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———EIR Daily Alert Service———
EIR DAILY ALERT SERVICE P.O. BOX 17390, WASHINGTON, DC 20041-0390
• LaRouche: Great Leaders Are Emerging Around the BRICS
• Scrambling Monday Follows Scandal Friday for Fed and Goldman
• ‘Deleveraging? What Deleveraging?’ Not until Another Crash
• Obama Lies on ISIS Quickly Exposed
• Obama Administration Invented Khorasan Group
• “Obama, the Serial Interventionist”
• Modi to Madison Square Garden Crowd: 21st Century Will Be India’s
• China’s High-Speed Rail Investment Would Cover the U.S.A.
EDITORIAL
LaRouche: Great Leaders Are Emerging Around the BRICS
Sept. 29 (EIRNS)—U.S. economist and statesman Lyndon LaRouche began a
discussion with the LaRouche PAC Policy Committee of today, by raising the
crucial importance of Indian Prime Minister Narendra Modi, now making a
definite impact in the United States and not only among Indian-Americans.
LaRouche’s subject was leadership, in a period of economic collapse, looming
financial crisis and war, but in which an entirely new and bright potential human
future has been created in countries in the growing grouping around the BRICS
nations.
“There is the important factor of a new figure on the international scale:
Narendra Modi,” LaRouche said. “This man requires special treatment, because
his role, in terms of his part in history, the history of India, but the history of the
region in general, as such is unique. And if you saw even fractions of what his
reception had been, you would say, ‘This is one of the most remarkable
individuals in modern political history.’ He won all kinds of praise and applause
from the people, and it was all very, very serious, very enthusiastic. But you
look back a little bit earlier, to his earlier moments in his recent history and he
was like this: He was a creature made for a time to lead.
“And there are others in that same category which he is related to. There are
people in Russia.... And through China, for example, we have great leaders in
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China. We have also in some of the BRICS nations, we have great leaders who
are emerging there....
“Therefore, we have to really understand what this man, Modi, has meant to
us, because what his role is now, and this is one of the great achievements.”
Notably, former President Bill Clinton expressed the same assessment of
Prime Minister Modi, in July in India, just after Modi’s election, and again now
in a Sept. 29 meeting of the Clintons with Modi in New York. “I’m thrilled,”
former President Clinton said, “No one else has had the knowledge and the
votes, than you, to build up the nation.” Some 40 Members of Congress from
around the nation attended the Madison Square Garden speech and were strong
in praise and support of Modi afterwards. And also notably, on the day (Sept.
30) Modi is to meet with President Barack Obama, one of India’s major English
dailies The Hindu presented as its leading “Opinion” a blunt condemnation of
Obama’s policy of permanent warfare and [“inadvertent”] spreading of terrorism
around the globe. The leadership LaRouche is praising, is one of a new global
strategic policy of peace through rapid economic and scientific development of
nations.
But LaRouche continued, on the “national town hall” webcast meeting
organized by the Policy Committee of LaRouche PAC the same weekend Modi
spoke. “We had a weekend event, in which we presented a description of what
the options are for the American system—the American political and economic
system. We presented that. And I think that what we did, in that weekend event:
We made a mark in history of our own. Not quite as impressive as any of the
things I’ve just presented, but, they were impressive, because we have brought
onto the platform, a factor of history, in this United States now, which is worth a
mention, by the greatest leaders of the United States up to now....
“We had the same kind of passion, determination, to create a success.... And
so therefore, I think this thing is going to be—I don’t have to tell you, I don’t
have to tell the audience—but what is going to happen, is we are going to be
presented, as in Madison Square Garden; we are going to have, coming out of
there, one of the most memorable experiences of the American people, as a
whole. The effects are going to be wonderful.”
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U.S. POLITICAL AND ECONOMIC
Scrambling Monday Follows Scandal Friday for Fed and Goldman
Sept. 29 (EIRNS)—Senators Elizabeth Warren and Sherrod Brown today
demanded a full Senate Banking Committee investigation of the New York
Federal Reserve Bank, over a scandal which became publicly known only on
Sept. 26, undescoring its seriousness. The Federal Reserve itself heatedly denied
the contents of the scandal today, and Goldman Sachs bank also scrambled in a
very public way, while denying it was doing so because of the scandal.
What has so stirred up Wall Street is the publication on National Public
Radio’s “This American Life” program Sept. 26, of excerpts from 46 hours of
tapes made by a New York Federal Reserve employee—a whistleblower, since
fired by the Fed—named Carmen Segarra. Formerly a banker, Ms. Segarra did
not begin working for the New York Fed until after the 2008 crash, and was
assigned to, and stationed at, Goldman Sachs. She found that her superiors at the
New York Fed were completely captive to the views and demands of the Wall
Street banks; and that when she overheard or directly witnessed Goldman
employees talking about skirting the law, or violating public morals, with bank
deals, she was repeatedly instructed by her bosses, “You did not hear that.” This
motivated her to begin making tape recordings of meetings and calls; and as The
Big Short author Michael Lewis put it in Bloomberg News Sept. 26, “You sort
of knew that the regulators were controlled by the banks. Now you know [they
are].”
In the worst instance of bankster crime observed and recorded by Segarra,
Goldman bankers “advised” an energy company, El Paso Corp., on being taken
over by a financial company, Kinder Morgan, in which Goldman and one of its
partners each had very substantial ownership, without disclosing it. Segarra
asked Goldman in-house counsel for the bank’s Conflict of Interest policy, and
was told Goldman did not have one. (Its CEO, after all, has said that he believes
it is doing God’s work.) Her strong representations to her New York Fed
superiors on this subject then resulted in her firing.
The New York Fed issued a furious statement this morning, Sept. 29, that
“The New York Fed categorically rejects the allegations being made about the
integrity of its supervision of financial institutions.” And Goldman Sachs? It
publicly issued a brand new conflict-of-interest policy for bankers and traders.
No wonder that the Wall Street Journal has so frequently registered the upset
caused among bankers by FDIC Vice Chairman Thomas Hoenig; even before
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getting to Hoenig’s proposals to break up the big banks, he is apparently already
one of a kind among regulators, in that he is not completely under the control of
a Wall Street banking group.
COLLAPSING WESTERN FINANCIAL SYSTEM
‘Deleveraging? What Deleveraging?’ Not until Another Crash
Sept. 29 (EIRNS)—That is the name of a report issued today by the Center for
Economic Policy Research (CEPR), a large network of economists based at
European universities in particular. Bluntly speaking, the “Deleveraging?” report
warns the upcoming IMF/World Bank meetings in Washington, D.C. that a
financial collapse of the system is coming, soon.
The report says that “a poisonous combination of high and rising global debt
and slowing nominal GDP, driven by both slowing real growth and falling
inflation,” has trapped the system. “The total burden of world debt, private and
public, has risen from 160% of national income in 2001 to almost 200% after the
crisis struck in 2009 and 215% in 2013.” The zero-interest-rate, bail-out policies
of all the “developed sector” central banks has produced economic stagnation
across the trans-Atlantic and Japan, which stagnation will continue until the
Federal Reserve starts trying to raise interest rates. Then, the financial system
will collapse. These “Geneva Conference” economists think this blowout will
happen by mid-2015.
The report also shows, with charts, that while the dominant form of this
rising debt in the “developed” economies is stock-market-related, with
government debt second; in the “developing” countries (meaning, primarily,
China and India), the dominant growth is in lending.
This “Glass-Steagall distinction,” though the authors do not name it, tells
where the crash is coming.
Only three weeks earlier, on Sept. 5, a “research report” came out of
Deutsche Bank, the London/Frankfurt universal bank monster, acknowledging
urgently that the “maintenance and expansion of the global debt bubble is
essential to the international financial system.” That report, on behalf of the Wall
Street and London-centered megabanks, said:
“We’ve created a global debt monster that’s now so big and so crucial to the
workings of the financial system and economy that defaults have been
increasingly minimized by uber-aggressive policy responses. Its arguably too
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late to change course now without huge consequences. This cycle perhaps
started with very easy policy after the 97/98 EM [exchange market] crises thus
kick starting the exponential rise in leverage across the globe. Since then we saw
big corporates saved in the early ’00s, financials towards the end of the decade
and most recently, Sovereigns bailed out. It’s been many, many years since free
markets decided the fate of debt markets and bail-outs have generally had to get
bigger and bigger.”
What the new, more deliberate “Geneva Report” adds, is that the “global
beast they’ve [the Fed] created” is going to blow up in a massive crash when the
Fed and other central banks try to “manage” it. [pbg]
STRATEGIC WAR DANGER
Obama Lies on ISIS Quickly Exposed
Sept. 29 (EIRNS)—Speaking on CBS News’ Sunday program “60 Minutes,”
yesterday evening, President Obama lied that the administration had been caught
unaware of the growing threat of ISIS, and had somehow “underestimated” their
strength until, well, just now.
CBS host Steve Kroft began by saying, “Two years ago, in the White House,
in this building, you talked about al-Qaeda being decimated. You talked about
al-Qaeda being back on its heels. Two years later, you’ve got al-Qaeda affiliates
and al-Qaeda offshoots controlling huge chunks of both Iraq and Syria. And you
have militias, Islamic radical militias in control of Libya.”
After Obama quoted his own UN speech, Kroft pressed: “How did this get—
how did they end up where they are, in control of so much territory? Was that a
complete surprise to you?” And Obama responded “Well, I think our head of the
intelligence community, Jim Clapper, has acknowledged that I think they
underestimated what had been taking place in Syria.” Kroft knew, and pointed
out, that Clapper had not said this, but that “We overestimated the ability and the
will of our allies, the Iraqi army, to fight.”
Today, as the “press corps of the willing” repeated Obama’s lies more or less
unquestioned, Eli Lake, writing in the Daily Beast, tore them apart. Lake quoted
a former senior Pentagon official, “who worked closely on the threat posed by
Sunni jihadists in Syria and Iraq,” who said he was “flabbergasted” at
Obama/Nero’s statements. “Either the President doesn’t read the intelligence
he’s getting or he’s bullshitting,” he told Lake. More importantly, Lake then
quoted former director of the Defense Intelligence Agency Lt. Gen. Michael
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Flynn, who had testified before Congress in February. Flynn, who some say was
forced out of his job in early August, had told Congress that “ISIS probably will
attempt to take territory in Iraq and Syria to exhibit its strength in 2014,”
additionally noting that ISIS had taken the cities of Ramadi and Fallujah, and the
demonstrated an “ability to concurrently maintain multiple safe havens in Syria.”
Obama Administration Invented Khorasan Group
Sept. 29 (EIRNS)—The Obama Administration is relying on fakery and
invented evidence as the legal basis for its war on ISIS. The inventions are used
to argue that the administration doesn’t require any additional legal authority,
either from the Congress or from the UN Security Council (where a motion to go
to war in Syria would be vetoed, anyway). Key to this construct was the socalled
Khorasan Group, the first target of the waves of air strikes that hit Syria
on the night of Sept. 22-23. Glenn Greenwald and co-author Murtaza Hussain, in
an article posted on The Intercept website yesterday, convincingly argue that the
Khorasan group is largely an invention of the Obama Administration so that it
could claim the mantle of “self-defense” part of the justification for the air
strikes in Syria. Greenwald and Hussain provide an extensive review of the
media coverage, showing how the major news outlets basically repeated the line
that was given to them by the Pentagon and the White House, that this was an
“imminent” threat (even though the administration is known to have an elastic
definition of what “imminent” means), that it was a greater threat than ISIS and
that it was about to execute a plot for a major terrorist attack, all without
evidence to back up what they were saying.
As Greenwald documents, the Khorosan group story began to fall apart soon
after the cruise missile strikes hit in the area of Aleppo, Syria, where it was
supposedly based. McClatchy News reported on Sept. 26 that European counterterrorism
officials said that they had never been briefed by their American
counterparts about the threat. The Washington Post’s Loveday Morris, based in
Beirut, reported that jihadi sources she queried in Syria had never heard of the
Khorosan group. Aki Peritz, a CIA counterterrorism official until 2009, told
Time magazine: “I’d certainly never heard of this group while working at the
agency,” while Obama’s former Syria ambassador Robert Ford said: “We used
the term [Khorasan] inside the government, we don’t know where it came from.
All I know is that they don’t call themselves that.”
Just before the Greenwald’s article was finalized, former terrorism federal
prosecutor Andrew McCarthy wrote in National Review: “You haven’t heard of
the Khorosan Group because there isn’t one. It is a name the administration
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came up with, calculating that Khorosan... had sufficient connection to jihadist
lore that no one would call the president on it.”
“Obama, the Serial Interventionist”
Sept. 29 (EIRNS)—Under the above headline, author Brahma Chellaney writing
in one of India’s major English-language dailies, The Hindu, issues a stinging
profile of Barack Obama as “America’s Nobel Peace Prize Laureate President.”
It is the paper’s lead Opinion piece on Sept. 30, the day Indian Prime Minister
Narendra Modi meets with Obama. Although Chellaney—a former government
official with notable Anglophile connections—does not address the British
angle, none of his insights are inaccurate.
“Mr. Obama was supposed to be fundamentally different than Mr. Bush,”
says Chellaney, early on, “an expectation that led the Nobel committee to award
him the Peace Prize soon after he assumed office. Yet, underscoring the
disconnect between his words and actions, Mr. Obama has been more at ease
waging wars—that too in breach of international law—than in waging peace. He
has proved to be one of America’s most militarily assertive Presidents since
World War II, with his readiness to use force driven by a penchant to act as
judge and executioner....
“What stopped Mr. Obama from seeking United Nations Security Council
(UNSC) mandate before initiating a war in Syria against IS [Islamic State]
militants? The answer is obvious: Mr. Obama wants to wage his open-ended war
on U.S. terms, like his earlier interventions.
“Five repressive Arab autocracies form the core of his coalition of the
willing on Syria. Paradoxically, four of the five—Qatar, Saudi Arabia, Jordan
and the United Arab Emirates—plus the U.S., aided IS’s rise, either openly or
inadvertently. This is a coalition of sinners now dressed as knights in shining
armor....
“The unpalatable truth that Mr. Obama seeks to obscure is that the main IS
force was born in Syria out of the CIA-trained, petrodollar-funded rebels who
were reared to help overthrow Syrian President Bashar al-Assad. Mr. Obama
turned a blind eye as IS made significant advances from mid-2013 onward. IS
militants ceased to be good terrorists undermining Mr. Assad’s rule and Iranian
interests after they threatened U.S. interests and beheaded two American
journalists.”
Chellaney says, “The U.S. indeed has also contributed to India’s terrorism
problem. After all, large portions of the CIA’s multibillion-dollar military aid for
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the Afghan rebels in the 1980s were siphoned off by the conduit, Pakistan’s
Inter-Services Intelligence (ISI), to trigger insurgencies in India’s Kashmir and
Punjab. India—and Pakistan—have paid a heavy price for America’s continued
cozy ties with the Pakistani military and its ISI spies. Yet, paradoxically, the
U.S. has used counterterrorism as a key instrument to build a strategic
partnership with India.”
“More broadly,” he says, “America’s long-standing alliance with the Gulf’s
jihad-bankrolling Islamist monarchs does not augur well for its ‘war on terror,’
which has spawned more militants than it has eliminated.” [mpb]
http://www.thehindu.com/opinion/lead/obama-the-serialinterventionist/
article6458593.ece
THE NEW GLOBAL ECONOMIC ORDER
Modi to Madison Square Garden Crowd: 21st Century Will Be India’s
Sept. 29 (EIRNS)—Addressing a rapturous crowd of 20,000 inside New York’s
iconic Madison Square Garden, and many thousands more outside, on Sept. 28,
India’s Prime Minister Narendra Modi made clear what he intends to achieve as
the prime minister of India. Promising a fast pace of development, Modi said,
“There is no reason to be disappointed. India will progress very fast and the
skills of our youth will take India ahead.... The 21st Century will be that of
India. By 2020, only India will be in a position to provide workforce to the
world,” he said, while citing examples of the “growing global demand for
teachers, scientists and engineers.” “Winning elections is not about any post or
chair. It’s a responsibility. Since taking over [as Prime Minister], I have not even
taken a 15-minute vacation,” he said.
The event was attended by nearly 40 U.S. Members of Congress; the
attending legislators immediately connected with Modi when he said he was a
small man who reached here “selling tea” but intended to do “big things for
small people.” “I see now why the people of India elected him,” said
Congressman Henry C. “Hank” Johnson from Georgia said. “He has got a
vision. He has a plan to make it happen.”
Rep. Cynthia Lumis of Wyoming, who visited Gujarat last year to meet
Modi when he was the state’s Chief Minister, said, “I have very few Indian-
American constituents, but I came from Wyoming for this event because I am
confident that he is a potentially transformative figure for the Indian economy.
The speech he gave today punctuated that, the fact that he talked about
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individuals and the ability that they have to do about communities for the good
of the country,” Lumis said, adding that lawmakers were highly impressed when
Modi said that he was a small person and wants to do great things for them. Rep.
Grace Meng from New York said. “It was an honor to be on stage at Madison
Square Garden, and to be part of this historic and important event. I look
forward to working with Prime Minister Modi and his administration to make
the bond between India and the U.S. even stronger.”
Pointing out that 1.25 billion people is what makes India great, Modi said:
“We are a youthful nation with a very old culture.... Today India is the most
youthful nation of this world. Today 65% of the population of the country are
below the age of 35 years. What more asset a nation requires whose 65%
population is below 35 years of age.... A nation, whose youths are committed to
make the future of the country, will not have to look back. This country is going
to progress with the support of the youths,” he said as the crowd continuously
cheered him.
When he referenced India’s independence from the British colonial rule,
Modi didn’t dignify the oppressor by naming the British Empire. In fact, he even
went so far as to cite the 18th-Century takeover of India as the result of a long
chain of oppressions going back many centuries, of foreign invaders eating away
at the country, and at one point, he went out of his way to thank the Sikh
population for everyone present, for their historic role in saving India from
foreign invaders. Rather than complaining about the British Empire, he repeated
several times, “Independence meant the end of our slavery!”
Recalling that Mahatma Gandhi, who is considered the Father of Modern
India, turned the freedom struggle into a mass movement, Modi said at that time
every Indian felt part of the crusade for the country’s independence. “My clear
view is that governments alone cannot bring development. At the most, the
governments can launch only schemes. ... Development happens when there is
public participation.”
China’s High-Speed Rail Investment Would Cover the U.S.A.
Sept. 29 (EIRNS)—China’s investment, through China Railways, in high-speed
rail within the country, has increased by 20% in the past year and is running at
nearly $100 billion a year (430 billion yuan, or $65 billion, through August in
2014, as reported in Xinhua).
This is a very large order of magnitude of investment; it would build a
nationwide network of high-speed electrified corridors in the United States in
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less than five years, according to a thorough EIR study of requirements
published in 2002, although U.S. landmass is greater than China’s. Rep. Peter
DeFazio (D-OR), when he publicly slammed Obama in 2011 for deliberately
failing on economic infrastructure, had introduced legislation for $300 billion in
high-speed rail funding over six years—a very serious level but only half that of
China now.
A Reuters article Sept. 29 quotes Xinhua that so far the increase has been
accomplished solely with state banks—Industrial and Commercial Bank of
China Ltd., Agricultural Bank of China, China Construction Bank Corp., and
Industrial Bank Co.—all contracting with China Railways Corp. The
government’s targetted investment level is even higher than this $100 billion
annual rate, intending to bring private banks and funds into the investments
through China Railways.
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———EIR Daily Alert Service———
EIR DAILY ALERT SERVICE P.O. BOX 17390, WASHINGTON, DC 20041-0390
• LaRouche: Great Leaders Are Emerging Around the BRICS
• Scrambling Monday Follows Scandal Friday for Fed and Goldman
• ‘Deleveraging? What Deleveraging?’ Not until Another Crash
• Obama Lies on ISIS Quickly Exposed
• Obama Administration Invented Khorasan Group
• “Obama, the Serial Interventionist”
• Modi to Madison Square Garden Crowd: 21st Century Will Be India’s
• China’s High-Speed Rail Investment Would Cover the U.S.A.
EDITORIAL
LaRouche: Great Leaders Are Emerging Around the BRICS
Sept. 29 (EIRNS)—U.S. economist and statesman Lyndon LaRouche began a
discussion with the LaRouche PAC Policy Committee of today, by raising the
crucial importance of Indian Prime Minister Narendra Modi, now making a
definite impact in the United States and not only among Indian-Americans.
LaRouche’s subject was leadership, in a period of economic collapse, looming
financial crisis and war, but in which an entirely new and bright potential human
future has been created in countries in the growing grouping around the BRICS
nations.
“There is the important factor of a new figure on the international scale:
Narendra Modi,” LaRouche said. “This man requires special treatment, because
his role, in terms of his part in history, the history of India, but the history of the
region in general, as such is unique. And if you saw even fractions of what his
reception had been, you would say, ‘This is one of the most remarkable
individuals in modern political history.’ He won all kinds of praise and applause
from the people, and it was all very, very serious, very enthusiastic. But you
look back a little bit earlier, to his earlier moments in his recent history and he
was like this: He was a creature made for a time to lead.
“And there are others in that same category which he is related to. There are
people in Russia.... And through China, for example, we have great leaders in
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China. We have also in some of the BRICS nations, we have great leaders who
are emerging there....
“Therefore, we have to really understand what this man, Modi, has meant to
us, because what his role is now, and this is one of the great achievements.”
Notably, former President Bill Clinton expressed the same assessment of
Prime Minister Modi, in July in India, just after Modi’s election, and again now
in a Sept. 29 meeting of the Clintons with Modi in New York. “I’m thrilled,”
former President Clinton said, “No one else has had the knowledge and the
votes, than you, to build up the nation.” Some 40 Members of Congress from
around the nation attended the Madison Square Garden speech and were strong
in praise and support of Modi afterwards. And also notably, on the day (Sept.
30) Modi is to meet with President Barack Obama, one of India’s major English
dailies The Hindu presented as its leading “Opinion” a blunt condemnation of
Obama’s policy of permanent warfare and [“inadvertent”] spreading of terrorism
around the globe. The leadership LaRouche is praising, is one of a new global
strategic policy of peace through rapid economic and scientific development of
nations.
But LaRouche continued, on the “national town hall” webcast meeting
organized by the Policy Committee of LaRouche PAC the same weekend Modi
spoke. “We had a weekend event, in which we presented a description of what
the options are for the American system—the American political and economic
system. We presented that. And I think that what we did, in that weekend event:
We made a mark in history of our own. Not quite as impressive as any of the
things I’ve just presented, but, they were impressive, because we have brought
onto the platform, a factor of history, in this United States now, which is worth a
mention, by the greatest leaders of the United States up to now....
“We had the same kind of passion, determination, to create a success.... And
so therefore, I think this thing is going to be—I don’t have to tell you, I don’t
have to tell the audience—but what is going to happen, is we are going to be
presented, as in Madison Square Garden; we are going to have, coming out of
there, one of the most memorable experiences of the American people, as a
whole. The effects are going to be wonderful.”
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U.S. POLITICAL AND ECONOMIC
Scrambling Monday Follows Scandal Friday for Fed and Goldman
Sept. 29 (EIRNS)—Senators Elizabeth Warren and Sherrod Brown today
demanded a full Senate Banking Committee investigation of the New York
Federal Reserve Bank, over a scandal which became publicly known only on
Sept. 26, undescoring its seriousness. The Federal Reserve itself heatedly denied
the contents of the scandal today, and Goldman Sachs bank also scrambled in a
very public way, while denying it was doing so because of the scandal.
What has so stirred up Wall Street is the publication on National Public
Radio’s “This American Life” program Sept. 26, of excerpts from 46 hours of
tapes made by a New York Federal Reserve employee—a whistleblower, since
fired by the Fed—named Carmen Segarra. Formerly a banker, Ms. Segarra did
not begin working for the New York Fed until after the 2008 crash, and was
assigned to, and stationed at, Goldman Sachs. She found that her superiors at the
New York Fed were completely captive to the views and demands of the Wall
Street banks; and that when she overheard or directly witnessed Goldman
employees talking about skirting the law, or violating public morals, with bank
deals, she was repeatedly instructed by her bosses, “You did not hear that.” This
motivated her to begin making tape recordings of meetings and calls; and as The
Big Short author Michael Lewis put it in Bloomberg News Sept. 26, “You sort
of knew that the regulators were controlled by the banks. Now you know [they
are].”
In the worst instance of bankster crime observed and recorded by Segarra,
Goldman bankers “advised” an energy company, El Paso Corp., on being taken
over by a financial company, Kinder Morgan, in which Goldman and one of its
partners each had very substantial ownership, without disclosing it. Segarra
asked Goldman in-house counsel for the bank’s Conflict of Interest policy, and
was told Goldman did not have one. (Its CEO, after all, has said that he believes
it is doing God’s work.) Her strong representations to her New York Fed
superiors on this subject then resulted in her firing.
The New York Fed issued a furious statement this morning, Sept. 29, that
“The New York Fed categorically rejects the allegations being made about the
integrity of its supervision of financial institutions.” And Goldman Sachs? It
publicly issued a brand new conflict-of-interest policy for bankers and traders.
No wonder that the Wall Street Journal has so frequently registered the upset
caused among bankers by FDIC Vice Chairman Thomas Hoenig; even before
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getting to Hoenig’s proposals to break up the big banks, he is apparently already
one of a kind among regulators, in that he is not completely under the control of
a Wall Street banking group.
COLLAPSING WESTERN FINANCIAL SYSTEM
‘Deleveraging? What Deleveraging?’ Not until Another Crash
Sept. 29 (EIRNS)—That is the name of a report issued today by the Center for
Economic Policy Research (CEPR), a large network of economists based at
European universities in particular. Bluntly speaking, the “Deleveraging?” report
warns the upcoming IMF/World Bank meetings in Washington, D.C. that a
financial collapse of the system is coming, soon.
The report says that “a poisonous combination of high and rising global debt
and slowing nominal GDP, driven by both slowing real growth and falling
inflation,” has trapped the system. “The total burden of world debt, private and
public, has risen from 160% of national income in 2001 to almost 200% after the
crisis struck in 2009 and 215% in 2013.” The zero-interest-rate, bail-out policies
of all the “developed sector” central banks has produced economic stagnation
across the trans-Atlantic and Japan, which stagnation will continue until the
Federal Reserve starts trying to raise interest rates. Then, the financial system
will collapse. These “Geneva Conference” economists think this blowout will
happen by mid-2015.
The report also shows, with charts, that while the dominant form of this
rising debt in the “developed” economies is stock-market-related, with
government debt second; in the “developing” countries (meaning, primarily,
China and India), the dominant growth is in lending.
This “Glass-Steagall distinction,” though the authors do not name it, tells
where the crash is coming.
Only three weeks earlier, on Sept. 5, a “research report” came out of
Deutsche Bank, the London/Frankfurt universal bank monster, acknowledging
urgently that the “maintenance and expansion of the global debt bubble is
essential to the international financial system.” That report, on behalf of the Wall
Street and London-centered megabanks, said:
“We’ve created a global debt monster that’s now so big and so crucial to the
workings of the financial system and economy that defaults have been
increasingly minimized by uber-aggressive policy responses. Its arguably too
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late to change course now without huge consequences. This cycle perhaps
started with very easy policy after the 97/98 EM [exchange market] crises thus
kick starting the exponential rise in leverage across the globe. Since then we saw
big corporates saved in the early ’00s, financials towards the end of the decade
and most recently, Sovereigns bailed out. It’s been many, many years since free
markets decided the fate of debt markets and bail-outs have generally had to get
bigger and bigger.”
What the new, more deliberate “Geneva Report” adds, is that the “global
beast they’ve [the Fed] created” is going to blow up in a massive crash when the
Fed and other central banks try to “manage” it. [pbg]
STRATEGIC WAR DANGER
Obama Lies on ISIS Quickly Exposed
Sept. 29 (EIRNS)—Speaking on CBS News’ Sunday program “60 Minutes,”
yesterday evening, President Obama lied that the administration had been caught
unaware of the growing threat of ISIS, and had somehow “underestimated” their
strength until, well, just now.
CBS host Steve Kroft began by saying, “Two years ago, in the White House,
in this building, you talked about al-Qaeda being decimated. You talked about
al-Qaeda being back on its heels. Two years later, you’ve got al-Qaeda affiliates
and al-Qaeda offshoots controlling huge chunks of both Iraq and Syria. And you
have militias, Islamic radical militias in control of Libya.”
After Obama quoted his own UN speech, Kroft pressed: “How did this get—
how did they end up where they are, in control of so much territory? Was that a
complete surprise to you?” And Obama responded “Well, I think our head of the
intelligence community, Jim Clapper, has acknowledged that I think they
underestimated what had been taking place in Syria.” Kroft knew, and pointed
out, that Clapper had not said this, but that “We overestimated the ability and the
will of our allies, the Iraqi army, to fight.”
Today, as the “press corps of the willing” repeated Obama’s lies more or less
unquestioned, Eli Lake, writing in the Daily Beast, tore them apart. Lake quoted
a former senior Pentagon official, “who worked closely on the threat posed by
Sunni jihadists in Syria and Iraq,” who said he was “flabbergasted” at
Obama/Nero’s statements. “Either the President doesn’t read the intelligence
he’s getting or he’s bullshitting,” he told Lake. More importantly, Lake then
quoted former director of the Defense Intelligence Agency Lt. Gen. Michael
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Flynn, who had testified before Congress in February. Flynn, who some say was
forced out of his job in early August, had told Congress that “ISIS probably will
attempt to take territory in Iraq and Syria to exhibit its strength in 2014,”
additionally noting that ISIS had taken the cities of Ramadi and Fallujah, and the
demonstrated an “ability to concurrently maintain multiple safe havens in Syria.”
Obama Administration Invented Khorasan Group
Sept. 29 (EIRNS)—The Obama Administration is relying on fakery and
invented evidence as the legal basis for its war on ISIS. The inventions are used
to argue that the administration doesn’t require any additional legal authority,
either from the Congress or from the UN Security Council (where a motion to go
to war in Syria would be vetoed, anyway). Key to this construct was the socalled
Khorasan Group, the first target of the waves of air strikes that hit Syria
on the night of Sept. 22-23. Glenn Greenwald and co-author Murtaza Hussain, in
an article posted on The Intercept website yesterday, convincingly argue that the
Khorasan group is largely an invention of the Obama Administration so that it
could claim the mantle of “self-defense” part of the justification for the air
strikes in Syria. Greenwald and Hussain provide an extensive review of the
media coverage, showing how the major news outlets basically repeated the line
that was given to them by the Pentagon and the White House, that this was an
“imminent” threat (even though the administration is known to have an elastic
definition of what “imminent” means), that it was a greater threat than ISIS and
that it was about to execute a plot for a major terrorist attack, all without
evidence to back up what they were saying.
As Greenwald documents, the Khorosan group story began to fall apart soon
after the cruise missile strikes hit in the area of Aleppo, Syria, where it was
supposedly based. McClatchy News reported on Sept. 26 that European counterterrorism
officials said that they had never been briefed by their American
counterparts about the threat. The Washington Post’s Loveday Morris, based in
Beirut, reported that jihadi sources she queried in Syria had never heard of the
Khorosan group. Aki Peritz, a CIA counterterrorism official until 2009, told
Time magazine: “I’d certainly never heard of this group while working at the
agency,” while Obama’s former Syria ambassador Robert Ford said: “We used
the term [Khorasan] inside the government, we don’t know where it came from.
All I know is that they don’t call themselves that.”
Just before the Greenwald’s article was finalized, former terrorism federal
prosecutor Andrew McCarthy wrote in National Review: “You haven’t heard of
the Khorosan Group because there isn’t one. It is a name the administration
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came up with, calculating that Khorosan... had sufficient connection to jihadist
lore that no one would call the president on it.”
“Obama, the Serial Interventionist”
Sept. 29 (EIRNS)—Under the above headline, author Brahma Chellaney writing
in one of India’s major English-language dailies, The Hindu, issues a stinging
profile of Barack Obama as “America’s Nobel Peace Prize Laureate President.”
It is the paper’s lead Opinion piece on Sept. 30, the day Indian Prime Minister
Narendra Modi meets with Obama. Although Chellaney—a former government
official with notable Anglophile connections—does not address the British
angle, none of his insights are inaccurate.
“Mr. Obama was supposed to be fundamentally different than Mr. Bush,”
says Chellaney, early on, “an expectation that led the Nobel committee to award
him the Peace Prize soon after he assumed office. Yet, underscoring the
disconnect between his words and actions, Mr. Obama has been more at ease
waging wars—that too in breach of international law—than in waging peace. He
has proved to be one of America’s most militarily assertive Presidents since
World War II, with his readiness to use force driven by a penchant to act as
judge and executioner....
“What stopped Mr. Obama from seeking United Nations Security Council
(UNSC) mandate before initiating a war in Syria against IS [Islamic State]
militants? The answer is obvious: Mr. Obama wants to wage his open-ended war
on U.S. terms, like his earlier interventions.
“Five repressive Arab autocracies form the core of his coalition of the
willing on Syria. Paradoxically, four of the five—Qatar, Saudi Arabia, Jordan
and the United Arab Emirates—plus the U.S., aided IS’s rise, either openly or
inadvertently. This is a coalition of sinners now dressed as knights in shining
armor....
“The unpalatable truth that Mr. Obama seeks to obscure is that the main IS
force was born in Syria out of the CIA-trained, petrodollar-funded rebels who
were reared to help overthrow Syrian President Bashar al-Assad. Mr. Obama
turned a blind eye as IS made significant advances from mid-2013 onward. IS
militants ceased to be good terrorists undermining Mr. Assad’s rule and Iranian
interests after they threatened U.S. interests and beheaded two American
journalists.”
Chellaney says, “The U.S. indeed has also contributed to India’s terrorism
problem. After all, large portions of the CIA’s multibillion-dollar military aid for
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the Afghan rebels in the 1980s were siphoned off by the conduit, Pakistan’s
Inter-Services Intelligence (ISI), to trigger insurgencies in India’s Kashmir and
Punjab. India—and Pakistan—have paid a heavy price for America’s continued
cozy ties with the Pakistani military and its ISI spies. Yet, paradoxically, the
U.S. has used counterterrorism as a key instrument to build a strategic
partnership with India.”
“More broadly,” he says, “America’s long-standing alliance with the Gulf’s
jihad-bankrolling Islamist monarchs does not augur well for its ‘war on terror,’
which has spawned more militants than it has eliminated.” [mpb]
http://www.thehindu.com/opinion/lead/obama-the-serialinterventionist/
article6458593.ece
THE NEW GLOBAL ECONOMIC ORDER
Modi to Madison Square Garden Crowd: 21st Century Will Be India’s
Sept. 29 (EIRNS)—Addressing a rapturous crowd of 20,000 inside New York’s
iconic Madison Square Garden, and many thousands more outside, on Sept. 28,
India’s Prime Minister Narendra Modi made clear what he intends to achieve as
the prime minister of India. Promising a fast pace of development, Modi said,
“There is no reason to be disappointed. India will progress very fast and the
skills of our youth will take India ahead.... The 21st Century will be that of
India. By 2020, only India will be in a position to provide workforce to the
world,” he said, while citing examples of the “growing global demand for
teachers, scientists and engineers.” “Winning elections is not about any post or
chair. It’s a responsibility. Since taking over [as Prime Minister], I have not even
taken a 15-minute vacation,” he said.
The event was attended by nearly 40 U.S. Members of Congress; the
attending legislators immediately connected with Modi when he said he was a
small man who reached here “selling tea” but intended to do “big things for
small people.” “I see now why the people of India elected him,” said
Congressman Henry C. “Hank” Johnson from Georgia said. “He has got a
vision. He has a plan to make it happen.”
Rep. Cynthia Lumis of Wyoming, who visited Gujarat last year to meet
Modi when he was the state’s Chief Minister, said, “I have very few Indian-
American constituents, but I came from Wyoming for this event because I am
confident that he is a potentially transformative figure for the Indian economy.
The speech he gave today punctuated that, the fact that he talked about
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individuals and the ability that they have to do about communities for the good
of the country,” Lumis said, adding that lawmakers were highly impressed when
Modi said that he was a small person and wants to do great things for them. Rep.
Grace Meng from New York said. “It was an honor to be on stage at Madison
Square Garden, and to be part of this historic and important event. I look
forward to working with Prime Minister Modi and his administration to make
the bond between India and the U.S. even stronger.”
Pointing out that 1.25 billion people is what makes India great, Modi said:
“We are a youthful nation with a very old culture.... Today India is the most
youthful nation of this world. Today 65% of the population of the country are
below the age of 35 years. What more asset a nation requires whose 65%
population is below 35 years of age.... A nation, whose youths are committed to
make the future of the country, will not have to look back. This country is going
to progress with the support of the youths,” he said as the crowd continuously
cheered him.
When he referenced India’s independence from the British colonial rule,
Modi didn’t dignify the oppressor by naming the British Empire. In fact, he even
went so far as to cite the 18th-Century takeover of India as the result of a long
chain of oppressions going back many centuries, of foreign invaders eating away
at the country, and at one point, he went out of his way to thank the Sikh
population for everyone present, for their historic role in saving India from
foreign invaders. Rather than complaining about the British Empire, he repeated
several times, “Independence meant the end of our slavery!”
Recalling that Mahatma Gandhi, who is considered the Father of Modern
India, turned the freedom struggle into a mass movement, Modi said at that time
every Indian felt part of the crusade for the country’s independence. “My clear
view is that governments alone cannot bring development. At the most, the
governments can launch only schemes. ... Development happens when there is
public participation.”
China’s High-Speed Rail Investment Would Cover the U.S.A.
Sept. 29 (EIRNS)—China’s investment, through China Railways, in high-speed
rail within the country, has increased by 20% in the past year and is running at
nearly $100 billion a year (430 billion yuan, or $65 billion, through August in
2014, as reported in Xinhua).
This is a very large order of magnitude of investment; it would build a
nationwide network of high-speed electrified corridors in the United States in
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less than five years, according to a thorough EIR study of requirements
published in 2002, although U.S. landmass is greater than China’s. Rep. Peter
DeFazio (D-OR), when he publicly slammed Obama in 2011 for deliberately
failing on economic infrastructure, had introduced legislation for $300 billion in
high-speed rail funding over six years—a very serious level but only half that of
China now.
A Reuters article Sept. 29 quotes Xinhua that so far the increase has been
accomplished solely with state banks—Industrial and Commercial Bank of
China Ltd., Agricultural Bank of China, China Construction Bank Corp., and
Industrial Bank Co.—all contracting with China Railways Corp. The
government’s targetted investment level is even higher than this $100 billion
annual rate, intending to bring private banks and funds into the investments
through China Railways.
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