Understanding World Events and Trends
Plain Truth Magazine
January 1985
Volume: Vol 50, No.1
QR Code
Understanding World Events and Trends
Plain Truth Staff  

When Big Banks Totter

   The Orwellian year 1984 ends not with a world dominated by socialistic countries, but with a Western Hemisphere filled with jittery capitalists.
   And it is all so strange. Rising shakily from deep recession, the United States' economy hit full stride by early spring with surprisingly high employment and production figures.
   Despite an enormous federal deficit, the economy gainsaid doom saying economists and financial forecasters whose faces reddened with embarrassment. But the 1982-83 worldwide recession took its toll.
   Officials of the U.S. Federal Deposit Insurance Corporation (FDIC) told The Plain Truth that bankruptcy caused an average of one bank a week to close its doors permanently, in 1983 and 1984 in the United States.
   Near the beginning of the recession Penn Square Bank in Oklahoma tottered on the edge of bankruptcy. Amid shaky and questionable banking practices (mostly concerning energy-related loans), the large state bank finally slipped over the edge and the financial cadaver was carved up by officials of the U.S. Treasury and Federal Reserve System. Continental Illinois Bank of Chicago absorbed about US $1 billion of Penn Square's loans.
   Government officials weakly asserted that the affair proved that the Federal Reserve safety net would work. But the debacle rocked the banking world. To those only vaguely familiar with high finance, the phrase "sound as a bank" began to take on a new, derogatory meaning.
   Then the impossible happened. In May, the aforementioned Continental Illinois Bank in Chicago — one of the largest — was reported to be in trouble. Within hours, a spectacle not seen since the days of the Great Depression ensued. For the next three months, depositors drained away an incredible US $10 billion from Continental's $30 billion in deposits. To stem the financial hemorrhage, the U.S. government and private banks rushed in with an unprecedented loan of $7.5 billion, dwarfing the controversial $1.2 billion Chrysler bailout loan of 1979.
   The situation slowly stabilized. Since a private buyer could not be found, the Federal Deposit Insurance Corporation, which insures deposits in a federally chartered institution to $100,000, agreed to absorb more than $4.5 billion of Continental's loans (about 8 percent of Continental's loans were classified as "nonperforming"). They also announced that the FDIC will hold more than 80 percent of Continental's common stock, thus giving the agency full control over Continental's future.
   U.S. Federal Reserve and FDIC officials interviewed by The Plain Truth claim that the U.S. banking system is still reasonably healthy. One official pointed out that "over 90 percent of the 14,800 [banking] institutions have very healthy ratings and are well managed." But the same official admitted that the Continental affair bordered on "catastrophe."

Safe Nuclear Storage?

   The National Advisory Committee on Oceans and Atmosphere has proposed that the United States reconsider dumping low-level radioactive wastes into the oceans.
   Most U.S. nuclear garbage is stored on land. Ocean dumping, however, is less costly. The committee believes that, if carried out properly, ocean dumping is no more dangerous than land storage.
   For several countries — including Britain, Switzerland and Belgium — ocean dumping of radioactive material has been a familiar task. Britain's Windscale nuclear reprocessing plant pours 1.2 million gallons of mildly radioactive water into the Irish Sea every weekday. Windscale disgorges more nuclear waste into the ocean than any other plant in the world.
   Whether ocean dumping poses a serious threat to human health is a topic of continuing debate.
   With the advent of nuclear power plants, governments had hoped that the answers for safe storage would come long before radioactive fuel was spent and ready for disposal. Governments and researchers are still groping anxiously for safe and socially acceptable ways to discard the huge volumes of nuclear garbage.
   West Europeans have been tempted by China's offer to store spent nuclear fuel in China's vast deserts. The proposals would permit European countries to escape the safety hazards and political problems of local storage. China's proposals, though costly, are less expensive than European storage projects.
   Europe, however, is not certain how to guarantee that China would not choose to convert the plutonium wastes into nuclear weapons for defense at a later date.

Why Overpopulation Threatens Africa

   The vast continent of Africa, with a population of about 500 million, may seem underpopulated. But its growth rate is alarming because it is coupled with inadequate food production.
   The United Nations has already noted 24 countries troubled by severe food shortages.
   Widespread drought has left numerous African countries hopelessly dependent upon foreign relief. An estimated 170,000 people have died because of starvation during Mozambique's three-year drought, according to international relief coordinators.
   Famine in the Sahel region of west-central Africa prompted a request for one million tons of food for the eight drought-stricken nations in that area. "Africa is failing desperately to cope with the problem of feeding its people," warns Edouard Saouma, director-general of the United Nations Food and Agriculture Organization (FAO).
   Africa faces certain calamity unless measures are taken to encourage a major drop in fertility rates. Women in Kenya now give birth to an average of eight children in their lifetime. In contrast, the fertility rate of Western Europe is 1.6; United States, 1.8; Soviet Union, 2.4.
   While many nations in other continents have stabilized their birthrates, an annual increase of 4 percent is not uncommon for some African nations. Under the present system, this poses an insurmountable task for farmers, Since 1970, the per capita food production has fallen more than 11 percent. At the same time, the volume of food imports has doubled.
   Natural disasters, unfavorable climate, social unrest, government corruption and even self-destructive government policies have all been blamed for the food.

"Seal" of Approval on River Thames Reclamation

   In the 1950s, Britain's River Thames was considered to be biologically dead. The water's oxygen level was essentially zero — a lifeless legacy of the Industrial Revolution.
   From the end of the 18th through the mid-20th century, industrial and population pressures overwhelmed the Thames' freshwater and tidal ecosystem. The river became more akin to a sewer than a wellspring of inspiration for the bards and poets who once sang its praises.
   In the early 1960s, legislation was introduced that allowed the Port of London Authority to regulate industrial and sewage discharge into the river. Strict laws and enforcement have paid off.
   An interlinking system of more than 450 processing plants treats 126.2 million cubic feet (3.786 million cubic meters) of sewage each day. Water that once removed paint from boat hulls now teems with life. The water oxygen level of the Thames is 98 percent of normal levels and the river now supports more than 100 species of fish. Swimming and angling have returned, to the river once again.
   A few months ago, a seal was seen swimming in the Thames near the Houses of Parliament. It caused a nationwide stir in Britaine This was the first seal sighted in the River Thames in 150 years. The presence of the flippered guest feeding on River Thames' fish seemed to be the final approval for all the hard work to reclaim the historic river from two and a half centuries of pollution.

Next Frontier: Thinking Machines

   "Stop, will you — stop, Dave!" But Dave continued to pull out Hal the computer's memory blocks one by one. "Stop, Dave, I'm afraid. My mind is going I can feel it. I can feel it.
   When the movie 2001. A Space Odyssey appeared in 1968, the concept of a self-conscious, " intelligent" computer called Hal became frightfully realistic. In a recently released sequel, 2010, Hal is back controlling the starship Discovery on a "daring romp through the solar system."
   Is a computer with artificial intelligence like Hal really possible? Computer scientists say yes. Their next frontier of research is a new breed of supercomputers that would surpass today's machines a thousand times over, so smart that they can outthink humans.
   While such prospects are met with some concern by nonscientists, scientists in several nations are already plodding toward the goal of artificial intelligence: computers that can reason as people do, learn from experience and communicate in human language.
   Says Patrick H. Winston, director of Massachusetts Institute of Technology's Artificial Intelligence Laboratory: "It's like being at Kitty Hawk when the Wright brothers' plane took off."
   Today's expert computers store, retrieve and manipulate vast amounts of information on databases. Artificial intelligence, by contrast, will imbue computers with "common sense," teach them to understand languages and make them learn from experience by processing knowledge based on logic, not arithmetic.
   Which country will be first to develop fifth generation computers?
   If the new wealth of nations is indeed knowledge, international computer supremacy will give that country an unequivocal advantage in technology, science, business, economics, industry — and warfare.

Intelligent machines, MGM's 2001: A Space Odyssey

Hong Kong: Union Jack to Come Down in 1997

   Britain has concluded almost two years of talks with the People's Republic of China regarding Hong Kong. An outpost of Britain's worldwide empire for more than a century, Hong Kong is slated to become a special administrative region of China in 1997. In effect, Britain will give up the colony in that year, when its lease on the territory expires. The end of British rule in Hong Kong is illustrative of the rising importance of China and the already diminished role of the British in world affairs.
   The 50-year agreement calls for China to preserve Hong Kong's British-based legal system. Hong Kong, third largest financial center in the world after New York and London, purportedly will retain its free-market economy and have financial autonomy. The arrangements are that it will remain a duty-free port, retain its own trading status, keep its convertible currency. Free movement of capital is to continue in and out of Hong Kong. China will control foreign and defense policies.

Back To Top

Plain Truth MagazineJanuary 1985Vol 50, No.1