Executive Intelligence Review - WEDNESDAY, APRIL 4, 2018

WEDNESDAY, APRIL 4, 2018

Executive Intelligence Review

• In a Worldwide Paradigm Shift, the Skripal Case Is Now Backfiring on British Empire
• White House Confirms Trump’s Washington Invitation to Putin
• Porton Is Down! on Skripal Poisoning Evidence
• Global Times: Western Pressure Bringing Russia and China Closer
• LIBOR Escalation Is Signaling Financial Crash
• Schiller Institute’s April 5 Webcast: ‘New Silk Road Is Shaping Strategic Affairs’
• Biggest-Ever Austrian Delegation Will Make Five-Day Visit to China
• Zimbabwe President Mnangagwa in China, with 80 Business Heads, Seeks Economic Deals
• China and Bolivia Finalize Financing for Mutun Steel Plant Project
• California Does Not Have the Power for Its ‘Environmentally Friendly’ Electric Vehicles

EDITORIAL
In a Worldwide Paradigm Shift, the Skripal Case Is Now Backfiring on British Empire
April 3 (EIRNS)—The poisoning of two Russian citizens in England last month, aimed with such bombast by the U.K.’s May government at isolating Russia’s President Vladimir Putin and trapping the British-targetted President Donald Trump, may wind up leaving May and Foreign Minister Boris Johnson with egg on their faces.

The situation is shifting. The new reality of the great benefit of China’s New Silk Road for nations all over the world, and the benefits of great-power cooperation for peace as understood by President Trump, is making May’s all-out attack backfire. Already stung when just half of the EU nations signed up for expelling Russian diplomats and other Mayhem against Russia, the British have been mortified by President Trump’s “less than full support,” as their media have put it.

In fact Trump’s press secretary has confirmed again April 2 that he did invite President Putin to a summit “at a number of potential venues including the White House.” President Trump now has three crucial summits in the offing—with Japan’s Prime Minister Shinzo Abe, Putin, and North Korean leader Kim Jong-un—which could shift the world situation for the better. The second and third are furiously opposed by the British and all brands of American and European neo-cons and liberal imperialists. But this too is backfiring.

Now with today’s report by the U.K.’s own Defense Science and Technology Laboratory at Porton Down that it has not established evidence for Ms. Mayhem’s Russian poisoning case, tomorrow’s executive session of the Organization for the Prohibition of Chemical Weapons (OPCW)—whose rules the U.K. has flouted to rush to “lead the attack” on Russia—is put in a new light. A few courageous Britons had said the scientists were not happy being demanded to “produce” for a political witchhunt, and were proven right.

Moreover, “China and Russia are developing closer ties,” not least because “Western countries are putting political pressure on Russia [in the Skripal case] and the U.S. is provoking China into a trade war,” the Global Times wrote yesterday. China has been entirely evenhanded and wanted OPCW procedures followed, but has sent an official delegation to the Seventh Moscow Conference on International Security beginning April 4, with 95 other nations.

We have seen the “Russiagate” attempted coup against President Trump made to backfire by the same new reality, combined with a long mobilization by the forces of Lyndon LaRouche’s movement in the United States. Now the FBI is, at long last, being investigated and cleaned out at the top.

But we cannot forget that the trans-Atlantic financial systems are again ready to crash. And sitting on that volcano, we cannot make slow and long-term plans to realize the new paradigm of the Eurasian New Silk Road. It must be on the table for the United States as well as Europe now. That starts by instituting or reinstating Glass-Steagall bank separation—as China already does with its commercial banks—to break up the Wall Street and London behemoths before they pull us into another collapse nightmare.

As Helga Zepp-LaRouche warned today, those governments that have fully backed Britain’s March Mayhem against Russia, are a danger to their own people and to world peace. President Trump’s going ahead with the summits, including with President Putin, is crucial and must be supported.

But the progress he promised Americans, including great projects of new infrastructure and space colonization, require implementing Lyndon LaRouche’s proposed “Four New Laws To Save the Nation.”

U.S. POLITICAL AND ECONOMIC
White House Confirms Trump’s Washington Invitation to Putin
April 3 (EIRNS)—The White House has confirmed that President Donald Trump invited Russian President Vladimir Putin to visit the White House in the “not-too-distant future.” This follows a statement by the Kremlin to the same effect. White House spokeswoman Sarah Sanders told journalists April 2: “As the President himself confirmed on March 20, hours after his last call with President Putin, the two had discussed a bilateral meeting in the ‘not-too-distant future’ at a number of potential venues, including the White House. We have nothing further to add at this time.”

In addition, the U.S. State Department stated that Russia would be able to replace the diplomats the U.S. expelled last week in response to the nerve agent attack in the U.K. Britain’s Guardian lamented that these developments “cast doubt on the effectiveness of what the U.S. presented last week as a strong gesture of solidarity with the British government.”

Furthermore the Kremlin, despite its reciprocal expulsions, will allow America to replace its expelled diplomats. Again the Guardianprotests that the same arrangement has not applied to Britain, and may not apply to other countries that expelled Russian diplomats.

The British have very good reason to be upset. Trump will now be meeting within the near term with North Korean leader Kim Jong-un, Japanese Prime Minister Shinzo Abe, and Putin. If these meetings are held, they could change the course of history.

The Guardian further criticized Trump for not mentioning or tweeting anything about the spy case or the expulsions. For the British, this means Trump has yet to endorse the hostile policy towards Russia.

“The United States has expelled 48 Russian intelligence officers, but it is not requiring the Russian bilateral mission to reduce its total number of personnel,” a State Department spokesman said. “The Russian government remains free to request accreditation for vacant positions in its bilateral mission. Any requests for new diplomatic accreditation will be reviewed on a case-by-case basis. The Russian Federation has not informed us that it intends to reduce the total number of personnel allowed in our bilateral mission. We therefore understand that the United States may request new diplomatic personnel to fill the positions of diplomats who have been expelled.”

STRATEGIC WAR DANGER
Porton Is Down! on Skripal Poisoning Evidence
April 3 (EIRNS)—Britain’s Sky News has had the unfortunate (for the May government) duty today to inform the public that Porton Down has not established where the “Novichok” nerve agent used in an attack on Sergei and Yulia Skripal came from; nor will it do so, apparently. “Scientists from Porton Down have not been able to establish where the Novichok nerve agent used to poison Sergei and Yulia Skripal was made,” Sky News reported today. “Gary Aitkenhead, chief executive of the Defense Science and Technology Laboratory (DSTL) at Porton Down, told Sky News they had not been able to prove it was made in Russia.”

Former British Ambassador to Uzbekistan Craig Murray, who has contested the May government’s loud and immediate claims that “the Russians done it,” had stated already more than a week ago that Porton Down technicians were unhappy with being asked to “produce” for those dubious claims.

Dr. Aitkenhead reportedly said: “We were able to identify it as Novichok, to identify that it was military-grade nerve agent. We have not identified the precise source, but we have provided the scientific info to government who have then used a number of other sources to piece together the conclusions you have come to.”

Lest we jump to the conclusion that the “other sources” were British dailies such as the Times, Telegraph, Guardian, etc., Sky News reported that Aitkenhead said that “establishing its origin required ‘other inputs,’ some of them intelligence-based, that the government has access to.”

The Organization for the Prohibition of Chemical Weapons (OPCW) Executive Board meeting in Geneva tomorrow may find this less than a convincing reason for the U.K. to have ignored all the rules of the Chemical Weapons Convention in order to stage a major confrontation with Russia.

Global Times: Western Pressure Bringing Russia and China Closer
April 3 (EIRNS)—Rising trade tensions between America and China and the expulsion of Russian diplomats by Western countries may be pushing Russia and China even closer than they already are, reports Global Times. Chinese Defense Minister Wei Fenghe is in Moscow this week and will be attending the Seventh Moscow Conference on International Security, while Chinese Foreign Minister Wang Yi will be arriving in Moscow on April 4 for meetings with Russian Foreign Minister Sergey Lavrov.

“China and Russia are developing closer ties not only due to their previous good cooperation but also because of changes in the international environment. Western countries are putting political pressure on Russia and the U.S. is provoking China into a trade war,” Gao Fei, a professor of Russian studies at the China Foreign Affairs University, told Global Times. “As China’s Minister of National Defense will also be in Russia during Wang’s visit, leaders may hold talks on enhancing the countries’ overall comprehensive partnership and strategic cooperation between China and Russia,” Gao said.

Sun Zhuangzhi, an expert on Sino-Russian relations from the Chinese Academy of Social Sciences, told the paper that Wang’s visit is also paving the way for meetings between Russian President Vladimir Putin and Chinese President Xi Jinping. Putin is expected to attend the Shanghai Cooperation Organization summit in Qingdao in June. “China and Russia also need to work together to maintain regional stability. Increasing military exchanges would deepen mutual trust and deter forces that may threaten domestic and regional peace,” Sun said.

A separate Global Times report states that both Beijing and Moscow not only face the common threat of terrorism, but also U.S. military muscle-flexing in the Asia Pacific region. America regularly deploys aircraft carriers into the Western Pacific and has deployed the THAAD anti-missile system to South Korea; both “offended the strategic interests of China and Russia. Therefore, it is reasonable and necessary for Beijing and Moscow to strengthen their military cooperation.”

COLLAPSING WESTERN FINANCIAL SYSTEM
LIBOR Escalation Is Signaling Financial Crash
April 3 (EIRNS)—While attention is on the gyrating major U.S. stock markets, the condition of bond markets has become more dangerous, and there has now been a very rapid rise in the London Interbank Offered Rate (LIBOR)—the development which introduced the onset of the 2008 financial crash. “Reassurances” are out, but not all believe them.

The difference between LIBOR and Treasury rates had moved from 0.1% to near 0.6% since January. This means rates corporate issuers and consumer borrowers have to pay had risen almost twice as fast as the rates set by the Fed in its December and March hikes. Banks and financial press are claiming “the reasons are technical,” having to do with the tax bill, etc., and banks are not in danger. But immediately, it is corporate borrowers and/or low-grade securities issuers who are in trouble from this.

On March 22 the Wall Street Journal said not to worry. “The good news is that what look like flashing red alerts about imminent trouble for the banks are nothing of the sort. The bad news is that blockages in the plumbing of the financial system could lead to unpredictable ruptures as the markets adapt to a new monetary regime. The danger signals at the moment are coming from the money markets, where banks are having to pay a bigger premium to borrow than during the 2012 euro crisis. Savers are directing their money to the U.S. Treasury rather than the banks, just as they did in the past two major crises.

“The cause this time isn’t a panicked flight to safety,” the Journaltried to reassure. “Yet, the money-market stress comes amid a transition to a new phase of the financial and economic cycle. It is a time when those who fail to prepare can be exposed—and in the past such shifts have led to the collapse of hedge funds and banks, and even sovereign defaults.” (This was the good news!)

Then came a dour analysis in Forbes March 23, “Does the Spike in LIBOR Signal the Next Financial Crisis?” To quote it: “There are serious signs of stress in the U.S. money markets. Commercial paper and LIBOR spreads have soared over the last couple of months to the highest levels since the 2008 financial crisis. The difference between LIBOR and OIS, a popular gauge of distress in the banking sector, has widened to 0.57% today from 0.10% just four months ago. The trillion dollar question is whether the stress is technical in nature, in which case short-term rates will eventually normalize, or is this spike in credit a harbinger of another banking catastrophe.”

On March 27 Reuters reported the “spread” now exceeded 0.6%. On March 29 and April 2 the Journal and “Seeking Alpha” both published long and quite technical reassurances. On April 3 CNBC carried “banks are not worried” quotes from Goldman Sachs, but reported that heavily indebted corporations were having trouble: CNBC named Campbell Soup, Black and Decker, Colgate-Palmolive, and Tesla as examples. Bloomberg reported a sudden big drop in subprime auto sales—and a fall in auto sales overall—as subprime loan defaults rose to 9%.

Some economists point to another factor. In the first quarter, total debt in the U.S. economy increased by $621 billion, while GDP increased by $100 billion. This ratio set a new record by far.

THE NEW GLOBAL ECONOMIC ORDER
Schiller Institute’s April 5 Webcast: ‘New Silk Road Is Shaping Strategic Affairs’
April 3 (EIRNS)—The Schiller Institute issued the following announcement regarding its weekly, international strategic webcast featuring Helga Zepp-LaRouche. The webcast will be streamed live on Thursday, April 5, at 12:00 noon EDT, 6:00 p.m. CET.

“The hysterical and vitriolic rhetoric against Russia, coming from Britain’s imperial oligarchs and their intelligence services, channeled through Theresa May and Boris ‘BoJo’ Johnson, is fooling no one. While some governments have subserviently gone along with the dangerous provocations, others, including the U.S., have made only token gestures. These actions, including expulsion of diplomats, have heightened tensions, but are thus far falling short of May’s claims of a global united front against Russia. Many nations seem more in line with the thinking of Russian Foreign Minister Lavrov, who said of the May government’s unfounded allegations in the Skripal affair, that it is ‘too obvious that our British colleagues have lost their sense of reality.’

“Those leaders who have not lost their sense of reality instead have been engaging in an impressive array of diplomatic and economic activity, forging agreements to participate in China’s Belt-and-Road Initiative BRI). Parallel to these efforts is a Russian initiative to bring peace to Syria, working with Syria’s neighbors. The British-directed geopoliticians have no doubt taken notice that as this initiative moves forward, President Trump restated his campaign promise to end all U.S. military involvement in Syria, while reiterating his desire for a summit with Putin in the near future.

“What is behind the British attacks against Putin and Russia is not the fraudulent claim that Putin ordered the poisoning of a former Russian intelligence officer, just as the Mueller investigation has nothing to do with ‘Russian meddling’ in the U.S. election. The target of these provocations is the New Paradigm, associated with the Belt and Road Initiative, which the City of London and its Wall Street allies correctly have identified as the successor to their failed system. Were the U.S. to join with Russia, China and India, as Lyndon LaRouche urged in the aftermath of the 2008 Crash, there would be no way to prevent the emergence of the New Paradigm.

“Join us this week, as Helga Zepp-LaRouche provides an urgent update on the extraordinary developments of the last days.”

Biggest-Ever Austrian Delegation Will Make Five-Day Visit to China
April 3 (EIRNS)—Headed by Austrian President Alexander van der Bellen and Chancellor Sebastian Kurz, the biggest delegation the nation has ever sent to China, will visit Beijing, Hainan and Chengdu from April 7-12. Four cabinet ministers (foreign affairs, economics, transport, and environment) will join the delegation of 170 businessmen, 30 academicians and culture representatives. Numerous agreements for economic cooperation are expected to be signed during the trip. Machines and urban planning rank prominently on the agenda of talks in China. A new Austrian consulate will be inaugurated in Chengdu, as well.

Chancellor Kurz said that it is true that Austria has so far been underrepresented on the New Silk Road, but that that is going to change, and the scale of future Austrian engagement is “open at the top.” Foreign Minister Karin Kneissl, who this past September had spoken respectfully of “changing the guard in world affairs by the advancing China” in a book with the same title, reiterated that her talks are not only to take into account the role of China as a global investor, but also its increasing role as a political player on a global scale. In her book, she had provocatively written that young Europeans should go to university in China rather than Europe, because only in China, could they hope to learn something for the future.

Zimbabwe President Mnangagwa in China, with 80 Business Heads, Seeks Economic Deals
April 3 (EIRNS)—President of Zimbabwe Emmerson Mnangagwa is on a five-day official visit to China, April 2-6, his first state visit of his Presidency, outside Africa. He met with Chinese President Xi Jinping today. Mnangagwa, who is accompanied by First Lady Auxillia Mnangagwa, met several Cabinet ministers and private sector executives, and will also meet officials of the Communist Party of China and the Chinese business community according to Zimbabwe daily The Herald. The Chronicle’s Harare bureau reported yesterday that President Mnangagwa’s delegation included some 80 private sector executives, as well as 10 Cabinet members.

The Zimbabwean President will also visit the provinces of Anhui and Zhejiang to meet with the political leadership and the business community. Several economic and business deals are expected to be signed. The director of Platinum Agriculture and Princewood Enterprises, Dakarayi Mapuranga, who is in China with the President, said his company had secured $500 million worth of deals in agriculture, mining and transport sectors. These include a $400 million deal with China’s Lovol company that produces heavy machinery for agriculture and mining, and an $80 million deal for the supply of irrigation equipment, including center-pivot and drip irrigation systems.

Dayu, the Chinese-listed firm which clinched the deal, will soon be in Zimbabwe to assess specific irrigation requirements and technology applicable to that country. “They [Dayu] need to know our specific needs and the Ministry of Agriculture has already identified farms where the equipment will be installed,” said Mapuranga. “Our thrust is to support initiatives … to ensure farmers are supported with the machinery they need. This will help bring Zimbabwe back to its breadbasket status.”

A deal was also signed with Allen Bus for 1,500 buses to ease transport challenges in the capital, Harare, and other towns. Some 500 buses will be imported fully assembled, and the remaining 1,000 will be imported as kits to be assembled in Zimbabwe.

China and Bolivia Finalize Financing for Mutun Steel Plant Project
April 3 (EIRNS)—Yesterday, Bolivian President Evo Morales introduced a law authorizing a 15-year $396 million credit to complete construction of the $466 million Mutun steel plant—the country’s first—to be built by China’s Sinosteel Equipment and Engineering Company. China’s Eximbank will provide 85% of the financing for the project, one of South America’s most important infrastructure projects located in southeastern Bolivia near the Brazilian border, and the Bolivian state will provide the rest.

“This is a historic and unforgettable day for us,” Morales said, according to Xinhua, because this investment will allow for industrialization of iron ore, and will have a major positive impact on Bolivia’s economy. He also challenged those who argue that Bolivia is accumulating a huge debt with China: “We are doing well economically, and that’s why we can guarantee big investments for our industrialization.”

Plant construction is expected to take about 30 months, and when complete, will create 4,500 direct and indirect jobs, and produce close to 200,000 tons of steel for an annual revenue of between $170-$200 million. The project will allow for development of the enormous iron ore and manganese deposits at Mutun including the downstream processing of the iron ore, and construction of the steel plant. Bolivia’s dream has always been to use its significant natural resources to leverage its own advanced industrial development, and this is now a real possibility thanks to the deal with China.

SCIENCE AND INFRASTRUCTURE
California Does Not Have the Power for Its ‘Environmentally Friendly’ Electric Vehicles
April 3 (EIRNS)—The United States as a whole, and California most definitely, does not have enough electric generating capacity to meet the demand from the projected number of electric vehicles, the U.S. Energy Information Administration reported in a recent study. A March 29 article on Grid News calculates that each new vehicle adds a demand equivalent to that of three new homes. This also translates to a doubling of a household’s annual electric demand if it has two electric vehicles. Carbon-conscious California, as one would expect, has the most aggressive goals for electric cars, and also restrictions for building new power plants.

The state’s goal of 5 million electric vehicles on the road by 2030, would require 300,000 charging stations by 2025. Because there is not the generating capacity to power such a number of vehicles, the state is coming up with all kinds of schemes, such as “dynamic pricing.” This, and “time of use” pricing, which means higher rates for peak times, and other gimmicks that “align driver travel and charging behaviors with the grid’s peak capacity,” are supposed to “smooth out” demand so shortages can be avoided while building a minimum of new capacity. This approach has been used for years for households, where lower rates are offered for doing laundry after midnight.

A study years ago determined that the TVA was the only utility in the country with the electric generating capacity to meet the future demand from electric vehicles.