World Economic News

'People's Daily' Publishes LaRouche Call

The People's Daily, China's official newspaper, published an article on April 18, citing Lyndon LaRouche's call for a New Bretton Woods financial system. Washington correspondent Yong Tang quoted three U.S. analysts on a recent U.S. Senate resolution demanding that China revalue its currency, the renminbi: Morgan Stanley's Stephen Roach, Treasury Secretary John Snow, and LaRouche. The article introduces LaRouche with the subhead: "LaRouche Calls for a New Bretton Woods System."

The article then stated: "The celebrated American economist and independent Presidential candidate, Lyndon LaRouche, has many times succeeded in predicting the outbreak of financial crises in many parts of the world.... A few days ago on receiving a call from this paper's correspondent, who was looking for an interview, he was quite straightforward. 'Such an action by the U.S. Senate shows that it has lost its mind!' LaRouche said. 'You can't blame the emerging problems of the U.S. economy on the exchange rate of the renminbi. Such action by the Senate has an imperialist flavor, of unilaterally opposing the actions of a rival, without providing any solution to the problem.'

"Continuing ... LaRouche said, 'If you want to solve the problems of the U.S. economy, you have to conduct major surgery.' He considers the present global financial and monetary system as already beyond any cure. It requires a thoroughgoing reorganization of the system, and cannot be accomplished through a simple reform. The ultimate goal of such a thoroughgoing reorganization is the establishment of a new Bretton Woods system."

German Finance Minister Calls for Hedge-Fund Regulation

Returning from the G-7 summit in Washington, German Finance Minister Hans Eichel, not known for any political ambitions other than cutting budgets, suddenly converted to the anti-speculation camp. In an interview granted to Reuters, he said: "There are reasons to think about regulations that do not favor people making quick money and moving on.... There are financial investors, and we have seen that with Deutsche Bourse, which is only interested in short-term profits."

The planned takeover of the London Stock Exchange by Deutsche Bourse had been prevented last month by a group of hedge funds. Another trigger for Eichel's statement is probably the recent explosion of takeovers of German corporations by private equity investors. Last week, it was revealed that international private equity firms had tried to get hold of DaimlerChrysler in order to dismantle it and make some quick profits by selling it in pieces.

The Financial Times on April 20 devoted front-page coverage to the Eichel statements, noting that his "comments come after mounting criticism of the behavior of German business by Chancellor Gerhard Schroeder's Social Democratic party. At the weekend, Franz Muentefering, SPD chairman, said financial investors were like 'swarms of locusts' descending on Germany."