Global Economic News
South Korea To Be 48% Nuclear
Dec. 28 (EIRNS)South Korea announced a $28.5 billion, 15-year energy plan today, calling for 12 more nuclear plants, raising the nuclear percentage of the nation's power supply from 34% to 48% by 2022. It will also build seven coal-fired plants and 11 LNG-fired plants, reducing the oil-fired dependence from 1.9% to 0.2%. (South Korea is almost entirely dependent on imports for its oil.) The cost of nuclear is 3 won/kw, compared to 22 won/kw for coal and 89 won/kw for gas.
Briton Calls for U.S. To Reinstate Glass-Steagall
Dec. 29 (EIRNS)Writing in the Daily Telegraph, commentator Liam Halligan called for the re-introduction of the Glass-Steagall Act in the United Statesa measure which Lyndon LaRouche has identified as a necessary component of any competent package of bankruptcy reorganization of the banking system.
Halligan writes that the key problem is that the banks are holding huge amounts of toxic waste, the amount of which they refuse to reveal. That is why they are not lending to anyone, including creditworthy firms and households. All the solutions attempted, including low interest rates and government takeovers, have not worked and will not work. He calls for threatening the banks with prosecution unless they come clean on their toxic waste exposure.
"Above all, we need to re-introduce the Glass-Steagall Act of 1933. This legislationthe centre-piece of America's response to the 1929 Wall Street crashwas copied across the Western world.
"Glass-Steagall prevented commercial bankswhich take in deposits and service ordinary firms and householdsfrom engaging in the high-risk speculative activities undertaken by investment banks.
"In the early 1990safter huge lobbying by Wall Street, and lots of ridiculous talk about 'freedom'the legislation was repealed. No other single action has done more to cause this crisis.
"The money men have, so far, managed to close down any talk about restoring Glass-Steagall. But that debate must now take place. That's why Glass-Steagall will be the subject of my first column of 2009."
German Farmers Head: Ag Production Chain Breaking Down
Dec. 29 (EIRNS)The president of the German Farmers Union, Gerd Sonnleitner, issued a warning for 2009, of a grain shortage and an explosion of prices. The statement said that farmers worldwide cannot afford fertilizer, thereby compelling them to reduce the acreage they plant. In Germany, there is not enough credit for the agricultural trading houses to buy up all the 2008 grain harvest, and therefore, a large proportion of this year's harvest is still stored on the farms, at immense cost. Farmers are using part of it for feed, or continuing to use it for biofuels. Production costs are no longer covered at all, said Sonnleitner.
Internationally, there are only two months of grain reserves, he pointed out. Land use for wheat production could fall by 1.6% worldwide in the new crop season, according to the International Wheat Council. Both the very good harvest of Summer 2008, and the grain price collapse of the last several months, have led many farmers to plant other crops, reducing wheat production next season. All of this, Sonnleitner warned, could lead to a "price explosion" in grains in 2009. He demanded that the government take action to restore trust in the markets.
Ex-BOE Banker Compares Britain to Iceland
Dec. 29 (EIRNS)In a feature on the euro, the Financial Times Deutschland today quotes economist William Buiter, ex-member of the Bank of England calling London "Reykjavik-on-Thames," comparing Britain's economy to Iceland's dire financial situation. Buiter calls for Britain to enter the eurozone in order to save itself. It might as well jump into the Atlantic, right away.
Germany To Repeat U.S. HMO Insanity
Dec. 29 (EIRNS)On Jan. 1, a new agency will be introduced in Germany called the National Health Fund. It is a variant of the U.S.-style health maintenance organizations (HMOs), schemes to cut medical care and allow private rip-offs, which were phased in over the decades since the first U.S. HMO Federal law was signed in 1973.
All insured German citizens will pay into the new fund, which will then equally redistribute the money to the health insurance funds, with the implication that as citizens' incomes dwindle, either the total dues paid to the fund will decrease, or individuals' dues will have to be increased to compensate. The cap imposed on the health insurance funds will force those with a high proportion of members with chronic and/or serious illnesses, to cut services to them, or take funds from the other members.
German health insurance funds expect to lose at least Eur440 million in revenues from member dues in 2009, caused by diminishing incomes, a percentage of which goes into the health insurance funds. Combined with expected price increases for many, if not most pharmaceutical products, the insurance funds expect an extra financial burden of Eur1 billion for 2009implying the need to increase the citizens' monthly health fund bill.