From Volume 37, Issue 15 of EIR Online, Published Apr. 16, 2010

Global Economic News

China May Boycott in Response to Iron Ore Robbery

April 5 (EIRNS)—China is responding to the move by the British iron ore cartel to almost double prices and force steel mills into short-term, three-month contracts which shook world markets last week. The China Iron and Steel Association has asked domestic steel firms and traders not to import iron ore from Australia's Rio Tinto, BHP Billiton, or Brazil's Vale for two months, according to China Net, a government news website.

China has 75 million tons of iron ore reserves, and production of the resource by Chinese mines was up by 18% year-on-year during the first two months of 2010, the report said. "At present our steel enterprises have ample supplies of iron ore to ensure normal steel production for two months," the report quoted association head Shan Shanghua as saying.

To no one's surprise, Australian Trade Minister Simon Crean responded by calling on Beijing not to interfere in the market. "You've got to let the market determine the price. You can't be issuing directives in terms of restricting supply," he told Australia's ABC Radio. (After all, it's their market, isn't it?) Crean said a boycott was unlikely, because demand for iron ore was so high from rapidly industrializing China. Rio Tinto refused to comment on the report; BHP was "unavailable."

Greece Being Looted on Both Ends

April 6 (EIRNS)—While Greece is being forced to pay usurious interest rates of close to 7% on its state bonds, it is now suffering capital flight at a rate that surpasses its ability to float more debt.

Britain's Daily Telegraph reports that astronomical amounts of flight capital from Greece are ending up in British banks like HSBC, as well as Swiss and Cypriot banks and French banks like Société Générale (of the Inter-Alpha group). EU5 billion was withdrawn in January alone, and another EU3 billion in February (that's about $11 billion, total). These withdrawals are debasing the Greek banking system, by cutting their reserves at a time when they are unable to raise funds.

Since it pays the same high interest on its Treasury bonds as countries in the "emerging markets," Greece is moving to raise money from U.S. financial predators. According to the Financial Times, Greek Finance Minister George Papaconstantinou will travel to the U.S. after April 20 to sell Greece to the Wall Street sharks in an effort to raise $5-10 billion at yields of 6.5% or more. That will barely cover the amount that has left through capital flight—and it will probably be stolen as well, if Greece continues with the eurosham.

Greece has no choice except to leave the Eurozone, declare a debt moratorium, establish capital and exchange controls, and implement the LaRouche plan, or find itself sacrificed on the altar of the Anglo-Dutch oligarchy.

France Resumes Funding for Astrid Fast Breeder Reactor

April 6 (EIRNS)—Feeling the heat of competition from Asia, the French government used a fast track to allocate EU650 million to Astrid, the Atomic Energy Commission's (CEA) new experimental fast breeder reactor, to be ready in 2020. The funds are from the EU35 billion loan taken by the state to "invest" in the future.

Astrid (the Advanced Sodium Technological Reactor for Industrial Demonstration) is a 600-megawatt fourth-generation high-temperature sodium-cooled fast breeder, which will test breeder technologies, including recycling and sodium coolant safety. The head of this program at the CEA indicated that these technologies represent "strong, non-linear breaks" relative to the previous French fast breeders.

Although the French had pioneered the fast breeder technologies in the 1970s, building two reactors (Phénix and the commercial-size Super-Phénix), that track was temporarily closed down because of a rotten deal between Lionel Jospin, when he became Prime Minister in 1997, and Dominique Voynet, then head of the Green Party.

In the meantime, under AREVA CEO Anne Lauvergeon's leadership, French policy oriented towards a totally commercial perspective around the EPR, a 1600-MW third-generation nuclear reactor, improved through a lot of computer technology. As a result, teams working on the fourth-generation reactors were dismantled and skills lost. There remain at this point, according to the head of the program at CEA, only around 100 French engineers able to work on these projects—of whom only 15 are actually capable of participating in the entire process. Having not yet decided to return to the Middle Ages, the government announced it would extend credit towards the creation of new national and international training programs.

All rights reserved © 2010 EIRNS