Global Economic News
Race to Hyperinflationary Blowout on Eve of Fed Meeting
Sept. 20 (EIRNS)The speculative boom which Lyndon LaRouche pointed to in the context of the Fed's Aug. 10 hyperinflationary decisions, as confirming his forecast of a financial system blowout at that time, is intensifying as the Fed prepares another intervention tomorrow. Junk bond prices are now the highest since June of 2007, just before the collapse. Dealogic reports that junk bond issues in 2010, at about $170 billion as of last week, had already exceeded the full-year record level of $164 billion for all of 2009, Financial Times reported today.
Covenants which protect junk bond buyers are also being weakened or removed from current junk-bond issues, the Wall Street Journal reports today, as was previously done in the same pre-Summer 2007 period.
Corporate stock buy-backs are also proceeding at record levels, amounting to $257.7 billion so far in 2010, versus $125 billion in all of 2009, Bloomberg reported today.
Investment banks' profits are low in all areas except bond underwriting and mergers & acquisitions, the Journal reports.
On this, the Journal features so-called "expert" Ken Rogoff, Harvard professor and former IMF chief economist, who "notes that new credit bubbles don't typically form immediately in the aftermath of old ones." Typically foolish. He should have listened to LaRouche rather than believing in statistics.
Is the Irish Taxpayer Bailing Out the ECB?
Sept. 20 (EIRNS)As Ireland sinks into a sea of bailout debt, questions are being raised as to why the names of those who are profiting from the bailout are being kept secret. The Irish Independent questions how many bondholders in Anglo Irish Bank had their bond holdings converted to a "deposit" between March 17, 2007, the day the Anglo bubble burst, and Sept. 30, 2008, when the Irish government extended its guarantee to all deposits and bond holdings in Anglo.
The Independent further reports that the names of senior bondholders, junior bondholders, and major institutional depositors also in the bank, remain secret. The daily writes, "Confidentiality, we are told, prevents the Irish public knowing who we are going into debt for a hundred years to rescue."
Now it turns out that among those for whom the Irish taxpayer is going into debt for 100 years, is the European Central Bank (ECB), which has EU30 billion worth of guaranteed deposits in Anglo Irish, which poses the question of whether these too had been bonds. Irish Independent notes the fact that "the EU is a benefactor of Irish state aid, a provider of EU aid to Ireland, through buying our government bonds, and the not insignificant matter of the ECB's huge 'deposit' in the bank that has suffered the biggest collapse of any bank in history, is the greatest story never told about our economic quagmire."
Meanwhile, the collapse continues in other Euroland countries: The Portuguese daily Diario de Noticias, according to London's Daily Telegraph, reported that three former Portuguese finance ministers said that the country might have to call in the IMF, saying the country had become sunk into "reckless reliance on foreign debt," and "runaway public spending."
In Greece, the International Monetary Fund is stationing a team in Athens for the duration of the IMF-European Union aid package which could be increased to last until 2020. This extends it from three years to ten, longer than the Allied occupation of Germany.
Close to One Out of Three Humans Lacks Access to Electricity
Sept. 15 (EIRNS)Some 1.5 to 2 billion people on the planet have no access to electricity, concluded the Sept. 12-16 World Energy Congress attended by experts, government officials, and private executives in Montreal, Canada. While India, Brazil, and China are going ahead with the build-up of hydroelectric capacity, many developing countries remain in the dark, notably in Africa. One frightening figure: The rich-in-resources African continent, with 1 billion people, has the same installed electric power capacity as Spain, whose population is 21 times smaller!
Experts now advise nations to exploit their own resources before tapping those of others. Chile, for example, which imported Argentine gas, now, after being cut off, has renewed interest in its own hydroelectric potential.
The energy source whose use increased the most is not nuclear, but coal which produces, for example, 53% of the primary energy of India. Worldwide, coal consumption is increasing faster than oil consumption, with an annual increase of 4.5%.
Private managers, such as Patrick Kron of the French energy infrastructure construction giant Alstom, hope the World Bank or the European Investment Bank will return to financing such projects. "The return to growth can be seen in the newspapers," Kron told a group of journalists, "but not in real life." In 2009, the world market of energy infrastructure fell by 50%, he underlined.