Global Economic News

Geithner Calls on Europeans To Rev Up the Printing Presses

Sept. 10 (EIRNS)—The Obama Administration told the Europeans to hit the printing presses to save the bankrupt monetary system during the G7 finance ministers and central bankers meeting in Marseille on Sept. 9. U.S. Treasury Secretary Timothy Geithner warned European leaders that they had "a lot more to do" to "demonstrate to the world they have the political will" to protect Eurozone members. He even claimed that Europe's debt crisis was a "significant cause" of the slowdown in the U.S. economy, and urged Europe's leaders open the taps all the way, to a create a "very, very powerful, unequivocal financial force.... It is completely within the capacity of the stronger members of the euro area to absorb those costs. Those costs would be much, much greater for their economies if they were to sit here and do nothing."

Pipeline Development 'Will Help Bring Peace' to the Koreas

Sept. 4 (EIRNS)—Discussion in Seoul over the Russia-to-South Korea gas pipeline through North Korea could lead to an inter-Korean summit and tripartite dialogue among the leaders of the Koreas and Russia. Hong Joon-pyo, chairman of South Korea's ruling Grand National Party, spoke of the project on Sept. 2, saying, "The President [Lee Myung-bak] is making a lot of efforts to improve inter-Korean relations."

Referring to the expression "wag the dog," Hong said, "Through the wag, which is the gas pipeline project, we can solve the problem of the dog, which includes the North Korean nuclear issue, the Cheonan (naval) vessel and Yeonpyong Island."

Former party chief Park Geun-hye, daughter of Park Chung-hee, nationalist President of South Korea from 1963 to 1979, and likely to replace President Lee, said Sept. 1, "Once the gas pipeline is laid, it cannot be easily severed. It will help bring peace to the Korean Peninsula."

Ceiling on Swiss Franc Is First in More Than Three Decades

Sept. 6 (EIRNS)—The Swiss Central Bank pledged, on Sept. 6, to defend the Swiss franc "with the utmost determination" against the flood of euros from those trying to escape the chaos in the eurozone. It is not imposing currency controls, but will "buy foreign currency in unlimited quantities." From where the "unlimited quantities" shall appear is not addressed.

An e-mail from the Central Bank told reporters that it "will no longer tolerate a euro-franc exchange rate below the minimum rate of 1.20 francs and is prepared to buy foreign currency in unlimited quantities."

The franc plunged after the announcement. This is the first use of this measure since 1978, when the Bank used it to stem gains versus the deutschemark. Before today's move, the currency had surged more than 13% against the euro this year. It reached a record of 1.0075 against the euro on Aug. 9, trading close to parity.

In the U.S., the 10-year Treasury note fell to an all-time low, for the same reason—panicked investors trying to find an safe island in the storm.