Development Is the Name for Peace, Wall Street the Name for War

December 30, 2014

While the BRICS-allied nations, led by China, continue to push forward with economic development and human creativity, the danger of world war hangs over this planet because City of London and Wall Street policy is to confront and destroy Russia and China as economic powers.

In an new interview with EIR, the chief spokesman for the commission building the new Inter-Oceanic Canal through Nicaragua — a great project of infrastructure made possible by the emergence of the BRICS — insists that the United States and Europe must drop this "policy of confrontation" which "will backfire against them," and join the BRICS initiative, "a reality which is advancing." The other extraordinary new canal, through Suez, is also transforming the productivity of physical trade for production on the planet, and it, too, is part of the new "Maritime Silk Road" being developed by China for the economic benefit of a large number of nations. Egypt's and China's Presidents have had four days of historic meetings fashioning this.

This is what the United States must align itself with, in order to play a role in shaping what the economic future of mankind should be.

But the reasons the United States under Obama does NOT do so, have been flagrantly on display — and must be reversed. Wall Street and London, in their "Saudi oil sanction" ploy intended to destroy Russia's economy, have unleashed the financial furies on themselves, while only confirming Russian President Putin's determination to prepare to defend Russia in war. Seeking the destruction of Russia and China as powers for economic development, Wall Street is blowing itself up.

Now we face potential financial chaos from a Wall Street which has $10-20 trillion in derivatives exposure to collapsing oil-sector debt. And as more and more experts are realizing, Wall Street and Obama forced the sudden, Dec. 16 repeal of a key U.S. derivatives regulation, precisely because of this looming chaos — to provide that the U.S. government would have to bail Wall Street out of it.

To quote EIR Founding Editor Lyndon LaRouche in a statement on this outrage,

"This recent voting by Congress was completely fraudulent; it was bought and paid for by Wall Street. This 'agreement' which Congress voted for, and which they claimed became law, was a violation of law — fraud committed by financial corruption. This act of Congress was a fraud against law in principle, and must be reversed. And if we have to impeach some of them, whose earlier elections were themselves bought by Wall Street, we should do that."

The whole so-called "fracking boom" itself, LaRouche said, is a fraud against economic productivity, and is dragging down the U.S. economy.

LaRouche and EIR have insisted that the Glass-Steagall Act be reinstated, as President Franklin Roosevelt intended, to crush the power of Wall Street — and in this crisis situation, avert the danger of world war which Wall Street's financial war is threatening. Some say the revolt which broke out against Wall Street's corruption of Congress has created a "Glass-Steagall moment." But the United States needs more: the creation of a system of national credit; the deployment of that credit for projects to increase productivity; the rapid development of thermonuclear fusion technologies. It needs LaRouche's "four laws."

SEE "LaRouche's Four Laws"



Oil Price Keeps Sliding, and Wall Street Chaos Coming Closer

With Persian Gulf oil producers continuing to maximize oil production into demand for oil products which has steadily declined since the 2008 crash, the price of oil has continued to slide, ignoring the hyping today of "militias fighting around oil facilities in Libya." Wall Street's and London's "Saudi oil sanction against Russia" is threatening to unleash financial furies against Wall Street banks themselves, with the Federal government now supposedly required to bail them out of it.

More experts are now writing and stating that mid-December's sudden, bought-and-paid-for Congressional repeal of a key U.S. derivatives regulation, was forced on Congress by Wall Street because oil debt derivatives will soon blow out. The Dec. 28 article published in the Huffington Post by Ellen Brown of the Public Banking Institute, entitled "Russian Roulette: Taxpayers Could Be On the Hook for Trillions in Oil Derivatives," is typical. So is MIT economist Simon Johnson's piece on his website, where he also proposes a "break-up Citigroup" public campaign targeting the Congress. Citigroup directly authored the repeal provision against Section 716 of the Dodd-Frank Act, which had prevented banks from putting their exposure to commodity derivatives, on the books of their insured depository units.

With the collapse of the oil price by more than 50% in the second half of 2014, the banks have found that a widespread type of commodity derivative known as a "three-way collar" has become very dangerous to them. As the price has declined, from $110/barrel for West Texas Intermediate (WTI) crude all the way down to near $50/barrel now, these derivatives have compelled the banks not only to buy more leveraged debt paper, but to buy more oil and gas futures as well. The immediate prospect of losses from defaulting debt in the leverage loan and junk bond markets, together with the only slightly longer-term prospect of huge losses in the derivatives markets, have put the Wall Street banks in trouble. The latter losses could be in the hundreds of billions in total, given this derivatives exposure of Wall Street is in the trillions.

This is the reason economist Lyndon LaRouche has called the entire mid-December voting procedure in Congress "fraudulent, bought-and-paid-for fraud," which must be set aside even if that means setting aside the bought-and-paid-for members of Congress themselves.

The Dec. 28 Wall Street Journal, looking at another side of the oil debt collapse, made a very conservative estimate that in 2015, 40,000 jobs will be lost directly in the oil drilling industry and oil services, another 5,000-6,000 in the companies making equipment, in the United States. The "shale boom," itself an economically inefficient and unproductive fraud, has been the source of nearly all high-wage jobs created since Obama became President — a net total of 300,000 jobs; so the estimate of a mere 45,000 job loss in 2015 is quite rose-colored. Texas itself lost 2,800 jobs in the oil section in November alone. Along with the job losses, large state budget deficits have suddenly sprouted in Alaska, Texas, Louisiana and other shale states.

Egypt-China Relations Are ‘A Meeting of Civilizations, Principles and Interests’

In a long, detailed article, editor Ahmed El-Sayed Al-Naggar of the government-backed Egyptian daily Al Ahram writes on the importance of Egyptian President Abdel Fattah el- Sisi's recent historic visit to China where he met Chinese President Xi Jinping and other Chinese political and economic leaders.

"Since Egypt's recognition of China in 1956, new, strong and long-lasting relations between Cairo and Beijing began — relations that nonetheless could go further now," wrote Al-Naggar, and that this recognition and the challenge to the West that it posed "was one of the reasons behind the criminal colonial attack on Egypt by France, Britain and Israel the same year. Egypt was akin to an ambassador for China, gathering recognitions from various African and Arab states.... In return, China was a supporter and champion of all just Egyptian and Arab causes on the world stage through direct relations.

"In China, Gamal Abdel Nasser became the symbol of national independence and solidarity with peace-loving people. Meanwhile, Mao Zedong and Zhou Enlai followed by Deng Xiaoping and other Chinese leaders became symbols of the values of national liberation, development and justice that is highly respected and appreciated in Egypt."

Al-Naggar continued,

"the giant Yangtze River that pours into the East China Sea towards the islands that are geographically and politically separated from the Chinese mainland seems very close and kin to the River Nile that gathers the spirit of Africa and passes through the Arab land of Egypt, then pours into the Mediterranean Sea where the Ancient Egyptian civilization sparked the dawn of human conscience 7,000 years ago."

Both Egypt and China enjoy a compatible "approach regarding political, economic, regional and international issues." Pointing to China is developing relations with developing and emerging countries, "by forming the BRIC (Brazil, Russia, India, China) bloc or launching an initiative to revive the old Silk Road to promote economic cooperation with these countries."

Internationally, Al-Naggar writes, China and Egypt share similar

"positions in the international arena in general and the Arab world — most notably Syria, occupied Palestine, and the war on religious radicalism and terrorism."

Al-Naggar then writes on the potential for expanding economic relations between the two countries, and details the potential for Chinese investment and participation in developing Egypt's huge reserves of phosphate rock for developing the phosphate fertilizer industry as well as Egypt's reserves of gypsum, quartz, marble, basalt, gold and other mineral ore, and glass sand.

He also detailed opportunities in agriculture and industry, pointing out that Egypt is seeking to develop its own automobile industry to supply the domestic and African-Middle East markets. The Suez Canal expansion also offers opportunities in shipbuilding and maintenance. Also of importance is the petrochemical sector since Egypt is close to the world's largest oil reserves in the Gulf region and Libya, as well as one of the largest consumers in Europe and in Egypt itself.

As for trade in merchandise between Egypt and China, Egyptian exports to China amounted to $488 million in 2013/2014, mostly construction materials, chemicals, fertilizers and leather. Egypt imported from China goods worth $4.986 billion in 2013/2014, making China is its third largest exporter, after the U.A.E. ($6.4 billion) and Saudi Arabia ($5.8 billion). Egypt suffers a serious trade deficit of $4.498 billion with China; its total trade deficit reached $33.7 billion in 2013/2014.

Warren's Battle Against Obama Nominee Gains Another Ally

Senator Elizabeth Warren garnered another ally in her fight to shatter the Wall Street/Obama nexus. In an e-mail sent to supporters over the weekend, Minnesota Progressive Sen. Al Franken asked readers to, "Join me in asking the President to withdraw Antonio Weiss's nomination."

"I don't think Mr. Weiss is the right man for the job, because the position requires someone who really understands how to make the economy work for middle class families. His current job is working on corporate mergers for a Bermuda-based investment firm, including mergers that help corporations shield themselves from paying their share of taxes."

Raising the question of Glass-Steagall , Franken says:

"We got into that mess because we were willing to let Wall Street police itself. Foxes make poor guards of henhouses. We know that through bitter experience, and I'm not willing to let it happen again."

Appropriately, The Hill ran their coverage of Franken's call under the headline, "Franken Takes On Obama."