From Volume 38, Issue 17 of EIR Online, Published Apr. 29, 2011

Ibero-American News Digest

Monetarism Is Triggering a 'Volcano' In Brazil

April 25 (EIRNS)—With inflation officially nearing 7% a year (led by food and transportation), the index of rents up by almost 11%, and, by some estimates, a fourth of Brazilian families' income already going to pay debts, the Brazilian Monetary Council nonetheless raised the SELIC benchmark interest rate for the third time this year on April 20, bringing it to 12%. The package, as Rio de Janeiro's Monitor Mercantil put it, adds up to a "veritable volcano."

The hyperinflation taking off in Brazil is not a local phenomenon, but continuously jacking up interest rates to maintain Brazil's unenviable position at the center of the global carry trade is the equivalent of the guy, who, knowing a hyperinflationary hurricane of QEII hot money is heading his way, rushes out to rip off all the windows, doors and roof of his house, to ensure maximum destruction.

Serious people are clamoring that Brazil is being "deindustrialized" by this suicidal policy of high interest rates and consequent cheap dollar. The president of the Brazilian Machinery and Equipment Association (ABIMAQ) Luiz Aubert Neto is outspoken against a policy of relying on exporting raw materials and importing machinery and finished goods, with a cheap dollar, high interest rates, and big taxes on investments, which is taking down Brazilian industry.

In his monthly ABIMAQ column for April, Neto puts it to the country's leaders: Will Brazil be a "Power, or Colony?" The model we've adopted is that of the 19th Century, when Brazil was the largest coffee bean grower and exporter in the world, but Germany was the largest exporter of processed coffee, he writes. Today, close to 75% of soy produced in Brazil is exported, but exports of soy derivatives are dropping, year by year. 90% of our cellulose is exported, while more than 50% of the paper consumed in Brazil is imported. Brazil is becoming an exporter of crude oil (10% of total exports are oil now), and a big importer of petroleum derivatives.

"I do not tire of repeating, that no developed country exists which does not have a strong manufacturing sector." For 16 years, the country has accepted a model of paying stratospheric interest rates (R$1.8 trillion). The government must have a sense of urgency. "It is necessary to implement emergency measures, because we are running the risk of losing the greatest, and perhaps sole, opportunity in our history to make of Brazil a developed country. If not, we will go back in time, to the days of Colonial Brazil, in which we exported Brazil lumber and coffee, so as to import little mirrors and handcrafted jewelry. There is still time to reverse the current picture of deindustrialization, but our government needs to communicate immediately what type of Brazil we want: rich and developed, or forever a poor colony?"

Obama's Haitian Genocide Grows

April 24 (EIRNS)—Ignore any notion that the situation in Haiti has "improved." Fifteen months after the January 2010 earthquake, and six months after the October 2010 cholera outbreak, the crisis in this nation of 9.6 million is more dire than ever—thanks to Barack Obama.

Lack of sanitation infrastructure, lack of preparedness for another earthquake or any other natural disaster; unemployment so high the government no longer counts it; lack of adequate housing (or any housing at all); rising food and fuel prices; and wrenching malnutrition and illness, including an expanding cholera epidemic—all of this can be laid on Obama's doorstep. Starving Haitian children are still consuming the infamous concoction known as bonbon tear—mud cookies, consisting of mud mixed with vegetable oil and a little salt.

The fact that "only" 700,000 people, instead of 1.5 million, still live in squalid tent cities in the capital, is not "progress," as experts like to claim. Most of those who have left the camps were forced out, either by the predominant violence and lack of sanitation, or by landowners who evicted them. Evictions, in fact, account for the majority of departures from the camps, with residents ending up in improvised or dilapidated dwellings that are as bad, or worse, than what they lived in prior to the earthquake.

It is still the case that those who remain in the camps, of which there are 1,060 scattered around the capital, only have access to a pitiful number of latrines, about 15,000. According to, most of the excreta from those latrines is collected and dumped into large, open-air, unlined pits. In Trutier, a small community north of the capital, the biggest pit is most likely contaminated with cholera. It lies over the Plaine Cul-de-Sac aquifer that supplies most of the water used by private companies that bottle and sell water in Port-au-Prince. Simon Fass, author of Political Economy in Haiti, reports that water prices in Haiti's capital are among the highest in the world.

The death toll from cholera stands at 5,000, with over 200,000 infected. Recent medical studies predict that at least 800,000 could be infected by November of this year—far surpassing World Health Organization estimates—as seasonal rains are already bringing a new wave of cholera cases.

According to Eric Calais, a seismologist with the UN Development Program (UNDP), Haiti will inevitably be hit with another earthquake sometime in the future. He reported on April 18 that efforts are underway to ensure that "risk mitigation" is incorporated into the nation's reconstruction program, by improving the resilience of infrastructure and reducing the risk for Haitians in poor housing. But since reconstruction is at a standstill, "risk reduction" is a meaningless phrase.

Mexican Tsunami Alert System To Protect Human Life

April 22 (EIRNS)—Speaking in Ensenada, Baja California, on April 15, Mexico's Government Minister Francisco Blake Mora announced that his ministry and the Secretary of the Navy had signed an agreement to create a new National Tsunami Alert System. The new system will operate 24 hours a day, seven days a week, 365 days a year, Blake said, allowing Mexico to protect "its most precious asset—the lives of our people."

Given this responsibility, Blake said, it is incumbent on the government to create such a system to "leave behind the culture of disaster"—that is, the idea that man is merely a victim of natural disasters. The key is preparedness, he underscored. Sometimes there are only minutes, or just a few seconds of warning; thus, the creation of a "culture of civil protection," in which citizens are trained to respond efficiently, and know exactly what to do, is crucial. "We shall spare no effort" in this area, Blake announced. Investments are being made in the new system, and in other areas to guarantee the country's ability to respond to any disaster.

The Mexican Navy will run the new center, whose responsibilities will be to process and analyze data coming in during earthquakes that occur on the Mexican coasts, but will also analyze data from other countries as well, and will release and transmit bulletins that warn or urge vigilance, to the appropriate government, state, and municipal authorities. Blake said that a plan will be disseminated shortly, aimed at putting Mexico "in the vanguard in terms of knowledge, technology and preparation, within the framework of a modern National Civil Protection System intended to protect the lives, property and surroundings of all Mexicans."

Costa Rica To Develop Central America's First Weather Satellite

April 19 (EIRNS)—While saboteurs in the White House and Congress work overtime to shut down America's constellation of weather and Earth-observing satellites, Costa Rica's foreign ministry, which signed an agreement with the Central American Association of Aeronautics and Space (ACAE) last year to help finance a small weather satellite, has laid out the plan for the project. It would be the first satellite completely developed in Central America.

The $500,000 small satellite would be an important step for Costa Rica's fledgling space industry, ACAE president Carlos Alvarado said.

Why Costa Rica? Because Costa Rican former Space Shuttle astronaut, Franklin Chang-Diaz, has a laboratory in his home country, to develop his VASIMIR plasma engine there. "Ad Astra Rocket and the figure of Franklin Chang have given a big boost for the country to be marketed as an investment destination for the aerospace industry," said Alvarado. ACAE already has a presence in Guatemala, and plans to be in the rest of Central America by 2015.

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