Strangely enough, after a two-and-half hour meeting on Feb. 9 between Angela Merkel and Mario Draghi, not a single item of information was given on the content. But one can safely assume that they discussed how to face the tsunami expected from Washington. The attack against the ECB by U.S. Trade Secretary Peter Navarro, who accused Draghi’s institution of manipulating the exchange rate, was just a foretaste.
Then came the resignation of Daniel Tarullo, the pro-Wall Street head of supervision at the Federal Reserve, while the chances for Thomas Hoenig, a strong supporter of Glass-Steagall, to take on the job look increasingly good. But it is above all the statements from Ted Malloch, mooted as possible US ambassador to the UE, that have spread panic in Brussels and Frankfurt.
With the Greek crisis back on the radar screen and the IMF again criticizing the EU austerity approach, Malloch has opined that Greece should have left the euro four years ago. In an interview with the Greek Skai TV network on Feb. 8, Malloch added that “Whether the eurozone survives, I think it’s very much a question that is on the agenda. We have had the exit of the UK, there are elections in other European countries, so I think it’s something that will be determined over the course of the next year, year and a half.”
Regardless of whether Malloch actually gets the nomination, he expresses the views of many in Trump’s team, and of the President himself. What will happen when the scenario which we have outlined in this newsletter, actually plays out, with the inevitable end of QE and the increase of rates on the Italian debt? Whereas in 2011 Italy was isolated and cornered, now Rome might find support in Washington. That is the nightmare of the Eurocrats. Thus, Draghi must have begged Merkel to ease German pressure on terminating QE, after he himself announced that the ECB is considering increasing monthly asset purchases from €60 to 80 billion. (In January, it even purchased 85 billion, increasing the total assets owned by the ECB to 1.6 trillion).
And Angela must have assured Mario of her backing, provided the ECB makes sure that Rome submits to EU “discipline”. The panic is particularly palpable in the City of London, the real beneficiary of the euro system. The Financial Times fretted on Feb. 9 that the Italian position on Trump is “in contrast to the more robust stance taken by France and Germany”. The City of EIR STRATEGIC ALERT n°7 / 2017 WEEKLY NEWSLETTER 3 London daily reports on a friendly phone conversation between Italian Prime Minister Paolo Gentiloni and Donald Trump, and gives two main reasons pushing Rome to distance itself from Paris and Berlin: the US-Russia dialogue promises to stabilize the Mediterranean, and Trump’s position on Europe could help Italy in view of the conflict with Brussels on the budget. If Italy does irritate other EU leaders, the FT warns, it could be marginalized, or even “punished”.
But it is more likely that the dinosaur-like trans-Atlantic elite will be punished for refusing to evolve. The White House Announces a War on Drugs, But It Needs to Target Drug Banks In a speech before the Major Cities Police Chiefs Association (MCCA) Winter Conference on Feb. 8 in Washington, Donald Trump announced a major war on drugs, to be directed by Homeland Security Secretary, Gen. (ret.) John Kelly. The next day, he announced a new Task Force, to be headed by the new Attorney General Jeff Sessions, a fierce opponent of Barack Obama’s drug legalization policies, “to focus on destroying transnational criminal organizations and drug cartels.”
This is the first serious call for combating the drug scourge since Lyndon LaRouche coined the term “war on drugs” in 1980. What is missing, however, in his strategy, is the stated commitment to crack down on the international banks that are laundering the drug money, which is the one cash flow keeping the international banking system afloat. In the Executive Order, there is only a brief mention of “corruption, cybercrime, fraud, financial crimes and intellectual property theft…” as activities to be combated, along with the “illegal concealment or transfer of proceeds derived from such illicit activities.”
The identification of the “too-big-to-fail” banks in London and New York as the headquarters of Dope, Inc., will also provide yet another motivation for the immediate re-enactment of Glass-Steagall, to stop the criminal money laundering and speculation which has brought the trans-Atlantic financial system to ruin. In his speech at the MCCA, Trump emphasized that “every child in America should be able to play outside without fear, walk home without danger, and attend a school without being worried about drugs or gangs or violence…. So many lives and so many people have been cut short… So much potential has been sidelined. And so many dreams have been shattered and broken, totally broken..It’s time to stop the drugs from pouring into our country”.
Indeed, although many Europeans may not realize it, the dimensions of the addiction problem in the United States are staggering. There is almost no community, no matter how remote, or family, which has not been at least indirectly affected by it. Deaths from heroin overdoses tripled in the 2008-2015 period, and the use of opioids (prescription drugs) has again doubled just since 2014. It was estimated in mid 2016 that 2.6 million Americans are addicted to opioids, and the highest rate of abusers is among young adults aged 18-25. Directly related to that substance abuse is the rise in mental health cases and in crime rates.
As Donald Trump pointed out, a group of police chiefs he had just spoken to said that 75-80% of all crimes they deal with are drug-related. He also pledged to address the mental health crisis by improving treatment of drug addiction, stressing that “prison should not be a substitute for treatment.” Given this tragedy, it is pretty sick to argue, as the Sorosfunded drug legalization lobby does, that “pot” is only recreational and that every person should have the right to decide on his “life style”. Former President Obama was notorious for doing less than nothing to stop drug trafficking, although the problem did not start with him. As the LaRouche organization has insisted since the 1980s, the solution is not to lock up single users or small-time traffickers, but to go to the top, and stop the money flows through the major international banks, such as HSBC. Failure to do so could be the Achilles’ heel of the new program
E.I.R.Strategic Alert, Weekly Review,
The Schiller Institute