Author: Alicia

British policy outlets are displaying unalloyed fear over what Greece portends for the future of the Eurozone, and their entire trans-Atlantic financial system.

“The dam has burst,” wailed Jeremy Warner, the assistant editor of the Daily Telegraph.

“There’s not much doubt where the biggest threat to global economic stability comes from right now—it’s the pesky euro.”

Fellow Telegraph columnist Ambrose Evans-Pritchard, after cataloging the recent raft of threats against Greece coming from hysterical European bankers and politicians, stressed that the Tsipras government in Greece has given no indication of buckling under the pressure. Evans-Pritchard concluded that “this spectacular game of chicken” is going to continue “until one side or the other blinks.” But, he warned, things may not go smoothly, quoting Professor Ashoka Mody, a former IMF bail-out chief in Europe, saying that the ECB’s actions are

“extremely irresponsible… I have never heard of such outlandish threats before. The EU authorities have no idea what the consequences of Grexit might be, or what unknown tremors might hit the global payments system. They are playing with fire… What they ignore at their peril is the huge political contagion. It would be slower- moving than a financial crisis but the effects on Europe would be devastating.”

An even more pointed warning was issued on Jan. 28 by Ian Bremmer, head of the Council on Foreign Relations’ Eurasia Group, who argued that Greece could well bolt from the trans-Atlantic sector altogether (both the eurozone and NATO), and align with Russia and China and the BRICS process—although Bremmer doesn’t dare mention the BRICS by name. The way he put it was:

“The Russians could push the issue and tell the Greeks, ‘Hey, we’ll bail you out, but you have to leave NATO and join the Shanghai Cooperation Organization. And you’re giving us access to the base’ [a warm water port]. That would absolutely be attractive for Syriza. And frankly, I might even see the Chinese joining in, since they’ve already put a lot of cash into the Port of Piraeus, for example.”

British policy outlets are displaying unalloyed fear over what Greece portends for the future of the Eurozone, and their entire trans-Atlantic financial system.

“The dam has burst,” wailed Jeremy Warner, the assistant editor of the Daily Telegraph.

“There’s not much doubt where the biggest threat to global economic stability comes from right now—it’s the pesky euro.”

Fellow Telegraph columnist Ambrose Evans-Pritchard, after cataloging the recent raft of threats against Greece coming from hysterical European bankers and politicians, stressed that the Tsipras government in Greece has given no indication of buckling under the pressure. Evans-Pritchard concluded that “this spectacular game of chicken” is going to continue “until one side or the other blinks.” But, he warned, things may not go smoothly, quoting Professor Ashoka Mody, a former IMF bail-out chief in Europe, saying that the ECB’s actions are

“extremely irresponsible… I have never heard of such outlandish threats before. The EU authorities have no idea what the consequences of Grexit might be, or what unknown tremors might hit the global payments system. They are playing with fire… What they ignore at their peril is the huge political contagion. It would be slower- moving than a financial crisis but the effects on Europe would be devastating.”

An even more pointed warning was issued on Jan. 28 by Ian Bremmer, head of the Council on Foreign Relations’ Eurasia Group, who argued that Greece could well bolt from the trans-Atlantic sector altogether (both the eurozone and NATO), and align with Russia and China and the BRICS process—although Bremmer doesn’t dare mention the BRICS by name. The way he put it was:

“The Russians could push the issue and tell the Greeks, ‘Hey, we’ll bail you out, but you have to leave NATO and join the Shanghai Cooperation Organization. And you’re giving us access to the base’ [a warm water port]. That would absolutely be attractive for Syriza. And frankly, I might even see the Chinese joining in, since they’ve already put a lot of cash into the Port of Piraeus, for example.”

On Feb. 2, the foreign ministers of China, India, and Russia will be meeting in Beijing, days after U.S. President Obama’s three-day (Jan. 25-27) visit to India. In addition to the trilateral talk, bilateral meetings will take place between the three foreign ministers, Wang Yi, Sushma Swaraj, and Sergey Lavrov. The 13th trilateral meeting will coincide with Indian Foreign Minister Sushma Swaraj’s first visit to China since she took office, China’s Foreign Ministry spokeswoman Hua Chun-ying said at a news conference on Jan. 28.

The meeting will be taking place at a time when the Western nations, led by the United States, have created a warlike situation against Russia over Ukraine, and the aforesaid three nations have enhanced cooperation through organizations such as BRICS and the Shanghai Cooperation Organization (SCO). On the Feb. 2 trilateral meeting of the foreign ministers of China, India, and Russia, Hua said:

Commenting on the upcoming meeting, Fu Xiaoqiang, an expert on South Asian studies at the China Institutes of Contemporary International Relations (CICIR), said the coming three-way meeting would focus on exchanging views on regional security and common interests, China Daily reported. Fu pointed out that China, India, and Russia currently cooperate on a range of issues, including industry, trade, agriculture, emergency relief, and healthcare, and are also members of various key organizations such as BRICS—a group of five emerging national economies, Brazil, Russia, India, China and South Africa—and the G20 forum of major economies. He also noted that the SCO decided last year to make India a member of the security group that also includes China and Russia.

“India subscribes to a balanced foreign policy, without swinging totally to the policies of any major country,” Fu said. But China and India can still find areas in which to cooperate further, such as infrastructure and trade. China is India’s top trading partner, with bilateral trade worth $65.5 billion in 2013. The Modi administration is keen to attract foreign direct investment from China to upgrade India’s infrastructure, Fu said, according to China Daily.

The European Union foreign ministers, meeting in Brussels yesterday, rejected pressures from the London-Obama war party to expand the sanctions regime against Russia, and merely extended current sanctions against individuals and companies in Russia and eastern Ukraine until September. They also, however, committed themselves to coming up with a list of more individuals and companies to be sanctioned within the next week—which list will be given to the EU’s Foreign Affairs Council on Feb. 9, and then to the European heads of state.

In her statement at the conclusion of the meeting, High Representative/Vice-President Federica Mogherini added that the third element of the decisions taken was to start “preparatory work” for more action, which she said she hopes “can help putting pressure, in particular on Russia, to make positive steps and prevent negative steps that we have seen in recent days.” The formal communique puts the onus of “responsibility” for the crisis on Russia.

Ukrainian Foreign Minister Klimkin was present at the talks—having also met with NATO Secretary General Stoltenberg.

At the end of the meeting, it was also reported that there’s a possibility of new Minsk contact group discussions Jan. 30, despite the ongoing fighting in Southeastern Ukraine.

While there is much discontent among the EU nations on the boomeranging sanctions, and any negative vote would have prevented action, the new Greek Foreign Minister chose not to upset the facade of “unity” at this event. Minister Nikos Kotzias said, according to the Wall Street Journal, that he was happy to sign on, since there was no immediate movement to new sanctions. He added,

“I don’t know what we are going to say in future negotiations. I’m not excluding anything,”

including a possible veto if his government felt the sanction weren’t in Greece’s interest.

“When sanction are imposed, you must be aware of the consequences,” Kotzias added. “The sanctions created financial problems in Greece.”

The Greek paper ekatherimi quoted Kotzias saying he considered Thursday’s result a “good compromise,” especially in light of the fact that the phrase “further restrictive measures” was removed from the communique.

Prior to the meeting, the Greek government had rejected statements of “unanimity” from the EU on its sanctions policy. Rather, Kotzias had said, according to the Wall Street Journal,

“Greece is working for a restoration of peace and stability in Ukraine, and at the same time working to avoid [a rift] between the European Union and Russia.”

Appropriately to that aim, Minister Kotzias is an expert on the BRICS, having taught at the University of Piraeus, which has a research center dealing with the BRICS. The Unviersity will hold a conference on Greek relations with the BRICS on May 7, 2015.

The new Greek government of Alexis Tsipras came into power committed to rejecting the murderous austerity conditions of the Troika, and to pursuing an approach explicitly identified with the 60% writedown of German debt in 1953, the so-called London Debt Conference. Whether it will pursue this aim—not to mention, achieve it—has come to the top of the agenda, not just for Greece, but for bankrupt Europe as a whole.

What is clear is that the Greek debt is fraudulent and unpayable—and that no amount of financial warfare against the country, such as was applied Jan. 28, will change that. Financial warfare is more likely to bring on a financial explosion.

In a major article in the Daily Telegraph Thursday, international business editor Ambrose Evans-Pritchard takes up this issue in dramatic terms. “Investors have woken up to Greece’s nuclear risk,” reads the headline. Pritchard then proceed to quote the radical rejection of the debt burden by the incoming government—the Finance Minister calling the austerity policy “fiscal waterboarding,” and the deputy Finance Minister authoring a book called “The Rape of Greece”—and to agree! The EU-IMF-ECB Troika forced the debt and “scorched earth austerity” on Greece, he writes— and the debt can’t be paid. Their demand for a “European Conference” for debt restructuring of all the southern European countries is “right.”

Greek Finance Minister Yanis Varoufakis showed a determined fighting spirit in an interview with El Mundo, one of Spain’s leading newspapers, on Jan. 21. What is happening in Greece is savage, he said,

El Mundo asked: Do you really believe that Spain is going to end up like Greece?

On the whole ECB game: the ECB knows we don’t have the money to pay for their mistakes, so they are forcing us to take loans from the Germans, the Spaniards, and from the ECB itself, to give it to the ECB.

Whether this attitude will continue, may well depend upon the amount of support the Greeks get. Most crucial is support from the United States.

In that regard, it is interesting to note that Thursday’s column by Washington Post regular Harold Meyerson, is devoted to supporting the 1953 London debt conference. Germans should remember that part of their history, he argues, in relation to Europe. Indeed, Americans should remember their history of Hamiltonian bankruptcy reorganization as well—before bankrupt Wall Street blows up the world.

For EIR‘s proposal on how the 1953 London debt conference precedent should be applied today, see “A Greek Proposal: Convene a European Debt Conference for 2015,” by Dean Andromidas and Paul Gallagher, in EIR‘s January 23 edition.

The first two EIR seminars in Berlin and Frankfurt by Helga Zepp-LaRouche have brought the reality of the imminent thermonuclear war danger—and the World Landbridge alternative—to Germany and Europe as a whole, at a moment of heightened danger and growing political warfare. The fact that the two Zepp-LaRouche events, on Tuesday and Thursday, came immediately on the heels of the shock of the Greek elections only added to the impact.

Wall Street and London are hopelessly, irreversibly bankrupt, and the only genuine war-avoidance option is immediate orderly bankruptcy proceedings against the $1.7 quadrillion dollars in derivatives and other gambling debts—starting with the reinstatement of Glass-Steagall.

It is becoming more and more obvious that the Greek debt can never be paid and that the Greek actions in the first days of the Syriza government—cancelling privatization legislation that had been dictated by the Troika—means that the Greek break with the genocide policies can be both a trigger for a new policy, and a detonator for a desperate London-Wall Street bloc to press for war on Russia and China. As Lyndon LaRouche warned on Tuesday, the Greek elections accelerate the danger of war and demand immediate emergency action.

On Thursday, both Ambrose Evans-Pritchard, the British intelligence mouthpiece at the Daily Telegraph, and Washington Post columnist Harold Meyerson, wrote about the need for the convening of a European debt write-off conference on the model of the 1953 London conference, which cancelled half of the German war debts from both world wars, stretched out the remaining debt over 30 years, and brought about, in conjunction with the Marshall Plan, the German economic miracle. Pritchard made clear that the Greek debt can never be paid, and that the Greek people made the right choice in repudiating the Troika, while Meyerson demanded that Germany treat Greece the way the U.S. treated Germany after the defeat of Hitler.

While details have not been made public yet, it is clear that the meeting of the European foreign ministers, to push new sanctions against Russia—-which is nothing short of further war provocations—was a brawl, which ended with the decision to maintain existing sanctions through September, but impose no new sanctions. Before the meeting began, Greece made clear that there was no “consensus” for new sanctions, because they had never yet been consulted.

These push-back gestures are indicative of a growing fear of a thermonuclear armageddon. Last week’s published warnings, by Igor Ivanov, Sam Nunn, Richard Lugar, and Theodore Postol, were joined by Mikhail Gorbachov on Thursday, in an Interfax interview, in which he again warned that the West is provoking a new Cold War that will quickly turn into a hot war—including thermonuclear war.

Obama is a stooge for the London-Wall Street forces that are driving the world to general war. As Lyndon LaRouche has repeatedly warned in recent weeks, the only way out of armageddon is to take down the controlling apparatus behind the war drive. That means shutting down Wall Street and putting in place a Hamiltonian credit system to ally the United States with the BRICS.

Russian, Chinese, and Indian foreign ministers will be meeting Feb. 2 in Beijing to advance the BRICS agenda and, no doubt, to review and assess the building danger of general war. President Obama’s performance in India, according to observers, was an abomination—insulting to India. Obama cut short the India visit, commemorating India’s Republic Day, to race off to Riyadh to fawn over the new Saudi King, whose ties to Al Qaeda and other jihadists are well-known and well-documented in world intelligence circles. At home, Obama continues to stick to the Bush-Cheney cover-up of the 28 pages. This performance in Riyadh added to the already intense pre-war buildup globally. As soon as he got back to Washington, Obama publicly professed his partnership with the House of Saud.

The Wall Street system of banks is again facing a bankruptcy crisis — this time triggered by collapsing oil and commodity debt and derivatives — and even central bankers know that it will be as bad as a second 2008 crash, or worse.

These banks have been generally bankrupt since the impact of the elimination of Glass-Steagall. Wall Street’s bankruptcy crisis is made worse by the free fall of the euro and the fact that all the biggest European banks, most definitely including the London banks, are loaded to the gills with toxic debt securities of more and more varieties, and have never written any of it off since 2008.

A financial crash worse than 2008 is looming over this whole bankrupt London-Wall Street system of banks. The United States must act immediately generate a buffer against this crash for its economy and citizens.

The Wall Street banks should effectively be shut down, put through a bankruptcy reorganization so that they may continue some limited function as commercial banks. Their ability to manage things in the U.S. economy must be terminated now, or the economy faces a terrible crisis…

Standard & Poors cut Russia’s sovereign debt rating to the junk level BB+ on Monday, below investment grade. S&P, acting as if this were a purely business decision rather than part of a coordinated act of financial warfare, said:

“In our view, the Russian Federation’s monetary policy flexibility has weakened, as have its economic growth prospects.”

Russian Finance Minister Anton Siluanov called the downgrade

“unreasonable, as the agency didn’t consider the country’s anti-crisis plan, and the strong economy with its large reserves and extremely low public debt.”

This “anti-crisis plan” was the subject of cabinet meetings chaired by Prime Minister Dmitri Medvedev and President Vladimir Putin over the past ten days. It includes a number of incentives for economic activity, coupled with budget cuts, but also the (healthy) abandonment of some of the extreme “more drastic than Maastricht” budget deficit targets of recent years. The plan does not, however, ameliorate the suffocating effects of the Russian Central Bank’s hiking of the prime interest rate to 17%.

A “Mahathir solution” of capital and exchange controls is being promoted by Putin’s advisor Sergei Glazyev, along with state-guided, effectively Hamiltonian credit policies for physical reconstruction and infrastructure, but it has not been taken up at the government level.

Glazyev’s Dirigist Plan for Sanctions Response

The Russian TV service RT quoted Paul Craig Roberts, former US Assistant Secretary of the Treasury, who identified the fact that

RT noted that even the US has acknowledged the crimes of S&P, imposing a $77 million fine on the rating agency last week for fraud in ratings it issued in 2011, and banning it from assessing a segment of the commercial mortgage-backed securities market (CMBS) for a year.