Ibero-American News Digest
LaRouche Was Right! Brazilian Reporter Recalls
Oct. 7 (EIRNS)In an article published in Correio Braziliense yesterday, reporter Rubem Azevedo Lima recalls that it was U.S. economist Lyndon LaRouche who first warned, as long as 15 years ago, that the speculative "casino" economy, reflected in the growth of the U.S. real estate bubble, would come crashing downas is occurring today.
Under the headline "The Lost Casino," Azevedo notes that LaRouche's warnings, published in the mid-1990s in his magazine Executive Intelligence Review, were dismissed by the so-called "elite" economists, both in Brazil and the United States. They called him crazy, and he was eventually imprisoned, "as he put it," Azevedo explains, "thanks to the machinations of the Bush Sr. government and his advisor Henry Kissinger." Azevedo reports that EIR arranged for him to interview LaRouche, and that he asked the American economist questions about the United States, the world, and Brazil.
Yet, Azevedo recalls, when he tried to publish his interview, no one would touch it. "That guy is crazy," the "experts" said. But look at the situation today! "The economists were blind or crazy, in rejecting LaRouche's warnings about the growing bubble of real estate mortgages which, he said, would bring down the U.S. and the world economy."
Azevedo Lima also chided Brazilian President Lula da Silva for loudly denouncing the casino economy today, but allowing it to flourish in Brazil in the past, as long as it appeared to benefit the country. He added that it's symptomatic of Brazil's problems that Central Bank president Henrique Meirelles, formerly of the Bank of Boston, praises the U.S. $700 billion bailout package as "perfect," when "most Americans think it only benefits the bankers."
Peso Meltdown: Which Way Mexico?
Oct. 10 (EIRNS)The disintegration of the international financial system is now "consuming" the Mexican peso, which has been devalued by 24% against the also-collapsing dollar since Aug. 4. For a nation which imports a quarter of its basic grains, this is a disaster. The rate of the peso collapse accelerated on Oct. 6 and 7with record drops each dayand then went into virtual free-fall on Oct. 8.
That day, and on the following two days, a frantic Banco de Mexico (the central bank) sold a whopping $8.9 billion to defend the peso, spending $6.4 billion on Oct. 10 alone. So far this month, the currency has plunged by 16%, and only inched up slightly following the Oct. 10 intervention.
The devaluation comes on top of a drop in remittances by as much as 30% in some states, more than double official figures, according to the National Peasant Federation (CNC). Remittances from Mexicans working abroad had been the country's second-largest source of foreign exchange.
As its jobs and growth program, the Calderón government had touted several giant, export-oriented public-private partnership (PPP) infrastructure projects, to stave off social chaos. But on Oct. 6, the Transportation Ministry announced it was postponing bidding on two of those projects, because the private investors that were to put up the cashsuch as the bankrupt AIG!are disintegrating along with the global financial system.
Under the leadership of the LaRouche movement, institutions in the state of Sonora are stepping up the fight for a change from failed national policies to those reiterated by Lyndon LaRouche during his April 2008 visit to Monterrey, Mexico. The latest salvo came from Sonora Gov. Eduardo Bours, who warned Oct. 7 that it would be the "gravest error," were the Mexican government to respond to the crisis by cutting its investment in infrastructure. Instead, he said, the federal government should be asking states about the projects they have to build, and help get those rapidly underway. Bours named the Northwest Hydraulic Plan (PLHINO) as one such project, whose construction would help to generate almost a million jobs and provide irrigation for hundreds of thousands of hectares of land for farming.
Calderón Offers PEMEX to Speculators
Oct. 9 (EIRNS)Following Mexico's dramatic peso collapse, President Felipe Calderón addressed the nation last night to admit, after weeks of public denial, that the world crisis will, indeed, affect Mexico, and gravely so.
He presented five "anti-crisis" measures, which pivot on one central act: setting up the state oil company, PEMEX, for sell-off to the financier vultures, by bankrupting it.
As London-centered financiers have been demanding for years, Calderón announced that the transformation of PEMEX into an "autonomous" entity, financially and technically separate from the state, must begin immediately. He also said that the government was moving some $176 billion in "PIDIREGAS contingency debt" (off-balance-sheet obligations) onto PEMEX's account, which PEMEX would have to pay from its own resources!
Lyndon LaRouche, who has defended Mexican sovereignty for decades, immediately identified the scheme as a move to turn PEMEX into a "public-private partnership," yet another infamous PPP.
Because Calderón packaged the whole swindle as a way to free up money through accounting hand-waving so that the government can spend on infrastructure projects, including building the first new oil refinery in 30 years, even the opposition Democratic Revolution Party (PRD), including its 2006 Presidential candidate, Andrés Manuel López Obrador, welcomed Calderón's gambit, ignoring the fact that PEMEX is about to be thrown to the wolves.
LYM Serenades Argentina's President
Oct. 10 (EIRNS)On Oct. 8, two members of the LaRouche Youth Movement serenaded Argentine President Cristina Fernández de Kirchner on the reality of the global financial crash and the need for a New Bretton Woods.
The two young women approached the President at the closing of the "Vital Voices of the Americas" conference in Buenos Aires, and in a song sung to the tune of Mozart's "Alleluja" canon, emphasized the historic change taking place in the world due to the global financial collapse.
Recalling that the LYM had also sung to her last year in Mexico before she became President, Fernández was delighted to hear the young women sing, although she nervously laughed upon hearing the words "the crisis is systemic," and "LaRouche was right!" This past week, Fernández called for a New Bretton Woods, which the LYM told her was very important, but added that "it has to be the Bretton Woods of Franklin Roosevelt and LaRouche, not of Keynes." Keynes "was a monetarist," the LYM told her.
Chile's Private Pension Funds Evaporate
Oct. 9 (EIRNS)Chile's private pension system lost a whopping $20 billion between July 25, 2007 and Sept. 30, 2008, according to an Oct. 4 report by Chilean pension expert Manuel Riesco. This is the private system imposed on Chile in 1981 by the fascist Pinochet dictatorship, and which George W. Bush's political godfather, Pinochet-backer George Shultz, tried unsuccessfully to ram down the throats of the American people in 2005.
Chile's private system fund is about $120 billion. Riesco charges that the losses are due to investments in speculative financial derivatives and mortgage-backed securities, which rating agencies recommended as perfectly "safe." Such insanity was also facilitated by the Chilean government, which recently raised to 50% (from 40%) the percentage of the fund that could be invested abroad.
A political activist who collaborated with the LaRouche movement in exposing the fascist nature of the Chilean system in the 2005 fight, remarked to EIR on Oct. 7 that "the losses to Chilean workers are more than considerable," adding that this occurs in the context of the global financial collapse that LaRouche had long ago forecast.