Author: Spencer

Helga Zepp-LaRouche addressed the Association of Alumni of Peru’s Center for Superior Military Studies, in Lima, Peru on May 28th, 2015, on the subject: “The Silk Road Becomes the World Land-Bridge.” For an overview of the whole conference, read “Peru Hosts BRICS Seminar, Featuring Helga Zepp-LaRouche“

Transcript

Dear conference participants,

Let me start with my full-hearted congratulations to the recently concluded idea to build a transcontinental railway, where after the visit of the Chinese Premier Li Keqiang, a Memorandum of Understanding was just signed between Peru, Brazil, and China, to make a feasibility study for the 3,300-mile transcontinental railway.  Now, that will connect the Pacific Coast of Peru to the Atlantic Coast of Brazil and that means this very important infrastructure connection will transform the entire South American continent, and increase the productivity of the production process, and of all the people of Latin America, and in this way increase the living standards of the population and build a hopeful future.  And this will be only the first step.

It means that Peru will be now connected to the breathtaking, optimistic transformation, of large parts of the world economy, which really has started since President Xi Jinping announced a New Silk Road policy in September 2013, in Kazakhstan, and which fully started to become operational with the BRICS summit in Fortaleza, Brazil last July.

Since that time, a completely parallel economic and financial system is emerging which is based on completely different principles than the presently, still dominating financial system of the trans-Atlantic world, the IMF/World Bank, Wall Street and the City of London.  The New Silk Road, or Maritime Silk Road of the 21st Century have become the synonym for what the Non-Aligned Movement used to call, many years ago, a just new world economic order, where the human being is put back in the center of the economy, and the common good of the people, and not the profit of the few.

Now, this new development is really big.  After all the Western mainstream media completely blacked out this new development for almost two years, now you have a sudden recognition that this is becoming the new reality in the world, and you have a flood of articles, such as a recent one in Time magazine, which is quite a freakout, with the headline, “New Silk Road Could Change Global Economics Forever”; “China and much of the world is intent on developing the largest economic development project in history.”  And indeed, it is exactly that.

Because the New Silk Road and the Maritime Silk Road are not limited to Eurasia at all.  The Schiller Institute and EIR have recently produced a 370-page study, of which you see a map just behind me, with the title “The New Silk Road Becomes the World Land-Bridge.” And this is actually a blueprint for the next decades and it contains many, many infrastructure corridors, connecting all the continents, so it means that very soon, you will be able to travel by mag-lev or by some other high-speed train from Punta Arenas, in Chile, or Ushuaia in Argentina, all the way north, through the inter-American railroad line, through Central and North America, crossing the Bering Strait Tunnel, all the way across Eurasia, go via a tunnel through the Strait of Gibraltar from Spain into Africa, and then travel on all the way to South Africa and the Cape of Good Hope.

Now, I think that most of us would like to make sure a journey, very, very soon.

Already  now, with the Chinese leadership and the BRICS, there is enormous momentum of infrastructure corridors, new canals, like the Nicaragua canal, the second Panama Canal through Nicaragua, tunnels, bridges, large water projects; cooperation in nuclear and space technology.  But with all of that, is also emerging a new financial system, the New Development Bank of the BRICS, the AIIB, which already has 58 founding members — among them, 12 NATO members; then you also have the New Silk Road Development Fund; the Shanghai Cooperation Bank; the SAARC bank, that is the bank of the South Asian countries.  And as Sergei Glazyev, who is the advisor of President Putin, recently said at the Seventh BRICS Academic Forum, which just concluded in Moscow:

This parallel system could very quickly also turn out to be the lifeboat for the collapsing trans-Atlantic financial system, because this could crash at any moment in a bigger way than 2008 during the crisis of Lehman Brothers.  Such a crash could be triggered by the “Grexit,” the Troika of the EU kicking out Greece from the euro, which then would collapse the entire European and probably American banking system; it could be caused by the bankruptcy of Ukraine; or just a blowup of the derivatives bubble which has right now, $2 quadrillion outstanding derivatives debt, which can never be paid.

So the BRICS countries better watch out.  As good as it is that the AIIB has been joined by 58 founding members, I think people have to be very much watching out, not to allow the high-risk speculation or the derivatives bubble in the new system.  But this New Silk Road and this new Maritime Silk Road is not just an economic and financial system.  In reality, it is also the only war-avoidance policy, and at this point we are very close to the danger of war, because of the Ukraine crisis and the NATO forward deployment to Eastern Europe and the borders of Russia.

Now, President Xi Jinping has made a policy which is the recipe to overcome geopolitics by being all-inclusive:  He calls it a “win-win” policy.  The critics of China say, “Well, this is just an attempt by China to replace the Anglo-American imperialism.  This is just going to be a new Chinese effort to take over the world.  They must have a secret agenda.  They must want to get raw materials.”

Well, I can tell you, “No!”  What “win-win” means is that each side will have benefits and as you can see in Africa, sure, China will have on its side, raw materials supply for long-term raw materials security, which it needs, because it has one-sixth of the world population are Chinese people.  But, they also develop infrastructure for Africa, dams, railroads and other things.  And every African I have spoken with, told me that they’d much rather have this “win-win” cooperation and benefit from it, than to have representatives of the EU coming to Africa, making Sunday sermons and talking about human rights, but giving no infrastructure.

Now, the question is asked many times: Can China be trusted? Well, judge for yourself:  How do you think it was possible that China was able to realize an economic development in 30 years — the world famous Chinese economic miracle — which normal countries in Western Europe and the United States needed 150-200 years to accomplish?  How do you think it was possible for China to go from extreme poverty in the time of the Cultural Revolution, to transform the life for 600 or even 800 million people into a relatively decent living standard?  Well, with the New Silk Road, China intends to overcome all remaining poverty in the inner regions of China as well.

The key to this is the Confucian tradition in China. Now, I can sort of connect that with my own life story, or life experience, because I went to China for the first time in 1971, and that was in the middle of the Cultural Revolution, and therefore,  I have a firsthand experience and knowledge of how poor the Chinese people were.  And during the Cultural Revolution there was a vicious attack on Confucianism.

Then, I went back 25 years later, in 1996, with the proposal of a Eurasian Land-Bridge and the New Silk Road, and I participated in a big conference in Beijing.  And already then, you could see the result of the reforms of Deng Xiaoping, who had started to reintroduce Confucianism, which after all, had been the state philosophy of China for 2,500 years.  And recently, last year, I went again to China two times and I was absolutely stunned by the even bigger development of the last 20-30 years, where people were just extremely optimistic, and happy, and really having a good idea about their own future.

Now, the idea of Confucian philosophy, which by the way, I believe by now are in the genes of the Chinese people, means that society must have harmonious development.  It must be based on the key concepts ren, which in English you would translate as “benevolence,” or agapë, which means the society has to be directed towards the common good of all the people. And it must be based on li, which means that each nation and each person should fulfill its place in the best possible way, and develop its fullest potential.  And if all nations and all people develop the best of their capacities, then you have harmony in the society at large.

There must be the rule of the wisest and the most moral persons.  There is the idea of a Mandate of Heaven, which means the government has to follow higher rules than just the ordinary daily requirements, but must be guided by some kind of a cosmic idea.  And if they don’t have the Mandate of Heaven any more, they must be replaced by the wise, the Chun-Tzu, the noble sages.

Now, with Xi Jinping, I think China in particular has a leader whose policy is fully based on Confucianism, and I can only encourage you to read his speeches, which are absolutely fascinating, speeches which he makes when he travels to India, or to other countries, to Europe, to France, to Germany, where he always, not only evokes the Confucian tradition of China, but also relates to the best traditions of the country he is visiting.

Some of the quotes of his speeches reflect a tremendous optimism. “

So, I think the Chinese notion of “Made in China,” in this period being replaced by “Created in China,” meaning, China is not only producing, but China is innovating; China is developing new technologies, and turning them into the most advanced products in the world.  China is in the process of moving to become a completely innovation-based economy, and that is the idea that the only real source of wealth is the creativity of their own people.  The Chinese Dream is the idea to create a better future for the whole society, based on the fullest development of the creative potential of every individual in society.

Now having worked with my husband Lyndon LaRouche for over 40 years, I can say that China right now, represents the closest approximation to what Mr. LaRouche calls “the physical economy, based on the identity of mankind as the only creative species.” The New Silk Road simply means that to make the Chinese economic miracle available for all other nations who participate in this Chinese Dream, by developing their own potential, in their own mutual interest and benefit.

Xi Jinping said at a certain point, “even if there are vast oceans between China and Latin America, they are still connected in the heart and the soul, and they should have the common pursuit of their beautiful dreams together.” And that is exactly what is now on the agenda, with the transcontinental railway. And as probably Admiral Zhou Man in the 15th century brought his fleet to the shores of Peru and brought  important technologies to Peru, let all the people of Peru today be inspired about the building of the transcontinental railroad, as the beginning of the transformation of the entire Latin American continent.

Let me end with a quote from Confucius, who always encouraged especially the young people to have the courage to innovate.  He said:  “Young people should have the willpower to cut paths through the mountains and build bridges over rivers.” And that is exactly the spirit which will enlighten the building of the transcontinental railroad and it will be the promise of a new era for all of mankind.

Raffaello Pantucci, Research Director at the Royal United Services Institute (RUSI) in London, has come out with a strong endorsement of Europe’s seizing the chance for grand economic cooperation with China along the New Silk Road in the European Observer journal.    

Pantucci writes that China will be a good and reliable partner for Europe, because the Silk Road project is a priority on the agenda of the Chinese foreign policy now. Pantucci says:   

On Monday and Tuesday of this week, foreign ministers and then national security advisors from the five BRICS countries met in Moscow, to update plans for the July 8-10 heads- of-state summit in Ufa, Russia. The Tuesday meeting of the security advisors broadened the BRICS collaboration to subsume common security issues, including the fight against terrorism, drugs, organized crime, separatism, and ethnic conflicts. One major topic of discussion was the use of speculative capital to target vulnerable nations for destabilization.    

At the same time that the preparations for the July summit were advancing, a leading Chinese specialist in China-Russia cooperation, Dr. Li Xin, was pressing in an interview with dialogi.su for inclusion of Russia’s Trans-Siberian Railroad in the overall New Silk Road development plans. Dr. Li emphasized that the development of Northeast China and adjacent areas of Korea and Russia will mean that the modernization of the Trans-Siberian Railroad will be an instrumental part of the Eurasian development and transportation corridors.    

Dr. Li described a letter he wrote last December to Vladimir Yakunin, head of the Russian Rail Corporation, emphasizing that

The drive for the New Silk Road was also the front-page theme of Chinawatch, the monthly supplement to the Washington Post, produced by China Daily. Under the banner headline “President Xi turning a new leaf for China,” the full front page was taken up with a report on Xi Jinping’s book Xi Jinping: The Governance of China, a collection of 79 essays, interviews, and directives by the Chinese President. The coverage focused on his New Silk Road initiative. The book, which was released last October at the Frankfurt Book Fair, has already sold 4 million copies, including 400,000 outside of China. The book has been already translated into English, German, French, Russian, Arabic, Spanish, Portugese, and Japanese.

Speaking at the London School of Economics (LSE) en route to the G7 meeting in Germany, U.S. Treasury Secretary Jack Lew called for a quick deal on Greece.  Asked whether he is optimistic about an agreement on Greece, he said he tries to be, but added that the situation must be resolved quickly.  To put it mildly, Lew is totally flipped out over the prospects of a worse-than-2008 systemic blowout that could easily be triggered by a collapse of the talks and a Greek default on its June 5 payment to the IMF.    

While Lew tried to appear calm, using bankers language, the message of panic was perfectly clear:

he said, indicating that he was sure Greece will be a key topic at the G7 meeting.    

According to the Guardian, Lew said the Greek situation is more stable than in 2012, because more of its debt is owned by sovereigns, but was quick to say,

This morning, Lew also spoke by telephone with Greek Prime Minister Alexis Tsipras, in which he repeated the same points made at the LSE. According to a Treasury Department statement, Lew told Tsipras that he “continues to monitor the evolving situation in Greece closely,” and remains engaged with all parties involved in the talks, and “continues to urge all parties to find common ground and reach an agreement quickly.” He said failure to reach an agreement would cause “immediate hardship for Greece and broad uncertainties for Europe and the global economy.”    

Now there are rumors flying that a “deal” could be signed very soon. Of course the real issue is the debt—will it be paid, or cut? This, no one is discussing.

The trans-Atlantic world’s financial press is ringing with cries about the “disappearance of liquidity in the bond markets.” Among many such complaints, one in the Wall Street Journal stands out because it tries to blame the ghost of Glass-Steagall as the cause.

Simultaneous central bank moves are occurring to accelerate “quantitative easing” money-printing, involving the European Central Bank and the Bank of Japan and IMF — out of fear of an imminent euro breakup.

Not just “regulation,” then, but the threat of resumed Glass-Steagall regulation, has brought the global secondary bond markets to the point of collapse? Criminal, universal-banking monsters, completely unregulated, are the only source of liquid capital markets?

The truth as to how — after injections by the central banks of $13 trillion in liquidity into the securities markets since 2009 — those markets now could “lack all liquidity,” is very different. Wall Street and the City of London always claim, when they are bankrupt and insolvent, that they are only “illiquid.”

The central banks’ quantitative easing or “QE” bubble has reached its top, and now has nowhere to go but down, fast. The clearest sign of this was the “shocking” announcement May 19 by ECB Board Member Benoit Coeuré, that the ECB will immediately try to accelerate its QE purchases in June beyond EU60 billion a month, to EU70-75 billion in June. While that QE program at first drove EU government debt interest rates down well into negative territory, taking corporate bond rates along, interest rates then suddenly rebounded sharply in May — not what the ECB expected.

This means the prices of these bonds in the secondary markets suddenly fell, throughout the month, and the ECB’s alarm bells went off. For seven years, central bank money-printing has dominated the secondary security markets worldwide, constantly increasing the prices (lowering the interest rates) of debt instruments held by banks and financial non-banks, and creating the speculators’ dream for those financial institutions: oceans of liquidity, and virtually automatic big profits.

If that run has now ended, a bubble of tens of trillions, printed by the central banks, is entering a stage of collapse. A Greek default “trigger” is just one possibility. So not only did the ECB decide to accelerate money-printing immediately. The IMF told Japan on May 22 that “BOJ needs to stand ready for further easing,” according to the Wall Street Journal.

Bank of Japan QE has for years been associated with bursts of hot-money investments in European sovereign and corporate bonds.