From Volume 37, Issue 50 of EIR Online, Published Dec. 24, 2010

Global Economic News

Asian Railway Roars Ahead Under Chinese Impetus

Dec. 14 (EIRNS)— The Bangkok Post reported today that Thai Deputy Prime Minister Suthep Thaugsuban, returning from a High-Speed Rail Conference in China, said that the government hoped to complete the Thai section of the Asian railway in just four years. A broad agreement was reached, that China would build a new railway from the northeastern province of Nong Khai (on the Laos border in the north) to Bangkok, connecting with the rail system through Laos to Kunming in Yunnan Province, which the Chinese have just agreed to build.

Suthep went to China recently to discuss the details and seek an extension of the route from Bangkok to Padang Besar on the Malaysia border in the south (and hopefully connecting to a new high-speed connection through Malaysia to Singapore, although this is not yet settled).

The Chinese agreement will include new public transport facilities in Thailand, and China's assistance with the development of areas linked to it. Thailand wants a loan agreement from China similar to that given to Laos for the construction of its part of the Asian railway. China asked for the Thai parliament to quickly approve the details of the project, so that a memorandum of understanding could be signed between March and April next year, and construction begin before the end of 2011.

Suthep also met with Lao Deputy Prime Minister Somsavat Lengsavad, who supervises the railway project in Laos, discussing a location for a new bridge across the Mekong, so that Laos could proceed with its part of the project.

British MEP Calls Irish Bailout An 'Ugly Shakedown'

Dec. 12 (EIRNS)—Daniel Hannan, a Conservative Member of the European Parliament since 1999 and a "euroskeptic," wrote in the London Daily Telegraph on Dec. 12 regarding the Irish IMF/EU deal: "This isn't about rescuing Ireland; it's about rescuing the euro. On any objective interpretation, Ireland has been ruined by the single currency. The ECB's policy of ultra-low interest rates forced Ireland to pursue a catastrophically pro-cyclical monetary policy, with real interest rates of minus one per cent between 1998 and 2007. The subsequent crash was utterly predictable and widely predicted.

"The EU then forced Dublin into a bail-out which, while calamitous for Ireland, was thought to be necessary to save the European banking system. As John Redwood (a Conservative MP) points out, it was the EU's insistence that a bail-out was necessary which forced Ireland to borrow ten-year money from 6 to 9 per cent. To make sure that Dublin caved in, the ECB then threatened to withdraw liquidity from Irish banks. Ireland has now been forced to accept the package on ruinous terms. Its repayment obligations, combined with the inability to devalue, will condemn its people to a generation of deflation, debt and emigration."

Hannan says the UK involvement is an "ugly shakedown, in which Irish taxpayers are being made to carry the cost of propping up European banks."

Is Germany Actively Preparing Return of D-Mark?

Dec. 14 (EIRNS)—Will the German Bundesbank will switch back from the euro to the deutschemark? There are more and more hints that something like that is up, and it cannot be ruled out that it will happen even in the next few days, as the euro system keeps winding down.

Short News, a website run by the weekly magazine Stern, leaks that there is a secret plan called "Full Circle" (Vollkreis), which involves a virtually overnight switch from the euro to the d-mark. And the Swiss website 20 Minutes runs an article including an assessment by euroskeptic Werner Eichelburg, that going from the euro to the d-mark would require only one week. Also, Udo Ulfkotte, an author with murky connections to German foreign intelligence, has a story on an "emergency plan" which he claims exists at the level of the government and central bank of Germany, to have an abrupt banking holiday and other measures, including military protection of the banks against a panic run, in case of a sudden collapse of the euro.

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