Raw Steel Million Metric Tons The Recovery 150 _____ � _ _ ----- That Never Was 110 - -Find out what the White House should know ... but doesn't 90 The EIR Quarterly Economic Report, prepared under the personal direction 70 60 of Lyndon H. LaRouche, Jr., presents a devastating picture of the current 1972 76 80 82 economic crisis-a crisis with profound implications for the national security, as Moscow is only too well aware . The study demonstrates: • Un less President Reagan replaces his present, foreign and domestic, Freight Cars monetary and economic policies, the U.S. economy will continue to describe Thousands 90 an accelerating downward trend in output of goods and in balance of trade . 80 • The potential for a 1931-32-style deflationary blow-out or new skyrocketing of dollar exchange-rates, is approaching certainty. Either 60 ___ _ alternative would be associated with an acceleration of the rate of collapse of 50 goods-output in both the world market and the U.S. economy; under either alternative, the federal budget deficit would soar. 30 -------- 20 For information about the Quarterly Report and a new feature, EIR's 1985 statistical 10 _ yearbook, please contact your local EIR representative or Richard Freeman, EIR News 1972 76 80 82 Service, P.D. 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Federal Republic of Germany. 6 mo. $225, 1 yr. $470 telephone (06121) 44-90-31. Executive Director: Michael Liebig. All other countries: 3 mo. $145, 6 mo. $265, 1 yr. $490 ------ - -------- ----� Founder and Contributing Editor: Lyndon H. LaRouche, Jr. Editor-in-chief: Criton Zoakos Editor: Nora Hamerman Managing Editor: Vin Berg Features Editor: Susan Welsh Production Director: Stephen Vann From the Editor Contributing Editors: Uwe Parpart-Henke, Nancy Spannaus, Webster Tarpley, Christopher White Special Services: Richard Freeman Advertising Director: Joseph Cohen Director of Press Services: Christina Huth INfELLIGENCE DIRECfORS: Africa: Douglas DeGroot Agriculture: Marcia Merry Asia: Linda de Hoyos Counterintelligence: Jeffrey Steinberg Richard Burt ("formerly" of the New York Times) made our cover Economics: David Goldman this week by getting into hot water. As we go to press, he's running European Economics: Laurent Murawiec Energy: William Engdahl around Europe impersonating an ambassador. But his nomination to Europe: Vivian Freyre Zoakos head the U.S. embassy in Bonn, the center of the European side of Ibero-America: Robyn QUijano, Dennis Small the Western Alliance, fell short of confirmation on June 27, and the Law: Edward Spannaus Medicine: John Grauerholz, M.D. fight is still on, over whether this irrepressible leaker of security­ Middle East: Thierry Lalevee sensitive information to the Soviet KGB will be stopped from selling Science and Technology: Marsha Freeman out the Federal Republic of Germany to Moscow. Soviet Union and Eastern Europe: . Rachel Douglas The lesson is that the State Department and other bastions of the United States: Kathleen Klenetsky Eastern liberal establishment, Burt's sponsors, can be beaten, if INfERNATIONAL BUREAUS: patriots mobilize to do so at this critical moment, when the Soviet Bangkok: Pakdee and Sophie Tanapura Union is in a state of war with the West. Bogota: Javier Almario Bonn: George Gregory, Rainer-Apel This is also proven by the June 19 statements of Chief of Naval Caracas: Carlos Mendez Operations Admiral JamesD. Watkins, who appealed to the govern­ Paul Greenberg Chicago: ments of Ibero-American countries to work out concrete plans with Copenhagen: Leni Thomsen Houston: Harley Schlanger the United States for an integrated war on drugs. This coheres closely Lima: Sara Madueiio with the proposal published in the April 2, 1985 ,issue of EIR by Los Angeles: Theodore Andromidas Mexico City: Josefina Menendez Lyndon H. LaRouche, Jr. , for a hemispheric "joint command" in the Milan: Marco Fanini war on drugs, a proposal presented at an EIR public seminar in Monterrey: M. Luisa de Castro Mexico City last March New Delhi: Susan Maitra 13. Paris: Katherine Kanter We'd like readers to know of two initiatives we've taken to Rome: Leonardo Servadio, Stefania Sacchi intensify our ability to intervene on policy in the United States and Stockholm: Clifford Gaddy internationally. First, as you have probably noticed, we have tight­ United Nations: Douglas DeGroot Washington, D.C.: Nicholas Benton, ened up production schedules to bring the weekly EIR to subscribers Susan Kokinda, Stanley Ezrol several days earlier than-previously. The next issue, forthcoming in �iesbaden: Philip Golub, Mary Lalevee, Barbara Spahn two weeks (Please note!) after we take our annual July one-week holiday, will be dated on Friday, July 19, instead of the following Executive Intelligence Review (ISSN 0273-6314) is published weekly (50 issues) except for the second Tuesday, to reflect the new, faster production schedule. week ofJuly andfirst week of January by New Solidarity International Press Service 101O·16th N.W., Washington, Secondly, we are bringing out several Multi-Client Special Re­ D.C. 20036 (202) 955·5930 ports each month, with in-depth information on key issues. EIR's '" Europe: Executive Intelligence Review Nachrichtenagentur GmbH, Postfach 2308, Special Report on "Economic Breakdown and the Threat of Global Dotzheimerstrasse 166,0·6200 Wiesbaden, Federal Republic of Germany Pandemics" was released on July 1, and documents what Lyndon Tel: (06121) 44-90·31. Executive Directors: Anno HeUenbroich, Michael Liebig LaRouche in this week's EIR feature terms a threat far more danger­ '" Mexit:o: EIR, Francisco oras Covarrubias 54 A·3 ous than thermonuclearwar. The 74-page Special Report is available Colonia San Rafael, Mexico OF. Tel: 705·1295. JfIIHDI •••criptio" .1Iles: O.T.O. Research Corporation, from EIR News Service for $100 per copy. Takeuchi Bldg.,1·34·12 Takatanobaba, Shinjuku·Ku, Tokyo 160. Tel: (03) 208·7821. Copyright IC 1985 New Solidarity International Press Service. AU rights reserved. Reproduction in whole or in part without permission strictly prohibited. Second·class postage paid at New York, New York and at additional mailing offices. 3 months -$125, 6 months-$225, I year-$396, Single issue-$l0 Academic library rate: $245 per year To Post Master: Send all address changes to EIR, 1010· 16th N.W., Washington, D.C. 20036 (202) 955·5930 • TIillContents InteIViews Economics 13 Paisal Thawachainan 4 Kissinger and Castro face The head of Thailand's largest otT against LaRouche labor confederation tells how his Kissinger's June 22 syndicated country's economy is being ruined column, "Building a Bridge of by the World Bank's "privatization Hope to Our Latin Neighbors," of industry" plan. proposes "the modem philosophical equivalent of the Departments Marshall Plan, a Western Hemisphere Development 45 Report from Italy Program"-but it 's a hoax. The rotten deal behind Cossiga. 6 Soviet bloc gears up nuclear industry 46 Dateline Mexico Writing about killing the 7 East Europe follows President. Gorbachov's orders 47 Report from Paris 8 U.S. housing-stock 'Make the SOl irreversible. ' collapse undermines family formation 64 Editorial Based on the June 1985 EIR Let 's get back to 'A mericanism. ' Quarterly Economic Report: 16 Science and Technology . A revolution in the H-bomb x-ray laser. 17 Currency Rates 18 Pestilence of Usury Brazil to impose 'conditions' on IMF? 19 Report from Africa The famine keeps worsening. 20 Business Briefs • Volume 12 Number 27, July 9, 1985 Feature International National 22 Lyndon LaRouche replies 36 TWA hostage taking: part to 1988 Doomsday forecast of Soviet war plan by Fidel Castro While a hostage "exchange" would part II of Lyndon H. LaRouche, bring to an end the ordeal of TWA Jr. 's "Open Letter to Fidel Flight 847 , it will likely leave Castro," written on June 12, 1985 , unanswered some of the most addressing the Jesuit-traine,/ Cuban pressing questions raised by the leader's mistakes of economic terrorist action that began in analysis, as well as his ulterior Athens on June 14. motives. NSIPS 38 Terror 'experts' run cover Warren Hamerman of the Ad Hoc Coalition to Stop for KGB plans Richard Burt hands the proposed ambassador a press release denouncing him as a traitor. 39 Costas Tsimas and the 50 Mobilization of patriots TWA hijacking puts Burt sellout on hold 40 Shi'ite terrorism: the Bennigsen factor 52 Soviet spokesman backed Documentation: Never-before­ into corner over TWA published intelligence documents hijacking relating to the destruction of U.S. Mideast policy. 54 Joint Chiefs: Use military vs. drugs 43 Kissinger, de Hoz, and the real culprits of Argentina's 55 Stop the