-----Original Message----- From: Brian Lantz <[EMAIL PROTECTED]> To: Linda Minor <[EMAIL PROTECTED]> Date: Tuesday, July 06, 1999 11:24 AM Subject: Re: Fw: [CTRL] ime: Clinton Approves CIA Role >At 05:26 PM 07/05/1999 -0500, you wrote on Clinton's CIA role. Attached is >a recent compendium of developments - "slugs" mostly - on key developments > > -Brian > >
Briefing - July 6, 1999 (Compiled from July 1-6, 1999) Lead: THE OLIGARCHY SACRIFICES ITS OWN Look at the extraordinary treatment that Henry Kissinger received last week in -- of all places, London -- where is it reported that he walked out of one rather hostile interview in a rage, and he was reduced to laughing and spitting in the face of another interviewer. Among the questions posed to Henry -- who is being likened to a war criminal -- was whether he felt like a fraud. That this would happen to Kissinger, in London, is but one reflection of the turmoil now raging in the oligarchy; one section of the oligarchy recognizes that the global financial system is blowing up, and, realizing this, they are willing to sacrifice some from their own ranks, in order that they can continue to rule. They will slaughter their own. They know their system is blowing up; even to the extent that they publicly announced this in the pages of {Daily Telegraph} last week, which warned that the phase of low inflation is ending, and that very rapidly, as the bubble bursts, the system can shift into the phase of hyperinflation. This is a period of coups, destabilizations, and dictatorships. The question is thus posed: unless the world goes LaRouche's way, it goes the way of coup d'etat and dictatorship. That is the trajectory of the world financial system, which determines how it will behave. Either that system is overthrown and replaced, or it hurls the world into a New Dark Age. Exemplary of the current state of mind of the oligarchy, is the way they ran the Balkans war, and the way they are now determined to sabotage the peace. Look at the op-ed by former German Defense Minister Lothar Ruehl last Friday in the {FAZ}, entitled "A Half Victory," in which he pointed out the failure of the air war against Yugoslavia to inflict anywhere near the amount of damage which was being claimed. Ruehl described a situation of total incompetence by NATO -- in which one can only conclude that the lunatics are in charge. These are the "Sorcerer's Apprentices" playing out their role. What then was the aim of NATO's war? What did NATO do? The only bombing that was "effective" was that which targetted the civilian infrastructure of Yugoslavia. The objective was to destroy the infrastructure of the Balkans region, spread destruction and chaos into Russia and Central Asia, and into Western Europe as well. The aim is to bring down the European economy. What the oligarchy is carrying out, is a Dark Age strategy. That is their intent. This is a Guelph-League strategy. They want a planetary dark age, they want to eliminate the nation-state, and to eliminate what they regard in their evil minds as "over-population." Look at how much money was spent to conduct the war, but now, they won't spend anything to shape the outcome of the war, and to guarantee a stable peace. Billions for war, but not a penny for peace! The oligarchy wants to destroy -- it doesn't want to build. And don't believe any of the b.s. about "democracy," that if Yugoslavia "democratizes," then it will get reconstruction money. The people claiming this, are the same people that are working to keep Milosevic in power! And, speaking of Henry Kissinger, that brings us to the case of Susan Rice, the U.S. Assistant Secretary of State for African Affairs, who recently gave a confession reminiscent of Kissinger's 1982 Chatham House address, the one in which he divulged his own British pedigree. Speaking at Rhodes House at Oxford University on May 13, Susan Rice gushed that coming back there, after nine years, was like coming home. Nine years ago, she recalled, she spent much of her time in the library at Rhodes House, and she went on to reveal that "much of what I know about Africa was discovered within these walls, refined at this great university, with the generous support of the Rhodes Trust." Contrast this with the speech given by Zimbabwe's President Robert Mugabe -- who, in effect, told the IMF to shove it. Mugabe attacked the conditionalities of the IMF, which he called "this creature," and he said that Zimbabweans are a proud people. "We will strive to go our own way," Mugabe declared. "The IMF can go away if they want." By the way, we have heard from high-level Japanese sources, that the Japanese financial balloon will stabilize only when it reaches a geo-stationary orbit. So, the system is coming down. The only issue is, does it collapse of its own accord, dragging the world into a new Dark Age of disease and warfare, or will it be brought down in an orderly way, to be replaced by LaRouche's New Bretton Woods design and global reconstruction. That shouldn't be a difficult choice, should it? LEADING DEVELOPMENTS [Sources: Moscow insider; British press, mainly London <Guardian> magazine, July 1] WIESBADEN, July 5 (EIRNS)--IS KISSINGER ABSENCE IN MOSCOW LINKED TO ROUGH TREATMENT HE RECEIVED IN LONDON? A Moscow source reports that, over the past weekend, there was a meeting in the Russian capital, of prominent "former foreign secretaries." Yevgeni Primakov was there from the Russian side, and there were top figures from India, Britain, Japan, various European countries, etc. A notable absence was that of Henry Kissinger, who sent a message to the conference, but said he could not personally attend, because of "bad health." The relevant circuits are abuzz with another explanation, namely that Kissinger was recovering from some nasty run-ins last week in, of all places, London. Indigestible Henry arrived in London over the June 26-27 weekend. On June 28, he gave an interview to the Hollinger (on whose board of advisers he sits) {Daily Telegraph}, pontificating on the situation in the Balkans, and praising the British for loving to fight wars. But then, on the night of June 28, troubles began. He appeared on BBC's "Start the Week" radio program, interviewed by host Jeremy Paxman. What happened, was synopsized in a July 1 London {Guardian} feature on Kissinger: "He has had a tough week.... Paxman, at his belligerent best, seemed to unburden himself of a quarter century's worth of suppressed bile. It was a pummelling more than an interview. In short, Paxman asked how a man could accept a Nobel peace prize after being responsible for bombing the life out of a neutral country (Cambodia), for extending a war well beyond the necessary (Vietnam), and for destabilizing a democratically elected Marxist government (Chile)? Didn't he feel a fraud?.... Over the past couple of decades, Kissinger has grown more and more unpopular, so much so that a mainstream radio program can treat him as something approaching a war criminal." {Guardian} writer Simon Hattenstone claims that Kissinger lost his temper so badly on the Paxman show, that he "walked out in a rage." This has been denied by Kissinger, as well as by the Paxman show itself, but EIRNS is further looking into the matter. The {Guardian}'s Hattenstone interviewed Kissinger, and begins the account of the interview by reporting Henry freaking out, because Hattenstone asked for two hours interview time, an amount which Kissinger never grants: "Henry Kissinger is laughing at me in disbelief. Laughing in my face. Spitting in my face, actually. I surreptitiously wipe away the spray from my cheek, and tell him I'll be more than happy to make do with an hour. It's the last time I see Dr. Kissinger laugh." The {Guardian} text is then filled with many other derogatory characterizations of Kissinger, as "pompous," and so on, and Hattenstone follows up Paxman's question, whether Kissinger admits to being a fraud? The one big "catch", is that Kissinger is described as "the unacceptable face of American imperialism," and his love affair with Great Britain, as epitomized in the May 10, 1982 speech to Chatham House, is never alluded to. (mjb) [Source: AFP, 7/5/99]: ZIMBABWE PRESIDENT MUGABE CALLS IMF `THIS CREATURE' IN SPEECH AT NKOMO'S FUNERAL. Zimbabwe President Robert Mugabe used the occasion of the funeral of independence fighter and leader Joshua Nkomo to excoriate the IMF, which has again refused to release its promised monies to Zimbabwe, which is not in arrears in debt payments. According to AFP, Mugabe attacked the IMF for imposing conditions on its loans, and called the IMF "this creature." He said that Zimbabweans were a proud people who would not take orders from others. "Nkomo goes to the grave a proud man. We will strive to go our own way. The IMF can go away if they want. The struggle continues." [ldh] [Source: Financial Gazette, Harare, 7/5/99]: IMF REFUSES AID PACKAGE BECAUSE ZIMBABWE GOVERNMENT SEEKS TO AVOID FOOD SHORTAGES. Millers are refusing to release maize-meal, "mealie-meal," the basic staple, because the government price is too low to even pay for production. The government raised the price to producers but will keep the regular price for consumers. "Any action by the government to extend price controls by controlling the price of bread will not be consistent with the economic program that the government has presented to us" to qualify for IMF funds, intoned Micheal Nowak, assistant director at the IMF's Africa Desk. "That will not be appropriate action by the government, and it certainly would cause considerable problems for the new program the IMF is working on," he said. [ldh] [Source: AFP, 7/5/99]: SOUTH AFRICA TRADE MINISTER ALEC ERWIN CALLS G7 DEBT POLICY CRIMINAL. Speaking at an economic summit of southern African political and business leaders, Alec Erwin declared that for the Group of Seven "to be cautious on debt is criminal. It's criminal." Erwin was responding to castigations from U.S. Deputy Commerce Secretary Robert Mallett that the SADC must erase all barriers to free trade regionally. "The global economy is here, and unlike Europe, you don't have 40 years to get your act together," the "ugly American" said. "Erwin answered: "In Mozambique, Zimbabwe, Zambia, how can we do projects in public-private partnerships when the sovereign risk is so massive because of debt? If we want to build southern Africa, G7 can help, but not by preaching to us about governance, but by taking debt off the books so we can have genuine public-private partnerships." [ldh] BALKANS RECONSTRUCTION FIGHT WIESBADEN, July 3 (EIRNS)--THERE WILL BE NO REBUILDING SAYS UNHCR; WE'RE BROKE. Today's Guardian quotes Dennis McNamara of the UN High Commission for Refugees (UNHCR), saying, "I find it quite incredible, after a hugely expensive conflict in Europe, that we have to keep on saying `We haven't got any money.'... We're just about bankrupt in terms of cash flow. "We're asked to coordinate complicated returns throughout devastated territory, and we're constantly looking to see whether we can afford to do it ... that is no way to run an operation." After noting that 500,000 people have returned over the last three weeks, the Guardian concludes that "as a last resort" the UNHCR may be forced to stop repatriation, owing to the lack of funds for the most basic supplies such as plastic sheeting, timber and blankets. Officials in Helsinki told the Guardian that funds for the Eurpean Agency for Reconstruction would be "ready in October," which is far too close to the onset of winter. [klk] [Sources: NYT, July 3; Itar-TASS, AFP; Ivashov in Nezavisimaya Gazeta 6/25 via FNS] July 3--INTENSE NEGOTIATIONS OVER DEPLOYMENT OF MORE RUSSIAN TROOPS INTO KOSOVA. The {New York Times} makes its lead story today, a report on fevered NATO efforts to keep Russia from reinforcing its contingent of the international peacekeeping forces in Kosova. According to the report, Russia sought permission to cross the airspace of Hungary, Romania, or Bulgaria, but was denied. Secretary of State Madeleine Albright was on the phone with Foreign Minister Igor Ivanov, reportedly to demand delay in the dispatch of Russia's up to 3,600 troops, until more details of their deployment are agreed. Disputes are surfacing, about what the command structure will be. NATO SACEUR Gen. Wesley Clark is quoted in the {Times}, that "unity of command" is sacrosanct, while Russian Defense Ministry official Gen. Col. Leonid Ivashov has continued to stress that "our contingent in Kosova will be under complete political and military control of the Russian command." Ivashov also stated, in his interview to {Nezavisimaya Gazeta} on June 25, that "Russia's position in Kosova will not be a fixed one; it will change, depending on the situation. This allws us to expand the zone and change the geography of our zones." Today, Itar-TASS wires report Russian study of options to bring their KFOR troops in by sea rather than air, using Black Sea fleet vessels. Interfax yesterday, according to AFP, cited military sources on the impending sailing of three ships from Sevastopol, bearing military personnel and supplies to Kosova. Airborne Forces commander Georgi Shpak said that more ships would set sail from Tuapse, also on the Black Sea, on July 7 with 300 paratroopers aboard. [RBD] [Source: The New York Times, letter to the editor; Washington Times, 7/4/99. Atlanta, Washington]. July 4--REFLECTING THE ENVIRONMENT IN THE BALKANS, the president of CARE International, Peter Bell, announced that that organization has suspended its operations in Serbia, since the safety of its staff can no longer be guaranteed. In May, the Milosevic government convicted three CARE humanitarian workers for allegedly passing on secret information to a foreign organization, namely CARE, Bell told {The New York Times} in a letter to the editor.[filed, crr] [Source: Washington Times, 7/4/99. Washington] July 4--ANY BALKAN RECONSTRUCTION PLAN MUST `EVENTUALLY' INCLUDE SERBIA, said Pertti Torstila, director general for political affairs at Finland's Foreign Ministry, during a trip to Washington this past week. ``If we leave a black hole of that size in the middle of the region, we will have a big headache for years to come,'' he said. Finland is about to begin its six-month term as president of the European Union, and Torstila was in Washington to work out the details of his government's EU agenda. He said that Finland's priorities for the EU agenda through the end of 1999 include Balkan reconstruction, relations with Russia, improving European security and defense capabilities, and the Middle East. Torstila emphasized that Finland {would not} move forward on the issue of aid to Yugoslavia, without the full consensus of the EU's 15 member-nations. He did call for suspending ``war related'' sanctions against Belgrade, however, such as oil, and air travel blockades. [filed, crr] [Source: Corriere della Sera July 1] July 1 -- ITALIAN FOREIGN MINISTER DINI: SERBIA IS MORE DESTROYED THAN KOSOVO. Italian Foreign Minister Lamberto Dini was yesterday in Kosovo, where he delivered polemical statements to the press to the effect that Serbia is much more destroyed than Kosovo and deserves reconstruction aid. "By flying in helicopter over Kosovo last week," Dini said, "I realized that it is less a disaster than what it is feared. Sometimes it looks like the Po [River] plain [in Italy], with crops growing beautifully. The territory is ordered, a few houses are destroyed. The real problem for reconstruction is Serbia. Kofi Annan himself said that we must rebuild water and electrical infrastructure of Serbia, and I do not see how we deny the Serbs the gasoline they need for their tractors, nor how we can keep sanctions". [ccc] WIESBADEN, July 1 (EIRNA)--REBUILDING THE BRDIGES `OUT OF THE QUESTION' SAYS EUROPEAN COMMISSION'S TOP AGENCY FOR RECONSTRUCTION. In a background discussion with this news agency, a highly-placed British official in the European Commission, whose name we are not authorized to cite, expressed remarkably candid views of what London will, and will not have happen, in the Balkans. Q - What role is the European Commission playing, relative to the US or member states as such ? A - The US Agency for International Development can come in, bilaterals can come in, but it is going to have to be clear that it is [the European Commission--klk] which is the lead organization in Kosovo. Q - The Danube region is on the verge of collapse. Are there plans to clean up the mess ? A - Fixing the bridges over the Danube is out of the question! It would cost 10 billion euros. We don't have it. Nobody is going to come up with that kind of money. When Serbia does come on line, maybe. But we're going to follow the political line of the US on this. The other member states will never give us the resources for this. You can't spend money on destroying a regime and then feed it back up again!" (laughs) The whole role of the Danube is over-estimated. There is no reconstruction exercise we can do which will change the parameters we're in. Q - What about what Koffi Annan said on Serbia on Monday? A - (Laughs) What Koffi Annan says ... well, I'd just say the UN is not a political structure. It's we at the Commission who have contractual relations with Eastern Europe. So far as Serbia is concerned, we'll repair the water supply, that kind of thing, but that's it. Q - Kosovo is not a separate country. How are you going to work it, from the standpoint of law ? A - We'll be working on this with the World Bank. Bretton Woods will have to come up with a financial system. Kosovo's cut off. It has no central bank, no state banks to speak of. We'll have to import a whole new financial system. Bosnia will be the model. Q - Bosnia ? A - (Laughs) Westendorp, King of Bosnia! He's King, isn't he ? Wouldn't you agree with that? He bangs on the table, and they vote up a law. He tells them to change their flag and they change their flag. ESFOR has built their barracks in Bosnia to last for 50 years, and that's what it'll take. It's going to be the same in Kosovo. The looting and terrorizing of Serbians in Kosovo is going on right under NATO's eyes. Don't you think they could stop it if they wanted to ? But they don't. Because the best thing that could happen to Kosovo is reverse ethnic cleansing. The Serbs should get out. That's the best solution. Q - I see you have a brilliant career in diplomacy ahead of you! A - (Laughs uproariously, chewing on something). Yup! That's why I chose to be on the economic side of things! [klk] [Source: ANA, July 1] WIESBADEN, July 1--GREECE AND TURKEY SHOULD COOPERATE IN THE RECONSTRUCTION OF THE BALKANS, Greek Foreign Minister Papandreou said after a meeting with Turkish Foreign Minister Cem in New York yesterday. The two diplomats had come to New York for a session of U.N. General-Secretary Annan's new initiative, "Friends of Kosovo" (which includes China, as well), and their discussion touched upon many areas of mutual cooperation, for example, in the fight against drugs and terrorism. "We also decided that we must strengthen our cooperation at a multipartite level, particularly in the Balkans and the Black Sea," Papandreou told journalists about his meeting with Cem. "Specifically for the Balkans, in the framework of the Stability Pact, the two countries could cooperate on issues concerning the reconstruction of the Balkans, and on this issue in particular, our two business communities must cooperate," he said. (rap) U.S. POLITICS [Source: "Retirement Life," July 1999, magazine of the National Association of Retired Federal Employees (NARFE); FEC Website (www.fec.gov). LAROUCHE LISTED AS ONE OF 12 (3 DEMS) LEADING PRESIDENTIAL CAMPAIGNS BY FEC. Lyndon LaRouche's presidential campaign is listed as one of 12 "selected" presidential campaigns on the official website of the Federal Election Commission. This is picked up in the July issue of {Retirement Life,} the monthly magazine of the National Assn. of Retired Federal Employees (NARFE), in its first in a series of reports on the national elections for November 2000. LaRouche is listed by the FEC as one of only three Democrats and nine Republicans. Gore and Bradley are the other two Democrats. The Republicans are, alphabetically, Alexander, Bauer, Buchanan, Bush, Dole, Forbes, McCain, Quayle, and Bob Smith. The NARFE article states: "There are 131 declared and potential candidates for President of the United States. This is twice as many as the same time frame prior to the 1996 elections. Twenty-six candidates have formally announced their candidacy, 60 have filed papers with the Federal Election Commission, and six have stated they have decided not to seek office; others have formed exploratory committees, are the focus of draft plans by various groups, or are being seriously discussed by media and political organizations as possible candidates. "The Federal Election Commission has selected the following dozen candidates and posted this list of their principal campaign committees and treasurers on their web site. "As this list changes during the primaries, we will narrrow the field and provide more information. Future reports in the series will detail the primary calendar. Suggestions gratefully accepted." Amelia Robinson subscribes to the magazine and faxed the article to Leesburg, saying how proud she is of LaRouche! [mw_] [Source: Arianna Huffington syndicated column, Washington Times, June 30, page A17]. DEMOCRATIC REPS. JESSE JACKSON, JR., AND TONY HALL SUPPORT AFRICA ANTI-AIDS BILL AGAINST GORE. "The reasons why Mr. Gore tried to get Mr. Mbeki to acquiesce to the drug companies," writes Republican columnist Mrs. Huffington, "are chillingly laid out in next month's {American Prospect} magazine. John B. Judis exposes `K Street Gore's interlocking directorate' of aides, friends, advisers and lobbyists, moving seamlessly between the pharmaceutical industry and his inner circle. Among them are Anthony Podesta, a top adviser and friend of Mr. Gore, and one of the Pharmaceutical Research and Manufacturers of America's chief lobbyists; Mr. Gore's chief domestic policy adviser David Beier, who was previously the top in-house lobbyist for Genentech; and Peter Knight, Mr. Gore's main fund-raiser, who made $120,000 lobbying for Schering-Plough. (According to Public Campaign, Mr. Gore has helped raise at least $1.4 million from drug companies during the course of his career.) With all of this crossover, a drug to loosen Al up on the campaign trail can't be far off. "It is no wonder that the African Growth and Opportunity Act, sponsored by Rep. Phil Crane, Illinois Republican, with the full backing of the President and the Vice-President, does not even mention the AIDS crisis. Fortunately, Rep. Jesse Jackson, Jr., Illinois Democrat, has introduced a competing bill that would prevent the United States from applying sanctions on South Africa and other sub-Saharan nations that are attempting to make AIDS drugs widely available. `American drug companies want some of the poorest people in the world to pay U.S. market prices for drugs,' Mr. Jackson told me. `But AIDS drugs can cost $500 per week -- which happens to be the annual per-capita income of sub-Saharan Africa.'" "One indication that the Jackson bill is gaining steam, is the fact that Rep. Tony Hall, Ohio Democrat, who originally co-sponsored both bills, has now decided to support Mr. Jackson's. `It is the better bill,' he told me. `The White House called me and asked me to suport Mr. Crane's, but it puts trade above all other humanitarian concerns.'" [Mrs. Huffington does not mention that Rep. Tony Hall is a close friend of the President.] "The Vice President's office says it is trying `to help AIDS patients by making sure drug companies maintain profit levels to develop new AIDS medications.' "But what good are AIDS medications if they can't get to the people with AIDS?..." [ap] OP-ED BY HAROLD JAMES WILL MILLIONS DIE IN SOUTH AFRICA BECAUSE OF AL GORE'S POLICIES? JUNE 30, 1999 Disturbing reports have come to public attention recently, concerning the apparent role of Vice President Al Gore in denying affordable AIDS medications to the people of South Africa. "It's hard to appreciate the horror of the situation," said Jamie Love of the Center for the Study of Responsive Law. "Millions of South Africans will die because of what Vice President Gore has done." Why would Al Gore take actions, which would unnecessarily increase the suffering and deaths from AIDS in Africa? Groups like the coalition AIDS Drugs for Africa, the Center for the Study of Responsive Law, among others, have documented the following facts: 1. AIDS represents a massive national emergency in many African countries, where the disease is spreading rapidly due to poverty, lack of proper sanitation, overcrowding, unsanitary medical conditions, lack of education, etc. In South Africa, it is estimated that 20% of pregnant women are HIV-positive, along with 45% of members of the military and 20% of all young people. At least 3.3 million, and possibly as many as 6 million people out of a total population of 40 million are infected. 2. The prices charged by multi-national pharmaceutical companies for AIDS medications are far beyond the reach of African nations. 3. Although sub-Saharan African nations account for 70% of the world's new HIV cases and 80% of all AIDS deaths, less than 1% of AIDS drugs are sold there. 4. In 1997, the government of South Africa passed legislation allowing the domestic production of generic versions of AIDS drugs, and the purchasing of cheaper types of AIDS drugs on the world market. The law also requires a reasonable fee to be paid by domestic producers to the drug companies which hold the patents. The pharmaceutical industry is worried that if South Africa and other Third World countries go ahead with these plans, their ability to charge vastly inflated prices back home in the U.S. may be undercut. While AZT, for example, can be purchased on the world market for 42 cents for 300 mg, it retails in the U.S. for nearly $6 a pill. 5. Under pressure from U.S.-based pharmaceutical companies, the United States government has retaliated by pressuring South Africa to suspend this law and imposing sanctions, such as placing the country on a "watch list" and denying it special tariff breaks on its exports. As a result, the South African law has not been implemented. 6. As U.S. head of the Commission on Binational Relations with South Africa, Al Gore is the one responsible for this policy. Gore made a point of pressuring then-South African Deputy President Thabo Mbeki on this issue in their meeting last August. At the end of April, Gore increased the pressure by ordering a special full review of South Arica's trade policies. James Love, of the Center for the Study of Responsive Law, and other Aids Drugs for Africa coalition members explain Gore's attitude by pointing to the tens of thousands of dollars contributed to his campaign so far by the pharmaceutical industry. They point out that several of Gore's top advisers and fund-raisers are also lobbyists for major drug companies. They charge that Gore is willing to see millions of Africans suffer and die prematurely, in order to attract more money to his presidential campaign. Even more troubling, supporters of Lyndon LaRouche's Democratic presidential campaign point to Gore's 1992 book "Earth in the Balance," where Gore claims that "overpopulation" is the greatest threat to the global environment. They say that propaganda about alleged "overpopulation" in Africa and other "non-white" areas is nothing but a cover for genocide, promulgated by those who would welcome millions of deaths from AIDS in those parts of the world. Indeed, in his book, the countries that Gore singles out as the most "overpopulated" are Nigeria, with about 300 people per square mile; Kenya, with 128 people per square mile; and Egypt, with 168 people per square mile. Gore writes, "it is truly frightening to imagine the impact of doubling or tripling their numbers." However, while Gore is frightened at the idea of doubling or tripling the numbers of black people in these African countries, he seems unconcerned with the numbers of people in the developed European countries of Belgium, with about 868 people per square mile; the Netherlands, with 976 people per square mile; or Germany, with 610 people per square mile. These European examples seem to show that a large population, but one that is also well-educated and allowed to develop modern industry and technology, is one of the things that goes along with a strong, prosperous nation. The problem in Africa, contrary to Mr. Gore, is underdevelopment, not "overpopulation." Recently, Rep. Jesse L. Jackson, Jr. (D-ILL), introduced an African development bill, which, among other things, would prevent the U.S. from applying sanctions on South Africa and other sub-Saharan nations that are attempting to make AIDS drugs widely available. "American drug companies want some of the poorest people in the world to pay U.S. market prices for drugs," Jackson said. "But AIDS drugs can cost $500 per week, which happens to be the annual per capital income of sub-Saharan Africa." If we want to see Africa saved, if we want to see her prosper and develop, if we are truly a moral nation, then the United States should reverse its unconscionable policy of denying affordable AIDS drugs to South Africa. Otherwise, Vice President Al Gore will have a lot to answer for. ------------- Source: Los Angeles Times (Reuters), The Dallas Morning News, internet version, 7/4/99. Austin, Los Angeles] July 4--AN ISSUE IS BEING MADE OF GEORGE W. BUSH'S SERVICE IN THE TEXAS AIR NATIONAL GUARD during the Vietnam War, in which he reportedly received ``highly favorable treatment and uncommon attention.'' According to the {Los Angeles Times}, George W. received ``an instant commission'' as a second lieutenant and went directly to pilot training, after completing basic training. ``Although getting into the state units was difficult for most others, George W. Bush was soon in the Guard.'' The {Dallas Morning News} adds on the same story that Bush showed ``below-average potential as a would-be flier, but scored high as a future leader.'' Bush's score on the pilot aptitude section of the test for pilot trainees was in the 25th percentile, ``the lowest allowed for would-be fliers,'' the {News} reports. The article quotes Ralph J. Ianuzzi, the Air Force captain who signed Bush's score sheet, who remarked ``that score for pilot seems low. I made that, and I'm dyslexic.'' Douglas W. Solberg, who served with Bush, was quoted in the {News} that being in the Guard ``was a cushy way to be a patriot.'' Bush was supposed to serve in the Guard until May of 1974, but was allowed to leave in October of 1973 to attend Harvard Business School. [filed, crr] [Source: Boston Globe 6/30/99 by Frank Phillips] GORE STRATEGY OF BREAKING WITH CLINTON THREATENS TO UNRAVEL HIS CAMPAIGN. "Gore Losing Grip on Bay State, May Want to Rethink Strategy" is the headline of a Boston Globe article which analyzes Gore's faltering campaign in the Bay State (Massachusetts), and strongly suggests that Gore's break with Clinton is a strategic mistake that will play out nationally. The article cites a new survey taken by the University of Massachusetts that shows former U.S. Sen. Bill Bradley has pulled even with Gore in Massachusetts, with Gore at 37.9 percent, Bradley at 34.6 percent and 10.3 percent undecided. This contrasts sharply with Gore's standing only two months ago in a similar U. Mass. poll, where he led Bradley by 14 percent. The article notes that "what may be unsettling for Gore is that his slip comes as Clinton's standing among Bay State voters has jumped 10 percentage points since the Kosovo victory." One of the poll's designers quoted said that Gore seems to be in a "free fall" and that the results raise questions about Gore's strategy of separating himself from Clinton. Although the U. Mass. poll does not square with recent national polls that show Gore with a much stronger showing over Bradley, the poll's designer, Lou DiNatale, senior fellow at the U. Mass. McCormack Insitute, said that his survey may have picked up an early trend that spells trouble for the vice president and his strategy to distance himself from Clinton. "One of the fundamental assumptions of the Gore campaign is that if he separates himself from Clinton, he should gain in the polls. But with Massachusetts so pro-Clinton, there may be a downside to the strategy that the Gore campaign has not fully thought out." The Globe asks: "Has Gore made a strategic mistake that will play out nationally for him?" [MJM] [Source: Daily Telegraph, July 3, 1999] `DESPERATE GORE PUTS CAMPAIGN ON RED ALERT,' is the headline in today's London Daily Telegraph on Vice President Al Gore's response to the announcement that George W. Bush has raised over $35 million for his Presidential campaign. They also report that former Sen. Bill Bradley (D) has emerged with support from senior Democratic senators, allowing Bradley to "emerge as a dangerous anybody-but-Gore candidate." The DT goes on: "Mr. Gore, whose leaden style makes some Democrats fear he is unelectable, claims to be unruffled," according to one of Gore's staff. Gore has brought on Carter Eskew, a political publicist and old friend to help run the campaign. Eskew is known to have helped the tobacco companies campaign successfully defeat the anti-smoking legislation which Gore himself had supported. Eskew apparently is an old enemy of another Gore campaign adviser Bob Squier and the DT claims that "having the two of them on the same team is a desperate move by Gore." The article concludes, "If Mr. Gore loses an early primary, the Democratic establishment could easily wash its hands of him and support Mr. Bradley. Even if he narrowly beats Mr. Bradley, it would be damaging." [dea] July 5 (EIRNS)--MIDWEST RACIST SHOOTER BELONGED TO A GROUP SPAWNED BY THE CANADIAN SECRET SERVICE. The latest saga of "blind terrorism" may have been a real blunder, in that the BAC murderers pulling the strings have left a blatant trail to themselves. A man identified by the FBI as Benjamin Nathaniel Smith, suspected of killing a black man and a Korean-American, and wounding orthodox Jews, had shot himself to death while being chased by police. (Radio reports said Smith supposedly shot himself three times.) Smith's shooting episodes began Friday, July 2 in Chicago and ended Sunday with Smith's death in Salem, Illinois. The Associated Press and other news agencies said Smith was a member of the "World Church of the Creator" -- a racist group brazenly manipulated, and in effect re-created, by the Canadian Secret Intelligence Service (CSIS), Canada's domestic intelligence agency. Canada's intelligence services report directly to Britain's secret services and to Queen Elizabeth II. A July 5 Reuters wire said, "Smith was formerly a student at Indiana University in Bloomington and until recently passed out hate-filled literature on or near the campus for the East Peoria, Illinois-based World Church of the Creator." Sometime before his terrorist attack this past weekend, Smith had been "talked to" by the Bloomington police about his activities on behalf of the "Church," according to Bloomington Police Captain Bill Parker. The "Church of the Creator" is a sub-entity of the Heritage Front, Canada's main organization of neo-Nazis. Heritage Front burst into the headlines in Canada in 1994 when it was revealed that Grant Bristow, an informant paid a $50,000 yearly stipend by the CSIS, founded and funded the Heritage Front, and led it into violence. In one infamous incident, a computer containing names of members of the "Church of the Creator" and the Heritage Front was stolen from the "Church." According to an affidavit by Heritage Front leader Wolfgange Droege, CSIS agent Grant Bristow told "Church" security director Eric Fisher that a certain member had stolen the computer. Fisher, a Canadian airborne special forces veteran, forcibly detained and beat up Bristow's suspect. After the victim, Tryone Mason, went to the police and Fisher was charged with kidnapping and assault, Bristow warned Mason to drop the charges, according to Mason's affidavit. "Church of the Creator" is said to have been founded originally in the early 1970s by one Ben Klassen, who grew up in Canada but moved to the U.S. and became a Florida state legislator. During 1992, South African police spies revealed they had been ordered to join and use the "Church" for recruits in an undercover war against the African National Congress. In the U.S., the Southern Poverty Law Center filed suit against the "Church," driving it towards bankruptcy and the 1993 suicide of founder Klassen. The Canadian secret service and army uses of the group, of which we have record, occurred during this chaotic and increadingly leaderless period of the "Church"; the reorganized "Church" had become an "affiliate" of the Heritage Front. After the Toronto {Sun} and {Globe and Mail} broke the story that Grant Bristow had "co-founded" the Heritage Front, Canada's Security Intelligence Review Committee held hearings on the Heritage Front affair. This official British Commonwealth review body mildly criticized Bristow and the CSIS, but praised the CSIS for maintaining "active" agents in racist groups -- supposedly to avert racism and violence. The nominal leader of the Heritage Front, Wolfgang Droege, immigrated to Canada as a teenager from Germany in 1963. Droege went to jail for his part in a 1981 secret-services-backed scheme of Canadian and U.S. racist mercenaries to overthrow the government of the Caribbean island of Dominica. After another U.S. term for cocaine trafficking, Droege returned to Canada and was asked by CSIS agent Bristow to create Heritage Front using Droege's name. In an April 26, 1996 affidavit, Droege describes Bristow's role in funding Droege personally, and funding the creation and development of the Heritage Front, funding its publicity, running the provocations and harrassment against leftist anti-racist groups, funding and personally running all aspects of its outreach to the U.S. and other countries, and running its legal protection from the Canadian authorities. For an example on the legal front, observers were astonished by the 30-day sentence offered by Canadian prosecutors as a punishment for "Church of the Creator" security director Eric Fisher in the Bristow-instigated kidnapping. Perhaps not surprisingly, the B'nai B'rith, parent of the FBI-affiliated Anti-Defamation League, praised the CSIS for Bristow's role. The B'Nai B'rith stance stood out in contrast to other Jewish groups' reaction to the affair. Hal Joffe, a spokesman for the Canadian Jewish Congress, said in 1994 that he was angry that taxpayer dollars had possibly been used to build the Heritage Front. "Essentially, I have paid for the development of an organization bent on my demise," Mr. Joffe said. But Frank Dimant, a B'nai B'rith Canada spokesman, praised CSIS for placing an informant who "had his finger on the pulse" of the Heritage Front, on the grounds that "information" he obtained could be used against the group in a trial. [ahc] U.S.-RUSSIAN RELATIONS [Source: Associated Press, New York Times 7/4/99. Moscow] July 4--THE RUSSIAN GOVERNMENT EXPELLED A U.S. MILITARY ATTACHE three days ago, after declaring him persona non grata. Lt. Col. Peter Hoffman was an assistant Army attache at the U.S. embassy in Moscow. No details have been given as to why he was expelled, and the report on his expulsion is couched in terms of ``worsening tensions'' between the U.S. and Russia. BBC News today highlights ``Tensions between U.S. and Russia'' in its coverage of the delay in the departure of Russian troops assigned to Kosovo as peacekeepers [see m.b. 7/4/99]. Reuters quotes Russian military officials who said the U.S. decision to delay the arrival of the Russian peacekeepers was ``a provocation.'' A NATO official in Brussels told Reuters that Russian diplomats will return to Brussels this coming week to work out the final details of their peacekeeping mission in Kosovo, and that until then, it were better that Russian troops in Kosovo {not be reinforced}. Reuters is also reporting that four ships from Russia's Black Sea Fleet will set out for Yugoslavia this week, escorted by two other vessels, and will pick up as many as 1,800 Russian paratroopers, in addition to tanks, armored personnel carriers and other military equipment at Novosibirsk. [filed,_crr] July 3 (EIRNS)--RUSSIAN DEPUTY DEFENSE MINISTER'S BOOK HIGHLIGHTS "PHYSICAL ECONOMY" FROM LEIBNIZ THROUGH LAROUCHE, AND "AMERICAN SYSTEM" VS. "OFFICIAL BRITISH POLITICAL ECONOMY." {EIR} has received the Russian-language book {Osnovy fizicheskoi ekonomiki} {(Foundations of Physical Economy)}, which was published in Moscow earlier this year. As we reported some time ago, the book is co-authored by Dr. Yu.S. Savrasov, Dr. D.S. Kontorov, and Dr. N.V. Mikhailov, who is the First Deputy Defense Minister of the Russian Federation, and includes an introduction that reviews "physical economy" as brought to life in our time by Lyndon LaRouche. First Deputy Defense Minister Mikhailov is identified in the book as the author of that introduction. Dr. Mikhailov is a leading Russian specialist in anti-missile defense (see accompanying slug). In 1996, he became deputy secretary of the Security Council, before moving to the Ministry of Defense the next year. Following are excerpts from the introduction to {Osnovy fizicheskoi ekonomiki}: Economics is "the law of the house" (Gk. oikos - house, nomos - law), from the household to the planetary level, the planet being the house for all humanity.... The first known book on economics was the Book of Genesis. There it was said, that man is destined to live in no other way, than by means of daily labor, to be fruitful and multiply, to replenish the Earth and have dominion over all living and non-living beings of nature. It is evident, that mankind is following those dicta down to the present day, although not always with success. Economic science (in the modern sense) is significantly more recent. The works of Leonardo da Vinci (1452-1519) show that there were successful efforts to develop economic science already in the Fifteenth Century. In 1671, Gottfried Leibniz (1646-1716) published his article "Society and Economy," devoted to questions of real value and compensation of productive labor. He established the terms "work" and "power," which subsequently were used in physics. He defined the term "technology." From 1791 until 1830, Leibnizian economic science became known worldwide as "the American system of political economy," which played a marked practical role. At the beginning of the Seventeenth Century, the tendency of cameralism had emerged, which was a variety of mercantalism, manifested as the State's active intervention into economic life in the interest of merchants. The partisans of this teaching believed that profit was created in the sphere of exchange, and that the wealth of a nation was comprised of money. The teaching of Leibniz was broader and deeper. In essence, Leibniz originated the synthesis of physics and economics. Then, the physiocrats, who modelled their schema on the Chinese economic model, influenced views in economics to a certain degree. Rejecting the notion of wealth as an accumulation of money, they considered nature to be the sole source of wealth.... Official British political economy begins with the book {The Wealth of Nations}, by Adam Smith (1723-1790). The British scientific paradigm opposed the American one, and took the upper hand. Economic science underwent fundamental anticapitalist development in the works of Karl Marx (1818-1883), who synthesized the British, American, and physicalist tendencies and brought to the fore {human labor} as the source of wealth. Thus it came to pass, that the fundamental ideas of Leibniz, about the concepts of labor and power, were first moved to the back burner, and then quite forgotten, although the principle of least action, which he discovered, was the central element for defining productive technology. The discoveries of Leibniz and his followers (Huygens, Carnot, et al.), using the differential calculus and other mathematical achievements, were the basis for the development of heat-powered machinery, the creation of the coal and iron industries, and for methods to economize labor in economic practice. They played a certain role in forming the technosphere. This fruitful tendency was continued in the works of F. List (1789-1846), Henry C. Carey (1793-1879), E.P. Smith (1814-1882), and, in our time, Lyndon LaRouche, who based his work on the geometrical conception of Bernhard Riemann (1826-1866), and the works of Kepler (1571-1630) and Gauss (1777-1855). {Physical economy} did not win due recognition, perhaps because economics is inevitably bound up with the concept of law. Physical economy borrowed the idea of {natural law} from N. Kuzansky [Nicolaus of Cusa] (1401-1461), who defined it as the {law of equity}. The economics of Adam Smith and his follows -- traditional economics -- proceeds rather from a notion of juridical, {legislative law.} It became a descriptive science, which identifies and interprets processes in production relations. It may seem paradoxical, that the impulse to create physical economy came from the thinking of the idealist Plato, while the point of departure for modern traditional economics, which is alien to the physical paradigm, is the concepts of the materialist Aristotle. This paradoxical character, however, is purely superficial. The profound causes of the difference have another genesis. The pretensions on the part of traditional economics, to be able to establish economic laws that are effective for purposes of prediction, proceeding only from the conditions of existence, turned out to be illusory. In that sense, traditional economics failed to justify being called "the law of the house."... Despite the dispensing of Nobel prizes for economics, this discipline has yielded virtually no fundamental achievements, which have predictive validity. In the mid-Twentieth Century, a new tendency arose -- mathematical economics, which is linked with the names of J. von Neumann, O. Morgenstern, L.V. Kantorovich, H. Nikaido, V.V. Leontyev [W. Leontieff], D. Meadows, M. Mesarovich, et al. The research and prognoses of the Club of Rome became particularly well known, but were not borne out. A powerful and highly ramified mathematical apparatus was developed, but due to the absence of promising economic ideas, the pragmatic validity of this tendency proved inadequate. The world developed so rapidly, that economics was unable not only to forecast coming changes, but even to explain those that had already taken place. In this phase, too, economics failed to justify its name, and, despite the prestige of the profession of economist and the need for such a science, it did not attain genuine scientific status as a basic science. It is impermissible to deny the great contribution to the development of economic thought by such nearly contemporary scholars as Samuelson, Nikaido, Marishima, M. MacNelsh, Dornbusch, Li Tyne [?], J. Fischer, J.M. Keynes, P. Magnusson. The Soviet school added little to the gnoseology of economic processes, but it achieved significant successes in the development of mathematical models (V.L. Makarov, D.S. Lvov, et al.). Contemporary Russian economists are pure pragmatists, and not very good ones. Using the experience of the West, some of them carried out a monetarist policy, paying no attention to the specifics of the real situation in Russia. Another group appealed to "the achievements of socialism" and called for restoring it, with some corrections. Not one economist in the world, however, has yet been able either to predict, or to explain the economic phenomenon of Russia in our time. Physical economy makes it possible to use physical analogies as a predictive instrument for economic research. Although the ideas of physical economy go back to Plato, Leibniz, and Cusanus, physical economy is becoming a scientific tendency, recognized by the public, only in our time -- due to the inability of traditional economics to solve problems of forecasting, and to the pressure of practical requirements. The representatives of this tendency -- L. LaRouche [biblio. ref. to Russian edition of {So, You Wish to Learn All About Economics?}], P. Kuznetsov, et al., have concentrated their attention on practical, as well as conceptual problems. [RBD] [Sources: Russian Defense Ministry web site www.rian.ru/mo; Nezavisimaya Gazeta via www.rian.ru; EIR files] July 3 (EIRNS)--FIRST DEPUTY DEFENSE MINISTER N.V. MIKHAILOV IS KEY FIGURE IN RUSSIAN MILITARY SCIENCE, ANTI-MISSILE DEFENSE. Dr. Nikolai V. Mikhailov, 62, has been First Deputy Defense Minister of the Russian Federation since September 1997, with the additional rank of "state secretary." Before that, he was deputy secretary of the Security Council of the Russian Federation, beginning in July 1996. He holds degrees as "doctor of economic sciences" and "grand doctor of philosophy." N.V. Mikhailov has worked chiefly on the industrial and technical side of Russian defense. In 1997, he received a State Prize of the Russian Federation "for projects on the creation and development of warning systems against missile attack, space control systems, and anti-missile defenses." From 1986 until 1996, Mikhailov headed an important Soviet, subsequently Russian, design bureau called "Vympel" ("Pennant"), which did classified work on radioelectronics and anti-missile defense. In 1993, "Vympel" was identified as one of the initiating organizations for the Russian "Trust" proposal for joint Russian-American anti-missile R&D, presented at the Vancouver summit. (See slug from the archives, below, and the cover feature in {21st Century Science and Technology}, Summer 1993, where Prof. Mikhailov's picture appers on page 42.) [RBD] [Source: Nezavisimaya Gazeta via www.rian.ru] July 3 (EIRNS)--N.V. MIKHAILOV ACTIVE IN CURRENT DELIBERATIONS ON RUSSIAN MILITARY POSTURE. Russian First Deputy Defense Minister Nikolai Mikhailov has published several articles in recent months, concerning the global strategic situation and Russia's defense posture. These may be reported on later. The most recent article appeared April 30 in {Nezavisimaya Gazeta}, titled "Weighty Answers to Military Challenges -- It is possible for Russia to have a rational military-technical policy under crisis conditions." [RBD] PHYSICAL ECONOMY [source: {EIR} discussions with Department of Commerce; Dept of Commerce data] July 3 (EIRNS)--U.S. SAVINGS RATE IS NEGATIVE; INCOME DOES NOT KEEP UP WITH EXPENDITURES. For the month of May, the U.S. savings rate was negative 1.2%, the lowest recorded level in history, and the sixth consecutive month that savings were negative. A principal cause is that income has not kept up with expenditures. The negative savings rate reflects a longer process of falling living standards since the start of the 1980s. This is the major reason. Although the "wealth effect" from increased capital gains and dividends derived from the stock market does figure into the picture, it would be a mistake to attribute the fall in the savings rate as purely an epiphenomenon of the increase of the "wealth effect." To determine the savings level and savings rate, the Department of Commerce first calculates "personal income." Personal income is the sum of a) wages and salaries; b) other labor income; c) income of proprietors (farms and small unincorporated businesses); d) rental income; e) interest income (the income earned from bonds and bank accounts); and f) dividend income, which comes from stock dividends. Capital gains from the stock market are {not} included in personal income. The Commerce Dept. then deducts taxes (and some related payments) from personal income, yielding what is called after-tax "disposable income." The Commerce Dept. also determines the level of expenditures by most consumers, called "personal consumption expenditures." The savings level is disposable income minus personal consumption expenditures. If disposable income exceeds personal consumption expenditures, then there is a positive savings level; if the reverse is true, then there is a negative savings level. The assumption is that, whatever part of one's disposable (after-tax) income one does not spend, one would save. The "savings rate" is arrived at by dividing the savings level by the level of disposable income. See Table 1. Table 1 Savings Level and Savings Rate Savings Level Savings Rate ($ bns) (percent) 1980 169.1 8.5 1985 207.4 6.9 1990 213.3 5.1 1992 264.1 5.7 1995 179.8 3.4 1996 158.5 2.9 1997 121.0 2.1 1998 27.7 0.5 May, 1999 - 61.0 - 1.2 Thus, the fall in the savings level and savings rate is a function of the two-decade transformation of the United States into a post-industrial society, and did not just arise from the ``wealth effect'' of the last few years. [ref] [source: same as above] July 3 (EIRNS) -- CAPITAL GAINS INCOME ON STEEP UPWARD PATH. It is absolutely the case that the fall in the savings rate is {principally} due to the contraction of the U.S. physical economy and productivity of approximately 2% per year, but there also exists an increase in the capital gains income from the hyperinflated appreciation of stocks and real estate (and secondarily art work), sometimes labeled the wealth effect. To the extent that the wealth effect is in effect, an individual who realizes a capital gains, would be able to either spend or save that money. Supposedly, to the extent that he or she saves that money, that would, in part, offset the fall in the official savings level, since capital gains are not considered as part of official savings. A realized capital gains is the profit an individual realizes from selling an asset that has gone up in price which the individual has held for a year or more--whether that asset is a stock, real estate, work of art, etc. The profit represents the difference between what the individual paid for the asset and what he sells it for. Table 2 Realized (Net) Capital Gains ($ bns) 1980 27.1 1985 60.9 1990 107.8 1992 109.1 1995 167.4 1996 249.5 Table 2 shows realized net capital gains, and its rise reflects the steep profits that have been realized from selling primarily stocks and homes which inflated in value due to the bubble economy. Thus, in 1996, one-quarter of a trillion dollars came from capital gains. {EIR} estimates that capital gains in 1997 were $350 billion or more (the data come from the Internal Revenue Service reports on income tax returns, and 1996 is the latest year). Comparing the official savings level (which does not include capital gains), and capital gains, one sees that between 1992 and 1996, the level of savings fell from $264.1 billion to $158.5 billion (see Table 1), a decline of $105.6 billion. Meanwhile, for the same period, the level of realized net capital gains rose from $109.1 billion, to $249.5 billion, an increase of $140.4 billion. Superficially, it would appear that the rise in capital gains ($140.4 billion) more than offsets the fall in savings ($105.6 billion). {EIR} is investigating this further. While 40-45% of the households in the United States own stocks, and these households benefitted to some extent in the fake appreciation of stock and realized capital gains, the benefits may actually be less than is commonly bandied about in the financial press. Prof. Edward Wolff of New York University has produced a study, based on data from the "Consumer Expenditure Survey" compiled by the Federal Reserve Board of Governors, which shows that America's wealthiest 10% of households own, by themselves, 88% of the value of stocks and mutual funds. Presumably, they would realize 88% of the realized capital gains, or very close to that. Thus, the "wealth effect" from capital gains, while real, may have benefitted mostly the wealthiest 10% of the population, but not filtered down as much as supposed to the lower 90% of the population to offset their decline in savings. [ref] FINANCIAL WIESBADEN, July 5 (EIRNS) -- `BANK CREDIT LINES TO HEDGE FUNDS HAVE BEEN CUT BACK DRAMATICALLY SINCE THE RUSSIA DEFAULT AND LTCM,' claimed a senior European banker just returned from a wide-ranging series of discussions with leading hedge funds. "If you take 100 as the level of capital which hedge funds had from major banks to speculate, that 100 was the level, say, just before the Russia default last August. Then we could say that the level of funds fell to 40 by last October in the wake of LTCM. But the process has continued, and today, I would estimate the level is 10% that of pre-August 1998. That is, banks have become extremely risk-averse. Bank management has also severely cut their own in-house proprietary trading as well. This process is one reason recent events such as the Prodi remarks about Italy leaving Euro were not target of a major speculative new assault. Where the process goes now is anyone's guess, but this in any case is the state of hedge fund access to speculative leverage today." [eng] THE INTERNET BUBBLE HAS YET TO DEFLATE. According to an analysis of the 66 leading listed stocks of Internet companies, compiled by Steve Leuthold in what he publishes as "Perception for the Professional," the 66 largest traded stocks of Internet companies such as AOL.com, AdobeSy, Amazon.com, despite a huge selloff in May, has risen in paper terms since January, by 75%. Since the market low of last October, the average price of the same 66 Internet companies has risen by 453%. If their value is tracked since January 1997, the stock rise has been 1,000%, a stock bubble surpassing anything seen even in the 1927-29 stock mania. Total market capitalization of these Internet stocks today exceeds $430 billions. [eng, Barrons] LEESBURG, July 5 (EIRNS)--RICHARD GRASSO IN HIS OWN WORDS. A full transcription of NYSE Chairman Richard Grasso's June 29 New York press conference on Colombia will appear in next week's {EIR}, as part of a broader package on the IMF's move to legalize `Gross Narco Product.' A few gems are provided here for use in the organizing. Note that no journalist asked him about the FARC's drug-running, and while {EIR} was on-line for the conference, no questions were taken from journalists not physically in New York. Grasso on the FARC, dope and the Chile model: "The leadership that I met with, I believe understands the value of a peace in Colombia. {Comandante} Reyes and the FARC recognize that it is not acceptable to the world that Colombia be viewed solely as a narco-traffic [sic] economy, and that the days of that being the principal industry are over. He is {very} well-attuned to the subject of alternative investment, what will happen when a peace is arrived at in Colombia, and is very open to the dialogue we had on the whole process of democratizaton of capitalism: How neighboring countries such as Chile, and others in Latin America, had repositioned their economies to create nations of owners. He was very interested in the model here in the United States, because, to his surprise, we spent a bit of time talking about the breadth of share ownership in America. How stockholders were not simply those in the financial community, but those who are on assembly lines, those who are teaching school, driving buses.... "It was an {extraordinary} experience, in the sense that the {Comandante} was trained as an engineer in the former Soviet Union. {Very} sophisticated, despite what the surface appearance may have been in terms of his jungle fatigues and his M-16. And he knew a {lot} about investment and capital markets, and the need to stimulate outside capital coming to Colombia. Very interested in how Colombian companies could come to the U.S., and raise capital to be invested in the country. So it was extraordinary...." And later, he repeated himself: "I invited {Comandante} Reyes and the Supreme Commander [sic!], to walk the trading floor with me.... And to do that together with President Pastrana, and I hope that when they do accept that invitation, they'll have the first hand experience of what we talked about on Saturday.... I think extending and permitting differing factors the opportunity to come here, and to walk the trading floor, and to understand capitalism first hand, will be very valuable in a post-settlement Colombian economy. I'm not so naive as to think that the {Comandante} will be here next week, but he certainly recognized the value of coming to America, and experiencing, not just the financial markets, but the technology of agriculture, which will become very important in redeveloping the Colombian economy; where and how to stimulate foreign investment in Colombia; how to raise capital, both in the region and outside of the region. And again, to underscore: This was a very, I believe, sophisticated leader. I think that Raul Reyes, {Comandante} Reyes, is quite knowledgeable, and very much interested in coming and seeing this first hand. Perhaps meeting many of you." Asked about the FARC killing of three Americans earlier this year, Grasso dismissed the murders as one more "issue" which will have to be worked out at the negotiating table. As for the State Department role, he said: "The American Ambassador to Colombia was gracious to give us a briefing before we went into the jungle. He was with us Saturday night [after the FARC meeting], when President Pastrana hosted a dinner for the business community and the financial community, and we openly shared our experiences." [Full transcript in 99272ggs.002; ggs] [Source: EIR Mexico City bureau, 7/2/99.] July 2--MEXICO'S PRIVATE SECTOR FOREIGN DEBT IS UNPAYABLE, AND CONSTITUTES A MAJOR CRISIS FOR THE ZEDILLO GOVERNMENT. The amount of private foreign debt coming due is hair-raising. For the second half of this year, and for the year 2000, $25 billion comes due -- not to mention the $17 billion which comes due for the banking sector in the same timeframe. Over the next 18 months, the private sector must obtain, and make payments in the amount of $32 billion! If the $27.3 billion credit line just arranged with the IMF/World Bank (referred to as Mexico's "financial rumor") is supposed to prevent the Mexican government from having to go as little as possible to international capitals markets, the private sector has no other option but resort to those markets. "What the government announced was the refinancing of public sector debt," said Jorge Marin Santillan, president of the Business Coordinating Council. Finance Minister Gurria has emphatically stated that the stand-by credit will "not be used to bail out any company, or assume any private sector credit risk." Faced with the impossibility of obtaining new credit, or rescheduling their debts in the capitals markets, Mexican businessmen (especially those who overnight became business bigwigs through Carlos Salinas de Gortari's fraudulent privatizations), are now having to declare bankruptcy or auction off their companies. Exemplary is the case of the Ancira Elizondo and Autrey families, owners of the country's largest steel producer, Altos Hornos de México, a subsidiary of the Grupo Acerero del Norte, which defaulted on a debt of $1.9 billion. Raymundo Gomez Flores is in the same boat. Having paid $311 million for his Motor Coach Industries Inc. in 1994, he just sold it for $80 million. Gomez Flores had become the primary producer of buses in North America. Altos Hornos produces 25% of Mexican steel, and is responsible for 19% of the country's steel exports. The Autrey family is also the majority owner of the Inverlat bank, which is on the government's waiting list of banks that have to be bailed out with public funds. [99263rcm001; rcm/crr] [Source: Gestion, 6/30/99 report based on Financial Times. Lima] July 2--THE COLOMBIAN, ECUADORAN, AND PERUVIAN BANKING SYSTEMS ARE IN THE GREATEST DANGER OF COLLAPSE, London's {Financial Times} warns in an article reproduced in Peru's {Gestion}. The daily says that the cost of bailing out Ecuador's banking system could amount to 33% of that country's GDP, surpassing the 22% of GDP used to salvage Chile's banking system when it fell apart in 1982. In 1994, 20% of GDP was spent to bail out Venezuela's banking system, and 17% of GDP to rescue Mexico's banking system in 1995. Today, the FT lies, Mexico's banking system is in very good shape, relative to the rest of the continent. It also argues that it will be relatively easy to restore "confidence" in Peru's banking system, give the large reserve ratio requirement, and the fact that of the five largest banks, four are foreign-run. [99264per002; crr] End of Briefing