E.I.R.STRATEGIC ALERT
WEEKLY NEWSLETTER
Volume 35, No. 6, February 11, 2021
For the Biden Administration,
Nuclear War Is a Real Possibility
The arrival of Joe Biden in the White House was greeted with relief by many political circles throughout the world, and not only among geopoliticians. For them, Biden’s first speech on foreign policy, delivered on Feb. 4, must have produced some
what of a shock. Under his direction, he said, the U.S. will reclaim the mantel of global leadership, and begin “rebuilding the muscles of democratic alliances that have atrophied from four years of neglect.” And in the same vein, “American lead
ership must meet this new moment of advancing authoritari anism, including the growing determination of China to rival the United States, and the determination of Russia to damage our democracy.”
Biden’s intentions cohere with a number of recent strate gic papers put out by various government entities and think tanks. The most shocking statement, however, came from Admiral Charles Richard, the commander of the US Strate gic Command, who wrote in the February issue of the US Naval Institute’s Proceedings: “There is a real possibility that a regional crisis with Russia or China could escalate quickly to a conflict involving nuclear weapons, if they perceived a conventional loss would threaten the regime or state. Conse quently, the U.S. military must shift its principal assumption from ‘nuclear employment is not possible’ to ‘nuclear employ ment is a very real possibility’....”
As Helga Zepp-LaRouche pointed out in a recent article, “It should be clear that Admiral Richard is talking here about World War Three, which would likely mean the annihilation of mankind.” As for the regional conflicts he mentions, what is he referring to? “A conflict on the Russian border because of the Aegis-based missile defense systems in Poland and Ro
mania? Or over Eastern Ukraine, with Europe becoming the theater of war? A conflict between Israel and Iran, or an es calation of tensions around Taiwan?”
In that context, Zepp-LaRouche goes through the recent paper published by the Atlantic Council calling for organizing a putsch against President Xi Jinping from within his “inner circle” in the Chinese Communist Party (cf. SAS 5/21). She proposes that her German audience engage in little mental exercise: “How would the German government react if a lead
ing Russian think tank were to publish a study calling for the overthrow of Chancellor Merkel and her inner circle with la
ser-like precision, in order to help take power a faction in the CDU that would be subordinate to Moscow’s interests, while at the same time the commander of strategic weapons was talking about how a nuclear war is likely? There would be an unprecedented uproar in all of Germany!”
As for Russia, the drumbeat of support for Alexei Navalny from Western geopolitical layers serves the same purpose of setting into motion a color revolution, and thereby “creating an opposition within Putin’s inner circle that could be used to remove him from office” (cf. below).
Helga Zepp-LaRouche further calls on European govern ments to avoid being dragged into the campaign against Russia and China. And in light of Admiral Richard’s statements, “Eu ropean countries must not only explicitly distance themselves from such a policy, they must also withdraw from NATO and seek a security architecture that reflects the interests of their populations. What is at stake, is Europe’s survival.”
The Case of GameStop:
How Hedge Funds Made out Like Bandits “The revenge of small investors” against the Wall Street Go liaths was the narrative surrounding the campaign to inflate GameStop’s stock value organized by some trading apps such as Robinhood, producing heavy losses for some large hedge funds. In reality, that incident shows how savers are used as cannon fodder by those same hedge funds in a cannibalistic fight for survival.
The negative rate policy enforced by central banks has forced many households to invest their savings in shares or high-risk assets, just to receive a slight return on their money. Online trading platforms such as Robinhood do not take fees for trading stocks, but they do demand high fees when it comes to derivatives. And who supplies the stock of options, derivative products, etc., and the money that is lent to specu
late? The hedge funds and Wall Street banks.
Thus, according to Investor’s Business Daily, nine large hedge funds gained about $16 billion from speculation on GameStop. “Nine investors, including large fund-running in stitutions like Fidelity’s FMR and BlackRock plus some well positioned individuals like Chewy co-founder Ryan Cohen watched the value of their GameStop holdings soar more than $1 billion apiece just this year.... All told, these nine investors made a total of roughly $16 billion on their GameStop stakes,
just in January. That means they grabbed roughly three-quar ters of the $20.4 billion gain in the company’s market value this year.”
In the meantime, the value of Gamestop shares has col lapsed, which is bad for those who bought the physical stocks, but makes no difference for those who made the derivative bets and won.
Many are now demanding that the derivatives market be “regulated”, but the only regulation that will work is to shut it down for good, as economist Lyndon LaRouche often warned. Glass-Steagall bank separation needs to be restored, so that speculators no longer have access to central bank liquidity or to depositors’ money in commercial banks. Future contracts which are not connected to real physical goods, such as com
modities, need to be banned, with licenses granted only to traders who buy or sell those commodities. The entire specu lative bubble should be allowed to burst, instead of attempt ing to bail it out with a new, “green” bubble, while household savings and company accounts are protected through bank separation.
Cheminade Responds to Economists’ Call to Cancel ECB Public Debts
In a call published on Feb. 5, over 100 economists from vari ous EU member states call for the cancellation of the public debts held by the European Central Bank, in order to “facili tate social and environmental reconstruction”, in the wake of the COVID-19 pandemic. They note that the ECB now holds “nearly 25% of European public debt”, amounting to some 2,5 trillion euros, and propose that it be either written off, or transformed into “perpetual debts at 0% interest rate”. The call, initiated by a group of French economists, was published simultaneously in nine European newspapers, including Le Monde (France), La Libre Belgique (Belgium), El País (Spain), Der Freitag, (Germany) and Avvenire (Italy), and on Euractiv in English at https://www.euractiv.com/section/economy-jobs/ opinion/cancel-the-public-debt-held-by-the-ecb-and-take back-control-of-our-destiny/.
For Jacques Cheminade, the head of the French Solidarité et Progrès party, the economists’ call is useful in that it con tributes to a much needed debate on the state of the Euro pean economy and the world economy. However, “it is far too limited in scope”, and “promotes de facto” the green finance scheme. It only concerns the debts held by governments, while ignoring the fundamental fact that the current system, “run by a financial and digital oligarchy”, cannot function without the constant accumulation of debts, both public and private, and the creation of fictitious capital and speculative bubbles. That entire system must be replaced.
Moreover, while calling for “ecological and social recon struction”, it does not define any rational criteria for defin ing the type of investments needed to ensure real economic growth. The main parameter, Cheminade explains, must be the increase of the potential population density, and increas es in productivity which make it possible, by creating even greater real economic wealth, to repay the legitimate debts contracted.
Promoting “environmentalism” without defining such crite ria, Cheminade goes on, plays into the “Great Reset” scheme pushed by the World Economic Forum, Big Tech, and the ma jor central banks.
But even the proposal of these European economists is too much for the European Central Bank head, Christine Lagarde. She told France’s Journal du Dimanche (Feb. 7) that “cancel ing that debt is unthinkable” and would be a violation of the European treaty. The latter argument is refuted by the signers in their call.
Italy: Mario Draghi Goes for Creative Destruction and the Great Reset
Financial markets, the European Commission and his former central bank colleagues were delighted to hear that Mario Draghi was given a mandate to form a national government in Italy. By the time our newsletter reaches subscribers, the former ECB chairman will probably have succeeded in patch
ing together a parliamentary majority of very motley groups, from the radical environmentalist M5S to the pro-business Berlusconi faction, the liberal Democratic Party and the sov ereignist Lega. To do so, he launched a deception operation based on the image of “the new Draghi”.
It began with an article in the Financial Times back in March, in which he called for expanded government spending to tack le the effects of the pandemic, which he compared to a war. The main task of governments, he wrote, is to provide firms with liquidity, and eventually cancel the debt of those that are not able to walk by themselves after the crisis.
But that’s only half of the story. To understand the rest, it must be seen together with Draghi’s presentation of the Group of 30’s 2020 report last December, which we covered in issue No. 52/20. In that report, he made it clear that gov
ernment support should go only to “sustainable” firms, i.e., those that are compatible with the EU’s transition towards decarbonization. “Attitudes toward firm failure and employ ment: Policymakers will vary in their weighting of preserving the status quo and existing jobs, versus allowing or encourag ing the process of ‘creative destruction,’ in which firms fail, allowing jobs and resources to flow from unsuccessful firms to ones that are better suited for the new economy....”, says the report, using the term “creative destruction” no less than six times.
Thus, Draghi’s agenda, which is to be adopted in the entire transatlantic region under the Great Reset paradigm, can be described as a Schachtian scheme, in reference to Hitler’s first Finance Minister Hjalmar Schacht. The latter used massive government debt, concealed behind a letterbox firm (Metall
forschung Gesellschaft Mefo), to finance unproductive spend ing (rearmament). Similar to Schacht, Draghi and the Great Reset faction intend to use massive public investments for the unproductive green transition.
In that context, some funds will also go to infrastructure, but the emphasis will be on guaranteeing increased financial flows to roll over the debt of the system. At the end of the day, the physical economy will be ruined and government finances as well. War was the outcome of Schacht’s policy from the very beginning. Italy is not planning a war, but Joe Biden’s United States and NATO are pursuing a confrontation policy with Russia and China, that makes the danger quite concrete.
On Jan. 29, Movisol, the LaRouche movement in Italy, pub lished a statement by its chairwoman Liliana Gorini warning of the danger of a Draghi government, which can be read at: https://movisol.org/renzi-draghi-e-il-grande-reset-per-litalia/
EIR STRATEGIC ALERT 2 WEEKLY NEWSLETTER n°6 / 2021
The Campaign for Nuclear Power
Gains Ground in Europe
One of the (likely unexpected) results of the campaign to de monize CO2 as responsible for an imminent apocalypse, has been to increase support for nuclear energy as a highly ef ficient, safe, and “clean” source of electricity. Unlike Germany, two new European countries, Poland and Ireland, may soon join the ranks of nuclear power producers.
* In Poland, the cabinet approved on Feb 2 the national energy development plan (PEP2040), which emphasizes re newable energies to replace coal, but also includes the com mitment to build at least six nuclear power plants by 2040, with the first reactor to come onto the grid in 2033. On the same day, Climate and Environment Minister Michał Kurtyka met with representatives of the French power company EDF in Warsaw. He confirmed that the government has also held talks with the Japanese Atomic Energy Agency on building a high-temperature gas-cooled research reactor, which could be part of the solution for hydrogen production.
* In Ireland, even the chairman of the Green Party, Environ ment Minister Eamon Ryan, is considering nuclear power as an option. When asked last week at an Institute of Interna tional and European Affairs event if modular nuclear reactors were on the government’s agenda, Ryan said he “wouldn’t rule it out if someone could show that there is a new form of nuclear power that fits in within this model.” He added he only saw options on a design board so far, but promised to look more closely into it if things turned more concrete.
* On the European level, 13 Labor unions representing en ergy sector workers in Belgium, Bulgaria, Finland, France, Hungary and Romania wrote an open letter to the EU Com mission stressing the key role of nuclear power generation in enabling Europe to achieve its objective of carbon neutrality, as well as in contributing to Europe’s energy security and re covery from the COVID-19 pandemic. They note that even the Intergovernmental Panel on Climate Change recognizes that nuclear power is an indispensable part of the solution to the climate challenge.
Already now, the letter states, nuclear power provides al most half of the low-carbon electricity production in the EU. They call on the Commission to include this clean source in the taxonomy, as its exclusion “would have a strong negative impact not only on the European nuclear industry -- which provides more than a million jobs in Europe -- but also on all European industries using electricity.”
British Royal Family Rakes in Billions from Decarbonization Craze
While the United Kingdom has the largest offshore wind sec tor in the world, the companies operating those wind farms pay a tithe to the Queen through the Crown Estate. The latter manages the lands and other holdings in England, Wales and Northern Ireland belonging to the Monarch, which include the entire seabed along the coastlines of all three.
According to The Guardian, in the last ten years, the Crown Estate has collected in “rent” more than 4 billion pounds from licenses sold through auction for the opera tion of such windfarms on the seabed. While 75% of such funds go into the Kingdom’s treasury, the Queen’s household skims off 25%. That previous sum of one billion pounds is set to more than double over the next ten years with the auctioning of 6 new licenses announced on Feb. 8. Among
the winners were BP, Germany’s EnBW and RWE, the Green Investment Group, etc.
The monarchy can thank Tony Blair for the windfall since it was under his government in 2004, that the Crown Estate was given the renewable energy exploitation rights. And thank Boris Johnson even more, since he has called for every home in the UK to be powered by offshore wind by 2030. Even the journal of the windfarm industries expressed “dismay” at the “bonkers” revenues the Queen is raking in.
But it wasn’t always this way. It was only in April of 2012 that the British government decided to do away with the grant payment system, and turn the clock back to a feudal form of income for the royal family. Under the terms of the Sovereign Grant Act 2011 (SSG), the monarch receives funds indexed to a percentage of the Crown Estate’s annual net revenue. Originally set at 15%, it was subsequently increased to 25% in 2017 on the pretext of renovating the Queen’s palaces. Furthermore, the payment was no longer subject to debate in parliament. Since then, the Queen’s income has increased handsomely:from 30 mn pounds in 2011-12, it rose to 76 mn in 2016-17 and, with the sales of leases for offshore wind farms, could increase to 200 mn this year.
How Navalny’s Right-Hand Man
Sought Millions from MI6
Russian opposition figure Alexei Navalny has been convicted on a number of criminal charges, and his latest imprisonment is due to parole violations. But many believe he is also acting as a foreign agent to launch a color revolution in Russia. That charge is bolstered by a surveillance video broadcast on Feb. 1 by RT. The video, filmed by Russia’s Federal Security Service (FSB) back in 2012, shows a meeting between the executive director of Navalny’s Anti-Corruption Foundation (FBK) Vladi
mir Ashurkov and the second secretary for political affairs at the U.K. embassy in Russia, one James William Thomas Ford, who was considered to be an MI6 agent working under diplomatic cover.
On the video, Ashurkov is heard saying: “If we had more money, we would expand our team, of course... $10, $20 million a year.... And this is not a big amount of money for people who have billions at stake.” For that price, Ashurkov claims he could deliver not just anti-corruption investigations and reports, but also “mass protests, civil initiatives, propa
ganda, establishing contacts with the elite and explaining to them that we are reasonable people and we are not going to demolish everything and take away their assets.” Ashurkov also says that his organization could benefit British business since it could deliver damaging elements against Russian banks operating in Europe.
British diplomat Ford makes no financial commitment in the video, but suggests that a workaround would be to go through Transparency International.
While RT presented no proof of Ford being an MI6 agent, his background is very suggestive of the possibility. On his Twitter account, which he opened in 2011, he posts his pro file as: “British diplomat in Brussels. European foreign policy. Russia, Turkey, Balkans, Middle East. Previously in Moscow, Paris, Ankara. English-Swedish family.” He was first secretary at the embassy in Turkey between 2015 and 2019, while the British Ambassador in Ankara between 2014 and 2017 was Richard Moore, who is now head of MI6 and was in reality always an MI6 agent.
EIR STRATEGIC ALERT n°6 / 2021 WEEKLY NEWSLETTER 3
As for Vladimir Ashurkov, he is still active, and living in London. In fact, he issued a public letter just last week to President Joe Biden, with a list of Vladimir Putin’s close asso ciates who, he says, should be slapped with sanctions. At the same time, a second ally of Navalny, Leonid Volkov, granted an interview to Reuters with the same call for sanctions on Putin’s inner circle, which would lead to “intra-elite conflicts”. Reuters was delighted, commenting that this “could trigger potentially destabilizing infighting among Russian elites,” i.e., a potential regime change from within.
The Urgency of a Global Health System Now The Schiller Institute held a German-language three-hour online seminar on Feb 3 on the theme “Into Economic Col lapse with the Great Reset? Or a New Paradigm for Coop eration?”. The event was opened by Helga Zepp-LaRouche, who counterposed the push for a green eco-dictatorship in the trans-Atlantic world, to the need for in-depth economic development, including as the antidote to war. She was fol lowed by Dr. Ole Döring, a Sinologist and health ethicist from Berlin, who went into the lessons to be drawn from China on how to fight the pandemic, not only from a medical stand point, but also socially. Dr. Wolfgang Lillge, editor-in-chief of Fusion magazine, then spoke from Berlin on the development of vaccines against COVID, and the potential breakthroughs being worked on, but which are only one aspect of the meas ures that must be taken. The last speaker in this first session was Rainer Apel, from EIR in Wiesbaden, who described the contributions that German medical technology can and should make to a global health system.
The second session was addressed by Strategic Alert co-edi tor Claudio Celani, on the subject of creating a system of pub lic credit to finance a true upswing in Europe, spearheaded by the creation of 30 million productive jobs. Dr. Uwe Behrens, a retired logistics manager from Berlin who lived for many years in China, gave a first-hand presentation on China’s suc cessful fight against poverty. The panel was rounded off by Andrea Andromidas, energy editor of EIR, who described the little-mentioned, but highly destructive impact decarboniza tion would have on economic productivity.
From Our Archives: George Shultz, Architect of the Demise of the U.S. Economy It would not be an exaggeration to identify George P. Shultz as one of those most responsible for the devolution unleashed on the physical economy of the nations of the transatlantic re gion over the last half-century. Shultz, who died on February 6 at the age of 99, was the quintessential “Economic Hitman”, whose policies and actions paved the way for today’s Davos billionaires behind the Great Reset and Green New Deal, who are carrying on his work to impose a global dictatorship run by central bankers, on behalf of the largest private banks and financial institutions.
He was not simply a typical “free market” fanatic with aca demic credentials, but one consciously committed to what was once called synarchism, a term used to describe the interna tional model in which global corporations usurped the sover eign powers of nation states to drive down wages and living standards, while increasing profits for corporate shareholders. This corporatist model had been employed by those who put Mussolini (a former “Socialist” turned “Fascist”) in power in Italy, and Hitler in Germany, to carry out slave labor policies.
Shultz was trained at MIT by notorious Tavistock Institute brainwasher Kurt Lewin, whose pioneering work in lowering labor costs experimented with ways to get workers to partici pate willingly in their own speed-up, to avoid the more brutal methods applied by the Nazis. This work came in handy in the 1970s, when Shultz worked with the “Chicago Boys” after the bloody coup against Salvadore Allende in Chile by General Pinochet. Though he admitted in an interview that the dicta tor Pinochet “no doubt did some unnecessarily brutal things,” he argued that this was needed to bring down costs to once again attract foreign investment in Chile!
Before becoming a part of the U.S. support effort for the Chicago Boys in Chile, Shultz was at the center of the Lon don-Wall Street destruction of Franklin Roosevelt’s Bretton Woods system. As a member of the economic team of the Nixon Administration, he joined with Paul Volcker, Arthur Burns and Henry Kissinger, to convince Nixon to break with Bretton Woods, ending the gold reserve system backing the dollar, and initiating the era of floating exchange rates. This act, done on August 15, 1971, was denounced by Lyndon LaRouche at the time, who accurately described it as modelled on the policies of Schacht.
This was the final blow to the post-war economic boom launched by President Kennedy, with his FDR-oriented com mitment to government-directed investment in physical goods production, with an emphasis on scientific and technological progress. Instead, since then, the physical economy of the U.S. has been on a downward trajectory, in which money flows have been directed to speculation on increasingly risky-but profitable financial instruments, creating ever-new bubbles, in an escalating wealth transfer to the wealthiest 1%.
Shultz was an ardent supporter in the Reagan adminis tration of the Thatcherite deregulation policies, which freed bankers from concern with the physical economy. In 1999, he organized a group of neoliberal War Hawks called the Vulcans to back George W. Bush, whose wars benefited his Military Industrial Complex confederates, including leading contractor Bechtel, on whose Board he served. He joined with Lord Jacob
Rothschild to make Arnold Schwarzenegger Governor of Cali fornia, after the free market energy policies he championed bankrupted the state. And with synarchist banker Felix Ro hatyn he pushed the “Revolution in Military Affairs”, designed to further privatize military and security operations coherent with the new surveillance state set up by the Bush-Cheney Patriot Act.
Among his last ventures was his work with fellow Bush League operative James Baker in support of a carbon-tax scam, in keeping with his anti-industrial Green proclivities. Shultz’s death no doubt will be mourned by those aggres sively pushing the fascist Great Reset, which he did so much to advance during his life.
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EIR STRATEGIC ALERT 4 WEEKLY NEWSLETTER n°6 / 2021
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