought peace. Depriving the population of Gaza of food, medicine and fuel will not let Israelis to live in peace, on the contrary. For that, a new security and development architecture is indispensable (cf. the following item). |
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| | | Over the course of 18 weeks of private weekly meetings, the IPC, co-initiated by the Schiller Institute, has built up a high level of cooperation between representatives of international organizations of different political outlooks which shared the recognition that the drive for global war must be stopped in favor of security and development for all nations. The coalition’s first public meeting was held on Oct. 13.
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Schiller Institute founder and chairwoman Helga Zepp-LaRouche opened the event, emphasizing that the world situation has worsened dramatically with the war in Israel and Palestine. Many questions remain unanswered: was Israel really caught unaware, or was the Egyptian warning ignored in order to provoke a crushing defeat, once and for all, of the Palestinian people? Was the intent to sabotage the Saudi-Iran agreements? Was it to provoke a wider war against Iran, or even against the BRICS itself? Whatever the case may be, she insisted, efforts must be made to avoid further bloodletting of the civilian population through an indiscriminate retaliation. That is also the view of major opposition to Bibi Netanyahu within Israel (cf. below).
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The solution, Helga Zepp-LaRouche said, is to put differences aside to prevent global war, and this can only be achieved with the “coincidence of opposites” approach of Nicholas of Cusa. Geopolitics must be eliminated, in favor of the principle of taking into account the “interests of the other” as per the Treaty of Westphalia. Concretely today, that means that a new architecture of development and security that applies to all countries must be recognized as the only means for peace. People need to think differently, to reject the idea that some people are animals or demons, and to look to the one mankind. The human mind, she said, is where the unity of mankind lies.
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| As an immediate action, it was proposed and accepted during the online meeting that the UN Resolution 242 from 1967, demanding an Israeli withdrawal from the occupied territories, be included in a petition. Resolution 242 was signed by Israel but never implemented. It demanded: |
| | 1. “Withdrawal of Israel armed forces from territories occupied in the recent conflict;
2. “Termination of all claims or states of belligerency and respect for and acknowledgement of the sovereignty, territorial integrity and political independence of every State in the area and their right to live in peace within secure and recognized boundaries free from threats or acts of force....” |
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| Among the participants at the meeting were former CIA Russia expert Ray McGovern, former President of Guyana Donald Ramotar, former Virginia senator Col. Richard Black, Bowling Green State University professor emeritus Oliver Boyd-Barrett, Argentina Institute of Geopolitical Studies head Ruben Dario Guzzetti, US Senate candidate Diane Sare, as well as speakers from Pax Christi, the Libertarian Party, and from Ghana, Costa Rica, Nigeria, and Nicaragua. |
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| | | Reports in Western media have mainly presented the Israeli population as being solidly unifed behind Prime Minister Benjamin Netanyahu. Israeli media, on the contrary, at least some of them, have given voice to the intense anger brewing at the government for having deliberately created the conditions for the renewed outbreak of war with Hamas. The following examples give the tenor.
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* Dmitry Shumsky is the Goldstein Chair in the History of Zionism and the New Yishuv at Hebrew University. “Why Did Netanyahu Want to Strengthen Hamas?” is the title of an article he wrote that was published in the Oct. 11 Ha’aretz. He traces the roots of the assault “by the Islamist nationalist Falangists from the prison that is Gaza on Israeli citizens” back to the period when Benjamin Netanyahu was Prime Minister of Israel for the second time, in 2009. Since then, “Netanyahu developed and advanced a destructive, warped political doctrine that held that strengthening Hamas at the expense of the Palestinian Authority would be good for Israel. The purpose of the doctrine was to perpetuate the rift between Hamas in Gaza and the Palestinian Authority in the West Bank. That would preserve the diplomatic paralysis and forever remove the ‘danger’ of negotiations with the Palestinians over the partition of Israel into two states, on the argument that the Palestinian Authority doesn’t represent all the Palestinians”...
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* In its lead editorial Oct. 8, entitled “Netanyahu Bears Responsibility for This Israel-Gaza War,” Ha'aretz charged that the current disaster “is the clear responsibility of one person: Benjamin Netanyahu”. He is accused of failing “to identify the dangers he was consciously leading Israel into when establishing a government of annexation and dispossession... while embracing a foreign policy that openly ignored the existence and rights of Palestinians.” The editorial staff points out that once Netanyahu became Prime Minister for the third time in Dec.2022, he began “overt steps taken to annex the West Bank, to carry out ethnic cleansing in parts of the Oslo-defined Area C... This also included a massive expansion of settlements and bolstering of the Jewish presence on Temple Mount, near the Al-Aqsa Mosque, as well as boasts of an impending peace deal with the Saudis in which the Palestinians would get nothing, with open talk of a ‘second Nakba’ in his governing coalition.”
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* Shelly Yachimovich is a former chairperson of the Israeli Labor Party and former leader of the Opposition in the Knesset. She wrote in Yediot Ahronot (Oct. 10): “Netanyahu is the main culprit of the terrible disaster that is befalling us now.” She listed crimes for which he was responsible, including being guilty of “nurturing Hamas and showering it with all good things, as no leader before him had done, and all to weaken, dry up and deteriorate the Palestinian Authority and its leader, perhaps the last pragmatic and non-fundamentalist Palestinian leader with whom it was possible to reach an agreement…. Guilty of never formulating a strategy to resolve the bloody conflict with our neighbors... Netanyahu must go.”
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| * Sever Plocker, the senior editor of Yediot Ahronot, Israel’s largest circulation newspaper, titled his op-ed of Oct. 10 “Netanyahu and His Messianic Cohorts Must Go”. He accuses the government of failing Israel “in every way” with its “catastrophic, perverted list of priorities”, including concentrating almost entirely on controversial judicial legislation and capitulating “to the financial and political demands of its ultra-Orthodox members. The government and its prime minister had no time, will, or interest in dealing with Israel’s economy, social problems, education, health, or security. Yes, security….This disgraceful failure can lead to only one conclusion, regardless of political views: Enough! Leave!” The Netanyahu “coalition along with their enablers must go…. They should leave, their heads bowed in shame and exit the stage, the sooner the better….” |
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| | | The increase of central bank interest rates is creating an “imbalance” in the financial system that can unleash a global meltdown if not stopped. The problem is, that it can be stopped only if the speculative side of the system is shut down. Traditional measures, such as lowering rates again, would not work. It is like the driver who steps on the brakes to stop a car traveling at 200 kph only to discover that the speed is increasing.
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Last week, we explained that the increased cost of sovereign debt financing due to higher interest rates is pushing indebtedness out of control, and the world bond market over the brink. The week before, we had shown how banks holding huge amounts of older bonds are accumulating losses on the market value of those bonds which they can no longer conceal, in addition to the losses due to the slowdown of the economy.
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Succinctly put, the ratio of new cumulative debt produced by the higher cost of money, to the shrinking physical economy as described in Lyndon LaRouche's famous “collapse function” (Triple Curve), has reached a boundary condition.
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This week, both the IMF and the U.S. Congress’ Budget Office launched the alarm. At the Oct. 9-15 IMF/World Bank meeting in Marrakech, Morocco, IMF Economic Counsellor and Director of the Research Department Pierre-Olivier Gourinchas said not only that the U.S. debt situation is precarious, but that corporate defaults are up dramatically from 2022 to 2023. According to S&P Global data which quantify what he said, corporate defaults in 2023 through August, and in the month of August alone, were higher than in any year since the “Great Recession” of 2009. And for credit cards and auto loans, defaults on the sub-prime categories are now at 4-5%.
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On Oct. 11, the IMF’s Fiscal Affairs Director Vitor Gaspar was quoted saying that “Under unchanged policies, debt dynamics in the U.S. are very unfavorable”. (The remedy pushed by the IMF is worse than the illness: Banks are supposed to increase leveraged credits for Green projects in developing countries. In other words, more debt for unproductive investments).
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The Committee for a Responsible Federal Budget predicts, based on the assumption that rates remain one percentage point higher than the CBO’s (Congressional Budget Office) forecasts, that interest spending in the current fiscal year is on track to exceed $800 billion, more than double 2021's $352 billion figure. And in 2026, the government's net interest expense would reach 3.3% of GDP, the highest on record.
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| With an eye to what this means for the financial system in the coming weeks, Michael Barr, the Vice Chair for Supervision at the Federal Reserve, warned Oct. 9 that economic losses in a major financial crisis could amount to the U.S. GDP. |
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| | | In a study published Oct. 2, the Washington Post analyzed data from the past 40 years to address the dramatic decline in life expectancy in the United States, compared to other “peer” (developed) nations and even to some poorer nations. While not addressing the collapsing U.S. physical economy and related factors directly, the study does usefully refer to the failing healthcare system, rising poverty and inequality and lack of social and healthcare services to explain why the U.S. has fallen so dramatically behind other “wealthy” countries.
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The U.S. “is failing at a fundamental mission -- keeping people alive,” the study asserts. After the average life span peaked in 2014 at 78.9 years, it began to drift downward, even before Covid hit. In 2020, it was recorded at 77.4 years, and in 2021, at a shocking 76.4. Although the rate has reportedly “rebounded” more recently, no updated statistics are given, and an actual increase in life expectancy is unlikely given the economic, social and cultural collapse in the country.
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“Among wealthy nations, the United States in recent decades went from the middle of the pack to being an outlier, and it continues to fall further and further behind”, the study notes. While pointing to the “extreme death rates” seen in young Americans due to gun violence, the opioid epidemic, etc., it emphasizes that chronic diseases (heart disease, cancer, diabetes, liver disease, obesity, etc.) are killing many more older people.
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| The greatest difference in the total number of deaths between the U.S. and peer countries is for those in their 50s and 60s. The U.S. specializes in high-tech interventions for acute illness, but other countries emphasize preventing illness. |
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| | | At the Russian Energy Week International Forum on Oct. 11, Vladimir Putin could hardly avoid ridiculizing the European Union’s energy policy – whether he wanted to or not. He reiterated that Moscow had proposed to immediately begin supplying Germany and other European countries with up to 27.5 billion cubic meters of natural gas annually, pumped through the undamaged pipeline of Nord Stream 2 (cf. SAS 42/23). Germany, however, has not taken up the offer, preferring to pay more to import LNG from the United States despite the ruin of its own economy.
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“I believe that this is an economically foolish behavior”, Putin commented. “It’s like they are intentionally undermining the German economy. I just don’t understand why gas can be supplied to Germany through the territory of Ukraine, but they think it’s impossible to do via Nord Stream 2. Why can’t they offer Poland to open the Yamal-Europe ? I just don’t understand it.”
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During the course of his address, the Russian President further commented that “the modern political system in obviously sometimes brings not the smartest people to the top.”
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Contrary to the policy imposed by Brussels, Putin also pointed out that Russia’s basic priority is to ensure “sufficient supply of fuel and energy resources within the country”, while improving the technologies used. In that context, the government has already informed the UN climate conference that it would not accept any call for the phasing out of any fossil fuel.
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The issue of the EU model also came up at the Valdai Discussion Club on Oct. 5, when Vladimir Putin was asked about a new global monetary system being discussed by the BRICS and the use of national currencies in trade. A single BRICS currency is possible, he said, and “theoretically speaking”, it is probable. “But in order to begin working on this, we need to achieve a certain parity in the development of the economies of the member states, which is a very distant perspective.”
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| He then warned against the Euro model, in which national currencies in the 19 countries of the Eurozone disappeared in favor of a single currency: “As my colleagues told me, in the course of time, the Eurozone transitioned to the common currency, the euro, without thinking about how it would work in countries with a different level of economic development, and problems emerged. Why would we make the same mistake? This issue is not even on the agenda. But we should and we will work to improve the entire financial system, both global finance and financial relations within BRICS.” |
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| | | Judging from the preliminary results of the national elections in Poland on Oct. 15, the current PiS government is set to be replaced by a coalition of the three opposition parties, which altogether received 53.1% of the votes. The new Prime Minister would be Donald Tusk, who served as Polish Prime Minister in 2007-2014 and President of the European Council in 2014-2019. Such a coalition would have 248 of 460 seats in the new national parliament, against 200 seats for the Law and Justice party PiS. On Oct. 1, Tusk’s PO party had organized a mass rally of one million Poles in Warsaw -- the biggest turnout since the big protest rallies of the Solidarnosc movement in the 1980s (cf. SAS 40/23).
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Although most of the votes for the PiS came from Catholic voters in countryside districts, a number of farmers supported Tusk’s PO party out of disgust with the government’s acceptance of the agricultural policy dictated by Brussels. After the government first decided to let Ukrainian grain into the country, to the detriment of the higher-priced grain produced in Poland, massive farmer protests were organized, leading to the decision to ban the imports in order to protect Polish producers. Many other voters are opposed to the crackdown by the government on the judicial sector and the media, and to its anti-abortion course. Donald Tusk, a liberal, is considered a more pro-European politician, generally—which given the policies pursued by the European Commission, is not likely to improve the overall economic situation of Poland.
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| Energy will be a crucial litmus test for any coalition led by Tusk. The big question is whether he will continue the pro-nuclear course of the outgoing government, which had just selected the Westinghouse AP1000 reactor technology for a plant at Lubiatowo-Kopalino in Pomerania. The country's Ministry of Climate and Environment issued a decision-in-principle for Polskie Elektrownie Jądrowe (PEJ) – 100% state-owned -- - to construct the plant, to be completed in 2033. Moreover, being 70% dependent on coal for its energy supply, Poland will maintain coal mining and coal plants until a full substitute is available with nuclear power – the European Commission be damned. |
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| | | China’s Third Belt and Road Forum for International Cooperation, on Oct. 17-18, will give new impetus to the initiative which has become the largest infrastructure and development project ever undertaken in the world – in just ten years after it was launched. The forum has brought together participants from 130 countries around the world, and some 20 heads of state and government, including Vladimir Putin and Hungarian Prime Minister Orban.
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Just prior to the opening, on Oct. 10, the Chinese government issued a White Paper entitled Belt and Road Initiative: A Key Pillar of the Global Community of Shared Future, which states that the BRI “connects the past, the present and the future. This initiative was launched by China, but it belongs to the world and benefits the whole of humanity.” It further stresses that the Initiative “advocates win-win cooperation in pursuit of the greater good and shared interests” among equal participants, and is in no way a “geopolitical tool” or a simple program for international aid. Countering a common piece of disinformation, it states that no country has fallen into a debt crisis as a result of cooperation on the BRI.
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At an Oct. 12 briefing of the Foreign Ministry, spokesman Wang Wenbin was asked by CCTV about the White Paper, and in particular about what the Belt and Road Initiative has achieved. “Development is a timeless theme for humanity”, he began by noting.
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“Over the past decade, Belt and Road cooperation has followed the principles of wide consultation, joint contribution and shared benefits and a high-standard, people-centered and sustainable approach and focused on connectivity -- the lack of which is considered the biggest bottleneck for development. A large number of landmark projects, such as the China-Laos Railway, the Jakarta-Bandung High-speed Railway, the Budapest-Belgrade Railway and the Piraeus Port, have been put into operation. The China-Europe Railway Express opened up new corridors for land transport on the Eurasian continent. The Maritime Silk Road shipping network provides service around the world. The connectivity framework of ‘six corridors, six routes, and multiple countries and ports’ has basically taken shape.
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“New roads, railways and airlines -- like blood vessels -- have greatly improved transportation, enabling a more efficient trade network and slashing the cost for accessing the global market by Belt and Road partner countries, which has boosted their own development capacity and helped build a path towards a more prosperous future.”
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| Wang Wenbin pointed out that over 3,000 development projects have been launched, and that according to World Bank estimates, BRI-related investments could lift 7.6 million out of extreme poverty by 2030, and 32 million out of moderate poverty. The BRI provides “not just a road to prosperity but also hope for humanity.... We hope the BRI will serve as wings for the world on a journey towards more peace, growth, cooperation and a better future for all.” |
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| | | A good deal of the discussion at the IMF/World Bank annual meeting, that took place Oct. 9-15 in Marrakech, Morocco, was devoted to the soaring indebtedness worldwide. These two leading institutions are pushing some new lending, but only for projects to “save the planet” and other boondoggles.
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China, which insists instead on funding actual development projects, remains a prime target of the G7 countries that accuse Beijing of laying “debt traps” in the Global South. That accusation was strongly refuted by Saudi Arabia’s Finance Minister Mohammed Al-Jadaan on Oct. 12 in a panel with IMF Managing Director Kristalina Georgieva and World Bank President Ajay Banga. “Maybe it’s time to set the record straight,” Al-Jadaan said, as quoted by CNBC. “China stepped up when people actually shied away from Africa. China built infrastructure that they cannot carry with them to China; it will actually be in Africa. China took the risks, when people didn’t want to take the risks. … Instead of actually poking China, I think we should establish here that they did what they needed to do for their own interest, but also to actually help other nations…”
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| “Instead of just antagonizing them, and actually damaging the low income countries which need their help, we should just show China as much love as we can, for the sake of the low-income countries, which need to find solutions for their debt,” he argued. |
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