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From Volume 37, Issue 24 of EIR Online, Published June 18, 2010

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EIR Seminar in Frankfurt
LaRouche: The Mass Strike Can Defeat the British Empire

June 10—Lyndon LaRouche was the keynote speaker today at a seminar of the European Bureau of Executive Intelligence Review{in Frankfurt, Germany, the first of this kind there in several years. The seminar, titled, ``The Task at Hand: A Glass-Steagall System and Return to Sovereign Economic Policy,'' drew about 25 people, including several representatives of the Mittelstand (small and medium-size enterprises), political activists, diplomats, and former banking officials. Helga Zepp-LaRouche moderated the three-and-a-half-hour event; her welcoming remarks were followed by a report from EIR{s Dean Andromidas, on the breakout of the organizing in the United States around LaRouche's call for the impeachment of Obama, and the need to reestablish the Glass-Steagall standard in banking. Here is a transcript of LaRouche's keynote, followed by his answer to one of the questions.

I was very happy to find that I had the opportunity to say, in the vicinity of Frankfurt, which used to be a financial center, that there is a plan for rescuing Europe, as well as the United States. Because without something very important happening, Europe is in big trouble, now. We're looking at a potential collapse, a chain-reaction collapse of the European economy....

In-Depth articles from EIR, Vol. 37, No. 24
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This Week's Cover


  • The Nuclear Option Against British Sabotage in Our Gulf
    It appears increasingly likely that recourse to use of a peaceful nuclear explosive (PNE), may become the only available option to seal the damaged BP well in the Gulf of Mexico. But just as important is that the underlying cause of the Gulf oil crisis has been our failure to go nuclear.
  • Arm of the British Empire:
    British Petroleum's Assault on America

    BP is not really a corporation, but an instrument of the British Empire's war against nationstates. This system, marketed as 'globalization,' is actually a return to the methods of the British East India Company.




This Week's News

U.S. Economic/Financial News

Courts in Utah: No Foreclosures Allowed

June 9 (EIRNS)—All home foreclosures in the state of Utah by a half-dozen big banks and lenders were prohibited, in a court order issued by Fifth District Court Judge James L. Shumate on May 22.

For nearly four years, the United States has been swept by foreclosures, hundreds of thousands each month, with "servicing banks" throwing out households on behalf of "security trusts" run by international banks and claiming to have bought parts of that household's mortgage, which had once been issued by still a third "lender" or a fourth "broker" no longer in the picture. Judge Shumate acted on a lawsuit, without even holding a hearing; he apparently agreed with its arguments, that this very toxic process of "securitization" of mortgages by the banks and investment houses, forfeited both the lenders' and the securities holders' power to foreclose.

The ruling has stopped all foreclosure proceedings in the Utah by Bank of America Corp.; Recontrust Company, N.A; Home Loans Servicing, LP; Bank of America, FSB; www.envisionlawfirm.com, and other corporations. Since Band of America is the owner of the notorious Countrywide Mortgage Corp., this amounts to more than 1,000 foreclosures/month. The court order, if allowed to become permanent, will force Bank of America and other mortgage companies with home loans in Utah to adhere to laws requiring lenders to register in the state and have offices where homeowners can negotiate face-to-face with their lenders. In seeking to overturn it, the banks will argue that the states cannot touch mortgage lenders because "Federal preemption" effectively made them wards of the Federal Reserve.

States Face Killer Cuts if House Fails To Restore Medicaid Funds

June 8 (EIRNS)—If the U.S. House of Representatives does not reconsider the Jobs and Tax bill it passed before the Summer recess—which cut $24 billion in aid to states for Medicaid, the health insurance program which covers the poor and the disabled—30 states face killer budget cuts.

Governors and state legislators were caught by surprise by the House's removal of the provision for Medicaid aid to the states. Over the past ten months, the Medicaid money had been separately passed by each chamber, and President Obama had wrapped the extension into his budget proposal. But House Republicans and conservative "Blue Dog" Democrats cut it out, so as not to increase the deficit.

Gov. Ed Rendell (D) of Pennsylvania counted on $850 million in Federal Medicaid assistance. If that money is cut, he would be forced to lay off at least 20,000 government workers, including teachers and police officers. In California, Gov. Arnie Schwarzenegger's budget assumed $1.5 billion in Federal Medicaid money. California has already seen $57 billion in cuts over three years. New York, where there is no budget yet, counted on $1.1 billion in Federal Medicare money.

Many states do not have contingencies for replacing the Federal money. Some have already made severe cuts, but face Federal requirements that they maintain eligibility levels for Medicaid.

Global Economic News

Bankers' Cartel Lying About Regulation Threat

June 11 (EIRNS)—"Regulatory reforms" for banks could negatively impact growth and job creation, members of the Institute of International Finance (IIF), a global lobby of 375 leading banks, said at their meeting in Vienna on June 11. They lied that regulations could kill 5 million jobs in Europe and 10 million in the United States.

In Brussels, the European Banking Federation, at the same time, issued a similar warning, claiming that new global rules forcing banks to put aside more capital could keep the Eurozone economy in, or close to, recession through 2014. The Federation said its analysis of the proposed new Basel III banking standards would limit Eurozone banks' credit growth and profits, hurt the economy, and prevent the creation of up to 5 million jobs in the 16 nations of the Eurozone alone.

Josef Ackermann, the CEO of Deutsche Bank, who heads the IIF, threatened tighter credit, saying that "some proposed measures may require banks to actually shed assets, which would reduce the volume of credit they can provide to the economy." That would "prevent" the creation of 9.7 million new jobs in the United States, claimed Peter Sands, group chief executive of Standard Chartered PLC, adding, "There is a price for making the banking system safer and more stable and that price will inevitably be borne by the real economy."

At the Vienna meeting, there were polemics against Germany's recent unilateral ban of naked short sales. Michel Peretie, the head of the investment banking division of France's Société Générale, claimed that short-selling bans are usually ineffective, and that "national solutions" were not the right approach. Polemics were also launched against the U.S. debate on legislation to curb financial markets—a reference to the debate over Glass-Steagall.

Meanwhile, the German parliament held its first reading of the planned extended-bans law in Berlin, after Finance Minister Wolfgang Schäuble attacked the belief of many that speculation is good for the market: "The past crisis developments show that speculation is not good, and not needed either, for the market."

Synarchist Rohatyn: A New Big MAC Can Save the Euro

June 8 (EIRNS)—Interviewed by Le Figaro, Synarchist banker Felix Rohatyn announced his plan for saving the euro and for having even larger bank bailouts. After praising his own alleged successes in 1975 in saving New York City from bankruptcy via the "Big MAC" swindle and bloody austerity, Rohatyn states that "when I was nominated as ambassador to Paris in 1997, the first report I made to the State Department was the fact that we had to support the creation of a single currency. Numerous Americans were very skeptical at that time. The break-up of the euro absolutely has to be prevented because it would be a terrible psychological shock to economic growth and the ability of Europeans to solve their problems."

Save the euro how? "Consolidation should result from the creation of federal structures, political and financial. A new Jean Monnet would be needed to enforce such an approach."

How can Europe avoid public deficits and depression? Financial "support mechanisms even greater than those now envisioned, and added to them tougher control mechanisms over public finances. I recall the scheme used for New York City in 1975 combining strict control over the accounting with the provision of large funding."

Ecofin Gives Birth to Next Bailout Flop

June 9 (EIRNS)—The EU Finance Ministers Council (known as the Ecofin) announced on June 8 the details of the EU440 billion Special Purpose Vehicle (SPV) which is part of the overall EU750 billion bailout package to Greece's creditor banks. As expected, the decisive aspect of the fund—who guarantees what for whom—has not been made clear. Germany is still rejecting a commitment, by which all members of the fund guarantee all the money to all Eurozone members that might need it. This is a formula which, in reality, means that countries that ostensibly have the ability to absorb indebtedness, guarantee debts for everyone. Germany, instead, wants a system in which each member of the fund guarantees in proportion to its share. The SPV is supposed to borrow money by issuing Eurobonds guaranteed by participating members.

As the Italian daily Milano Finanza wrote, it is not clear why investors should buy bonds issued by the new EU fund, when there are no certainties on risk yet. "If countries such as Ireland, Spain, and Portugal were to have financing problems, investors could in any case choose less risky assets, like German Bunds, rather than bonds issued by the Fund."

According to a poll by Bloomberg of its clients, only 23% expect the bailout to work, and 40% say Greece is likely to leave the euro. Investor confidence in European Central Bank President Jean-Claude Trichet has tilted from positive to negative, with 48% giving him an unfavorable rating. In January, his approval rating was 60%.

Meanwhile, a potential Bulgarian crisis has prompted Eurostat, with newly created financial police powers, to send a mission to Sofia for preemptive destruction.

United States News Digest

Obama's Shutdown of Constellation Already Nixed by Supreme Court

June 13 (EIRNS)—The attempt by the Obama Administration to use a 140-year-old law to shut down NASA's Constellation (manned space) program is an illegal abuse of power under current statute regarding the program. In a similar case six years ago, the U.S. Supreme Court ruled that while the [previous] law may be on the books, the "state of the law compels us to hold this clause void and unenforceable."

NASA Administrator Charles Bolden sent a letter last week to Constellation contractors telling them to immediately put aside some of this year's NASA funding to pay for contract termination costs. Never mind that the Congress has specifically prohibited the termination, or even slowdown, of any Constellation contracts.

Former NASA associate administrator for program analysis and evaluation, Scott Pace, as quoted in the New York Times June 10, said that "NASA has never held contractors liable for termination liability." The "new" policy, he stated, "appears to be purposefully punitive" against Constellation contractors.

Rep. Bob Bishop (R-Utah), whose district includes solid rocket motor manufacturer ATK, which is looking at a $500 million close-out liability, responded that the Administration is flaunting its disregard for Congress with "reckless abandon," and in "complete violation" of the law. He characterized the attempt as "sleazy."

Faced with the possible requirement that hundreds of millions of dollars be set aside, should contracts be terminated, Constellation contractors are stopping work on the Orion crew vehicle and Ares rockets, and readying pink slips. Lockheed Martin announced that 600 Orion engineers were being pulled off the contract. On June 11, Boeing announced that it will issue termination notices on July 2 to 100 employees who work on the Ares rocket in Huntsville, Ala., as the first increment of what could be 180, by September. The total number of layoffs across the country could be as many as 5,000, according to NASA , just to cover the termination costs. Never mind the possibility that the whole program could be killed.

Largest U.S. Nurses Protest Action Ever—12,000 Walk Out in Minnesota

June 10 (EIRNS)—A protest walkout by 12,000 nurses in Minnesota today, is the latest, dramatic manifestation of mass-strike sentiment cross country. Fourteen hospitals in the Twin Cities area were struck by a pre-planned 24-hour nursing work outage, coordinated by the Minnesota Nurses Association, in what was to be a parallel to a one-day strike by California nurses against cutbacks by hospitals. However, the California strike has been barred for two weeks, by a judge's temporary restraining order.

Instead, California nurses planned to hold rallies today at hospitals in Irvine, Santa Monica, San Pedro, and Covina, to draw attention to dangerous staffing cutbacks, and pay, pension, and duty issues. "Our number-one priority remains correcting the chronic staffing issues at University of California Medical Centers, which we have been unable to resolve through any other means," said Beth Kean, chief negotiator for the California Nursing Association's University of California Division.

Even without California, the Minnesota walkout is the biggest ever in U.S. history. In Washington, D.C., on May 12, some 1,000 registered nurses demonstrated on Capitol Hill, demanding that Congress enact measures to ensure proper nurse-to-patients staffing ratios in hospitals. This was coordinated by National Nurses United, the largest union for RNs in the United States.

Issa Wants Probe of White House Top Guns for Violation of Hatch Act

June 8 (EIRNS)—Rep. Darrel Issa (R-Calif.) today sent a referral and request for investigation to the U.S. Office of Special Counsel regarding alleged violations of the Hatch Act by White House Chief of Staff Rahm Emanuel and Deputy Chief of Staff Jim Messina, for their admitted involvement in attempts to dissuade Rep. Joe Sestak (D-Pa.) and Andrew Romanoff (Colorado) from running for Senate against contenders favored by the Obama Administration.

In his statement, Issa points out that the Hatch Act restricts Federal officials from using official authority or influence for the purpose of interfering with or affecting the result of an election.

Issa wrote: "Rahm Emanuel was leveraging the power and access of his official position to advance the political interests of the Democratic Party by affecting the result of the Pennsylvania Democratic Primary. Averting divisive primary campaigns and protecting a Democratic seat in the U.S. House of Representatives are purely political concerns and as such, federal officials are prohibited from using their official authority or influence to address them.... [T]his is precisely the sort of behavior forbidden by the Hatch Act."

With respect to Messina, Issa wrote: "In the White House's June 3, 2010 public statement, Mr. Gibbs claimed that clearing the field for a candidate preferred by the White House was not problematic because 'there was no offer of a job.' There is evidence to the contrary. Additionally, a finding of a Hatch Act violation does not require that a job was formally offered; any use of official authority by a restricted federal official to interfere with or affect the outcome of an election is unlawful."

Also, on June 5, Issa challenged President Obama to directly address whether he condones the efforts of Emanuel and Messina. "President Obama likes to talk about accountability and project an image of being in charge or control, yet these recent controversies raise legitimate questions surrounding what exactly is going on in Barack Obama's White House. White House Press Secretary Robert Gibbs said the President had no prior knowledge of these incidents, so the outstanding question for President Obama is, does he condone these efforts, and if not, what is he going to do about it?"

Goldman Sachs' Arrogance Angers Financial Crisis Inquiry Commission

June 8 (EIRNS)—The Financial Crisis Inquiry Commission issued a subpoena on June 4 to Goldman Sachs, after the firm "willfully avoided" requests for interviews and documents made in January. The Commission requested information about Goldman's derivatives, including the Abacus transactions that figure in the SEC's fraud lawsuit against Goldman. The Commission also demanded information on Goldman's receipt of a $14 billion payment from AIG on mortgage deals which became worthless. The $14 billion represented virtually full payment on AIG's obligations to Goldman.

After the Commission's demand in January, Goldman stonewalled and provided nothing for months. It submitted dribs and drabs of information, starting March 8, that the Commission called incomplete; asked for extensions; and when it still failed to produce, took the position that it had produced everything by March 8. When the Commission refused to back off, on May 24, Goldman electronically dumped the equivalent of roughly 2.5 billion pages of documents on the Commission, without sufficient guidance on where to find the information the Commission requested.

Phil Angelides, the Commission's chairman, said that Goldman is deliberately "trying to run out the clock" by dumping the billions of pages on the Commission. "We should not be forced to play 'Where's Waldo?' [a children's book series] on behalf of the American people," said Angelides. Former U.S. Rep. Bill Thomas, the vice-chair, called Goldman's conduct "deliberate obfuscation," adding, "They may have more to cover up than maybe we thought." The Commission is required to submit its final report by Dec. 15, 2010. "We're not going to let the American people be played for chumps here," Angelides said on June 7.

58% Say Repeal ObamaCare; Dems Launch Goebbels Campaign

June 7 (EIRNS)—Fifty-eight percent of Americans now favor repealing the Nazi ObamaCare law that was rammed through Congress last December. And that large majority, according to Rasmussen Reports, is even down 2% from last week—but still far higher than immediately after Nero signed the bill.

Recognizing this may pose an electoral problem for those who voted for the bill, Democrats today announced a "$125 million campaign that White House allies are rolling out to defend health-care reform amid growing signs Democrats are failing to get political traction on the issue," as Politico understated.

It is to be a protracted Goebbels campaign, slated to stretch over the five years from now through 2014, when the law's largest provisions are set to kick in. Politico says that the campaign will continue as long as Obama is President—which should cut into its duration several years.

The co-chairmen of the Goebbels project are former Senate Majority Leader Tom Daschle (D-S.D.), and Victoria Kennedy, widow of the late Sen. Ted Kennedy, who helped push through the law establishing HMOs.

The Democratic National Committee is now circulating a polling memo by Joel Benenson, one of the Obama's pollsters, which argues: As misinformation about President Obama's health care reforms gives way to Americans' real-life experience with it, voters are slowly becoming increasingly comfortable with the law and resistant to Republican efforts to repeal it.

As Goebbels said, "The truth is the greatest enemy of the State."

Ibero-American News Digest

President Uribe's Parting Shot Against the British

June 14 (EIRNS)—In a surprise strike yesterday on a jungle concentration camp run by the narcoterrorist FARC, some 300 Colombian Armed Forces commandos rescued four police and military officers who had been held in captivity for 12 years. Among the four was the highest-ranking hostage held by the FARC, police Gen. Luis H. Mendieta. Col. William Donato Gómez, who escaped into the jungle during the firefight, and was found today by Army troops, still wearing the three-meter long chain attached to his neck by the FARC.

The military rescue, named "Operation Chameleon," required six months of careful planning, once Army intelligence learned that the FARC was moving this group of hostages around in the jungle every 8-15 days.

This latest strike comes one week before the June 20 run-off Presidential election, which has been shaped by London's adamant insistence that President Uribe could not, and would not, run for a third term of office, since, for years he has been a thorn in the side of London's effort to legalize drugs internationally. The line from London is that you "can't win, so there's no point in fighting."

Uribe's latest, and final, Presidential action, has just shown, again, that that is a lie.

With Uribe out of the picture, the race is down to Juan Manuel Santos, Uribe's long-time Defense Minister and supposed heir apparent, and Antanas Mockus, the existentialist and psychologically unstable former mayor of Bogota. The successful freeing of the FARC hostages boosts the likelihood of Santos winning, since he has campaigned as the man who will continue Uribe's policy of making no deals with the narcoterrorists.

But that is an open question. Santos is also politically very close to the very London forces—especially Tony Blair—who want the war on drugs ended, and they will be pressuring Santos to do their bidding. But institutional forces inside Colombia, including the military, and many institutional forces in Washington, will be pressuring Santos in the opposite direction.

Haiti Situation Is Worsening

June 8 (EIRNS)—Half a million more displaced persons in Haiti came into the Port-au-Prince high-hazard zone over the month of May, as the nationwide dislocation and danger from storms and disease worsened. There remain over 2 million people, out of a population of nearly 10 million, in the flood and disease-prone area most hard-hit by the Jan. 12 earthquake.

No mass relocation logistics, CCC- or Army Corps of Engineers-style operations have been undertaken. All the particulars of the situation, document the perpetration of a death policy by the Obama Administration, which flatly rejected proposals for mass relocation and infrastructure-building required, and instead ordered the pullout of the U.S. military forces aiding in reconstruction. Henceforth, only small-scale, individual U.S. projects—called "New Horizons"—involving 500 U.S. National Guard personnel, will take place from June through September. This kind of micro-aid is a mockery of the need for mass relocation and infrastructure-building.

Former President Bill Clinton, UN Envoy for Haiti, visited there the first week in June, saying, "We have more than 1 million people that are living in very precarious conditions, in camping tents. We cannot allow people to die during this hurricane season because they inhabit temporary dwellings." He was in the Dominican Republic for the June 3 World Summit for the Future of Haiti, which appealed to 54 nations and 35 NGOs, for some $11 billion for aid to Haiti.

The June 5 operations update by the International Federation of Red Cross and Red Crescent Societies reports on the emergency:

"During the last month, the internally displaced population in Port-au-Prince increased by 500,000, due to lack of job opportunities, food, education and livelihood opportunities in host communities outside the city...."

"High population movement" is taking place all over the half-island nation, because of desperation. People wander back and forth to relatives, camps, and destroyed towns. Factors such as job shortages, education, food and shelter in non-direct-earthquake-affected areas provoke constant population movements from the outside of Port-au-Prince to the capital, in addition to movement within the same city from a camp to another that may be better maintained and supported.

"Recently, heavy rains have caused flooding in most vulnerable temporary settlements. Some households, which had set up temporary shelters at the site, were flooded by heavy rains and had to move to a nearby settlement. At the same time, the ground is becoming increasingly saturated and causing damage to water and sanitation facilities. The deteriorating conditions are now causing families to migrate towards the well-maintained camps, making it difficult to monitor population needs."

In the meantime, there are charades of relief. Among the fake housing "solutions," for example, is a new kind of storm-resistant hut, featured in a Deutsche Bank exhibit in New York City. The "cutting-edge" architects who designed it are on a promotional trip to Haiti this week, where a grant is to fund the building of a few thousand glorified sheds. The U.S. AID Washington, D.C. office likewise featured a different design for an impoverished person to build.

Among the farming rip-off "solutions," is a mango export project, in which a five-year, Public-Private Partnership (PPP) deal is underway, between Coca-Cola and Haitian-based Carifresh, for the Coca-Cola product to be sold in the U.S.A., called "Haiti Hope Mango Lime-Aid." The funding involves $7.5 million, overseen by the PPP-consulting outfit, Technoserve, from Inter-American Development Bank and Coke money.

CCC-Type Program Proposed for Haiti

June 7 (EIRNS)—Rep. Gary Miller, a Republican from Florida, introduced a bill at the end of April to create a U.S. program to aid in the reconstruction of Haiti, which is similar in principle to Franklin Delano Roosevelt's Civilian Conservation Corps (CCC). Miller's proposed "'Partnership With America' Rapid Rebuilding of Haiti Act of 2010" does not cite the CCC, but the program coheres with Lyndon LaRouche's call for a CCC program to save Haiti, and giving a mission to U.S. youth, too.

H.R. 5171 would "create a program under which ... U.S. construction and reconstruction experts and workers who currently are unemployed or significantly underemployed shall begin work in Haiti on an organized and coordinated plan to help Haitians rebuild the infrastructure of Haiti, including roads, airports, energy facilities, schools, hospitals, and other services fundamental to economic development, including permanent housing for persons who lost their housing because of the earthquake."

Respectful of Haiti's sovereignty, the bill calls for a plan to be developed, "anticipating the needs of a Haitian economy that does not merely return to pre-earthquake levels but grows fast enough to provide jobs for Haitians and raise the overall standard of living in that country," and "seek to ensure that the U.S. workers do not take the place of Haitian workers, but instead supplement, coordinate, and mentor Haitian construction workers, and train them so that an adequate and adequately trained Haitian construction force is left in place to accommodate the hoped-for future growth of the Haitian economy."

Western European News Digest

Survival of Euro Questioned

June 8 (EIRNS)—The head of research for the Inter-Alpha Group's Royal Bank of Scotland, David Simons, speaking before a business group in Singapore recently, expressed doubts that, even with the huge bailout of Greece's creditors, the euro will survive. "Maybe we reach the point where this herculean effort works and enough policy stimulus is provided so countries can fly again," Simons said, according to Bloomberg. "However, I do not subscribe to this view, because one cannot treat a debt-fueled overconsumption problem with a lot more debt." He revealed that the combined exposure to Portugal, Spain, and Greece is more than EU2 trillion, EU500 billion of which is held by French and German banks, while fully half of the EU2 trillion is held by European banks.

In an article posted on the Cato Institute website on May 26, Czech President Vaclav Klaus examined the possibility that the Eurozone could eventually come undone. (The Czech Republic is not a member.) He noted that the Eurozone is divided into two regions—one with a low inflation rate, and one with a higher rate that includes Greece, Spain, and Portugal. "The global financial and economic crisis only escalated and exposed all economic problems in the Eurozone—it did not cause them," wrote Klaus. He went on to note that since the establishment of the Eurozone, economic growth for many member-states has actually slowed in comparison with previous decades. But since so much political energy has been invested by the European governments into the euro project, they will try to keep it at any cost—and the cost will be immense. Klaus added that, for the Czechs, it was no mistake that they did not join the euro.

Crisis of Euro Creates Paralyzed Governments

June 14 (EIRNS)—After the three elections in the Netherlands and Belgium (early national elections) and in Germany's most populous state North Rhine-Westphalia (NRW), a sizeable section of the Eurozone is faced with a dramatic loss of voter confidence in the establishment parties—especially the Christian Democrats in the three countries. This has created a very complicated political situation that makes the formation of a new government almost impossible.

In NRW, five weeks after the state parliament elections, all options for government coalitions have collapsed, and the old coalition of Christian and Free Democrats will remain in place for the time being, without having a majority in the Landtag (the state parliament). This is a bad omen for scenarios that one reads about these days, such as for splitting the Eurozone up into a northern zone, led by Germany, and a southern one led by France. The northern zone, portrayed as allegedly "stable" as opposed to the "less stable" southern one, would not be stable at all, given the situation in NRW, and including the neighboring states Belgium and the Netherlands among its core members.

The situation of the national German government is not stable, either. The ungovernability in NRW adds to the many other problems that Chancellor Angela Merkel's government coalition already faces; it is deeply split over many aspects of the EU bailout policy, such as drastic tax increases and additional budget cuts, but is also split over Merkel's planned expanded ban on short sales of speculative paper. A favorable ruling of the Constitutional Court, even if only in part, for the plaintiffs against the EU bailout package, would deal another severe blow against the government, maybe before the Summer recess, as would the failure of Merkel's candidate for Federal President, Christian Wulff, in the June 30 vote. Should Wulff lose, today's London Financial Times wrote, it "might be enough to cause Ms. Merkel's ruling coalition to fall apart."

European Labor Leader Warns: Austerity Leading 'Back into 1930s'

June 14 (EIRNS)—The chief of the European Trades Union Federation (ETUC), John Monks, has warned that the austerity packages being imposed across the EU will inevitably send the continent "back to the 1930s." He reported that European Commission President José Manuel Barroso also fears that member states will turn their back on democracy—but for the opposite reason.

"This is extremely dangerous. This is 1931; we're heading back to the 1930s, with the Great Depression and we ended up with militarist dictatorship," the general secretary of the ETUC told the EUobserver. "I'm not saying we're there yet, but it's potentially very serious, not just economically, but politically as well."

Monks reported that Barroso believes, on the contrary, that the austerity packages will save Europe from returning to the darkest days of the last century. "I had a discussion with Barroso last Friday about what can be done for Greece, Spain, Portugal and the rest and his message was blunt: 'Look, if they do not carry out these austerity packages, these countries could virtually disappear in the way that we know them as democracies. They've got no choice, this is it.'

"He's very, very worried. He shocked us with an apocalyptic vision of democracies in Europe collapsing because of the state of indebtedness."

Danes Demonstrate in Copenhagen Against Austerity

June 8 (EIRNS)—Around 40,000 people showed up in front of the Danish Parliament to protest the government's new austerity plan, which will cut in half unemployment benefits, spending for schools, universities, children's subsidies, hospitals, and more. All trade unions were involved in mobilizing for the demonstration. People came in buses from all over the country.

The Schiller Institute distributed nearly 5,000 of its campaign newspaper, with articles on the need for a Glass-Steagall law, investments in infrastructure, the campaign of the LaRouche movement in the U.S., and the transcript of Lyndon LaRouche's May 8 webcast.

For many Danes, this is the first time they have come to a demonstration, because they are beginning to see how serious the collapse really is. The potential for mass-strike ferment is beginning to develop in Denmark.

Russia and the CIS News Digest

Russian Prof.: Draw Lessons of 500 Years of British Enmity

June 11 (EIRNS)—Currently circulating on Russian-language Internet sites is a 12-minute clip from a recent Russia.ru broadcast by Prof. Igor Panarin of the Diplomatic Academy of the Russian Ministry of Foreign Affairs, titled "London Shall Not Seize Moscow!" While the current state of Russian economic policy, including the legal registration of a large number of Russian corporations in British and related offshore havens, might suggest that the seizure had already taken place, Panarin's summary of 500 years of British enmity toward Russia is a carefully worded appeal for Russian leaders to "draw the lessons" of that history, and not be fooled again.

The interview also comes amid the considerable resonance of recent writings by Lyndon LaRouche and his EIR Online, issued in Russian, including "Free Russia from the Pirates of the Caribbean!—The Case of Arkadi P. Dvorkovich"; the EIR article "London's 'Our Men' Keep Poisoning Russian Policy"; and LaRouche's memorandum on British monetarist imperialism, sent to the June 9-10 Moscow conference on Afghan Drug Production (see InDepth, last week). These publications are reportedly being hotly discussed in Russian political circles.

Panarin reviewed Anglo-Russian tension from the time of English operations against Ivan Grozny (Ivan the Terrible) in the 16th Century, and especially after the late 18th Century, "when the Seven Years War had made Britain the world-ruling British Empire." He cited the famously reported reason for the British organizing the murder of Tsar Paul I in 1801, namely that Paul might really have been sending a Cossack force through Afghanistan into India.

World War I was identified by Panarin as the outcome of the British Round Table's scheme to dominate the world by destroying Germany and Russia. World War II, he said, began when the British Prime Minister Neville Chamberlain's 1938 Munich agreement with the Nazis "sent Hitler East," but Panarin also cited Bank of England credits to the Nazis in 1934-40. On the Russian side, Panarin laid out the rarely mentioned fact that the British backed both sides in the 1918-21 Russian Civil War, in which 10 million died: White Army General Kolchak was "recruited by Churchill," while Bolshevik figure Leon Trotsky created the Red Army, with Robert Bruce Lockhart and Sidney Reilly of British Intelligence as his advisors. It was only the victory of "Bolshevik statists" under Stalin, against "Bolshevik globalists," that prevented the utter destruction of Russia in that period, he said.

Although Panarin incorrectly stated that the British Empire ceased to exist at the close of World War II, his most important remark conveyed that it really did not. Said Panarin, "London is the historical enemy of Russia, and London is also the contemporary one, because it is precisely in London that all the enemies of the current leadership of the Russian Federation have gathered. And, it seems to me that Russia needs to draw the lessons of this centuries-long geopolitical opposition. Take this example: during World War I, Russia provided its allies in the Entente with a million rifles and 5 million rounds of ammunition for combat at the front, but received nothing in return. And that was done deliberately, to achieve destabilization, such that 1915 was a year of stunning defeats for the Russian Army. And when Russia began to recoup ... and threatened British interests, British Intelligence agents carried out a successful operation to overthrow the Russian emperor; it is my view that the February [1917] Revolution was the fruit of British Intelligence operations."

Panarin maintains a high public profile as host of the Voice of Russia interview show "World Politics." He is most famous for his forecast that the U.S.A. will plunge into crisis and fragment in the Summer of 2010, but few in the West have reported that Panarin says the threats to the existence of the U.S.A. originate from London-centered financial interests, including "aristocrats who have held on to their fortunes for many centuries," and who intend to survive and retain power by destroying the United States.

At Istanbul Security Conference, Nuke Deal Announced

June 8 (EIRNS)—Russian Prime Minister Vladimir Putin met today with Iran's President Mahmoud Ahmadinejad and Turkey's Prime Minister Recep Tayip Erdogan on the sidelines of a Eurasian security conference in Istanbul. AP reported the following from that conference:

"Russian Prime Minister Vladimir Putin announced in Istanbul that Russia has committed to establishing a joint venture to operate Tehran's first nuclear plant. The Iranian Bushehr nuclear power plant is expected to come online by the end of the summer, after being delayed since 1975 for a variety of political reasons. According to Sergei Kiriyenko, chief of Russia's nuclear state corporation, Iran is only embarking on the path to peaceful nuclear energy and needs Russia's leadership to successfully implement its nuclear program. We have agreed that our experts will work as part of this joint company and maintenance of the station will be implemented by the staff of our two countries for the next few years, he says. Putin maintains that the launch doesn't violate the new sanctions imposed on Iran by the UN."

The idea that Russia will co-manage the Bushehr reactor with Iran throws a great big obstacle in the way of London's option to deploy "breakaway ally" Israel to launch military action against Iran, in the hope that a U.S.A. under British agent President Barack Obama will join Israel to "finish the job."

Southwest Asia News Digest

Siegman on Israel's Greatest Loss: Its Moral Imagination

June 12 (EIRNS)—Henry Siegman, one of the elder statesmen of American Jewry, who served as national director of the American Jewish Congress from 1978-94, and now runs the U.S./Middle East Project, penned a devastating exposé of Israel's moral degeneration in the June 11 edition of Israel's Ha'aretz newspaper, under the headline, "Israel's Greatest Loss: Its Moral Imagination."

Siegman, who was born in Frankfurt in 1930, came to the U.S. from Antwerp, and served as an Army chaplain in the Korean War, recounted a conversation with a friend in Israel, days after the Israeli commando assault on the flotilla bringing aid to Gaza aid. The friend lamented that the international condemnation of Israel "was reminiscent of the dark period of the Hitler era."

Siegman wrote, "When I managed to get over the shock of that exchange, it struck me that the invocation of the Hitler era was actually a frighteningly apt and searing analogy, although not the one my friend intended. A million and a half civilians have been forced to live in an open-air prison in inhuman conditions for over three years now, but unlike the Hitler years, they are not Jews, but Palestinians. Their jailers, incredibly, are survivors of the Holocaust, or their descendants. Of course, the inmates of Gaza are not destined for gas chambers, as the Jews were, but they have been reduced to a debased and hopeless existence.... Particularly appalling is that this policy has been the source of amusement for some Israeli leaders, who, according to Israel press reports, have jokingly described it as 'putting Palestinians on a diet.' That, too, is reminiscent of the Hitler years, when Jewish suffering amused the Nazis."

Siegman clarified: "Of course, even the most objectionable Israeli policies do not begin to compare with Hitler's Germany. But the essential moral issues are the same.... So, yes, there is reason for Israelis, and for Jews generally, to think long and hard about the dark Hitler era at this particular time. For the significance of the Gaza flotilla incident lies not in the questions raised about violations of international law on the high seas, or even about 'who assaulted who' first on the Turkish ship, the Mavi Marmara, but in the larger questions raised about our common human condition by Israel's occupation policies and its devastation of Gaza's civilian population. If a people who so recently experienced on its own flesh, such unspeakable inhumanities cannot muster the moral imagination to understand the injustice and suffering its territorial ambitions—and even its legitimate security concerns—are inflicting on another people, what hope is there for the rest of us?"

Commentators Condemn Israeli/Neocon Drive To Kick Turkey Out of NATO

June 14 (EIRNS)—An Israeli government campaign, run through U.S.-based neo-conservative operatives and organizations, to kick Turkey out of NATO, has drawn a serious reaction from U.S. military, academic, and intelligence veterans on the "Sic Semper Tyrannis" blog created by Col. W. Patrick Lang (U.S. Army, ret.).

On June 10, the blog headlined the following report: "In the aftermath of the Israeli armed assault on a Turkish-flagged aid ship, bound for the Gaza Strip, some of the more rabid American neocons have demanded, in no uncertain terms, that Turkey must be punished by being kicked out of NATO. Yes, you heard me correctly. Israel carried out an act of international piracy, and cold-blooded murder in international waters, and Turkey must be punished....

"It is pretty obvious that a talking points memo went out from the Israeli embassy or some other locale, because in a matter of days, many of the usual suspects—Daniel Pipes, Stephen Schwartz, Michael Rubin, and Victor Davis Hanson, not to mention the Jewish Institute for National Security Affairs (JINSA)—all came out with the identical, preposterous notion that Turkey is the perp and Israel the victim."

Former CIA analyst Phil Giraldi, who is well-known for exposing Anglo-Israeli-U.S. efforts to go to war against Iran, posted one response: "Editorials, op-eds, letters and what purport to be news stories have also been appearing" in major media, "either strengthening the narrative that Turkey is becoming dangerously 'Islamist' or calling for some kind of punishment for [Turkish Prime Minister] Erdogan. This is clearly a coordinated effort and I expect that congress will soon join the attack." He adds: "The US cannot unilaterally expel Turkey from NATO, nor can it exclude Turkey from the intel that is shared within the alliance."

Another commentator notes that a Brookings Institution academic recently compared the non-response by the U.S. to the Israeli attack on the flotilla, where an American citizen was killed by Israeli troops, to the lack of serious U.S. response to the June 8, 1967 Israeli sinking of the U.S.S. Liberty, in which 34 crew members were killed, and 171 injured.

London Times: U.S. Backs Israeli Strike on Iran; Overflights of Saudi Arabia

June 12 (EIRNS)—The British are escalating the drive for a new Southwest Asian war. The London Times today writes that Saudi Arabia will allow the use of its airspace for an Israeli attack on Iran, and that this has the approval of the U.S. State Department. It even claims the Saudis have practiced standing down their systems to allow Israeli strike aircraft to fly over their airspace en route to Iran.

There is no reason whatsoever to believe that this is anything other than British psychological warfare disinformation. For months, other Rupert Murdoch-owned publications, like the Wall Street Journal, have been promoting an Israeli strike on Iran—complete with maps of the routes that would be taken. Not noted in the Times article is the fact that Israeli planes would have to have overflight permission from Iraq/U.S. after they overfly Saudi Arabia to hit the Iranian targets. On May 29—one day before the Israeli commando assault on the Gaza aid flotilla, the Times published another war-mongering disinformation story, claiming that Israel now has permanently stationed submarines, armed with nuclear warheads on cruise missiles, in the Persian Gulf, as both a deterrent and as a platform for launching attacks on Iran's nuclear facilities."

The Times June 12 story says: " 'The Saudis have given their permission for the Israelis to pass over and they will look the other way,' said a U.S. defense source in the area. “They have already done tests to make sure their own jets aren't scrambled and no one gets shot down. This has all been done with the agreement of the [U.S.] State Department.'

"Sources in Saudi Arabia say it is common knowledge within defence circles in the kingdom that an arrangement is in place if Israel decides to launch the raid. Despite the tension between the two governments, they share a mutual loathing of the regime in Tehran and a common fear of Iran's nuclear ambitions. “We all know this. We will let them [the Israelis] through and see nothing,' said one."

The Israelis will hit four main targets, including "the uranium enrichment facilities at Natanz and Qom, the gas storage development at Isfahan and the heavy-water reactor at Arak. Secondary targets include the light water reactor at Bushehr, which could produce weapons-grade plutonium when complete."

The rest of the article rehashes the line that the Arabs, including Egypt, Jordan, Saudi Arabia, as well as Turkey, would turn a blind eye to an Israeli attack.

Asia News Digest

China Youth Daily Exposé of Goldman Sachs Marks Phase-Shift

June 8 (EIRNS)—A May 31 article in China Youth Daily detailing the criminal operations of Goldman Sachs in China, exposes the comprador capitalism practiced by foreign investment banks in China. The article outlines Goldman's manipulation of the relatively primitive Chinese market during the period of China's "opening up" to the West, and the inability of Chinese regulators to defend the national patrimony in this unfamiliar terrain. "Many people believe Goldman Sachs, which goes around the Chinese market slurping gold and sucking silver, may have, using all kinds of deals, created even bigger losses for Chinese companies and investors than it did with its fraudulent actions in the U.S.," the article says. It shows how Goldman put out stories that the state-owned banks, which were being put up for privatization, were in a state of financial chaos and carried huge bad loans, thus driving down their price and allowing Goldman to come in and purchase their assets at bargain-basement prices.

One particular area of concern is that Goldman suckered major Chinese companies to hedge against future oil price inflation right before oil prices collapsed. The Chinese government has supported the several companies in refusing to pay Goldman the millions in these derivative losses.

Youth Daily shows how Goldman used their interests in a variety of "front companies" to gain a controlling interest in the meat-processing industry, in spite of the formal limitations on foreign control of any specific industry, which the article characterizes as Goldman's "kidnapping of domestic industries." Similarly, in the securities field, Goldman has been successful in using its leverage in a variety of companies, using what Youth Daily calls the "policy of the ambush," to garner a controlling share in that market. The article refers to the "black hand" of Goldman Sachs.

The wide circulation of this article in the state-run media indicates a reaction to the "Wild West capitalism" that has been allowed to proliferate during the period of "reform and opening up." It has generally been out-of-bounds for Chinese journalists to lambaste in this way any company which has been considered to be working in China's interests. This critique goes far beyond Goldman Sachs in its treatment of the workings of the London financial mafia, in general.

It is of note that two months ago, one of Goldman Sachs' Chinese "golden boys," Fred Hu, was making a bid to get on the board of the People's Bank of China (PBOC). The scandal around Goldman and the disillusionment over this new unexpected "phase" in the world market put him out of the running.

China also postponed indefinitely the planned introduction of credit default swaps this past week, which had been pushed by Goldman and its friends at the Central Bank.

The Real Surge in Afghanistan and Pakistan Is the Number of Deaths

June 11 (EIRNS)—While the Obama Administration continues to protect the British drug trade, the death toll in the longest "hot" war the British have ever induced the United States to enter, is rising rapidly.

During the past week, 23 NATO soldiers were killed in Afghanistan, including four Americans whose helicopter was shot down in Helmand Province. In Pakistan, two NATO convoys on their way to Afghanistan were attacked, one near Islamabad today, destroying 20 trucks and killing eight; another convoy was hit June 8, near the Afghan border, in an area where the Pakistani army is fighting the Taliban.

Also, Obama's increased use of CIA-run drone attacks in Pakistan killed 17 in North Waziristan this week. There have been more than 35 drone attacks this year alone, the highest rate since the attacks began in earnest in 2008. Lyndon LaRouche has condemned this "video game" assassination operation as a crime against humanity.

Cameron Nearly Killed in Afghanistan

June 11 (EIRNS)—David Cameron, on his first visit to Afghanistan as Prime Minister, almost didn't make it out of Helmand Province, London's international opium production capital. His trip to a village where British troops were building a school was aborted when two Taliban communications were intercepted as they were discussing bringing down Cameron's helicopter. Cameron was only ten minutes from the ambush site when his helicopter was diverted to a nearby air base.

Cameron spoke to British soldiers at the main British base in Afghanistan, Camp Bastion in Helmand Province, promising to double their pay and to give more money to the government—but not to send more troops. He did not say whether the funds were to come directly from the drug production which is under British control and protection.

Malaysian Judicial Organization Calls for Murder Charges Against Israel

June 6 (EIRNS)—The Kuala Lumpur Foundation to Criminalize War, which is linked to former Malaysian Prime Minister Mahathir Mohamad's Perdana Global Peace Organisation (PGPO) and to the War Crimes Tribunal which indicted Tony Blair earlier this year, called on Turkey and Ireland to bring charges against Israel for its May 31 attack, in international waters, on the flotilla that was attempting to bring aid to Gaza. Foundation secretary-general Datuk Dr. Yaacob Husaain Merican said the attack was in "clear violation of the Convention for the Suppression of Unlawful Acts Against the Safety of Maritime Navigation. For this act of piracy, murder and abduction committed on the high seas, both Turkey and Ireland can bring up charges against Israel under the convention."

The PGPO was one of the funders of the Gaza relief flotilla attacked by Israel in international waters, although no Malaysians are among the dead. Datuk Mukhriz Mahathir, the son of Dr. Mahathir Mohamad and an advisor to the PGPO, called Israel's action a violation of international law. "We don't recognise Israel's illegal siege of Gaza. We think it's our right to continue our mission there. After all, we're not sending arms or anything like that," he said in an interview with Al-Jazeera.

But Mukhriz said the mission was partly successful, as it had raised awareness of the Palestinians' plight.

Africa News Digest

Brits Aim To Move Conflict Jurisdiction from Security Council to ICC

June 12 (EIRNS)—The British imperial financial cartel gained ground at the conference of the International Criminal Court (ICC) in Kampala, Uganda, which ended yesterday, in their campaign to take greater control over conflicts they initiate or that result from policies they back, such as the IMF's austerity conditionalities policy. Their goal at the conference was to increase the jurisdiction of the privately created International Criminal Court (ICC)—funded by megaspeculator and drug-promoter George Soros—at the expense of the United Nations Security Council (UNSC).

At the Review Conference of the Assembly of States Parties to the Rome Statute of the International Criminal Court, which began June 4, the financial cartel added a new area, "aggression," that the ICC would be mandated to investigate. The proposal called for giving the ICC authority to investigate, prosecute, and punish individuals for aggression. This would greatly complicate future decisions by any nation on the use of force to protect their interests, and inserts the ICC into an inherently political realm that would work to the advantage of British-spawned destabillization operations. Up to this point, the ICC has only focussed its investigations and prosecutions on African nations.

Concerned about what the British could unleash with this change, the four non-British permanent members of the Security Council, and other delegates at the conference opposed the move. But the leader of the U.K. delegation to Kampala, Chris Whomersley, said the British could act as an interface between the ICC and the UNSC.

The compromise agreement on the motion that was reached at Kampala states that the UNSC will hold primary responsibility for determining whether an act of aggression has occurred, and that the ICC can initiate an aggression case only if the UNSC takes no action. The amendment will not take effect until Jan. 1, 2017.

Although other technicalities further weaken the amendment, the compromise amendment gets another foot in the door for the ICC to be used in the context of propaganda campaigns, such as its campaign against the government of Sudan over the Darfur situation, to enhance orchestrated destabilization campaigns.

Elizabeth Evanson, counsel in Human Rights Watch's international justice program, was happy about the development. "The agreement may pave the way for the court to act on aggression without Security Council control," she said.

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