Global Economic News
Korea-Russia Railroad Brings Pusan to Amsterdam Closer to Reality
Oct. 14 (EIRNS)North Korea and Russia held a test run of their renovated cross-border railway on Oct. 13. The track once again links Russia's Far Eastern border town of Khasan to North Korea's northeastern port city of Rajin (Rason) after three years of renovation, mostly financed by Russia.
Hundreds of North Korean and Russian officials attended the ceremony in a North Korean border railway station to celebrate this opening step towards the realization of the long-held vision to make North Korea's Rajin port a regional hub for Europe-bound freight shipments. "Rajin port will be a new center that will attract cargo from the Asia Pacific region," said Valery Reshetnikov, senior vice president of Russian Railways, which was deeply involved in the railway renovation investing over a quarter of a billion dollars in the project.
Russia will eventually link the 54-kilometer-long railway line with the Trans-Siberian Railway to transport Asian cargo to Europe, an option that would significantly reduce shipping time and costs. As part of the project, Russia is scheduled to complete the building of a container terminal at the Rajin port by next year, and has been in discussions with both North and South Korea about the establishment of a gas pipeline, and eventually a rail line, extending the route from Vladivostok to South Korea, completing the northern route of the "Eurasian Land-Bridge"a project which has long been one of Lyndon and Helga LaRouche's global priorities.
Change in Monsoon Pattern: Floods Disrupt Industry in Southeast Asia
Oct. 13 (EIRNS)A change in the seasonal monsoon pattern has brought widespread flooding to much of Southeast Asia. The annual rains are heavier, came earlier, and look to stay longer than normal. Thailand, Cambodia, Vietnam, Laos, and the Philippines have all seen deaths, widespread property damage, lost crops, and now disruption of manufacturing.
Significant parts of the rice crop, along with other produce, have been lost, as reported earlier. Lost crops and supply disruption have resulted in large increases in the prices of ordinary goods, from bottled water to lettuce.
Now many major factories, including Toyota, Sony, Pioneer, and others, both within the region and outside of it, are closed or working reduced hours. There are factories which are themselves under water, but there are many others whose workers cannot get to the site, or at which the flow of parts in and out is disrupted by flooded roads, damaged bridges, mudslides, etc.
Plants in Japan and India are now being affected as supplies of components from Southeast Asia are reduced or stopped. At least one executive has compared the disruption to supply lines as similar to what occurred after the March 11 Japanese earthquake.
It is far too early to determine overall damages, because further rains are still expected in some areas, while many rural areas are isolated and won't be reachable until the waters abate.
Max Bank, 12th Danish Bank, Has Crashed
Oct. 10 (EIRNS)On Oct. 9, the regional Max Bank crashedthe 12th bank to crash since the financial crisis. The immediate cause was that the financial oversight institution demanded greater solvency, which the bank could not meet. The longer-term cause was bad speculative real estate loans from before the onset of the financial crisis.
On Oct. 10, it was announced that the healthy part of the bank was taken over by another regional bank, Sjaelland Bank, and that the bad customers were transferred over to the state bad bank institution Financial Stability.
Finn Østrup of the Copenhagen School of Business pointed out on TV2 News that this was the first bank to crash under the new "4th bank package," designed to eliminate losses by foreign investors, which had given Danish banking a bad name. To restore foreign confidence, the losses were transferred to the taxpayers, in the form of the state offering a monetary incentive to induce another bank to take over the healthy customers. He said that this was not viable in the long run, because it didn't deal with the underlying causebad speculative real estate loans, and an unknown amount of bad loans to farmers. The Danish bank sector is in bad shape, he said, and we see many crashes in the future.
While Østrup did not call for Glass-Steagall, he argued that Denmark should follow the solution being called for in the euro countriesthe state should require increased bank solidity, and those who cannot meet it should be taken over by the state.