Food Inflation, Shortages in Asia Trigger Demonstrations

Jan. 16 (EIRNS)—Dramatic food price spikes and shortages are driving demonstrations and emergency measures across Asia, triggered by the money-pumping operations of the U.S. and European central banks trying to stave off a banking collapse.

The U.S. Federal Reserve and European Central Bank money-pumping began at the beginning of August 2007, hitting $550 billion in the second week of December. As that occurred, there was a leap of 55% in the prices of a major index of agricultural products, in just four months. Asia, with the world's greatest proportion of malnourished people, is facing disaster. Some cases:

Indonesia: On Jan. 14-15, there were demonstrations of 10,000 in Jakarta protesting a 90% increase in the price of soybeans; the government is trying emergency measures to increase local production, but the head of the national farmers' union says he expects the "social situation with soybeans" to get worse.

Pakistan: There were demonstrations in Pakistani cities this week because of wheat shortages: Very high prices are causing wheat needed in Pakistan to be exported to Afghanistan instead.

China: Price controls have been imposed on grain, edible oil, meat, milk, and eggs (as well as gasoline), Xinhua reported today. This follows the imposition of export tariffs last month to curtail food exports.

Hong Kong: Pork prices surged by 70%, following a similar pork crisis on the mainland for the past months. Pork is central to the Chinese diet.

Thailand: A price freeze was imposed on sugar, and cooking oil (from palm oil) is about to be included, as palm oil stocks collapsed by half and prices spiked. Meat price hikes of over 20% are expected, due to feed price increases of 70%, and the diversion of food to biofuel. The government is imposing a price freeze on a large list of manufactured items as well, blaming the oil price hikes.

Cambodia: A high government official told EIR that the food inflation rate is near 50%, causing worries of social unrest in the extremely poor nation.

These developments throw some light on the phoniness of the consumer inflation statistics issued in the United States, where government and media agencies are desperately trying to allow big Federal Reserve rate cuts, and revive stock markets, by claiming inflation is "tamed."

Philippines Moves To Stop Biofoolery, as Hunger Spreads

Jan. 16 (EIRNS)—The Philippine political elite is coming to its senses, as food hyperinflation and the mounting prevalence of hunger are forcing politicians to scrap their insane biofuel policy. Sen. Miriam Defensor-Santiago, the author of the Biofuels Act of 2007, said Jan. 14: "Biofuel is land-based and will eventually compete with food. Because the Philippines has a small land area, biofuel production will tend to encroach on food production. Corporations are already searching for millions of hectares for jatropha alone. We have to step on the brakes and decelerate."

Rep. Roilo Golez called on the House to open an inquiry into the impact of the biofuel program, saying: "There seems to be a mad rush to develop biofuels. A lot of resources are being committed, including millions of hectares of land and billions of pesos, on something that is now being debated."

China Refutes 'Conjecture' of Bailout of Citigroup

Jan. 16 (EIRNS)—The official People's Daily of China today reported that the extensive speculation that the China Investment Corp (CIC), the Chinese sovereign fund investing some Chinese reserves, would pump billions into Citigroup, was a mere "conjecture," and that there are "no plans" for such a bailout. The paper quotes insiders at the fund saying, "Many have come to CIC hoping to get our investment."

Showing the intense debate over the financial crisis, the article quotes "experts" saying that the CIC must "select its investment targets cautiously, especially since US financial institutions have been hit hard by the sub-prime mortgage crisis." Others, they report, "considered it a good opportunity for CIC to invest at reasonable prices in overseas markets as international finance institutions, affected by the sub-prime crisis, were in dire need of capital to fill up their fund gaps and to expand business." The CIC has already dumped $5 billion into Morgan Stanley and $3 billion into Blackstone, which has dropped in value by over $1 billion.

India: The Thorium Cycle and Nuclear Apartheid

Jan. 15 (EIRNS)—During the trip of Indian Prime Minister Manmohan Singh to Beijing Jan. 14-16, cooperation in civilian nuclear energy was recognized as a key ingredient to economic growth in the region, which is home to one-third of the world's people. For India, this hinges on the development of technologies that make use of India's vast reserves of thorium, as an indigenous nuclear fuel.

Because thorium would make India self-sufficient in energy, thorium nuclear development has been a hate object of Al "Let Them Eat Biofuels" Gore, and the anti-population, non-proliferation mafia. India has a three-stage program to enable it to end its dependence upon imported enriched uranium, and instead fuel its civilian nuclear reactors with thorium. Although thorium is not fissile (does not fission on its own), it is fertile, meaning, when bombarded by neutrons from plutonium, it transmutes to fissile uranium-233, an excellent nuclear fuel. The lack of an adequate amount of available plutonium has slowed the pace of India's thorium R&D program. During Singh's visit to Beijing, it was suggested by one analyst that China provide India with some of its excess plutonium, for India's thorium program.

Russia also has an active thorium R&D program. With plenty of plutonium available, spent nuclear fuel from power plants, and dismantled nuclear warheads, Russia plans to move from dependence upon relatively rare fissile uranium, to more plentiful natural uranium and thorium, by the middle of this century. Beginning last Summer, in a joint program, Russia's Kurchatov Institute began testing designs for thorium fuel assemblies, fabricated by Thorium Power, Ltd., in McLean, Virginia.

The roadblock to what should be a cooperative India-China-Russia-U.S. thorium development program, is the "Henry Hyde United States-India Peaceful Atomic Energy Cooperation Act," signed into law by President Bush on Dec. 18, 2006. To gain access to U.S. and international nuclear technology and enriched uranium fuel, India is supposed to give up its right to reprocess spent fuel and separate out the plutonium, as a show of support for the nuclear nonproliferation regime. That would cripple India's thorium program.

Tokyo Mayor Lashes Out at Both China and U.S.

Jan. 16 (EIRNS)—Tokyo Mayor Shintaro Ishihara said on Jan. 9 that the United States and China will form stronger ties and leave Japan behind, because of the two countries' "money worship."

"The U.S. will gravitate more and more toward China at the expense of Japan as it seeks short-term benefit," Ishihara, 75, said in an interview with Bloomberg television. The "American and Chinese people share a similar value for just money, money, money."

Lyndon LaRouche, in an interview given to the Chinese press in August 2007, characterized Isihara as someone who "want[s Japan] to be an imperial power, allied with Britain, to feel like a Great Power."

Isihara reiterated his view that Japan should scrap its security treaty with the U.S. and strengthen its military.

Growing ties between China and the U.S. are a "very dangerous thing," Ishihara said.

U.S. Commander Keating Builds Military Ties With China

Jan. 17 (EIRNS)—Adm. Timothy Keating, commander of the U.S. Pacific Command, told journalists that his just-concluded trip to China had strengthened military relations between the U.S. and China, easing tensions after China had refused to approve a scheduled November visit to Hong Kong by the USS Kitty Hawk, and denied entry to two U.S. minesweepers caught in poor weather.

"A singular important reason for my visit to Beijing was to see appropriate-level officials," said Keating, "so as to develop the trust, understanding, to look them in the eye, and to get a phone number, so if something comes up that requires some background, some explanation, or is of a time-critical nature, I can make a phone call and have someone on the other end take a phone call. I don't know for a fact that will happen; I am much more confident today than I was before my first visit in May."

U.S. Deputy Secretary of State John Negroponte is in China for the semiannual U.S.-China Strategic Dialogue, as is Saeed Jalili, Iran's top nuclear negotiator. It was reported that Chinese Foreign Minister Yang Jiechi met with the two high officials, separately, but it may be that private U.S./Iranian discussions are taking place under Chinese auspices. British Prime Minister Gordon Brown is also in Beijing, officially on a totally different track.