EIR Online
Online Almanac
From Volume 7, Issue 3 of EIR Online, Published Jan. 15, 2008

return to home page

EIR on London
London's Brutish Fairy-Tale
by Lyndon H. LaRouche, Jr.

The truth of the presently onrushing, general breakdown-crisis of the present world monetary-financial system, can not be competently understood, nor remedies for that crisis found, unless we shift our attention from the apparent world-center of the present world financial crisis, away from that London sideshow curiously identified as the British government, to the real, global financial system which has controlled the world, including London, increasingly, since the U.S. Nixon Administration's August 15-16, 1971 collapsing of the Bretton Woods monetary system. Those persons, unfortunately including most of those individuals in the relatively highest political ranks of both our U.S.A. and many among today's other leading nations, who do not accept what I have just said, are thus continuing to show themselves as lacking any competence for judging the presently spiraling world financial breakdown-crisis....

In-Depth articles from EIR, Vol. 35, No. 3
...Requires Adobe Reader®.


The 68ers Reviewed:
Under Their Skins
by Lyndon H. LaRouche, Jr.

The intention of the superwealthy financial parasites largely controlling the U.S. Presidential campaigns, is to have the candidates destroy each other, clearing the road for a campaign by New York City Mayor Michael Bloomberg, as the American Mussolini. To understand how this threat could emerge, look at the reality underlying the role of the '68ers,' and their deadly, Nazi-echoing, global strategic significance.

Bloomberg 'Mussolini Option' Is Kicked Off in Oklahoma
Harley Schlanger reports from Norman, Okla., where Bloomberg was featured at a Bipartisan Forum of primarily former elected officials, pledging to work for 'bipartisan' corporatism and austerity.

Governator Demands Sacrifice, Death
California Gov. Arnold Schwarzenegger's State of the State address.

Long Before Bloomberg, There Was Mussolini


London's Brutish Fairy-Tale
by Lyndon H. LaRouche, Jr.

If you want to understand what's going on in Britain, don't rely on what is being said publicly, or what the press reports. The politics of the British political system itself 'have arrived at a point far beyond the reach of any self-determined sort of possible remedial actions by that political system itself. The residual function thus remaining within the power of the British political system, has been to provide distracting pieces of entertainment, fairy-tales or mere gossip, whiling away the hours until the economic version of the proverbial 'grim reaper' arrives. . . .'

London's Blair Pushes Post-Westphalia Chaos

The End of the 'Free' Market Economy:
We Need Laws To Save the Common Good in Germany!

Because the 'free-market' world economy is now as wrecked as the Communist system was in 1989, Helga Zepp-LaRouche asserts that Germany must dump the European Union's financial architecture, so the German government can activate its Basic Law to uphold the vital functions of the economy.

International Intelligence


Clinton's Fight for 'Invisible Americans' Can Save the U.S.
In the final 72 hours before the New Hampshire primary, Hillary Clinton shifted her strategy, abandoning the campaign persona that had been scripted for her, and reaching out to citizens in the lower 80% of income brackets.

Grassroots Support for LaRouche's HBPA
The Homeowners and Bank Protection Act (HBPA) is gaining support in the first weeks of 2008.

Veterans' Suicide:
From Eugenics to Video Games


The Monkey Trap
What we are witnessing are not events which could lead to a financial collapse, but the disintegration of a system which has already died. As various financial groups maneuver for their own survival, this is ultimately not a financial fight, but a political one: over the nature of the system which will replace the one which has failed.

Ruination of Auto:
The Consequences of Following Fascist Felix Rohatyn

Brazil and Argentina Launch Space Mission

Business Briefs

The American Patriot

Who Was Benjamin Franklin?
In honor of Franklin's birthday, we reprint a chapter from the late H. Graham Lowry's book, How the Nation Was Won: America's Untold Story, Volume 1, 1630-1754, first published in 1987. Lowry rips apart all the myths to show how Franklin was the product of a nation-building conspiracy dating back to the earliest days of our republic.


Running a Policy for President

U.S. Economic/Financial News

Economic Collapse Hysteria Hits the Front Pages

Jan. 12 (EIRNS)—The state of emergency that Lyndon LaRouche forecast would hit the U.S. economy as of Jan. 3 has arrived. The bad economic news that emerged yesterday, which just piles onto that of the previous several days, is the leading news item everywhere. The Washington Post, in a front-page story headlined "Fears About Economy Worsen," reports, "New indications emerged yesterday that the spiraling subprime mortgage crisis is spreading from home loans to credit cards, potentially engulfing a far broader segment of Americans." A feature of the Post's coverage is that we're not even close to passing through this crisis. Joe Brusuelas, chief economist of the economic research firm IdeaGlobal, is quoted, "We haven't even scratched the surface of what the losses [in the banking sector] will be. I don't think we're anywhere near the end. Rather, we're still at the beginning of this."

The Wall Street Journal's coverage is of the same tone, but focused on plunging consumer spending rather than the paper losses in the markets. The Journal notes reports of weaker-than-hoped-for sales in retail, a fall in earnings of credit card issuer Capital One, and AT&T cutting off telephone and Internet customers for non-payment, as indicators of where consumer spending is heading. Consumers no longer have the ability to tap into their home equity as a source of spending. "They don't have any reserves to fall back on," the Journal quotes one economist saying.

And they haven't seen anything, yet.

Half a Million Jobs Axed in Residential Construction

Jan. 9 (EIRNS)—The residential construction/real estate sector fired nearly half a million workers in 2007, as a result of the blowout of the real estate bubble. This is a prelude to the debacle that will unfold in 2008, when 1 million more workers will likely be fired. According to the massaged, understated figures of the U.S. Department of Labor, between December 2006 and December 2007, some 69,400 workers lost jobs in residential construction; another 125,200 workers lost jobs in residential specialty trades, such as plumbing, electrical work, and driveway construction. Thus, the total loss of physical residential construction jobs reached 196,400.

During the same period, 103,200 workers lost their jobs in the combined sectors of real estate credit and mortgage loan brokers.

However, based on field reports from LaRouche PAC and the LaRouche Youth Movement, at a minimum, 100,000 undocumented Hispanic workers, who work off the books building homes, have been fired from construction jobs, but do not show up in Department of Labor Statistics.

Thus, between December 2006 and December 2007, at least 467,000 U.S. workers were fired in residential construction. With the ongoing financial-economic collapse gaining gale force, 2008 would be a much bigger catastrophe.

States Subpoena Banks, Call Lending Disclosures 'Useless'

Jan. 12 (EIRNS)—In what looks to be a coordinated action, New York's and Connecticut's State Attorneys General are investigating Wall Street banks for targetting the poor for "reverse red-lining" in issuing mortgages. New York Attorney General Andrew Cuomo said banks did not disclose "high-risk" mortgages, called "exceptions," in reporting to credit agencies and investors. The New York Times reports that in the multi-trillion-dollar market, banks pooled the "exceptions" with other mortgages into securities and sold them to investors. These loans account for as much as 80% of their mortgage lending.

Connecticut Attorney General Richard Blumenthal said the public disclosures in the filings by the banks, were "useless." He said, "a company that knows in effect that the disclosure is deceptive or misleading can't be shielded from accountability." Blumenthal has issued over 30 subpoenas in his investigation. Under Connecticut law, only civil charges can be brought. New York's Cuomo can bring both criminal as well as civil charges, which could be filed within weeks. Last Summer, Cuomo had begun the investigation by issuing subpoenas to Wall Street banks, including Lehman Brothers and Deutsche Bank.

Countrywide's Stocks Plummeting

Jan. 9 (EIRNS)—Countrywide Financial Corp., the actually bankrupt mortgage lender kept afloat by grabbing $50 billion from the Federal Home Loan Bank system in December, saw its stock fall 15% today, as foreclosures and late payments on mortgages were the highest on record. On Jan. 8 the stock tumbled 28%, the biggest drop since Black Monday in October 1987. Washington Mutual, Inc., the biggest U.S. savings and loan, lost 13%; while IndyMac Bancorp, Inc., the second-largest independent mortgage firm, fell 10.9%. Bank of America, which poured $2 billion into Countrywide in August, would face a loss of more than $1.3 billion, if it sold its stake in Countrywide's stock at the current price.

Foreclosures doubled to 1.44% of unpaid principal in December, to the highest level since the company began tracking data in 2002; while delinquencies jumped to 7.2% of unpaid principal balance, from 4.6% a year ago. December loan fundings fell 45% from a year earlier, to $23.55 billion. Ratings company Egan Jones said Countrywide is in dire need of "an infusion of at least $4 billion within the next couple of weeks."

Global Economic News

ECB Head Trichet Cites 'Spiraling Risks' of Inflation

Jan. 10 (EIRNS)—At his first press conference this year, Jean-Claude Trichet, governor of the European Central Bank (ECB), issued a call to EU governments, those 15 inside the Eurozone and the other 12 outside, to contain what he termed "spiraling risks" of inflation and to preserve "monetary stability" by not making concessions to labor unions' demands for higher wages. Only vaguely, Trichet described what in reality is a full-blown global financial collapse, with misleading terms like "upside risks" and "downside risks," "protracted inflation," but was very definite on the ECB's antipopulation line: he spoke of a "clear message" to the EU governments not to let down on their budget-cutting "reforms."

Trichet's statement that the ECB was "not neutral," but pro-austerity, and was "fully prepared to intervene" by "preemptive steps," was read as a not-so-veiled threat of new interest rate increases.

An EIR journalist noted that the official inflation rate of 3.1% that Trichet was citing, did not reflect the dynamic of real inflation in everyday crucial consumer goods like food and gasoline, and that because of that dynamic, more and more experts would agree with "American economist LaRouche, who says that we are already at the beginning of a process of hyperinflation." Furthermore, EIR asked, if things turned to the worse during 2008, who would be the lender of last resort? Trichet answered after some seconds of visible irritation, that the ECB was not an institution to take care of "solvency problems," implying that the ECB did not want to be a lender of last resort.

Speculators Bet on Oil Hitting $200 a Barrel by December

Jan. 7 (EIRNS)— The fastest-growing bet in the oil market these days, is that the price of crude will double to $200 a barrel by the end of this year. Options to buy oil for $200 on the New York Mercantile Exchange (Nymex) have risen ten-fold in the past two months, to 5,533 contracts, a record increase for any similar period, according to Bloomberg News. The contracts purchased in early December have appreciated 36% since then, as futures contracts for crude oil reached a record $100.09 per barrel on Jan. 3.

This is obviously pure financial speculation, indicative of the mania dominating the markets. Options, which give speculators the right to buy 1,000 barrels of oil in December, are becoming a favorite for traders even if they don't expect crude to reach $200, simply because it is a cheaper way to speculate. The Nymex options expire, worthless, if crude fails to reach the "strike" price, but can increase in value if the price of oil goes up. According to one analyst, these figures indicate that investors believe the likelihood of crude reaching $125 a barrel in December has almost doubled since Dec. 25, to 18%. There were 500 of the options on Nov. 7.

At work in the background are two opposing views, both based on the "law" of supply and demand. The first says supplies are limited and price will stay high; the other, sees demand slipping as the U.S. goes into a depression. One of the most insane corollaries of this theory, is that, in the words of one trader, "We can't be in a recession, look at the price of oil!"

U.K. Property Market Faces Biggest Collapse in 25 Years

Jan. 7 (EIRNS)—The only thing that kept British commercial property prices up last year is the fact that no one dared to put their assets up for sale, but now LaSalle Investment Management put Condor House, on the market for £130 million ($256 million) six months ago. The building sold last month for about 117 million pounds, 10% below the asking price. According to Bloomberg, appraisal values for commercial property and derivatives contracts fell at a record rate in November, indicating commercial property companies could suffer their biggest annual losses in more than a quarter century.

The U.K. market is falling apart, Bloomberg.com quotes Peter Hobbs, London-based head of research at RREEF Real Estate, a Deutsche Bank AG said. Britain's £700 billion commercial property market will perform worse in 2008 than in the rest of Europe, the U.S., and Asia, Hobbs said.

Jones Lang LaSalle Inc., the world's second-largest commercial real estate broker, estimates transactions in the U.K. are down 60% during the last quarter of 2007 to about 5 billion pounds.

One major reason for the collapse is that companies are being forced to sell assets because of the withdrawal of funds by investors. Further net outflows could result in funds being forced to liquidate assets, which could potentially spark a selloff in the market, said Sally Collins, a senior advisor at Bestinvest, which counsels British savers with more than £2 billion of investments.

Projects that are already under construction are failing to find tenants, especially as banks and financial companies are laying off thousands of workers. British Land has yet to find tenants for its Ropemaker and Leadenhall Building developments in London's main financial district, which are scheduled to be completed by 2011. The company's shares tumbled 45% in 2007, exceeding the average 39% decline for U.K. real estate stocks.

China Takes Even Stronger Measures Against Inflation

Jan. 10 (EIRNS)—The Chinese government will take more measures to stabilize prices and punish hoarding and speculation of basic commodities, the China Daily reported today. At a meeting of the State Council executive led by Premier Wen Jiabao, it was decided that "prices of gasoline, natural gas and electricity shall not be adjusted in the near future, and charges for gas, water, heating and public transport in cities shall not be raised," a statement said. "Fees for medical treatment shall be stabilized. Prices of major fertilizers, such as carbamide and phosphate fertilizer, shall be kept steady too and can only be raised really because of cost increase and after being approved by the regulator."

On a temporary basis, the government will intervene in setting prices of daily necessities, in line with the Price Law.

All large-scale producers of key consumer products must get government approval before imposing any price increases, as will large-scale wholesalers and retailers that want to raise prices. The Price Law allows the State Council to temporarily freeze prices or centralize the price-setting power on part of or the whole market if the prices undergo strong fluctuations.

Cheng Guoqiang, deputy director of the Market Economy Institute, with the Development and Research Center of the State Council, said that the measures were taken after key government meetings held last year set the tone of "preventing economic growth from evolving from rapid to overheating and preventing price hike shifts from going from structural to inflationary."

United States News Digest

Bill Clinton Calls for Protection of Homeowners and Banks

Jan. 9 (EIRNS)—Speaking on Hillary Clinton's behalf at a campaign event Jan. 7, former President Bill Clinton gave a relatively elaborated presentation of the subprime mortgage crisis, including the role of hedge funds. While falling short of endorsing Lyndon LaRouche's Homeowners and Bank Protection Act, Hillary Clinton's call for moratorium on foreclosures and a freeze on monthly mortgages payments is the only comprehensive proposal so far offered by any Presidential candidate, to the housing and banking crisis.

Responding to a question about the subprime mortgage issue, Clinton pointed out that the way subprime mortgages often worked, is that people were buying houses that cost more than they could afford, often by just paying interest for the first five years or so.

Clinton explained that "banks packaged these mortgages and sold them to investment houses and hedge funds, who then sold them as investment vehicles to others, and they turned out not to be such good investments, and when they started going down in value, it cascaded back, and the subprime mortgages failed as investment vehicles."

"So then they wind up back on the books of the bank as bad debt," Clinton said, and the banks come under pressure "to rewrite the mortgage, which has the effect of raising the monthly mortgage rate of the person that got the mortgage in the first place, which means we're at risk of foreclosing on huge numbers of people who never missed a single mortgage payment."

This is "dumb," Clinton declared, adding that, "It will cause cataclysm in the real estate market, and throw a lot of middle class people out of their homes. Hillary asked the President to do something about this six months before they announced anything, and her program is to first have a 90-day moratorium, no foreclosures, and during that 90 days, give everybody a chance to renegotiate their mortgage in a way that will get the bank out of trouble, but [it] has to have a five-year freeze on the monthly payments of the homeowners."

"It will require some federal money," Clinton continued. "It will be much, much cheaper—take my word for it—much cheaper than having all these houses foreclosed on and having the value plummet, then having them resold and having huge numbers of Americans who will never own a home again in their lives."

Clinton concluded by warning that "it's going to take a much more aggressive intervention than the government has proposed, so far, to avoid that."

Gulf Confrontation Stirs Interest in Iran Bill

Jan. 10 (EIRNS)—The office of Rep. Walter Jones (R-N.C.) told EIR that the latest naval confrontation between a U.S. destroyer and Iranian speedboats in the Persian Gulf has sparked renewed interest in, and more potential co-sponsorship, of Jones's HJR 14, introduced in January 2007.

The resolution requires that, absent a national emergency created by an attack, or a demonstrably imminent attack, by Iran upon the United States or its armed forces, the President must consult with Congress and receive specific authorization prior to initiating any use of military force against Iran.

Reps. Jones, Wayne Gilchrest (R-Md.), Ron Paul (R-Tex.), and William Delahunt (D-Mass.) also introduced HJR 53 in November 2007, to strengthen the War Powers Act, such that Congress would be required to exercise its responsibility in the declaration of any war. This resolution is awaiting action in the House Foreign Affairs Committee.

Wexler Denounces Bush's 'Surge of Lies'

Jan. 10 (EIRNS)—Rep. Robert Wexler (D-Fla.) became the first member of Congress to say openly that Bush's "surge" in Iraq is not working, and to criticize fellow Democrats for saying it is.

In a Jan. 8 statement entitled, "Surge of Lies," Wexler wrote: "A new troubling myth has taken hold in Washington and it is critical that the record is set straight. According to the mainstream media, Republicans, and unfortunately even some Democrats, the President's surge in Iraq has been a resounding success. In fact, nothing could be further from the truth.

"This assertion is disingenuous, factually incorrect, and negatively impacts America's national security. The Surge had a clear and defined objective to create stability and security—enabling the Iraqi government to enact lasting political solutions and foster genuine reconciliation and cooperation between Sunnis, Shias, and Kurds. This has not happened.

"There has been negligible political progress in Iraq, and we are no closer to solving the complex problems—including a power-sharing government, oil revenue agreement and new constitution—than we were before the Administration upped the ante and sent 30,000 more troops to Iraq."

Wexler has also called for the impeachment of Dick Cheney.

Backing up Wexler's statement, today's Washington Post has an article detailing that none of the "benchmarks" set by the Bush Administration in January 2007 for the Iraq government to fulfill during the "Surge," have been even approximately met. The Cheney-Bush White House has now quietly given up those "benchmarks," reports author Thomas Ricks.

Dems Bow to White House Spending Ceiling Without a Fight

Jan. 9 (EIRNS)—According to an article in The Hill today, Democrats capitulated in a stand-off with President Bush at the end of last year, by agreeing to the limit that he set for total Federal spending. Democrats initially passed a group of appropriation bills that exceeded Bush's spending ceiling by $22 billion; funding intended to go toward veterans' medical care, transportation infrastructure, medical research, Pell grants, and low-income students. When White House officials refused to budge, Democratic leaders "rewarded the Bush administration's hard line," and caved in.

Rep. John Murtha (Pa.), the second-ranking Democrat on the House Appropriations Committee, said a White House official told him that Bush would have agreed to spend more on domestic programs if Democrats had pushed a little harder. Murtha said, "We should have negotiated at $22 billion [over the President's number] to start with," rather than propose an $11 billion compromise and then fold entirely. "One of the [White House] staffers called my staffer and said, 'You guys gave up too early, we thought we were going to end up at $7 or 8 billion more.'"

George McGovern Calls for Impeachment

Jan. 6 (EIRNS)—Former Senator and Democratic Presidential candidate George McGovern published a call for the immediate impeachment of both George Bush and Dick Cheney, whose administration, he said, is far more guilty of high crimes than even that of Richard Nixon. Impeachment is "unlikely," he wrote in an op-ed in today's Washington Post, not only because of the Republican opposition, but because of "a lack of courage and statesmanship on the part of too many Democratic politicians." "Impeachment," he writes, "quite simply, is the procedure written into the Constitution to deal with Presidents who violate the Constitution and the laws of the land."

He concludes: "At age 85, I won't be around to witness the completion of the difficult rebuilding of our sorely damaged country, but I'd like to hold on long enough to see the healing begin."

McGovern's op-ed intersects growing support among rank-and-file Democrats in the House for impeachment hearings by the Judiciary Committee. Rep. Michael Michaud (D-Me.) sent a letter, dated Dec. 21, 2007, to House Judiciary Committee Chairman John Conyers (D-Mich.), asking Conyers to hold "vigorous hearings into the abuses of power" by the Bush-Cheney Administration, and to include impeachment hearings of Cheney on the Judiciary Committee schedule. "There is no doubt that at the very least this Administration has dangerously expanded the scope of executive authority and flaunted the constitutionally defined separation of powers," Michaud wrote. "Expansions and potential abuses of power become precedents for future ones, which lead to further erosions of our constitutional rights. That is why these [impeachment] investigations must be held with the utmost seriousness of purpose and must lay all the facts on the table ... this is the only way to restore the faith of the American people in their government."

Ibero-American News Digest

Chávez Fronts for Brit Drive To Legalize FARC, Shatter Colombia

Jan. 11 (EIRNS)—Following a script provided by British imperial gamemasters, Venezuelan President Hugo Chávez today called upon governments to grant formal "belligerent" status to Colombia's FARC and ELN narcoterrorists, as the first step towards "regime change" in Colombia.

Any such move, granting de facto diplomatic recognition to the FARC and ELN, would set in motion the breakup of Colombia, and trigger generalized war across South America, including in Venezuela. EIR warned in its Jan. 11 issue that London interests were out to provoke just that, as part of the British drive to provoke global mayhem and war, as the financial disintegration deepens (see "The Americas: New Opium War to Balkanize Continent").

The FARC has not only perpetrated repeated crimes against humanity, but it are the largest cocaine cartel in South America, peons in a global drug trade still run, top-down, from the City of London.

Chávez, roundly defeated in his Dec. 5 referendum on constitutional reforms, and then left hanging on Dec. 31 by the initial collapse of his FARC hostage release operation, reshuffled his cabinet on Jan. 3, and promised that his government would not be "dragged by extremist currents."

After the FARC released to Venezuelan hands the two hostages they had promised on Jan. 10, Chávez dropped any semblance of sanity, and adopted the full British Jacobin program for the Americas. Speaking to the National Assembly the next day, Chávez declared that the FARC and ELN are not terrorists, but "true armies, which occupy areas of Colombia," Bolivarian insurgent forces "respected" in Venezuela. He made reestablishment of normal dialogue with the Colombian government contingent on its recognizing the FARC and ELN as insurgent forces, rather than the terrorist groups they are. And he offered Venezuela's entire 2,219 km border with Colombia as "humanitarian territory," open for FARC and ELN "humanitarian" actions.

The FARC issued its own communiqué, reiterating its demand that the government hand over control of two Colombian municipalities—the equivalent of U.S. counties—located only 30 miles from one of Colombia's biggest cities (Cali), before any "dialogue" with the government could take place.

Colombia: The FARC Are Cruel Mercenaries of the Drug Trade

Jan. 11 (EIRNS)—The Colombian government today issued a communiqué restating its position that the FARC is a narcoterrorist outfit, assaulting the nation, and refusing to grant them "belligerent" status, because they are terrorists "financed by a business lethal to humanity: the drug trade." The statement names the FARC, ELN, and paramilitaries as "violent groups," noting that the paramilitaries are in the process of being dismantled by government forces.

These groups kidnap, place indiscriminate bombs and anti-personal mines, recruit and murder children, and assassinate elderly persons and pregnant women, the government reminded the world. Having long ago given up their old ideas of Marxist revolution to become mercenaries, accumulating money from "cruelty" and illicit drugs, the FARC continues to hold 750 citizens kidnapped over the last ten years, and torturing law enforcement, military, and political figures they hold.

One of the two hostages just released by the FARC with such great fanfare, told Colombia's Radio Caracol that the FARC keeps the majority of its hostages chained day and night, even while eating, bathing, and sleeping, constantly moving them from one "people's jail" to another in jungle camps.

Chile Targetted for Chaos, British-style 'Indigenous' Warfare

Jan. 8 (EIRNS)—The same British Empire faction that has already instigated indigenous warfare in several Ibero-American nations, now has its sights set on Chile. These financier interests are using the Jan. 7 attack on a foreign businessman in Santiago by a gunman, purportedly associated with radical Mapuche Indian activists, to set the stage for chaos and destabilize the government of President Michelle Bachelet.

On Jan. 7, an unidentified gunman in the capital of Santiago shot at the car of Mario Marchese Mecklenbur, general manager of the Trayenko hydroelectric project in southern Chile, owned by the Norwegian firm SN Power. The company's main operations are in the Araucania region of Chile's Patagonia, which the Mapuche claim as their ancestral lands, a fact which has led to sometimes violent Mapuche protest in the region. Last week's killing of a 22-year-old Mapuche college student, who was shot by police in Araucania during a demonstration, unleashed another round of violent actions.

As it is now evolving, the situation bears all the earmarks of a classic British operation which plays both sides. In the Santiago shooting, media such as El Mercurio, associated with the late dictator Augusto Pinochet, are screaming about the existence of "violent Mapuche cells" invading Santiago, pointing out that prior to escaping, the gunman threw out leaflets with the name of a radical Mapuche group, the Malleco Araucan Coordinator (CAM).

The Bachelet government stated that there is no evidence that the Mapuches were involved, or that new terrorist groups were emerging, while a spokesman for the CAM denied that the group had anything to do with this incident. But the situation is ripe for manipulation. The Mapuche live in conditions of extreme poverty on reservations in the South that are virtually militarized by police forces, and Bachelet's promises to redress their grievances have yet to produce concrete improvements. According to Mexican daily El Universal, radio stations in southern Chile are reporting statements by Mapuche leader Victor Marilao, warning that "the Mapuche people are arming themselves for the battle to defend our territory against the repressive State. This will continue, and the way things are going, there will be nothing peaceful about it."

Argentina's Nuclear Technology for African Desalination

Jan. 9 (EIRNS)—Hector Otheguy, the president of Argentina's premier nuclear technology company INVAP, owned by the Rio Negro provincial government, reports that the company's plans for 2008 include a contract with the Libyan government, to modernize that country's Russian-built nuclear reactor which has been in operation there for a number of years.

In an interview published Jan. 7 in Noticias & Protagonistas, Otheguy underscored that the contract, which was bid through the IAEA (International Atomic Energy Agency), is especially important. It could open the door for eventually introducing use of Argentina's small prototype CAREM reactor—soon to become commercially available—in order to desalinate sea water and provide potable water for Libya.

"These countries of Northern Africa have a very serious problem, which is the shortage of water," Otheguy said. The potential exists for Libya to become a "very interesting partner" for Argentina in this area, he said, and could lead to other more complex projects, possibly with other countries of the region.

Western European News Digest

French Officials Back LaRouche Call for New Monetary System

Jan. 10 (EIRNS)—A substantial group of mayors of French cities and towns, including Members of Parliament, are publicly backing the recent call, issued by Helga Zepp-LaRouche, for governments to agree on a new international monetary system, returning to the principles of Bretton Woods, to replace the collapsed global casino called the "floating-exchange-rate system."

A Jan. 9 press release by the Solidarité et Progrès party in Paris, headed by LaRouche's friend and ally Jacques Cheminade, is called "Faced by a Banking Crash: Officials in Favor of the New Bretton Woods of LaRouche." In addition to a regional vice-president and a growing list of mayors, signatories include Etienne Chouard, whose Internet site catalyzed the opposition in France to the globalist European Constitutional Treaty in May 2005, and the founder of Reseau Voltaire, author Thierry Meyssan.

Banks Anticipate Break-Up of European Monetary Union

Jan. 8 (EIRNS)—The Daily Telegraph's Ambrose Evans-Pritchard today reported on a document from BNP Paribas, forecasting a break-up of the European Monetary Union (EMU), because of the "Latin risk"—i.e., Spain and Italy. The document pushed the scenario of a public debt crisis, saying that it is probable that the spread between Italian, Spanish, and German state bonds will reach 60 basis points this year, meaning a real crisis.

Although such a scenario rumored for years, it is a real possibility under serious crisis conditions.

The author of the report, London-based head of currency strategies Hans Redeker, over-dramatizes current figures in order to make his point. For instance, he claims that Italy's public debt is increasing and is now at 108% of GDP, whereas 2007 figures show that the debt is down, at 104% of GDP. However, a run on Italian state bonds, 50% of which are owned by foreign investors, could prompt a debt crisis. Maybe that is what subprime-ridden BNP Paribas wants to achieve.

German Bank Balks at Bailout, Defends Common Good

Jan. 9 (EIRNS)—The local savings bank of Rheine, a city in Germany's state of North Rhine-Westphalia, is making headlines with its opposition to a phony bailout scheme for West Landesbank, that state's bank. Rheine opposes an agreement by which the regional savings bank association gave 750 million euros for a recapitalization of West LB, maintaining that since the agreement was made over the head of the Rheine savings bank and without its approval, therefore Rheine is not willing to pay its share of 500,000 euros in that phony deal.

In a discussion with EIR, a spokesman for the Rheine savings bank said that although their case dates back from the Summer of 2004, long before the subprime mortgage blowout and the things that have come since, it is important as a matter of principle, because their view is that savings banks have a mandate to care for the citizens of their city or region, rather than being cows to milk for other, dubious ventures. The spokesman said that even though Rheine seems to stand alone on that point, it wants to fight the issue through legally.

Kosovo Independence Bid: British Ploy to Set Europe Aflame

Jan. 9 (EIRNS)—Kosovo's Prime Minister Hashim Thaci said in an interview with the Japanese daily Asahi Shimbun, published today, that he believes Kosovo would unilaterally announce its independence in the first half of February. "We cannot drag our feet with independence any longer," he explained. "The U.S. and the EU member-states will immediately recognize our independence. The number of such states is likely to be considerable." Thaci's party won the elections last November.

A senior expert on Kosovo told EIR that the British are controlling everything in this situation, through the secondary level of "advisors." While the U.S. is the most important visible power, there is virtually no law or reform that does not come from London. The expert sees Kosovo, along with Israel/Palestine, as the most probable areas for war and geopolitical confrontation.

Labor Unrest Grows Over Hyperinflation

Jan. 9 (EIRNS)—The Italian government and labor unions had their first meeting of the new year yesterday in negotiations for wage increases. The government presented a general proposal to increase net wages by reducing employees' taxes. The plan would be financed through an increase of taxes on financial revenues (stocks, bonds, derivatives, etc.). The unions are demanding an immediate decision, while the government wants to wait at least until March, when it will be clear how much money is available according to the first quarter revenues. UIL national trade union leader Luigi Angeletti said yesterday, "I do not think we can wait until March."

In Germany, the association of civil servants (Beamtenbund, DBB) concluded its two-day convention in Cologne yesterday evening, with a call for a review of privatizations, which in many cases have led to vital functions of the German state coming under the control of other states' monopolists. Waterway dredging, for example, is now almost entirely under the control of a few Dutch firms. Privatizations have led to a decrease of services and increases of prices, especially in the formerly public infrastructure, the DBB charges. At times of increasing inflation, the citizen should no longer be confronted with rising expenses in what were formerly public services; neither can civil servants be expected to drop demands for salary increases, the DBB states.

Poles Stall on U.S. BMD System; Military Sets Demands

Jan. 9 (EIRNS)—On the day before the start of diplomatic/military negotiations concerning the deployment of ten U.S. ballistic-missile interceptors in Poland, the government continued to make clear that a decision will be made based Poland's own security. While the previous Polish government had welcomed the placement of the missiles, which it specifically said would protect it from Russia, not Iran (as the Bush Administration has claimed), the new government warns that Poland's security will worsen, because it has antagonized Russia, which says it could "mistakenly" end up firing off a missile to intercept Poland's interceptor, and because Poland could then also be a target of many other nations.

Defense Minister Bogdan Klich, who will meet with Russian Deputy Foreign Minister Kislyak in Poland Jan. 10, said that Poland will demand a "defense package" from Washington, including Patriot missiles and the U.S. ground-based medium-range anti-missile system, to update its outmoded defense capabilities. "The presence of a U.S. military installation in Poland undoubtedly makes Polish airspace more vulnerable," he stated.

Klich is planning to come to Washington for a three-day visit starting Jan. 14.

Russia and the CIS News Digest

Protests Follow Saakashvili Victory Claim in Georgia

Jan. 6 (EIRNS)—Rose Revolution poster-boy Michael Saakashvili claimed first-round victory in the Republic of Georgia's snap Presidential elections, held yesterday, with an alleged 52.8% of the vote, according to incomplete official returns. The outcome did little to calm the situation in the country, with thousands of people demonstrating against Saakashvili, and charging vote fraud, in Tbilisi during the day, as his vote teetered near the 50% mark. OSCE observers pronounced the election results legitimate, despite "significant challenges" in the process.

But the Russian foreign ministry issued a statement citing opposition and NGO reports of "numerous violations of electoral laws by the authorities." Said the ministry, "This was hardly unexpected, since the pre-election campaign could hardly be called free and fair. It effectively began under conditions of a state of emergency, while the administration made broad use of its official resources, with undisguised pressure against opposition candidates and limitation of their access to financial and media resources." The statement also criticized U.S. Congressman Alcee Hastings (D-Fla.)for calling the election "a triumph for Georgian democracy."

Levan Gachechiladze, the United Opposition candidate, was running at 27%, and during the day today declared that a second round had been secured. Running third was Labor Party leader Shalva Natelashvili—a staunch opponent of Georgia's joining NATO and supporter of the LaRouche proposal for a New Bretton Woods—with over 7% of the vote. Natelashvili called for repeat elections in two months. "Any international findings that deem this election democratic and in compliance with international norms," he said, "will amount to collaboration with Saakashvili's criminal band." Yesterday, Natelashvili's staff alleged that a plot to kill him had been uncovered, in which Saakashvili was to blame.

Iran's Space Exhibition Opened by Russian Cosmonaut

Jan. 8 (EIRNS)—On Jan. 5, the well-known Russian cosmonaut, Georgi Grechko, opened a space exhibition at Tehran's Astronomy Center, which will run through Jan. 11. Grechko, who flew three Soyuz space missions, commented on Jan. 7 that he had noticed that young Iranians had a marked enthusiasm for astronomy, as compared to Americans and Russians. There are many amateur astronomy clubs in Iran, some of which, before 9/11, had joint activities with American astronomers. Grechko said that, although for many decades, manned space missions were the monopoly of U.S. and Russian astronauts, more representatives from developing countries are getting involved, and he sees a promising future for them. A South Korean astronaut is scheduled on a Soyuz mission later this year.

Southwest Asia News Digest

Syrian Foreign Minister: Damascus Ready for Negotiations

Jan. 9 (EIRNS)—Syrian Foreign Minister Walid Muallem told Arabiya Television, as also reported in Ynet ahead of President George Bush's arrival in Israel, "We are by no means seeking a military solution against Israel. We are ready for negotiations with Israel, to realize the peace.

"The Road Map does not tangibly exist. We are committed to the Arab peace initiative. Unfortunately, this initiative has not been marketed correctly by the Arab nations. We came to participate in the Annapolis peace conference based on our willingness to negotiate."

Addressing relations between Damascus and Tehran, Muallem denied the existence of a Syrian-Iranian axis parallel to the Saudi-Egyptian axis. "However, Syria has always made an effort to improve the relations between Arab nations and Iran, because geographical and historical reality dictates this."

Addressing the leadership crisis in Lebanon, he expressed hope that it would be solved, and a new Lebanese President could be elected by the next Arab summit, in late January.

Hamas's Haniyeh Urges France To Aid Palestinians

Jan. 7 (EIRNS)—Hamas leader Ismail Haniyeh, who is prime minister in the Gaza Strip, called on France yesterday to provide assistance to the Palestinians, saying he welcomed "all international efforts" aimed at enhancing security in the region, AFP and the Jerusalem Post reported. In a letter to French President Nicolas Sarkozy, Haniyeh said the Gaza government is "prepared to cooperate with all international efforts to establish security and stability in the region." He praised Sarkozy's call for an international peacekeeping force in the Palestinian territories, which Sarkozy made at the international donors conference in Paris last month. "We followed your speech at the recent Paris conference, in which we found many positive and encouraging initiatives aimed at ending the occupation and restoring the legal rights of the Palestinian people and ending their suffering," he wrote. He also said he would accept French mediation in resolving the Hamas-Fatah conflict.

However, Haniyeh blasted the revived peace talks between Israeli Prime Minister Ehud Olmert and Palestinian Authority President Mahmoud Abbas.

Former Reagan Official Calls for Talks With Iran

Jan. 3 (EIRNS)—Former U.S. Assistant Secretary of State for Near East and South Asia Affairs Richard Murphy said the U.S. should talk with Iran without preconditions. Speaking to the Arabic paper Al-Alam, Murphy said, "Talks between the U.S. and Iran should be calm and concentrated on the nuclear issue, without asking for preconditions." Piling pressure on Tehran and Hamas, Murphy said, would not prepare the ground for progress. Murphy was also skeptical about the Annapolis peace summit, where he said nothing really "got off the ground." In Iraq, Murphy said, the situation is "critical."

He is working with some other retired diplomats in "second-track" discussions with representatives from all three ethnic groups in Iraq. Similar to the Oslo talks, they feel that these talks, a private initiative rather than a State Department initiative, could lead to some statement of principles which might provide the framework for a unified, federated Iraq. The Kurds have proven to be the least flexible of the three, hoping to maintain de facto independence from any interference from Baghdad. But the backchannel talks will continue, and some progress has been made, Murphy said. He was also encouraged by the recent statements of Abdul-Aziz al-Hakim, leader of the Supreme Council for the Revolution in Iraq (SCIRI, a Shi'ite political party), who said that the Sunni group "Awakening," which is working with U.S. forces against al-Qaeda, had played a positive role in helping stabilize the country.

ElBaradei: Iran-IAEA Cooperation Proceeding Normally

Jan. 12 (EIRNS)—Mohammed ElBaradei, the director general of the International Atomic Energy Agency, emerged from meetings with officials in Tehran on Jan. 11-12, expressing optimism about Iran's cooperation with the agency. On Jan. 11, after his meeting with Reza Aqazedeh, the head of Iran's Atomic Energy Organization, Tehran's official news agency IRNA reported that ElBaradei told reporters, "In our talk with Mr. Aqazedeh, we asked for more transparency so we can give necessary guarantees to Iran. If we can make Iran's current and past activities transparent, we can prepare the grounds for Iran's future activity."

On Jan. 12, after meeting with Saeed Jalili, the head of the Supreme National Security Council, ElBaradei said that Iran-IAEA cooperation is proceeding on course. According to Iranian officials, ElBaradei expressed the hope that the remaining issues between Iran and the IAEA would be resolved before the next meeting of the IAEA board of governors in March.

U.S. Military Seeks Incidents-at-Sea Agreement with Iran

Jan. 12 (EIRNS)—U.S. Naval commanders in the Persian Gulf have, for some time, been seeking an "incidents-at-sea" agreement with Iran, in order to prevent the kind of encounter that (allegedly) occurred in the Strait of Hormuz last weekend, from escalating into a more serious confrontation. Columnist Jim Lobe reported on his blog, on Jan. 11, that Adm. William Fallon, the Commander of U.S. Central Command, has been pressing the White House—without success—for an agreement "that would reduce the risk of an accidental confrontation in the Strait of Hormuz and the [Persian] Gulf, itself." Lobe recalls that Washington Post columnist David Ignatius reported, on Sept. 16, 2007, that an unexpected opportunity for a discussion had appeared just a few days before, when Vice Adm. Kevin Cosgriff, U.S. 5th Fleet commander, appeared on a panel with the brother of the commander of Iran's Revolutionary Guard. "This chance encounter at a Geneva meeting of the International Institute for Strategic Studies should be pursued," Ignatius wrote.

Similar agreements existed between the United States and the Soviet Union during the Cold War, and provided procedures and radio channels so that when military forces of the two sides encountered each other in international waters and airspace, accidental war could be avoided. Kaveh L. Afrasiabi, a professor of international relations and the author of several books on Iran, added, in a column in the Dec. 21 Asia Times, that such an agreement between the U.S. and Iran "may help set relations between the two countries on the right track, off the path to confrontation, and in line with the provisions of international law."

Turkish President Vows Response to PKK Attacks as Needed

Jan. 9 (EIRNS)—Speaking to an audience at the Woodrow Wilson Center for Scholars in Washington, Turkish President Abdullah Gul responded to a question from the audience regarding his discussions with President Bush on the Kurdish separatist party PKK's attacks on Turkish territory, and Turkey's response. The questioner noted that the White House, which has characterized the PKK as a terrorist organization, has begun to urge Turkey to also seek a "political solution" to the PKK problem. "We have cooperation with the United States in Iraq," Gul said, "but there are certain regions in the North which the Iraqi government doesn't control. There are camps and training grounds in those territories. These are attacks coming from another country. How can there be a political solution? It is like the U.S. response to al-Qaeda. Neither today nor before did we discuss this issue in that context. In Turkey we are also discussing these issues. And in the fight against terrorism, we must fight arms with arms."

Asia News Digest

Eurasian Land-Bridge Takes Off From Beijing

Jan. 9 (EIRNS)—With great fanfare, a large container train left Beijing today, on its way to Hamburg, Germany, traveling through Mongolia, Russia, Belarus, and Poland, to Germany. This was the "pilot train" of the Eurasian Continental Land-Bridge. The train was highly decorated in Chinese style, and the send-off included railway officials from the six countries along the route.

Chinese television coverage showed them at the station in front of a large railroad map of the Eurasian line, very similar to that published in the 1997 EIR report on the subject, with the caption "Sketch Map of Eurasian Land-Bridge Corridor" (printed in Russian, English, and Chinese). "The train will travel 9,800 kilometers through six countries," the CCTV commentator told viewers. "The train will take 18 days. The same trip would take almost 40 days by container ship." "This can be seen as a breakthrough in our cooperation," said Zheng Mingli, the chairman of the China Container Transportation Company. "Today railway officials from six countries are here to witness this event. This is very important for the development of the Asia-Europe continental bridge. This means of transportation has great potential for the countries involved." A Polish railway official was also interviewed, who expressed the wish that this "pilot train" would be the beginning of a permanent connection to Europe. The commentator noted that the rail connection will take a much greater chunk of the trade between China and the EU.

India Reorienting Towards China, Eurasia

Jan. 11 (EIRNS)—Indications that India is re-emphasizing its relations to China, and downgrading the non-productive "U.S.-Australia-Japan-India" orientation, are emerging in the days before Prime Minister Manmohan Singh begins his three-day visit to China on Jan. 13.

Yesterday Singh called engagement with Beijing an "imperative necessity," when speaking to reporters at a political forum in New Delhi. Asked about the U.S.-Australia-Japan-India security dialogue, which held sea maneuvers in the Bay of Bengal in September, Singh said: "I have made it clear to the Chinese leadership that India is not part of any so-called 'contain China' effort." He said there is "no misunderstanding" between India and China on the security dialogue, which "never got going" anyway, he said.

"China is our largest neighbor and in many ways engagement with China is an imperative necessity," Singh said. When he meets Chinese Prime Minister Wen Jiabao and President Hu Jintao in Beijing, "We will discuss all issues with frankness and friendship. Engagement with China is a priority."

The two nations will sign five agreements during the visit, including a pact between their state-run railways, the Press Trust of India reported today. Information and Broadcasting Minister Priya Ranjan Dasmunshi said the accords would also cover housing, geosciences, land resource management, and traditional medicine.

The rail agreement counters complaints by some of the more geopolitically oriented in India, who have been expressing concern about the Chinese rail line to Tibet, and plans to extend it further west, in the direction of Nepal and India.

Japan Votes To Rejoin U.S. 'War on Terror'

Jan. 11 (EIRNS)—Japan's House of Representatives enacted a law today to resume the Maritime Self-Defense Force's (MSDF) refueling mission for U.S. and NATO ships in the Indian Ocean, as part of the "war on terror," possibly in mid-February, after a three-month hiatus, despite rejection of the bill in the opposition-controlled upper chamber.

The House of Representatives, the more powerful lower chamber in the bicameral Diet (parliament), passed the bill in a second vote, with a two-thirds majority vote by the Liberal Democratic Party's (LDP) ruling bloc, under Prime Minister Yasuo Fukuda. This vote allows the lower house to pass a bill without passage in the upper house, but will aggravate political tensions. Fukuda was under intense pressure to ram the bill through, from London, from Washington, and from the neocons within the LDP; but passing it in this "in-your-face" manner to the opposition risks political turmoil. This is the first time since 1951 (soon after the current constitution came into effect), that a bill has been passed and enacted into law in this way.

Japan suspended the mission in November, when a law authorizing it expired, in the face of resistance from the opposition camp, led by the Democratic Party of Japan. The new law would limit the supply operations for foreign vessels to the provision of oil and water, and would be valid for only one year. It does not require specific parliamentary approval for the mission.

The officials also said the Japanese government will ensure that the oil supplied in the mission will only be used for operations related to Afghanistan, and will not be diverted for other purposes such as operations in Iraq, as the Democratic Party of Japan and major press had charged.

The Democratic Party of Japan handily won the last election to the upper house, and is way ahead in the polls, but Fukuda is not likely to call new elections for the lower house until next Fall.

How enthusiastic Fukuda is about support of the refueling policy and helping in the "War on Terror" in Afghanistan (and Iraq) is debatable. He represents traditional nationalist interests—replacing the right-wing faction of the party which was in power under the last two prime ministers, Junichiro Koizumi and Shinzo Abe—but is not willing to damage Japan's relations with the West.

Junta-Led Government Moves To Reverse Thai Election

Jan. 10 (EIRNS)—Remnants of the Thai junta, which appointed the present government, have threatened to keep the new party allied with deposed Prime Minister Thaksin Shinawatra, which swept the December election, from participating in the formation of a new government, and possibly to disband it. The Thaksin-allied party, the People Power Party (PPP), won 233 of the 480 parliamentary seats. The three-man election commission, appointed by the junta, has already thrown out seven PPP candidates for supposedly buying votes (at least some of them, in districts where there is no way anyone else could have won). The election commission has set up a sub-panel to rule on PPP deputy leader Yongyuth Tiyapairat; the sub-panel is headed by one of the judges who voted against Thaksin in a 2001 corruption case that failed.

A provision in the Thai constitution states that if a member of a party's executive board (such as Tiyapairat) knew something wrong was being done (which is implied, if his election is reversed for vote fraud), the party can be dissolved by a court. This is one of several scenarios for disbanding the PPP altogether by February or March.

Junta-appointed Prime Minister Chulanont today called on the Thai population to respect the Election Commission's decisions, and by no means to protest the decisions in demonstrations; just to make sure, the prime minister also announced that he'd assigned the national police chief to keep law and order.

India and Malaysia Agree To Counter British Operation

Jan. 8 (EIRNS)—India and Malaysia have agreed to increase defense ties, after the meeting between visiting Indian Defense Minister A.K. Anthony and Malaysian Deputy Prime Minister and Defense Minister Mohd Najib Tun Razak. This high-level trip counters the attempted destabilization of Malaysia, and India/Malay relations, by a British-backed dissident group in Malaysia claiming that there is "ethnic cleansing" against the minority Indians.

Malaysian Air Force personnel will be trained by Indian specialists in the operation of Su-30 MKM aircraft. The two nations also discussed co-production, joint ventures, and military-related industry collaboration. Also, Najib announced that Malaysia has awarded a $1.08 billion project to Indian Railways for a 100-km two-track network between Seremban and Gemas in Malaysia.

India has also been invited to participate in security projects for the Strait of Malacca, one of the most critical waterways in the world. Najib said India had accepted the offer to cooperate based on the "principle [that] the primary responsibility for the security and safety aspects of Malacca lie with the littoral states," and India "respects this principle."

Africa News Digest

Al-Qaeda Projects 'Downfall of Sarkozy,' 'Economic Collapse of France'

Jan. 11 (EIRNS)—In the wake of the murder of four French tourists in Mauritania on Dec. 24, French authorities have expressed fear over the last several days, of new terror attacks. Citing high-level police sources, today's Le Figaro reports that authorities have travelled to North African countries to beef up counter-terror cooperation, with Tunisia in particular, but also with Mauritania. As a result of the terror threat, organizers on Jan. 5 cancelled the famous multimillion-euro cross-Sahara Dakar Rally auto race. Newspaper headlines proclaimed that "Al Qaeda Killed the Dakar."

Yesterday, the Site Intelligence Group, an American center which specializes in monitoring al-Qaeda's communications, publicized the latest threats to France that have been posted on a website, al-Ekhlaas, which promotes al-Qaeda. Al-Qaeda's Maghreb Salafist branch, which took responsibility for a Jan. 2 bombing in Algeria, is threatening to "bring about the fall of President Sarkozy," and the "economic collapse of France," by targeting "prestigious personalities, such as the mayor of Paris." The group says that bombings are also planned for highly frequented areas such as the Eiffel Tower, and the populous business center of La Défense, in Paris.

In the Jan. 2 incident in Algeria, a car rammed into a police station in Naciria, 50 km to the east of Algiers, and exploded, killing four policemen and injuring 20 people, according to Algeria state radio.

All rights reserved © 2008 EIRNS

top of page

home page