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Online Almanac
From Volume 37, Issue 41 of EIR Online, Published Oct. 22, 2010

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The View from the Galaxy:
Science from the Top, Down
by Michelle Fuchs

Oct. 16—Get off your couch. In fact, leave your house, fly up off the Earth and out of its atmosphere, and don't stop until you've exited our lowly little Solar System and entered into the real universe known as cosmic space. As presented in the new LPAC-TV feature, ``Our Extraterrestrial Imperative 2: Cosmic Rays,'' it is only when you have taken this journey beyond your senses, and what you think you know about the world around you, that real science can begin.

A scientific revolution was launched last week with the release of the video, which presents the hypothesis of the galactic processes that influence and shape the development of life on our planet. The video begins by taking the viewer back in time, asking the question of how and why different species of life enter and exit the stage of planetary history in measurable cycles of increase and decrease. These cycles also participate in the longer-term process of upward evolutionary progress. Then, in the search for the cause, the video proceeds to take the viewer from the domain of the very large, to the very small...

In-Depth articles from EIR, Vol. 37, No. 41
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This Week's Cover



  • Mass Strike in France Hits Bankers' Pension Heist
    Millions are protesting President Sarkozy's plan, dictated by the International Monetary Fund and the banks, to raise the age at which a person can receive a pension. It's just one aspect of the broader push for austerity in Europe.
  • FDR, not Obama:
    Bring Back Haiti's 'Valleys of Hope'

    Barack Obama's 'let 'em die' policies towards Haiti, in the ten months since the Jan. 12 earthquake, have kept the majority of Haiti's people in a Dark Ages hell, where survival is a daily struggle. Not a cent of the $1.15 billion pledged by the U.S. government, has materialized. Contrast this to Franklin Roosevelt's approach, of building CCC-style camps in Haiti, to foster its economic development.



  • Kesha Rogers
    LaRouche Democrat Rogers is the Democratic candidate for Congress in the 22nd Congressional District (Houston), having defeated her opponent in March, with 53% of the vote. She has been running a scantily funded, but aggressive, David vs. Goliath grassroots campaign against Republican incumbent Pete Olson, calling for President Obama's ouster, Glass-Steagall, and defense of NASA.

This Week's News

U.S. Economic/Financial News

Social Security COLA Denial: Obama's 'Screw the People' Policy

Oct. 11 (EIRNS)—For the second year in a row, almost 59 million senior citizens are being told that, since there is "no inflation," they will not be getting any cost-of-living allowance (COLA) increase in their Social Security checks next year. While the determination of the COLA is technically an independent function related to the Consumer Price Index, last year, the first year that increases were denied (ever, since 1975), the Congressional Budget Office and the Obama Administration were both "predicting" that there would be no COLA increase until 2013; that is when Obama's term would expire.

Some 59 million seniors and disabled rely on Social Security, over 34% of them as their primary source of income. Last year, seniors received a $250 check, from stimulus money, which some blog commentators said was Obama's finale to the practice of continual increases. Currently, as inflation in commodities is causing daily increases large enough to halt trading, Rep. Earl Pomeroy (D-N.D.), chairman of the House Ways and Means subcommittee on Social Security, has introduced a new bill to provide another $250 payment to seniors, if there is no COLA increase. "Costs of living are inevitably going up, regardless of what that the formula says," Pomeroy told AP. "Seniors in particular have items such as uncovered drug costs, medical costs, utility increases, and they're on fixed incomes."

Bernanke Fans the Flames of Inflation

Oct. 15 (EIRNS)—As the dollar reached its lowest value against the yen in 15 years, creating new tensions in the relationship between the currencies, Federal Reserve chairman Ben Bernanke, speaking at the Reserve Bank of Boston on Oct. 15, ignored the hyperinflationary pressure across the globe, and pushed the old policy of pumping more money to "stimulate" the economy.

It was evident from Bernanke's speech, that he is preparing to buy more worthless securities and pass on the debt to the American people. He said: "For example, a means of providing additional monetary stimulus, is warranted, would be to expand the Federal Reserve's holdings of longer-term securities."

Reports from across the world, however, show an underlying dynamic leading toward hyperinflation. Asian and African nations report increasingly high food prices and huge volumes of cash sloshing around. Gold prices reached a record high today.

The Commodities Research Board Index of 19 raw materials jumped 2.7% on Oct. 8 to 295.17, the highest since Oct. 15, 2008. That date, two years ago, followed a year of severe food price inflation. Every price in the CRB Index advanced. Wheat, soybeans, and corn led the gains, each jumping the most allowed by the Chicago Board of Trade. Copper climbed to a 27-month high, and crude oil topped $83 a barrel.

Economist John Williams, who runs the econometric website shadowstats.com, wrote on Oct. 7, "The intensifying economic and solvency crises, and the responses both by the U.S. government and the Federal Reserve in the last two years, have exacerbated the government's solvency issues and moved forward my timing estimation for hyperinflation, to the next five years. Hyperinflation means extreme inflation, minimally in excess of four-digit annual percent change, where the involved currency becomes worthless."

Treasury Backs Off from Labeling China a 'Currency Manipulator'

Oct. 15 (EIRNS)—In spite of the recent announcement of an increase in the U.S. trade deficit, which would provide grist to the mill of the currency "warriors," Treasury decided again to refrain from labeling China a "currency manipulator," noting that the upcoming G20 summit in South Korea will be an occasion to deal with these matters.

In the last few days, the China's renminbi currency has actually risen against the dollar (as has every other currency in the world), simultaneously with a rise in the U.S. trade deficit, giving the lie to any direct connection between the two. Just prior to the Treasury statement, China's Ministry of Commerce spokesman said that it is wrong to blame the renminbi for the problems of the U.S. trade deficit. China's Foreign Ministry spokesman pointed out that the U.S. trade deficit will not be affected by any measures China might take with regard to the valuation of its currency.

Obama Administration Calls for 15% Ethanol in Gasoline for Newer Cars

Oct. 13 (EIRNS)—The Obama Administration today approved increasing the blend of ethanol in gasoline from 10% to 15%, for cars built since 2007, a move directly in line with British imperial blueprints, for how to destroy the U.S. economy. The E15 announcement by the Environmental Protection Agency (EPA) both criminal and insane: The heavily subsidized gas/ethanol-blending companies aren't rushing to implement E15, because they don't want to be liable for lawsuits when people ruin their engines!

Over 35% of the U.S. corn crop at present is going into ethanol. Since the United States accounts for 30% of the annual worldwide corn harvest, this is an automatic hit against the world food supply, whereas all corn grown should be going to the food chain.

Moreover, all the skills, land, machinery, water, agro-chemicals and transportation involved in corn-for-ethanol, could be re-deployed into producing many other needed food commodities. Over 17% of U.S. food consumption—across all categories (by volume)—is imported, while the U.S. farmbelt is degraded into a monoculture for inefficient, corrosive biofuel for cars, which anyway, should be rapidly phased out by rail systems.

A large part of the vast cornbelt capacity (trucking, equipment), can be re-deployed into construction on the North American Water and Power Alliance (NAWAPA), to upgrade the continent and the Biosphere.

The EPA cites the insanity that carbon dioxide is a toxic pollutant under the Clean Air Act, to justify the Oct. 13 E15 ruling.

Global Economic News

Hyperinflation Specter at IMF Meeting

Oct. 10 (EIRNS)—At this weekend's IMF meetings, the threat of global hyperinflation, resulting from bailout money-printing by the Federal Reserve and other central banks, was apparently the leading item of discussion—but under a cover phrase, "currency wars." That was thrown out by IMF Executive Director Dominique Strauss-Kahn in his speech, focussing on Obama Administration pressure on China to revalue its currency, but referring, as Strauss-Kahn said, to "everybody cheapening at once"—many central banks and governments all trying to drive down the value of their own currencies.

What does this mean? Ultimately, various forms of money printing, trying to overcome economic collapse and pay unpayable debt, bailing out banks and financial companies, and "getting them to lend"—but also to buy other currencies, and drive down the home currency.

The Christian Science Monitor headline, "IMF Nations Have No Solution for Currency War Threat," was typical; the governments represented "had no answers" and asked the "IMF to find a solution."

While U.S. politicians bashed China, the IMF final statement reflected the arguments of developing countries, that the U.S. economic collapse is a fundamental cause of imbalances in the global economy, with U.S. money-printing policies fueling the dollar weakness.

ITAR-Tass quoted Russian Finance Minister Alexei Kudrin at the IMF: "In the beginning of the year, all the forecasts were changed for very optimistic ones; while after the second quarter, they were returned back [to the grim ones of 2009]. This proves that every quarter may change the situation and that big uncertainty still remains."

United States News Digest

Does Anyone Still Support Obama?

Oct. 17 (EIRNS)—A new AP poll reports on what the whole country—with the exception of the narcissistic Barack Obama—already knows: Everyone hates Obama and his toadies in Congress.

One-quarter of those who voted for Obama are defecting to the GOP or considering voting against Democrats, showing the "wide scope of Obama voters' disappointment with the President and his policies," according to the poll. Most Obama backers who expected change in Washington, now think "nothing ever will happen." Only 36% think Obama can still do it.

As the Nov. 2 Election Day approaches, Secretary of States Hillary Clinton has made arrangements to be halfway around the world that day, on tour in Australia, New Zealand, and Papua New Guinea. The London Daily Telegraph noted: "The message is unmistakable: 'Nothing to do with me!' " Meanwhile Bill Clinton, the Telegraph adds, is campaigning across the country for Democrats who backed Hillary; he is "a man vindicated by events and who knows he has a right to warn of Obama's shortcomings."

Chief 'Prosecutor' of Racist OCE Resigns; Shutdown May Be Imminent

Oct. 15 (EIRNS)—In a move that Politico says "signals trouble" for the Office of Congressional Ethics (OCE), Leo Wise, the former Justice Department prosecutor who is now the OCE's staff director and chief counsel, announced his resignation today.

Politico notes that Wise had clashed repeatedly with members of the House Ethics Committee. Time magazine had reported, in an Aug. 5 profile of Wise, that "members of Congress complain that OCE's reports are written more as an indictment than a straight reading of the facts," which simply provides fodder for the press to smear members of Congress.

Politico notes that Wise is not scheduled to change jobs until after the mid-term election, but that he wanted to make the announcement now, so it did not appear that his departure was motivated by the results on Nov. 2. This, because a Republican takeover of the House would likely mean the end of the OCE, since most Republicans were originally opposed to House Speaker Nancy Pelosi's efforts to create it in 2008, and many Democrats also want to see it gutted or killed off entirely.

Rep. Marcia Fudge (D-Ohio) and 19 other members of the Congressional Black Caucus introduced a bill in June to curtail the powers of the OCE. Fudge denounced the OCE's operations as being inconsistent with America's "spirit of justice," noting that "OCE is currently the accuser, judge, and jury." On Sept. 9, Rep. Dan Boren (D-Okla.) called for OCE's shutdown.

Lyndon LaRouche denounced the OCE as unconstitutional in a July 30 statement, and called for it to be "uprooted" and abolished.

Holder: U.S. Will Enforce Federal Drug Laws in California

Oct. 15 (EIRNS)—U.S. Attorney General Eric Holder said today that the Federal government will enforce Federal marijuana laws in California, even if the state attempts to legalize marijuana through a referendum on the ballot in November.

This contrasts sharply with what President Obama said only a day before, when he argued that the Federal government has to choose what it is going to crack down on, for example, between pursuing drug kingpins, and going after users of small amounts of drugs.

The U.S. Justice Department opposes California's Proposition 19, and remains firmly committed to enforcing the Federal Controlled Substances Act (CSA) in all the states, Holder said. "We will vigorously enforce the CSA against those individuals and organizations that possess, manufacture or distribute marijuana for recreational use, even if such activities are permitted under state law," Holder wrote. He also said that legalizing recreational marijuana in California would be a "significant impediment" to the government's joint efforts with state and local law enforcement to target drug traffickers, who often distribute marijuana alongside cocaine and other drugs.

Approval of the ballot referendum would "significantly undermine" efforts to keep California communities safe, Holder added.

Obama Has Expanded Cheney's 'Black Ops' Worldwide

Oct. 15 (EIRNS)—It didn't end with Bush and Cheney. In fact, Obama has escalated "black ops."

Abuse of prisoners under the Obama Administration, at a secret "black jail" attached to the larger prison at Bagram Air Base in Afghanistan, was exposed in a report issued by the Open Society Foundations on Oct. 14. The report documents consistent use of conditions such as exposure to excessive cold and light, inadequate bedding, inadequate food, sensory deprivation, forced nudity, and the like—all in violation of U.S. Army regulations and Common Article 3 of the Geneva Conventions, and of Obama's own promises to end such abuses and the system of secret prisons.

The report identifies the Bagram "black jail" as a "screening facility" run by the Joint Special Operations Command (JSOC), the military's counter-terrorism unit which runs a network of secret prisons, and deploys hit teams around the world for the purpose of "snatch and grabs" and targetted assassinations—much of which is falsely attributed to the CIA. The JSOC also carries out many of the drone bombing raids, especially those which kill civilians, in Afghanistan and Pakistan. (U.S. government documents show that the JSOC was also involved in the October 1986 raid against Lyndon LaRouche and his associates, in which the intention was to use the search-and-seizure operation as a cover for the assassination of LaRouche.)

Obama is an enthusiast for the JSOC and special operations, The Nation reported on Aug. 25, saying that "the Obama Administration has taken the Bush-era doctrine of the world as a battlefield and run with it." U.S. special forces now operating in 75 countries around the world, up from 60 under Bush-Cheney, and "special operations sources say Obama is a major fan of the work of JSOC and other special operations forces."

The Obama Administration has expanded these "black operations" internationally under the authority of a secret order issued by Bush and Cheney in 2004. A special forces source told The Nation that Obama has "let JSOC off the leash." And, the source added, "JSOC has been more empowered more under this administration than any other in recent history. No question."

Hedge Fund Mogul Treated Frank to Vacation After Getting Bailout

Oct. 14 (EIRNS)—After Rep. Barney Frank's (D-Mass.) LaRouche Democrat opponent in the Democratic Primary, Rachel Brown, devastated him in debate as a stooge for bailed-out financiers, Frank has now been outed for a lavish reward from one of the billionaires in question.

The Boston Herald reports that last December, Frank and his boyfriend flew to the Virgin Islands on the private jet of Paloma Partners hedge fund mogul Donald Sussman, to spend four days at Sussman's "tropical mansion." Also on the flight was Rep. Chellie Pingree (D-Maine), whom the press calls Sussman's fiancé.

Paloma subsidiary Paloma Securities received $200 million in the bailout of AIG, according to the Boston Herald (Oct. 14).

When the trip was criticized by Republicans, Frank's spokesman Harry Gural commented, "They're friends. Are you not supposed to have friends if they're wealthy?"

The Portland, Maine Press Herald reported, "He described the gift as 'First Class Round Trip Travel by Private Aircraft' with a value of $1,500 in a required House financial disclosure.

"As the source of the gift, Frank listed Pingree and Sussman.... '[Pingree] and I have become friendly and they invited us to the Virgin Islands,' Frank told the Herald. 'I checked with House Ethics [committee] and they gave it the OK. It was purely personal.'

"....[A] press release from AIG in March listed Paloma Securities as receiving 'public aid' of $200 million."

Desperate Police Departments Hire Civilians

Oct. 12 (EIRNS)—The number of "civilian volunteers" utilized by municipal police departments across the U.S. has almost tripled in the last five years, to almost 250,000, with a 70% increase in 2007 alone. The move is being fought by the National Association of Police Organizations (NAPO), which sees it as a lowering of training/performance standards, as well as undercutting hard-fought pay and benefit contracts with cities. "The economy ought not to be pushing this," said NAPO executive director Bill Johnson. "You want the real deal when you call 911."

In San Francisco, the police department plans to hire 16 civilians for investigating burglaries, under a $1 million program, which management expects to save $40,000 per person. Mesa, Ariz. expects to save $15,000 per person under a program for eight civilians to investigate low-level crime scenes, lifting fingerprints and the like. And in Durham, N.C., civilians are aiding initial police investigations, canvassing for witnesses, etc.

Ibero-American News Digest

Chile, and the World, Changed Miners' Rescue

Oct. 10 (EIRNS)—Ironically, from a Chile brutalized by decades of oppression under Gen. Augusto Pinochet, and a never-broken British monetarist hell, has come a rescue action which expressed, as one Chilean wrote to this news service, "the highest degree of love for our fellow man, ... the best message of love we can send to the world." There are lessons to be learned from the successful fight to save Chile's 33 trapped miners, lessons on how the human race itself can be rescued from imminent doom.

Not since the rescue in 1970 of the Moon-bound Apollo 13 spacecraft, which had suffered a catastrophic fuel-tank explosion, nearly killing the crew, has anything so gripped the imagination of the world's people, as the stunning rescue of the 33 miners trapped nearly half a mile underground in Chile's San José mine for 69 days. The rescue succeeded because Chilean and international forces committed to fighting for both advancing technology and to the sanctity of human life, rallied worldwide.

The rescue was accomplished more than two months earlier than expected, due to the unrelenting commitment to apply the most advanced technologies, without "cost-benefit" considerations. NASA, whose assistance was requested by the Chilean government, was central to the return to safety of all the miners, from health and psychological requirements for surviving in isolation for months, to NASA's creation of an impromptu design team of about 20 NASA engineers "from almost every [NASA] center around the country" which designed what became the Fenix (Phoenix) rescue capsule in an intense three days of round-the-clock work.

Other contributions to the effort were made from around the world. A high-technology German Mittelstand firm provided an indispensable device to ensure that the rescue hole was precisely vertical. China's 400-ton, three-tower "crawling crane," the SCC4000, and three engineers from its manufacturer, Sany Heavy Industry, were on hand in the Chilean desert. American manufacturing firms jumped in to help, one providing the successful drilling rig, another the unusual drilling-bit, and the third serving as general contractor for the entire drilling effort. Other contributions came from Argentina, Austria, Canada, Japan, Spain, South Africa, and elsewhere.

Within Chile, the nationwide sentiment of fierce pride and relief over the rescue, but also anger over the conditions that caused the miners to be trapped in the first place, have shifted the political terrain irrevocably. The country's problems remain, but the deep pessimism resulting from decades of free-trade, Benthamite "pleasure/pain" tenets, since the 1973 Pinochet coup was run to impose them, has been cracked, and the principles of human life and ingenuity have proven more powerful.

Particularly ironic, is that the accident put the spotlight on the laissez-faire mining reform put through under the Pinochet dictatorship by José Piñera, brother of today's President, Sebastian Piñera, who first privatized Chile's Social Security system, and then, as Mining Minister, dismantled Chile's mining code, when he served under Pinochet, and opened up the mining sector to both domestic and foreign predators.

EIR received numerous messages from Chileans, expressing the sense of hope. As one put it: "The rescue was incredible; all of Chile was watching. But the country's reality was really there below [in the mine] ... with the subcontractors who are socially isolated; people with silicosis working because they have no rights, or are paid very little, and can't retire on disability; our Bolivian brother who represents migrants [forced to come] to Chile, etc. The union members weren't even allowed to be there.... There's no question as to ownership of the mines: according to our Constitution, all natural resources below the subsoil belong to the State. But Pinochet authorized a 90-year concession, or until the minerals run out. This bleeds the country, as our blood is copper."

Western European News Digest

Switzerland Celebrates Breakthrough in Longest Tunnel in the World

Oct. 16 (EIRNS)— On Oct. 15, the gigantic 3,000-ton tunnel-drilling machine "Sissi" broke through the final 1.5 meters of rock in the Gotthard Base Tunnel. At 57 kilometers, the tunnel is now the longest in the world. An engineering masterpiece, the tunnel passes through the Alpine base of St. Gotthard mountain, between Sedrun in the north, and Bodio in the south. The drilling of the tunnel was completed ahead of schedule. Digging in the neighboring tunnel is expected to be finished early next year. Seven more years will be required to finish work inside the tunnel, fit in the electronic installations, signals, emergency rescue elevators, and the like.

The Gotthard Base Tunnel is part of a network of Alpine transportation projects, including two additional tunnels beneath the mountain range, that is designed to make transportation between northern and southern Europe quicker and easier. The network, known as NEAT, is being built to relieve Swiss roadways of about half of the 1.3 million trucks that pass through each year.

In addition, the tunnel will cut one hour from the passenger rail trip between Zurich and Milan, once regular transport is begun in 2017.

EU's Food Self-Sufficiency Has Become Virtual

PARIS, Oct. 11 (EIRNS)—Addressing the Société des Agriculteurs de France in July, Prof. Harald von Witzke of Berlin's Humboldt University presented his original way of analyzing the new trends in the world food production. Instead of measuring tons of commodities or monetary values of exchange, Witzke translates food production into areas of "virtual" arable land. If a country imports so many of tons of corn, and knowing how many average hectares are required to produce a ton, one can calculate hectares of "virtual arable land" that were imported.

For the EU, the picture is quite grim. Demolishing the myth of "overproduction," Witzke underlined that, since 2008, the EU has become the world's largest net food importer ($173.1 billion), ahead of the U.S. ($115.9 billion), and China ($86.8 billion). In 2008, said Witzke, the EU imported close to 35 million "virtual hectares," i.e., an area of arable land nearly the size of Germany (37.7 million hectares). This is done while thousands of EU farmers are being driven out of business by insane environmental regulations, among other factors.

For the future, Witzke examined three scenarios. First: with pesticides, irrigation, high-yield seeds, etc., productivity is increased by 0.3% per year, implying better use of total land. Second: use 20% of all EU farmland for "biological" agriculture. In the third scenario, farmland is used to produce biofuels to allow the EU to reach its 10% target of "renewable" energy.

German Institutes Back EU Bankruptcy Law

Oct. 15 (EIRNS)—Strong support for a law to permit EU member-states to file for insolvency and cancel part of their debt, came from Germany's six top economic institutes, which presented their semiannual report yesterday. The report strongly criticizes the EU's current "strengthened" debt and deficit rules, saying that this is no deterrent for countries, and that only an insolvency law, where both creditors and debtors are called to make sacrifices, would work.

The report otherwise praises what it claims is a "strong German upswing," and forecasts a spillover effect on income and consumption. It criticizes the European Central Bank's undifferentiated borrowing rate policy. Money costs are too high for countries such as Spain, Ireland, and Greece, and too low for Germany, they argue.

Hungary Bank Tax Irks Erste Bank

Oct. 11 (EIRNS)—It seems only the small countries have the nerve to challenge the banks. The Hungarian government's commitment to raise an additional $1 billion through increased bank taxes has irked Erste Bank, Austria's largest. Commenting on the tax in an interview with the Financial Times, Erste's chief operating officer, Andreas Treichl, said, "We're angry, of course, about excessive bank taxation. That's an unnecessary step. Hopefully, it will be for a very short period of time. It's our home market and we'll stay. We don't leave a country because somebody imposes a tax for a year or two."

Hungary, with a population of 10 million, has more guts than the rest. The U.S. wanted to impose a tax to raise a measly $9 billion a year and then dropped the idea. Britain, whose population is five times greater than Hungary's wants to raise £2 billion in taxes, but seems to be getting cold feet at this point.

Greece Slashes Health Care for Diabetics

Oct. 12 (EIRNS)—Greece's largest government health insurance provider, according to a report in the Greek daily To Vima, told its policy-holders that it would no longer pay for orthotic footwear for diabetes patients. Amputation is cheaper. The new policy was announced in a letter to the Pan-Hellenic Federation of People with Diabetes. In a statement, the Federation challenged the "science" behind the decision, arguing that it is contrary to evidence presented in the international scientific literature. Orthotic footwear is often needed by diabetes sufferers to prevent minor sores—which the patient cannot feel, because diabetes damages the peripheral nerves—from becoming infected and putting the patient at high risk for amputation.

Soros Creates Berlin HQ for Dirty Operations

Oct. 11 (EIRNS)—The British Empire's special agent for economic-financial warfare, George Soros, has created a command center in Berlin, apparently for the coordination of his "green-brown revolution" operations in Germany—for example, the political insurrection against the Stuttgart 21 railway project which is co-funded by the European Climate Foundation and has at least the political backing of the European Council of Foreign Affairs, both being institutions created by Soros.

As reported by the Frankfurter Allgemeine Zeitung daily on Oct. 8, Soros claims he is no longer involved in financial speculation, he is now doing something else, namely "coming and going as an advisor to heads of government of this world.... As a matter of fact, at least in Germany, Soros meanwhile is spending more time in Berlin, where he resides at the Adlon Hotel, than at the banking site Frankfurt."

Stuttgart Protesters Move to Berlin

Oct. 16 (EIRNS)—In Stuttgart, the two sides in the conflict over the Stuttgart 21 railway project agreed yesterday to a "cooling-off period" which involves restraint on protests but also a freeze of the entire construction work for weeks, if not months. The mediation will drag on, as the two sides and the mediator want to meet every Friday to continue discussion.

Whether that agreement will hold, remains to be seen anyway—it is rather doubtful, as the radical faction of the anti-project camp rejects the agreement and is continuing to mobilize, also outside of the city. On Oct. 26, a convoy of chartered buses will take several hundred protesters to Berlin, to be joined by radical greenies and leftists for a rally and "actions" against the railway project. The question is posed, who pays for all these buses?

Trichet's Rejection of Glass-Steagall Reported

Oct. 16 (EIRNS)—The Italian news agency ASCA covered European Central Bank President Jean-Claude Trichet's answer to EIR on Glass-Steagall, in a wire datelined Oct. 7. "I repeat: the European banking system is different from that of the U.S.A.; I do not believe that the model of universal banking, prevailing in Europe, should be abandoned," ASCA quotes Trichet saying, and adds: "Thus spoke Jean-Claude Trichet, answering a question on the reform of the U.S. banking system that could move towards a re-enactment of the Glass-Steagall Act, the 1933 banking law that separated commercial banks from investment banks and was dropped under the Clinton Presidency."

European Car Sales Plunge for Sixth Month

Oct. 15 (EIRNS)— Just a reminder for those who claim to see an "upswing" in Europe: Data published by the European Car Industry Association (ACEA) show that in September, all major markets contracted, from -8.2% in France, to -8.9% in the United Kingdom, -17.8% in Germany, -18.9% in Italy, and -27.3% in Spain, as compared to the same month of last year. On average, the plunge was -9.6%.

Russia and the CIS News Digest

Russian Economy Still Depends on Energy Exports

Oct. 11 (EIRNS)—The economy of Russia is even more dependent upon oil and gas export prices and foreign capital than ever, Deputy Minister of Economic Development Andrei Klepach had to admit at an investment forum on Oct. 6, Novye Izvestia reported. Russia has not broken the power of the "Pirates of the Caribbean" crowd which has run looting operations against the country since the 1990s.

Russia's economic vulnerability is growing, Klepach said. Weakening oil and gas prices could cut Russian economic growth in half, down to just 2% (in GDP terms), rather than the 4-4.5% predicted by the Economic Development Ministry, and Russia "will have to fight for even this growth." The effect of the global financial and hydrocarbons market on the Russian economy these days was even more formidable than during the crisis of 1998, Klepach said. The only option is to modernize as fast as possible, he added.

If that means a leap into Silicon Valley, as is now being planned in Moscow, Russia will be in far worse shape than it is even now.

Free-market liberal Finance Minister Alexei Kudrin admitted that Russia needs for oil to average more than $60 a barrel in 2011, to get over the devastation of 2009, speaking at the IMF meeting Oct. 8.

Despite the danger, Russia is only upping its investment in the energy export sector: Economic Development Minister Elvira Nabiullina told journalists Oct. 6 that investment in the energy sector, including supporting infrastructure, could rise to 50% of overall Russian investments in 2011, RBC reported. Currently, 30% of investment goes to the energy sector, and this could rise to 38% by the end of 2010. Nabiullina said that investment in mechanical engineering and human capital were seven times lower than in energy, just 6.3% of Russian investment.

On top of refusing to break from the energy-export addiction, the liberal reform crowd in Russia is promoting a new wave of privatization. While the scale of Russia state enterprises is still considerably larger than in the United States, that could change. Sales of government stocks in the largest oil-producing company Rosneft, the leading infrastructure company Transneft, the power-generating company Rushydro, and the largest banks, Sberbank and VTB, are planned for this year, the "Voice of Russia" reported today. VoR quoted Alexei Kudrin calling the interest of U.S. banks in the privatization of Russian state companies a good sign, since, he claims, American banks are known for their ability to detect a profitable project earlier than other banks! Moscow city assets could be the next on the privatization block, the Moscow Times reported today.

Kudrin received the Finance Minister of the Year 2010 award from Euromoney magazine at the IMF meeting last week, for his support for free markets, joining the WTO, and privatization.

Russian Project Begins 'Virtual Existence,' as Arnie Drools Over 'Bags Of Gold'

Oct. 11 (EIRNS)—The Pirates of the Caribbean are ramping up operations in Russia, amidst illusions in Moscow about recovery from the world economic crisis. Today, President Dmitri Medvedev attended the meeting of the Global Innovation Partnerships Forum, to promote Skolkovo, the yet-to-be-built Russian "innovation center" intended to be Russia's very own Silicon Valley. One of the featured guests was California Gov. Arnie Schwarzenegger, who is leading a delegation of U.S. venture capitalists and Silicon Valley hotshots to Moscow and Kazan. Medvedev complained today that "sadly," Russian businessmen are not yet ready to invest in risky innovation projects; hence, Arnie's visit, which is returning Medvedev's visit to California in June, when he visited Apple, Inc., Cisco Systems, Inc., and Twitter, Inc., in Silicon Valley. Medvedev joked that perhaps Arnie could become Mayor of Moscow, to replace the ousted Yuri Luzhkov.

On Oct. 8, deputy head of the Presidential Administration Vladislav Surkov announced that the Ministry of Finance has allocated funds for Skolkovo, and today, the Skolkovo Foundation will sign all the papers, so that, as Izvestia reported Oct. 8, "the innovation city outside of Moscow, which still does not physically exist, will begin operating virtually."

Schwarzenegger is licking his lips. "The potential for growth [in Russia] is so extraordinary, it's like looking at a gold or diamond mine," he told the innovation forum. "All you've got to do is to go in there and get it." Arnie praised Medvedev as "one of those great visionaries." Accompanying Schwarzenegger are officials from Google, Inc., Oracle Corp., and Microsoft Corp., biotechnology company Amgen Inc., and fuel-cell technology startup Bloom Energy.

Viktor Vekselberg, a Russian energy and metals entrepreneur who is running the Skolkovo project, said it will need 180-200 billion rubles ($6-6.7 billion) over the next five years, public and private. But Russian small enterprises are in no situation to invest: Despite government subsidies, the number of SMEs (small and medium-size enterprises) has fallen 6% in the past year, and at rates three and four times that in central and south Russia.

A key operative in the Skolkovo project is Anatoly Chubais, who ran the privatization (mass looting) of the Russian economy for President Boris Yeltsin in the 1990s. As head of the Russian Corporation of Nanotechnologies (Rosnano), Chubais today announced that they will be buying into Silicon Valley this year. "We are considering one of the most reputable microelectronics companies in the Silicon Valley, with which we are working on such deals," Chubais said. "We are talking about directly acquiring a share package in the parent company based in the Silicon Valley and, correspondingly, accommodating real business as part of the project's expansion in Russia." Rusnano will be negotiating with the venture capitalists accompanying Schwarzenegger. "The deals relate to production projects worth $1 billion and one serious venture capital fund with the potential volume of $400 million," he said.

'Shadow Economy' Is 25-45% of Russian GDP

Oct. 14 (EIRNS)—The head of the Russian State Statistics Service estimates that the revenues of the shadow economy—drugs, prostitution, illegal arms, tax-evading enterprises—make up about 25% of Russia's GDP, Russia Today reported yesterday. State Statistics head Aleksandr Surinov said told the newspaper: "Strictly speaking, all countries have to take into account illegal business, such as drug dealing, prostitution, counterfeiting, and arms sales. But only a few really do."

The Statistics Service estimates that the black economy accounted for 14-16% of Russian GDP during 2006-08, but surged to 20-25% in 2009. Other economists put the figure much higher: Mikhail Delyagin, head of the Globalization Issues Institute, was quoted by Novye Izvestia saying that the "figures presented by State Statistics are enough to make a cat laugh. On the other hand, 49% [an estimate of the black economy share of Russian GDP by some World Bank economists] is more about 2008, when a big part of Russian economy went into the shadows. The real figure, I believe, is around 44%. It is evident that the shadow economy still makes up a very big part of the Russian economy."

Russia Impatient Over U.S./NATO Inaction Against Afghan Opium

Oct. 15 (EIRNS)—Having received no real help from the United States and NATO against the Afghan opium/heroin flooding into Russia, Moscow is becoming increasingly impatient. For years, Victor Ivanov, the director of Federal Drug Circulation Control Services, has urged the United States and NATO to interdict huge amounts of drugs flowing into Russia through Central Asia. The narcotics are coming through northern Afghanistan, where the Taliban is not a dominant force. Recently, Ivanov announced that Russia, Iran, Azerbaijan, Turkmenistan, and Kazakhstan will form what will be known as the Caspian 5, a coalition to fight the inflow of Afghan drugs.

In addition, some Russian Members of the Duma are now contemplating the deployment of Russian military units in Central Asian states to wage an anti-drug campaign. Speaking at a security conference in Moscow in early October, Semyon Bagdasarov, a member of the State Duma's International Affairs Committee, called on Russia to seize the initiative. The United States, he hinted, can't be trusted to defend Russian interests.

A permanent representative of the Russian Defense Ministry may enter the Russian State Anti-Drug Committee soon. Until now, all Ministries except the Defense Ministry were represented in this office.

The use of the Army to interdict drugs has also been mooted in Moscow. Many countries use their Army in the struggle against drug distribution, Dmitri Rogozin, the Russian permanent emissary to NATO, told the Voice of Russia last month. "For example, Americans, in cooperation with the Colombian authorities, often organize raids of the U.S. Special Operations Troops against the Colombian drug mafia," Rogozin pointed out.

Southwest Asia News Digest

Turkish High-Speed Rail Project To Be Financed by China

Oct. 13 (EIRNS)—Turkey and China have agreed to cooperate in the construction of 7,000 kilometers of high-speed rail lines across Turkey, the Turkish daily Zaman reported on Oct. 13. A Railway Cooperation Agreement was signed during the visit of Chinese Premier Wen Jiabao, with China reportedly offering loans up to $30 billion.

The entire network could be completed by 2023, in time for the 100th anniversary of the founding of the Turkish Republic. It will include six new lines, which will link the capital of Ankara with the four corners of the country. Once completed, the journey of over 1,600 kilometers from Edirne, which is on the border with Greece, in the extreme northwest corner of Turkey, and Kars, on the border of Iraq, in the extreme northeast corner, would take 12 hours,

The train would pass through the Maramray Tunnel under the Bosporus Strait, which is now under construction. At Kars, standard rail lines already operate to Mosul, Iraq, to the west, and into Iran in the northwest. The projects would pass through some very challenging topography, including mountainous regions requiring state-of-the-art tunneling.

Turkish Prime Minister in Damascus

Oct. 12 (EIRNS)—Turkish Prime Minister Recep Tayyip Ergodan was in Damascus for talks with Syrian President Bashar al-Assad on Oct. 12.

While the talks centered around both security and economic issues, the issue of dealing with the terrorist Kurdish Workers Party (PKK) was a high priority. The PKK, a narco-terrorist organization and instrument of British intelligence operations, is a destabilization threat against Syria and Iran, as well as against Turkey, its main target. Talks also dealt with the establishment of a free trade area among Syria, Lebanon, Jordan, and Turkey.

Turkish Foreign Minister Ahmet Davutoglu and his Syrian counterpart, Walid Al Moallem, joined the talks as well, with both countries expressing their commitments to cooperate in suppression of the PKK.

Another mutual concern is the failure of Iraq to form a new government since elections were held in March 2010. Speaking at a press conference in Damascus, Erdogan emphasized that it is the mission of the Iraqis to decide on their own government. On Oct. 11, Iraqi Shi'ite cleric Ammar al-Hakim, the head of the Supreme Islamic Iraqi Council, was in Turkey, where he met Erdogan and Davutoglu.

Erdogan's visit to Damascus followed the second ministerial meeting of the Syria-Turkish High-Level Strategic Cooperation Council, held in the Syrian city of Latakia on Oct. 3. The two sides pledged to continue the security cooperation agreements based on the Adana Protocol of 1998, which had paved the way for improved Syrian-Turkish relations.

Israel's Jabotinskyites Begin New Settlement Provocations

Oct. 15 (EIRNS)—Stymied by the Palestinian decision not to walk out on the U.S.-patronized peace talks, the fascist Jabotinskyite Prime Minister Benjamin Netanyahu, on Oct. 14, approved 238 new Jewish housing units in East Jerusalem—the Arab sector of the old city—and the bulldozers began rolling the next day to clear way for these illegal Jewish settlements. This is the first such building since U.S. Vice President Joe Biden's visit to Israel last March, when Netanyahu delivered his cynical slap at the demands by the United States to halt building Jewish settlements in Palestinian territories.

The provocation by Netanyahu is intended to ensure that there will be no resumption of the Israeli-Palestinian talks.

Both Russia and the U.S. State Department condemned the Israeli action. "It is contrary to our efforts to resume direct negotiations between the parties," said State Department spokesman, P.J. Crowley. A statement by the Russian Foreign Ministry was stronger, expressing "extreme concern and disappointment" and calling on Israel to reconsider this decision.

Jordan To Build Nuclear Plants with Japanese Aid

Oct. 13 (EIRNS)—Japanese Prime Minister Naoto Kan pledged on Oct. 12 that Japan would extend "maximum possible" financial aid to Jordan's project to build nuclear power plants, according to AFP. The pledge was made when Kan met with Jordanian Prime Minister Samir Rifai in Tokyo. A civil nuclear cooperation pact was signed in the suburbs of Amman by Kiyoshi Asako, chargé d'affaires at the Japanese Embassy in Jordan, and Khaled Toukan, chairman of the Jordan Atomic Energy Commission. Jordan aims to start operation of its first nuclear plant by 2019, and a Japan-France consortium as well as Russian and Canadian groups are bidding for the project, according to Kyodo news agency. Rifai told Kan that Jordan, as a "regional hub," was going ahead with its nuclear power, water, and railway projects, which would bring economic benefits to the whole of the region.

Saudi Arabia Investing in Desalination and Power Projects

Oct. 12 (EIRNS)—Between the first quarter of 2011 and the fourth quarter of 2015, Saudi Arabia is expecting to complete more than $20 billion in power projects. Almost $10 billion of that figure has been or will be invested in desalination plants. Power, desalination, and construction are projected to experience the most growth going into the next decade.

Desalination plants take massive amounts of electricity to fuel the water filtration processes, the minimum of which costs 0.86 kilowatt-hours (kWh) per cubic meter of desalinated water produced. This electricity runs the pumps that push water through membranes, used in the reverse osmosis desalination process, the most widely used desalination process not only in the Middle East, but wherever desalination is done.

One of the largest desalination plants planned for Saudi Arabia will produce upward of 1 million cubic meters of freshwater per day.

Asia News Digest

Pakistan Army Faces More Trouble

Oct. 13 (EIRNS)—According to intelligence emanating from Pakistan, its Army is under criticism from its own rank and file. The target of the criticism is the Chief of the Armed Services Gen. Ashfaq Pervez Kayani, a key collaborator of the U.S. Chairman of the Joint Chiefs of Staff, Adm. Mike Mullen, in Washington's confused and murderous Afghanistan campaign.

The critics of General Kayani within the Army are reacting to the poor relief work that followed the recent devastating floods in Pakistan. The floods were particularly severe in the areas from where both the Army and the jihadis recruit. The floods had washed away crops and homes of many Pakistani soldiers, and they find to their dismay that their families were not provided the relief they needed at the time. Moreover, these soldiers were denied leave from the military at the time the floods were destroying their lands and families. This failure of Islamabad and the military has helped the jihadis to step up recruitment from areas devastated by the floods.

One sign of such weakness of Pakistan's military brass became visible when Kayani stopped the U.S./NATO supply line going into Afghanistan, after NATO helicopters came into Pakistan and killed three Pakistani soldiers on Sept. 30. The halting of the convoy was an attempt by Kayani to convey to the rank and file that he cares about them. The five-day halting of the convoy did nothing, however, to change the policies of the U.S. and NATO authorities. On Oct. 13, NATO helicopters went into Pakistan again, but, this time, without causing any serious harm.

The weakening of Pakistan's Army, which guides an extremely dysfunctional civilian rule in Islamabad, speaks well, neither for Pakistan nor for Washington, which depends heavily on Pakistan to support its 150,000 troops across the border in Afghanistan.

Karzai Sets Up Council To Negotiate with Taliban

Oct. 15 (EIRNS)—A 70-member High Peace Council has been set up by Afghan President Hamid Karzai to prepare the ground for reconciliation between his Administration and the Taliban. The council will be headed by an ethnic-Tajik and former President of Afghanistan, Burhanuddin Rabbani. The council's specific powers and duties have not yet been defined. It is unclear whether it will act as an advisory body, or whether its decisions will be binding and subject to oversight. It will develop its own rules and procedures, Presidential spokesman Waheed Omer said during a Sept. 28 news conference, referring to the body's powers of enforcement.

Like Rabbani, many of the council members played prominent roles in the 1992-96 factional fighting that followed the collapse of Afghanistan's Moscow-backed Communist regime. Meanwhile, NATO is willing to offer practical assistance to help President Karzai pursue reconciliation with the Taliban.

The setting up of the High Peace Council is a tactical move by Karzai, primarily aimed at preventing outside forces (such as the United Kingdom, Saudi Arabia, and the United States) from gaining control over the reconciliation process, by setting up a team and thrusting that upon the President. Karzai was careful in picking Rabbani as the leader, since Rabbani, a Tajik, is the head of Pushtun-dominated Jamiat-e-Islami group engaged against U.S. and NATO troops in northeastern Afghanistan. Pakistan-controlled Pushtun warlord Gulbuddin Hekmatyar also considers Rabbani as his leader.

Cambodia: 'We're Not Part of the British Empire!'

Oct. 11 (EIRNS)—An official at the Cambodian Embassy in London told a British labor activist to "go to the Moon" after he inquired about unrest in the garment industry. The Daily Telegraph reported that when an official at the Brent Trade Union Councils complained to the Embassy about labor relations in Cambodia, he received the e-mail response: "It is none of your business! Please report to your clown boss to stop this childish game and stop this circus at once. Thank you."

When the trade union official protested, the Embassy reply was: "Please go to the Moon and stay there until you get an answer. Cambodia is not part of the British Empire."

In fact, Cambodian Premier Hun Sen and the Cambodian courts had already given conditional support to garment laborers in their request for higher wages and improved conditions, and restored dismissed union leaders to their jobs.

China Cancels Ministerial Meetings with Norwegian Official

Oct. 12 (EIRNS)—In a further expression of Chinese outrage over the awarding of the Nobel Peace Prize to Chinese "dissident" Liu Xiaobo, China yesterday canceled a planned meeting between Norwegian Fisheries Minister Lisbeth Berg-Hansen and her Chinese counterpart, in which the two sides were to discuss the sale of Norwegian salmon on the Chinese market. And today the Chinese government canceled another meeting, between Berg-Hansen and the vice-minister in charge of food exports, in which they were to discuss a possible bilateral free-trade agreement. As a result, Berg-Hansen has decided to cancel entirely her trip to Beijing and to Shanghai, where she was to attend the Norwegian expo at the Shanghai Exhibition.

Chinese Foreign Ministry Spokesman Ma Zhaoxu said that the decision to award Liu Xiaobo the Nobel Prize showed disrespect for China's legal system and represented an attempt to get China to change its political course forward. "They have made an obvious mistake," he told reporters today. Norwegian authorities have expressed regret over the cancellation of the meeting, but claim that the effect of a failure to get a free-trade agreement will be marginal, given that China is a member of the WTO, and must adhere to its trade regulations.

U.S. and China Defense Chiefs Repair Relations

Oct. 11 (EIRNS)—U.S. Secretary of Defense Robert Gates met with Chinese Defense Minister Liang Guanglie today on the sidelines of the ASEAN+8 meeting of defense ministers in Hanoi, announcing afterwards that restoring military-to-military relations between the two powers was essential in "understanding each other, and preventing mistrust, miscalculations and mistakes." Gates said that military relations lag far behind the nations' diplomatic and economic ties, especially since China cut military ties over the announcement earlier this year that the United States would sell $6.4 billion in arms to Taiwan. Gates told reporters: "I have felt for a long time that the dialogue between the two militaries ought to be sustainable regardless of the ups and downs in the relationship," adding that the arms sale to Taiwan was a political decision, not a military one, and should not affect military relations.

Liang invited Gates to China, and Gates agreed to visit sometime next year.

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