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Web Log - "Watching the pot come to a boil"

29-Aug-15 World View -- Iran calls for Yemen ceasefire as Saudi-backed troops threaten Sanaa

Deadly MERS virus cases surge in Saudi Arabia as Hajj approaches

This morning's key headlines from GenerationalDynamics.com

Iran calls for Yemen ceasefire as Saudi-backed troops threaten Sanaa


Men dig through rubble at residential compound struck by Saudi warplanes last month (HRW)
Men dig through rubble at residential compound struck by Saudi warplanes last month (HRW)

In what could be a major humiliation for Iran, Yemen Saudi Arabia-backed government in exile says that it's prepared to launch an attempt to recapture the capital city Sanaa within two months.

The Iranian-back Shia ethnic Houthi militias seized Sanaa last September, forcing the president Abdu Rabu Mansour Hadi to flee to the south to the port city of Aden, Yemen's second largest city. The Houthi militias then swept south, first capturing Taiz, the third largest city, and continuing to the south to Aden. Hadi was forced to flee to Saudi Arabia as a government in exile.

A Saudi-led coalition began airstrikes on Houthi targets in Yemen on March 26, in support of Sunni militias allied with Hadi. These recaptured Aden and then Taiz. Reportedly, some troops from the United Arab Emirates (UAE) have taken part in some fighting in the south. On Friday, Yemen's foreign minister in exile said that government forces intend to launch the battle to recapture Sanaa with two months.

Saudi Arabia has appeared loath to send their own troops into the war, but for the first time, Saudi Arabian troops have entered Yemen, crossing the Saudi border into Yemen near a site where Houthis have launched shelling attacks on Saudi targets.

If Hadi government forces are able to recapture Sanaa, then it would be a major victory for Saudi Arabia, and a major humiliation for Iran. Earlier this year, Iran was bragging endlessly that it was in control of four major Mideast capital cities -- Damascus, Baghdad, Beirut and Sanaa, in Syria, Iraq, Lebanon and Yemen, respectively. The loss of Sanaa would be particularly humiliating, in view of the recent defeats that have been inflicted on Syria's president Bashar al-Assad.

Iran has never called for a ceasefire by the al-Assad regime in Syria to stop using chlorine-laden barrel bombs on innocent women and children civilians in Syria, but it's now desperately calling for a ceasefire in Syria. Iran is demanding that the Saudi-led airstrikes on Houthi targets in Yemen must stop, and that an immediate ceasefire must be followed by negotiations, since “adopting a political solution and avoiding war” would be beneficial not only for Yemen but for the entire region as well. Arab News and International Business Times

Carnage grows in Yemen as both sides commit war crimes

Yemen has always been one of the poorest countries in the world, and the war in Yemen that began with the Houthi capture of Sanaa last year in September has brought a great deal of destruction to the country.

According to the United Nations, more than 4,300 people have been killed in the conflict, most of them civilians, but that figure is consider to be an almost certain underestimate.

According to Human Rights Watch, the blockade imposed by the Saudi-led coalition has had a severe impact on civilians. The activist organization says that 80% of the population need assistance, and half the population face food insecurity. The blockade has made it difficult to deliver food and medicines, according to HRW.

HRW says that both sides are guilty of war crimes. Houthi militias repeatedly fire mortar shells and rockets indiscriminately into populated area. But HRW particularly condemns the Saudi airstrikes which it says have killed nearly 2,000 civilians, including hundreds of children.

HRW is also claiming that Saudi warplanes have been dropping cluster munitions. Cluster bombs release hundreds of bomblets in order to cause blanket damage over a wide area. Some bomblets will often fail to detonate and remain on the ground as a latent explosive threat. More than 100 countries have signed the Convention on Cluster Munitions, which bans the use and stockpiling of the weapons, though Saudi Arabia and the United States have not. Human Rights Watch and Vice News and AP

Deadly MERS virus cases surge in Saudi Arabia as Hajj approaches


Pilgrims attending last year's Hajj wore nose and mouth masks (AFP)
Pilgrims attending last year's Hajj wore nose and mouth masks (AFP)

A surge in cases of deadly MERS-CoV (the Middle Eastern Respiratory Syndrome coronavirus) in Riyadh, Saudi Arabia's capital city, has killed 26 people in just the last two weeks. Saudi officials are taking immediate steps to isolate all cases as quickly as possible. There's an additional threat of spreading when more than 5 million Saudi students resume school on Sunday after summer vacation.

The sudden surge in new MERS cases is raising concerns because the annual Hajj will take place this year from September 20-25. The Hajj is a pilgrimage to Mecca that every Muslim is required to make at least one in his lifetime. Plane loads of Muslims have already begun to arrive for this year's Hajj. Millions of Muslims from around the world will arrive in Saudi Arabia in the next few weeks for their once in a lifetime Hajj pilgrimage.

Saudi officials are saying that even one case of MERS can present a major threat. With millions of people attending, a single infected person could transmit the disease to many others. The danger is increased because an infected person may not show symptoms for several days.

This is now the third year that MERS has appeared as a serious threat to the Hajj. Saudi officials are confident that the procedures that they followed for the last two years will keep everyone safe this year. Arab News and On Islam

(Comments: For reader comments, questions and discussion, see the 29-Aug-15 World View -- Iran calls for Yemen ceasefire as Saudi-backed troops threaten Sanaa thread of the Generational Dynamics forum. Comments may be posted anonymously.) (29-Aug-2015) Permanent Link
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28-Aug-15 World View -- Explanation of Price/Earnings ratio and Stock Valuations

Discovery of decomposing corpses worsens Europe's migrant crisis

This morning's key headlines from GenerationalDynamics.com

Discovery of decomposing corpses worsens Europe's migrant crisis


Migrant routes into Europe (Washington Post)
Migrant routes into Europe (Washington Post)

German Chancellor Angela Merkel was meeting in Vienna Austria on Thursday with leaders of the western Balkan countries -- Croatia, Serbia, Bosnia and Herzegovina, Montenegro, Kosovo, Macedonia and Albania -- to discuss the "huge challenges" the countries face in view of the huge tsunami of migrants entering Europe.

However, the meeting was overshadowed by the discovery of 30-50 corpses in the back of a truck abandoned off of a highway in Austria near Vienna.

When the police first approached the putrid-smelling truck, they thought it was just having motor difficulties. But then they discovered that there was no driver, and blood was leaking. They opened the truck and found the corpses. The truck had been parked for several days in the searing summer heat, and the bodies were so decomposed that it was impossible for the police even to determine how many there were.

Merkel said of the horrific discovery: "This reminds us that we must tackle the issue of immigration quickly and in a European spirit. That means in a spirit of solidarity - to find solutions."

Unfortunately, Europe is finding few solution. The massive influx of migrants and refugees from Syria, Iraq, Afghanistan and Africa is forcing the European Union into discussions of whether the EU has any morality.

There are two agreements under particular discussion. One is the Schengen Agreement of 25 nations that permit free travel with no visa requirements or border restrictions. Once a migrant reaches a country like Hungary in the Schengen zone, he can travel freely to any other country.

The other agreement is the "Dublin Regulation," which establishes which country is responsible for processing the asylum application. This is usually migrant's first country of entry to the EU, but this ends up placing an enormous burden on Greece and Italy.

The core problem is that hundreds of thousands of migrants are expected to enter Europe illegally this year, and the EU has no coherent policy for dealing with them, or for distributing them among member nations.

The gruesome discovery of the decomposing Austrian corpses is making it more difficult to decide exactly what the European Union stands for. Al-Jazeera and Washington Post and Schengen Agreement and Dublin Regulation

Commemorating the Kellogg-Briand pact that outlawed war

In Camelot, there's a legal limit to the amount of snow that can fall in Winter. As far as I know, the US has never made earthquakes or snowstorms illegal, but on August 27, 1928, the United States signed a pact making war illegal.

The agreement was signed in Paris. Fifteen nations signed the pact on that day in Paris. Signatories included France, the United States, the United Kingdom, Ireland, Canada, Australia, New Zealand, South Africa, India, Belgium, Poland, Czechoslovakia, Germany, Italy and Japan. Later, an additional forty-seven nations followed suit.

Did it work? I guess not.

The first major test occurred in 1931 with the Manchurian Incident or Mukden Incident, which I described a couple of weeks ago. ( "15-Aug-15 World View -- Japan's Shinzo Abe blames WW II on the Smoot-Hawley Tariff act")

Japan had signed by Kellogg-Briand pact, but still invaded Manchuria in 1931, and no other country nor the League of Nations did a thing to stop them.

Like Barack Obama and probably John Kerry, Secretary of State Frank B. Kellogg received the Nobel Peace Prize in 1929 for his work on the Kellogg-Briand pact, which made war illegal. Dept. of State

Explanation of Price/Earnings ratio and Stock Valuations


S&P 500 Price/Earnings Ratio (P/E1) Index (Stock Valuations), 1871-present
S&P 500 Price/Earnings Ratio (P/E1) Index (Stock Valuations), 1871-present

If you listen to CNBC or Bloomberg TV, then you know that they're always showing graphs, and they're always talking about stock valuations, but for some strange reason they never show graphs of stock valuations. One look at the above graph, which shows the S&P 500 Price/Earnings Ratio back to 1871, and you know why they never show it.

As the graph shows, the historic average for the P/E ratio is 14. The P/E ratio today is 21.63, which is far above the historic average. In fact, thanks to the Tech Bubble, the Real Estate Bubble, the Credit Bubble, and the Stock Market Bubble, the P/E ratio has been well above 14 continuously since 1995.

By the Law of Mean Reversion, the P/E ratio not only must fall below 14 again, it has to stay well below average to make up for the 20 years it was above average. Roughly speaking, that means it will be below average for 20 years.

How low will it go? Well, it fell to the 5-6 range three times in the last century -- in 1917, in 1949, and in 1980. That's going to happen again with absolute certainty, and that means that the Dow Jones Industrial Average will fall below 3000.

Let me go on to mention a couple of very technical points.

As I've said many times, analysts on CNBC lie constantly about stock valuations. I used to quote analysts doing this, hoping to name and shame them. (See, for example, "14-Apr-12 World View -- Wharton School's Jeremy Siegel is lying about stock valuations" from 2012.) However, these people don't shame. After Monday's 4% plunge on Wall Street, I saw one analyst on CNBC say that now is the time to buy stocks because stock valuations are the lowest in decades.

Starting in the 2000s, analysts found the best way to lie. If you listen to them, listen for the words "based on forward earnings" or "based on operating earnings." The P/E ratio is computed by dividing the stock price by the annual earnings, and the easiest way to lie is to use bloated earnings that come from a company's public relations department. "Oh yes," a company president might say, "our earnings next year will be twice as high as this year!!" If you increase the earnings, then the P/E ratio goes down.

Then to complete the lie, they refer to the historical average of 14. "Universal Widgets stock has a P/E ratio of 12, based on forward earnings, which is much lower than the average of 14!!!"


S&P 500 Price/Earnings ratio, based on one year trailing earnings, at astronomically high 21.63 on August 21 (WSJ)
S&P 500 Price/Earnings ratio, based on one year trailing earnings, at astronomically high 21.63 on August 21 (WSJ)

That historical average of 14 is only valid for P/E ratios based on "one year trailing earnings." Those are the company's earnings in the past 12 months, as actually reported in SEC filings and tax forms. They're not public relations numbers, and they're the only numbers you can count on.

If you want to use "forward earnings" or "operating earnings" to compute the P/E ratio, then you can, provided you use the correct historical average -- which I've estimated to be about 8. So if Universal Widgets stock has a P/E ratio of 12, based on forward earnings, then it's way overpriced, much higher than the historical average of 8.

One more technical note. Professor Robert J. Shiller of Yale University, who compiles the price/earnings data that I use, prefers to use "PE10", referring to the price of the stock divided by the average annual earnings for the past ten years. I prefer to use PE1 because it gives essentially the same results, and because it's easier to explain. Robert J. Shiller online data

(Comments: For reader comments, questions and discussion, see the 28-Aug-15 World View -- Explanation of Price/Earnings ratio and Stock Valuations thread of the Generational Dynamics forum. Comments may be posted anonymously.) =eod

(28-Aug-2015) Permanent Link
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27-Aug-15 World View -- Pakistan's army continues 'Karachi operation' to eliminate terrorists and criminal mafias

Wall Street on Wednesday goes from boom to super-boom in final hour

This morning's key headlines from GenerationalDynamics.com

Pakistan's army continues 'Karachi operation' to eliminate terrorists and criminal mafias


Pakistan army soldiers
Pakistan army soldiers

Karachi, the huge port city in Pakistan's south, remains one of the most dangerous cities in the world, almost ungovernable, with an average of 2.7 murders reported per day in 2015, according to data compiled by the UK-based Institute for Conflict Management(ICM).

However, as bad as those figures are, they're a very big improvement of 2014, when there were 5.7 murders per day in the same period.

Pakistan's army is taking credit for the dramatic reduction in violent crime from the "evil nexus" between terrorism, perpetrated by Taliban-linked jihadists, and criminal mafias, represented in the major political parties, particularly the Muttahida Qaumi Movement (MQM) political party.

Pakistan's army launched the "Karachi Operation" in September 2013, at a time when the death toll from murders was mounting.

Although MQM leaders initially supported the operation, they now claim that the Pakistan Rangers have singled them out, and that 4,000 of their supporters have been arrested over the past two years, with some saying they were tortured for crimes they did not commit. However, the army points to hundreds of arrests this year alone of suspects allegedly associated with al-Qaeda, Tehrik-e-Taliban (TTP), Lashkar-e-Jhangvi (LeJ), and Al Qaeda in the Indian Subcontinent (AQIS). The Rangers “are arresting criminals across the board,” according to retired brigadier supporting the operation.

On August 10, the Pakistan Rangers announced that the first stage of the operation has been completed, and that the second stage will begin:

"[We] are well prepared to start Stage 2 from Aug 14th 2015 till the time it is successfully completed. Stage 2 will be more severe than Stage 1 as the main task is to hunt down Land Grabbers, Target Killers, Extortionists, Kidnappers, Terrorists to Justice. Pak Rangers Sindh is committed not to spare any criminal. If you have information or if you are a victim yourself than please do not hesitate to contact Pakistan Rangers Sindh through email or telephone numbers. Do not worry even if the criminals are very powerful because Pakistan Rangers Sindh are more powerful by the will of Allah. Credentials of the complainant will be kept highly confidential."

The News (Pakistan) and South Asia Terrorism Portal (SATP - India) and Washington Post (27-July)

Generational history of Karachi Pakistan since World War II

One of the worst wars of the 20th century was the bloody genocidal war between Hindus and Muslims that followed Partition, the 1947 partitioning of the Indian subcontinent into India and Pakistan. The scale of civilian displacement from their homes was so massive that it was called by some an "exodus of biblical proportions."

The Partition war occurred when the new boundaries between India and Pakistan were put into place. The politicians, including India's Mahatma Gandhi and Pakistan's Muhammad Ali Jinnah is the founder of Pakistan, had thought that the remaining Muslims living in India and the remaining Hindus living in Pakistan could all live in peace with their neighbors. Instead, there was a forced migration of 14 million people and the killing of a million more, making it one of the largest mass migrations in history.

That war occurred mostly in along the northern border between India and Pakistan, mainly in Punjab province, with the fiercest fighting between Muslim Punjabis and Hindu Punjabis. The Kashmir and Jammu regions are still a source of continuing conflict between the two countries.

But after the Partition war, millions more Urdu-speaking Muslims living in India migrated to Pakistan, where they became known as Mohajirs ("migrants") and formed the the Mohajir Qaumi Movement (MQM - Migrant National Movement) political party. This party changed its name to the Muttahida Qaumi Movement (United National Movement) in the 1990s, but its members are still referred to as Mohajirs.

The Mohajirs settled mainly in Karachi, which became a business-oriented city, a cosmopolitan home to many ethnic groups.

The first major fault line emerged after the Soviet Union's invasion of Afghanistan in 1979. Karachi became one of the biggest refugee camps for Afghans fleeing the war, mostly Pashtuns. This provided a big boost for religious organizations and in 1983 the first large-scale Shia-Sunni riots broke out. This also occurred near the end of a generational Awakening era, a typical time for this kind of riot to occur, but then to fizzle quickly.

After 9/11, a new fault line grew between the Pashtuns and Taliban-linked jihadist organizations versus the MQM and Shia groups. This resulted in increased sectarian violence throughout the 2000s decade.

Then in 2010, a major disaster happened to Pakistan and to Karachi. ( "5-Aug-10 News -- Multiple crises overwhelm Pakistan")


Almost the entire Indus River valley was flooded in 2010 (BBC)
Almost the entire Indus River valley was flooded in 2010 (BBC)

It's hard to overstate the catastrophic impact of the massive 2010 floods in Pakistan, the worst floods since 1929, since before Pakistan was even a country. The flooding wiped out hundreds of villages from the top of Pakistan to the bottom, along the Indus River. All the major roads and bridges were destroyed and so were the police stations, administration buildings, and telephone exchanges. Thousands of houses were razed to the ground by the storm and at least one million people became homeless.

This created a huge new crisis for Karachi, as massive numbers of refugees flooded into the city.

After that, the city became almost completely lawless. There were jihadist groups. There were ethnic, sectarian, and anti-state militants -- generally two young men on a motorcycle engaging in daily targeted killings of their rivals and enemies. There were extortionists, real estate mafias, terrorist networks and kidnappers. And there was violence between MQM and the city's other political parties, as they fought for governmental control.

For many residents of Karachi, the arrival of the Pakistan Rangers and the "Karachi Operation" in September 2013 has been welcome, because of the reduction in crime. But no one believes that the violence is over. Pakistan is in a generational Crisis era, meaning that fault lines are likely to be inflamed into further violence. With the Pakistan Rangers having made so many enemies, a backlash may bring back the violence worse than ever. Center for the National Interest (Washington)

Wall Street on Wednesday goes from boom to super-boom in final hour

Wednesday on Wall Street was sort of the opposite of Tuesday.

As of 3 pm on Tuesday, the Dow Jones Industrial Average (DJIA) had had gained about 400 points. Then, as I wrote yesterday, Wall Street went from boom to bust in the final hour with a wild 600 point downward swing, resulting in a loss for the day of 205 points.

But not on Wednesday. At 3 pm, the DJIA was up about 400 points, but in the last hour of trading it started going up by a point every few seconds, ending up 620 points for the day, for a kind of "super-boom."

Wednesday was the kind of day that I was expecting and wrote about two days ago ( "25-Aug-15 World View -- What to expect after Monday's global stock selloff"). The expectation is of wild swings upward and downward, and Wednesday was a wild swing upward.

The USA Today headline reads, "Dow roars back, rallies 620 points, in sign of market stabilization." It's a sign of the foolishness of the mainstream media that these wild swings could be interpreted as "market stabilization."

There are two scenarios. One scenario is that these swings really do stabilize in the next few days and weeks, and that the DJIA goes up or down no more than 50-100 points in a single day.

The other scenario is that these wild swings increase in amplitude, triggered by events such as the continuing crash in China's stock market. In that scenario, a Wall Street panic and financial crisis is increasingly likely. As I've repeatedly pointed out, the S&P 500 Price/Earnings ratio index (stock valuation index) is over 21, far higher than the historic average of about 14. And by the Law of Mean Reversion, it will return to the 5-6 level, which it did several times in the last century. When it does, the DJIA will fall well below 3000. USA Today

(Comments: For reader comments, questions and discussion, see the 27-Aug-15 World View -- Pakistan's army continues 'Karachi operation' to eliminate terrorists and criminal mafias thread of the Generational Dynamics forum. Comments may be posted anonymously.) (27-Aug-2015) Permanent Link
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26-Aug-15 World View -- Europe increasingly overwhelmed by tsunami of migrants

Wall Street turns around on Tuesday, goes from boom to bust in one hour

This morning's key headlines from GenerationalDynamics.com

Europe increasingly overwhelmed by tsunami of migrants


Hundreds of migrants stand in line on a railway track as uniformed police watch on (Athena Pictures)
Hundreds of migrants stand in line on a railway track as uniformed police watch on (Athena Pictures)

There are about 10,000 migrants on the Greece's Aegean Sea island of Lesbos, having arrived from Turkey. There are also migrants on the islands of Chios and Kos. Greece is running a ferry that's takes 2,000 migrants per day from the islands, in a trip that takes 12 hours at sea. In Athens, Greece provides buses to the Macedonia border.

There are now about 3,000 migrants per day traveling along the route from Greece to Macedonia to Serbia to Hungary, which is a Schengen zone country. From there they can travel to wherever they want, but in most cases the desired destination is through Austria to Germany. Germany processed 173,070 asylum applications in 2014, and expects to process 800,000 in 2015, which would add 1% to Germany's population.

The flow of migrants is so large that Germany decided it had no choice but to suspend the "Dublin rules" for Syrian migrants. Under the Dublin Rules, if a migrant reaches Germany and requests asylum, then Germany would not even process the paperwork. Instead, the migrant would be shipped back to the first EU country that the migrant arrived in, usually Italy, Greece or Hungary. With almost 3,000 migrants arriving every day, that would mean shipping 3,000 migrants per day back to Italy, Greece or Hungary for processing, and those countries are already overwhelmed. Under the new rules, Germany will process the paperwork in Germany.

The tsunami of migrants is overwhelming Europe. Every attempt at a fence or other border control is being swept away, and Europe is showing little sign of finding a way to deal with the situation. Telegraph (London) and Daily Mail (London) and AFP and Guardian (London)

Syrian migrants prepare carefully for trip to Europe

Paul Ronzheimer, a journalist for the German newspaper Bild, was interviewed on al-Jazeera on Tuesday. He joined a group of Syrian migrants from Aleppo as they traveled from Turkey to Germany, and outlined what preparations the migrants make for the trip:

Ronzheimer said that the group he was with were well-prepared, but others just travel without advance preparation, and they usually get into trouble with smugglers or the police.

China reduces interest rates after new stock market rout

The People's Bank of China (PBOC) lowered interest rates by 0.25% on Tuesday, to make it easier to borrow money, after the Shanghai Stock Exchange suffered another rout, falling 7.6%, falling a total of 22% in four days since August 19.

Presumably the purpose of the move was to allow people to borrow money to invest in the stock market, in the hope of pushing up the stock market. However, some analysts criticized the move, because the stock market bubble was caused by stock purchases using borrowed money, and lowering interest rates makes the situation worse.

China's debts have increased by almost $21 trillion since 2007, and total debt is now 282% of GDP. No big country has avoided suffering a big crash, sooner or later, under these conditions. Bloomberg and Bloomberg

Wall Street turns around on Tuesday, goes from boom to bust in one hour

Wall Street stocks seemed finally to be bouncing back upward on Tuesday from the 588-point rout in the Dow Jones Industrial Average on Monday. China's interest rate cut seemed to encourage buyers, and at one point the DJIA was up 442 points.

But starting at 3 pm, in the last hour before close, the stock market plummeted, with the DJIA ending the day losing 205 points. This was the sixth day of a losing streak on Wall Street.

Each day that passes in this way looks more and more of the prelude to a major crash. As I wrote yesterday, I expected Wall Street to bounce up on Tuesday, and I expected it to stay up through the close. ( "25-Aug-15 World View -- What to expect after Monday's global stock selloff")

So I was as surprised as anyone when stock prices plummeted in the final hour.

However, as I wrote yesterday, the overall picture to expect a lot of volatility, with possible huge gains one day and huge losses the next day. With the S&P 500 price/earnings ratio (stock valuations) at historic highs, this will continue until a panic occurs. USA Today

(Comments: For reader comments, questions and discussion, see the 26-Aug-15 World View -- Europe increasingly overwhelmed by tsunami of migrants thread of the Generational Dynamics forum. Comments may be posted anonymously.) (26-Aug-2015) Permanent Link
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25-Aug-15 World View -- What to expect after Monday's global stock selloff

North Korea 'expresses regret', defusing war threat with South Korea

This morning's key headlines from GenerationalDynamics.com

What to expect after Monday's global stock selloff


S&P 500 Price/Earnings ratio at astronomically high 21.63 on August 21 (WSJ)
S&P 500 Price/Earnings ratio at astronomically high 21.63 on August 21 (WSJ)

Monday was one of the most volatile days in Wall Street history, with high-volume wild swings. The DJIA fell almost 1100 points within minutes after the opening, and then recovered most of the loss, finally ending down 588 points, or almost 4%.

The selloff was global. In Europe, stock exchanges in Britain, Germany and France fell around 5%, and in Asia, stock markets in Japan, Hong Kong and Australia fell 4-5%.

So let's start with where we are.

Generational Dynamics predicts that we're headed for a global financial panic and crisis. According to Friday's Wall Street Journal, the S&P 500 Price/Earnings index (stock valuations index) on Friday morning (August 21) was at an astronomically high 21.63. This is far above the historical average of 14, indicating that the stock market is in a huge bubble that could burst at any time. Generational Dynamics predicts that the P/E ratio will fall to the 5-6 range or lower, which is where it was as recently as 1982, resulting in a Dow Jones Industrial Average of 3000 or lower.

I've been pointing out for years that the Wall St bubble had to burst at some point, with 100% certainty. It's impossible to predict the exact time. It's worth noting that we still don't know to this day why the stock market crashed on that particular day, Black Monday, October 28, 1929, instead of a few weeks earlier or later.

So it's quite possible that when the crash comes, we'll never know why it occurred on precisely that day.

Most of the commentators and analysts on Monday were their usual glib selves, saying things like, "This is a healthy correction," and "This is a buying opportunity, and "China has too small economy to affect the rest of the world."

I listened to a number of analysts on CNBC and Bloomberg TV on Monday, and I did notice a change. Normally, mentioning the price/earnings ratio (stock valuations) is always strictly forbidden, or if it's mentioned, then the analysts simply lie, saying "it's low," which is ridiculous. But on Monday, I actually heard two or three analysts mention, however briefly, that stock valuations were unsustainably high. This is quite remarkable, as if some secret code were being violated.

There's was one particular exchange that was especially interesting. Mohamed El-Arian is quite possibly the most glib analyst on TV, always taking a professorial tone, and answering every question by intoning something like, "There are three reasons: one ... two ... three...." On Monday, he was specifically asked if stock valuations were high. He said, almost under his breath, that they were, and then quickly changed the subject to something completely different. Apparently he is not ready yet to break the secret code by saying clearly that valuations are unsustainably high, though he evidently is aware of it. It was one of the many weird things on a weird day.

Some analysts are calling this Monday the new "Black Monday," but it's not.

From the point of view of generational theory, October 28, 1929, is a very special day because it was a day of total panic, and it traumatized the nation, and it's remembered to this day. But this day was nothing like that, not a day of total panic. It was a bad day, but it will be soon forgotten. This was no new "Black Monday."

What this Monday seemed like was a prelude to the real day of panic. And with stock markets plunging globally, the panic may not begin on Wall Street at all -- it may begin elsewhere and spread to Wall Street. As I wrote yesterday ( "24-Aug-15 World View -- Asian stock markets in freefall, with China in full-scale panic"), it may be that China already appears to be in full-scale panic, though it's hard for me to judge for sure from this distance.

If I were to guess what's going to happen in the next few days it would be this: I would expect Wall Street stocks to bounce back up on Tuesday. Expect to see a lot more volatility, with stocks rebounding one day, and plunging the next. Then, one day, a real panic will occur, and that will be the day that will be remembered for years. That day has to come, with 100% certainty. We just don't know exactly when. AP and ZeroHedge

African currencies crashing, along with commodities and China

Stock markets usually get most of the attention, but in fact the global selloff is applying to currencies and commodities as well.

As we wrote last week ( "21-Aug-15 World View -- Kazakhstan joins the 'currency wars' as global stocks plummet"), a number of currencies are falling against the dollar, following in the lead of China's surprise devaluation of its yuan currency.

African economies, and African currencies, are being hit hard China's devaluation and economic slowdown. More than one-quarter of Africa's exports go to China, and countries like South Africa, Kenya and Zambia are being hit hard. Zambia derives almost 70% of its export earnings from copper, and with copper prices falling, Zambia's currency fell 4.6%. The price of oil keeps falling, and oil-exporting countries Nigeria and Angola are losing substantial portions of their income.

The price of oil is falling dramatically, reaching as low as $38 per barrel on Monday. Countries outside Africa, such as Venezuela, Russia and Saudi Arabia, are suffering because their income depends on oil being closer to $100 per barrel.

What makes the global financial situation so precarious is that there doesn't seem to be any good news anywhere. Economic growth is tepid in the the U.S. and slowing, while there's no growth to speak of in China, Europe, or any of the developing countries with the possible exception of India.

Another bizarre twist in today's world is that investors are very concerned when the US Federal Reserve is going to raise interest rates, with the base Fed Funds Rate currently almost zero (0.13%). With all of these currencies weakening and devaluing against the dollar, the dollar is getting stronger, which will make America less competitive in the world, and affect the US economy.

However, there's another angle to this. With near-zero interest rates in the U.S., it's been possible for countries and businesses around the world to borrow a lot of money, and go deeply into debt. If the Fed Funds Rate goes up, then the interest rates on those debts will also grow, causing further problems for these borrowers. Bloomberg and BBC and Zero Hedge

North Korea 'expresses regret', defusing war threat with South Korea

As we reported yesterday, North and South Korea were both mobilizing for war, but were negotiating for peace at the same time. South Korea was demanding that the North apologize for planting landmines in the demilitarized zone (DMZ), causing two South Korean soldiers to be wounded. North Korea was refusing to apologize, or to admit laying the land mines. South Korea was using loudspeakers to broadcast anti-North propaganda across the DMZ, and the North was demanding that the loudspeakers be turned off.

Some analyzed were predicting that the North and South would reach an agreement, whereby the North would "express regret," without actually apologizing, and that the South would accept that as an apology.

And that's exactly what's happened. North Korea said that it "regrets" that South Korean soldiers were injured by landmines and lifted its "semi-state of war."

Even though this was neither an admission nor an apology, it was good enough for the South to claim that the North had apologized. The South shut down the loudspeakers, and the national security chief, Kim Kwan-jin, said:

"I wish that we can build the new South and North Korea relationship that our people (wish for) by sincerely carrying out the agreed issues and building trust through dialogue and cooperation. During the meeting, it is very meaningful in the aspect that the North apologized over the landmine incident and that they agreed on making efforts to prevent such incidents from reoccurring and easing tension."

Nobody believes that this new agreement will bring about any fundamental changes. It won't be long before the North once again does a military provocation, or threatens the South with war. Korea Herald and CNN

(Comments: For reader comments, questions and discussion, see the 25-Aug-15 World View -- What to expect after Monday's global stock selloff thread of the Generational Dynamics forum. Comments may be posted anonymously.) (25-Aug-2015) Permanent Link
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24-Aug-15 World View -- Asian stock markets in freefall, with China in full-scale panic

North and South Korea negotiate as both sides prepare for war

This morning's key headlines from GenerationalDynamics.com

North Korea mobilizes its troops and submarines


South Korean soldiers near the DMZ on Sunday (Yonhap)
South Korean soldiers near the DMZ on Sunday (Yonhap)

Although peace negotiations between North Korea and South Korea are ongoing, the North has mobilized thousands of its troops near the DMZ, the border with the South, and 50 North Korean submarines, about 70% of its fleet, have left port and remain undetected by South Korean radar. This is the highest level of North Korean military activity in years.

In response, the South Korean military is maintaining full readiness and mobilizing more antisubmarine assets such as destroyers, P-3C patrol planes and Lynx antisubmarine helicopters.

These activities come in the midst of long-scheduled joint military exercises between South Korea and the U.S. Arirang (Seoul) and Yonhap (Korea) and Korea Herald

North and South Korea negotiate as both sides prepare for war

It's very hard for me to get excited about the threats of war from North Korea's child dictator, Kim Jong-un, that have been going on almost daily for years, or for South Korea's empty expressions of outrage over any hostile action that the North Koreans take.

In April 2010, North Korea launched a torpedo that sank the Cheonan, a South Korean navy warship, in South Korean waters, drowning 46 people. Then in November 2010, North Korea launched an artillery attack on on South Korea's Yeonpyeong Island, killing civilians. ( "26-Nov-10 News -- South Korea in chaos over North's attack")

In those and other cases, South Korea responded by carefully avoiding officially blaming the North Koreans, even though there was never any doubt that the North Koreans were to blame. The reason for the reticence was that to blame the North Koreans would force South Korea to respond military, resulting in a war.

(As an aside, the Chinese have conducted massive cyber attacks against the US government, and the US government uses every possible wording to avoid blaming the Chinese. The reason is the same -- blaming the Chinese for an act of war would require American retaliation.)

Although South Korea did not retaliate, there was a substantial increase in public nationalism, and hostility to the North. The South Korean government promised that the next military provocation by the North would be met with a military response.

Earlier this month, two South Korean soldiers were wounded by land mines planted in the so-called demilitarized zone (DMZ) that separates the two countries, and was defined in 1953 by the armistice that ended the active fighting in the Korean War.

Once again, South Korea decided not to take military retaliation. Instead, the South Koreans began broadcasting anti-North propaganda via loudspeakers on the end of the DMZ into North Korea.

As mild as this form of retaliation seems to be, it appears to have completely infuriated the child dictator, who threatened war if the loudspeakers were not turned off.

The South Koreans offered to turn them off only if the North Koreans apologize for the landmine in the DMZ earlier this month. The North refused to do so, and set a deadline of 5 pm on Saturday for the South to turn off the loudspeakers or face war.

However, peace talks began on Saturday, and are apparently continuing into Monday.

So the question remains whether North Korea will actually use those troops and submarines it's mobilized. Analysts are suggesting that the negotiations will succeed with the North expressing regret for the landmine but not apologizing, and the South turning off the loudspeakers. Arirang (Seoul) and Reuters

Flood of Syrian migrants into Europe continues to grow


Migrants from Syria and Afghanistan travel to Turkey, through Istanbul to Greece, through Greece to Macedonia, where they take the train to Belgrade Serbia, and then walk or hitchhike 100 miles to Hungary's border.
Migrants from Syria and Afghanistan travel to Turkey, through Istanbul to Greece, through Greece to Macedonia, where they take the train to Belgrade Serbia, and then walk or hitchhike 100 miles to Hungary's border.

Because of the weather, this is probably the peak season for migrants from the Mideast and Africa attempting to reach Europe.

On Saturday, there were some 5,000 migrants in Greece on the border with Macedonia. Macedonian police officers tried to prevent them from entering their country, but more than 1,500 pushed through the barbed wire, with the police trying to stop them with batons and stun grenades.

In the meantime, the Greek passenger ship "Eleftherios Venizelos" is traveling back and forth carrying 2000-2500 migrants each trip from the islands of Lesbos, Kos and Chios to the Port of Piraeus. Many of them will take buses to Thessaloniki, and from there join the throng trying to pass into Macedonia.

The Macedonians are now letting most of them into the country, since they're only going to pass through to Serbia. From there, they'll try to pass through to Hungary, which would put them into the Schengen zone, allowing visa-free travel from country to country. They want to get through the border as quickly as possible, since Hungary is building a double-fence to keep them out, and it's supposed to be completed within a couple of weeks.

The other route taken by Syrian refugees is overland to Libya, where human traffickers pack them into rubber boats and push them out into the Mediterranean Sea, where the migrants hope that European naval vessels will rescue them before the rubber boats sink, drowning them all.

Italy's coast guard rescued 4,400 migrants on Sunday, the biggest single-day operation mounted to date. The increase in rescues prompted criticism from an Italian government official:

"This must be a joke. We are using our own forces to do the people smugglers' business for them and ensure we are invaded."

Greek Reporter and BBC

Asian stock markets in freefall, with China in full-scale panic

As of this writing on Sunday evening ET (Monday morning in Asia), Asian markets are down 1-3% in different countries, that is being called a "broad-based meltdown."

An hour after the Shanghai stock market opened, the index was down over 7%. It seems pretty clear that China's stock markets are in a state of full-scale panic.

Futures in the Dow Jones Industrial Average are down 220.

(Comments: For reader comments, questions and discussion, see the 24-Aug-15 World View -- Asian stock markets in freefall, with China in full-scale panic thread of the Generational Dynamics forum. Comments may be posted anonymously.) (24-Aug-2015) Permanent Link
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23-Aug-15 World View -- Fraud and subversion in Healthcare.gov - the greatest IT disaster in history

A report on Obamacare and the Obamacare web sites

This morning's key headlines from GenerationalDynamics.com

Fraud and subversion in Healthcare.gov - the greatest IT disaster in history


Typical Healthcare.gov home page
Typical Healthcare.gov home page

For three months I've been investigating the Heathcare.gov disaster -- the federal web site and multiple web sites all failed disastrously on launch day, October 1, 2013. It can't be a coincidence that so many software development projects all failed disastrously in the same time frame, so there has to be a core reason.

My investigation has shown that the core reason was that the Obama administration poured a tsunami of money into these projects -- so much money that the contractors hired thousands of incompetent programmers in order to spend that money, with the result that the software projects failed. Spending the money became more important than getting the web sites working. As the projects failed, the coverups, corruption, lies and fraud began, and continue to this day.

I also expanded my investigation into Obamacare in general, and found that almost every aspect is thoroughly drenched in corruption and fraud. The Obama administration took the money in the $710 billion Medicare fund and used the money to fund one disastrous Rube Goldberg component after another. These components, such as the "risk corridors," the "co-ops," and the state-run "Obamacare exchanges," were all supposed to be self-sustaining by now, but instead they're all financial disasters. And now that the confiscated Medicare money is running out, they'll have to be shut down.

The Obama administration has confiscated the $710 billion dollar Medicare fund that millions of people worked for decades to create, and essentially thrown it into the garbage. The contributions of those millions of people have all been lost, with nothing to show for it.

Many of the state-run Obamacare exchanges are working today, but only barely. Since they were implemented with thousands of incompetent programmers, where the objective was simply to spend money, they're technological dinosaurs with billions of lines of code that's now almost completely unsupportable. In addition, they're financial disasters, and will have to be thrown out.

This World View article is a summary of two lengthier articles on my web site:

Earlier this month, I wrote "5-Aug-15 World View -- Britain's National Health Service (NHS) faces existential financial crisis". In that article, I described how both the NHS and the Veterans Administration health care system were quickly becoming financial disasters. The same is true of Obamacare.

Introduction to the Healthcare.gov debacle

On October 1, 2013, Healthcare.gov went "live," and was soon revealed as the biggest IT (information technology) and computer software disaster in history. That it was a disaster was clear, as President Barack Obama was completely humiliated after announcing that the slow response was because millions of people were signing up for insurance.

Two months after the launch, I wrote "1-Dec-13 World View -- Obamacare: 500M lines of code, $500M, only 60% completed". In that article, I said that the reported number of 500 million lines of code was impossible. It was impossible to develop a working web site with 500 million lines of code, and anything that size would be unsupportable anyway. I added:

"I get a picture in my mind of 1,000 monkeys sitting at computers typing code, without worrying about whether or not it works. Given the size of the catastrophe, some variation of that must have happened."

I was thinking "criminal fraud" when I wrote that article, but I didn't use those words without any proof. Now, almost two years later, we finally have reports coming out that provide evidence of criminal fraud. There weren't thousands of monkeys typing random code, charging $200/hour each, but there might as well have been.

We now know exactly why Healthcare.gov was such a disaster:

There's little doubt in my mind that if the Obama administration had granted $20 million per web site instead of $150-500 million per web site, then they would have gotten working web sites to start with. By pouring out a tsunami of money, they got a disaster and major humiliation, which is what they deserved.

The above conclusions were based on a detailed examination of the Massachusetts Health Connector project, and briefer looks at other Obamacare exchange projects.

In the case of the Massachusetts Health Connector project, there was development contractor, CGI Corp., and an overseer contractor, the University of Massachusetts Medical School. The evidence from the whistleblowers indicates that both these contractors allegedly committed criminal fraud, and furthermore that they were allegedly in a criminal conspiracy to defraud the government.

This story is full of criminals and a few heroes. The heroes are the ones who told their bosses that the project was in trouble, and were ordered to keep quiet, or were treated abusively and fired. The criminals are the ones who lied and cheated, committed fraud, and conspired to commit fraud.

The Massachusetts Health Connector web site

Now let's turn to what happened to the Massachusetts Health Connector web site. Much of the following depends on extensive research done by by Josh Archambault at the Pioneer Institute. (See Josh Archambault's report).

There were two contractors involved. CGI Corp. was responsible for coding and implementation, and the University of Massachusetts Medical School (UMass) was hired to do oversight on CGI's work.

"Dave" was the Interface Manager at UMass early in the Mass Connector development. He ended up being a whistleblower, and he asked me not to use his real name. He said that a small team could have done the Mass Connector for very little money:

"One of the last conversations I had with the program managers was that I said I wanted to take this over. I said that we don't need 200 or 300 people that CGI is using. You can't herd information through 300 people fast enough for them to develop anything. They'll never get it done. Give me six people, and we'll get it done, and it will work. I was fired the next day."

This is an important statement, and it explains why I wrote the comment about the "1,000 monkeys" typing random code in my original article. It's literally impossible to spend the kind of money that the Obama administration was pouring out to its supporters to get a technical project done. As Dave says, "You can't herd information through 300 people fast enough for them to develop anything."

Like Dave, I could have developed the Mass web site or the federal web site within a few months, working with a team of five to ten people. And it would have actually worked.

The following is a brief summary of what happened, omitting many technical details. The full story, including technical details, can be found in the lengthy article "Healthcare.gov -- The greatest software development disaster in history".

In the fall of 2012, CGI was missing deadline after deadline. More importantly, CGI was unable even to provide any technical specifications of what it was doing. CGI had hired hundreds of programmers in order to spend all the money they'd been given, and it was becoming clear that in order to hire so many programmers, CGI had had to lower their standards substantially, with the result that many of the programmers were too incompetent even to produce technical specifications. And if CGI was too incompetent to produce any technical specifications, then they certainly were too incompetent to produce usable code.

In the aftermath, UMass claimed that they didn't know that CGI had been missing deadline after deadline. However, Dave says that that claim was completely untrue:

"I was reporting to management, calling meetings, and we had a JIRA [problem reporting] system set up. Report in JIRA, escalate it, escalate it. So when UMass said they didn't know that CGI was missing deadlines, that's absolutely not true - there were meetings and JIRA reports."

UMass had been hired to provide oversight over CGI. But instead of being an overseer, the contractor became a collaborator.

In December 2012, CGI had to perform a live test that required sending test messages back and forth between CGI's software and the servers in Washington. CGI proposed to cheat on the test, and then lie to government officials. Dave refused to approve the fraudulent test, despite intense pressure from his bosses at UMass. Dave was removed from his job and fired shortly thereafter. The fraudulent test was approved by UMass's management.

After Dave was fired, CGI continued to miss deadlines and fake tests, and lie to government officials. When launch day came along, October 1, 2013, the web site didn't work at all.

According to Archambault's report, problems just continued. In the Spring of 2013, CGI faked tests by using dummy screens on its web site, and claimed that it had performed a valid test. By that time, CGI knew that the project would fail, but refused to tell anyone. CGI never ran the end to end tests that it had committed to, and by the October 1 launch date, the software was completely untested. Indeed, it was not working at all, as they knew, but they lied and claimed that it was working, and accepted hundreds of millions of dollars in payment for software they knew wouldn't work. UMass was fully informed about the lying and fraud, but collaborated with it.

CGI and UMass had violated one of the oldest and most important rules about software development projects: Brooks' Law: Adding manpower to a late software project makes it later. This is discussed in detail in my full-length article.

CGI and UMass had spent hundreds of millions of dollars to produce a piece of garbage, and as bad as that is, there's one more completely disgusting thing that happened.

By the beginning of 2014, it was clear that CGI Corp.'s development effort was a total disaster, and the State of Massachusetts transferred the project to a new consultant firm, Optum Inc. CGI was paid $17 million for the task of turning the work they had completed over the Optum But when Optum received CGI's code, they unable to use any of it -- it was complete garbage. So CGI had already spent close to $200 million for a $10 million project, and with that money they produced nothing but garbage. And they were paid ANOTHER $17 million to turn the garbage over to Optum. As cynical and jaded as I am, this is almost too much to bear. It illustrates the level of corruption and fraud throughout the Healthcare.gov project.

What happened here, based on years of experience as a Senior Software Engineer and as a tech journalist, is that the cause of the disaster was that the Obama administration paid CGI and UMass had been paid hundreds of millions of dollars for a $10-20 million software development project. If they'd paid only $10-20 million, then the project would have been completed successfully. This was a major humiliation to the Obama administration, and they got what they deserved.

Other Obamacare exchanges

What's remarkable is that similar disasters occurred in one state Obamacare exchange after another, with different contractors, but always with the same problem: Being given $150-500 million for a $10-20 million project.

In my full-length article, I discuss Covered California, the Vermont Health Connector Obamacare exchange, the Cover Oregon Obamacare exchange, the Nevada Health Link Obamacare exchange, and the Maryland Health Connection Obamacare exchange.

All of these were disasters, and they were all drenched in corruption, fraud and criminality.

There were four state Obamacare exchanges that ran reasonably well on launch day, October 1, 2013: Connecticut, Kentucky, Rhode Island and Washington State. What those four had in common was that the contractor was Deloitte Consulting.

I made repeated requests to Deloitte Consulting for technical information on how they had accomplished this, but they just made non-credible excuses and refused to provide any information, so I'm unable to report whether Deloitte accomplished this through technical expertise or because of some corrupt relationship with the Obama administration. However, Deloitte does prove one thing: Whatever they did could have been done by the contractors for the other Obamacare state exchanges, so any excuses the other contractors give are sure to be phony.

Obamacare's Medicaid and 'Nixon-Obama Price Controls'

Long-time readers are aware that from the day it was first proposed in 2009, I've referred to President Barack Obama's health care plan as a proposal of economic insanity, because it's a repeat of President Richard Nixon's price controls, which were an utter, total disaster for the economy. What I now refer to as the "Nixon-Obama Price Controls" have been equally disastrous.

As part of my research on the Healthcare.gov software development projects, I investigated other aspects of Obamacare. Here's a summary of my findings:

These are all discussed in detail in my full-length article "Healthcare.gov -- The greatest software development disaster in history".

About the Author

I'm very passionate about this story because I've been a Senior Software Engineer for decades, and I well understand how software development efforts work, and how criminality would have brought about the Healthcare.gov disaster.

As far as I know, I'm the first journalist to write at length about the massive corruption, fraud and criminality in Obamacare, but I'm hardly considered mainstream. There should have been thousands of stories about this in the mainstream media by now, but there have been almost none. But almost no mainstream reporter would dare to criticize Obamacare in any way, because they know they would face massive retribution from the Obama administration, just as would happen to an Iranian reporter who criticized the Supreme Leader.

I'm perhaps uniquely qualified to do this Healthcare.gov analysis. I'm an apolitical, non-ideological, highly analytical writer. My background is both as a Senior Software Engineer and a technology journalist. The following is a very brief summary: Over the years, I've successfully developed hundreds of software applications for dozens of employers, from operating systems to compilers to web sites to complex enterprise-wide systems, working as both a consultant and an employee. (Resume: jxenakis.com/resume) I was Boston Bureau chief for InformationWeek magazine for two years, and Technology Editor for CFO Magazine (part time) for ten years, and I've interviewed hundreds of CEOs, CIOs, CFOs software developers and managers. (Examples: http://ww2.cfo.com/author/john-xenakis/).

(Comments: For reader comments, questions and discussion, see the 23-Aug-15 World View -- Fraud and subversion in Healthcare.gov - the greatest IT disaster in history thread of the Generational Dynamics forum. Comments may be posted anonymously.) (23-Aug-2015) Permanent Link
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22-Aug-15 World View -- Macedonia declares state of emergency along border with Greece

Wall Street stocks in free fall on Friday

This morning's key headlines from GenerationalDynamics.com

Greece ferries thousands of migrants from islands to Port of Piraeus


The ferry Eleftherios Venizelos with Syrian migrants on board leaves Lesbos for Greece's mainland
The ferry Eleftherios Venizelos with Syrian migrants on board leaves Lesbos for Greece's mainland

A couple of weeks ago, I wrote about 'total chaos' on Greece's islands Kos, Chios and Lesbos, because thousands of migrants were arriving at the islands from Turkey, crossing the Aegean Sea in rubber boats. After human rights activists expressed outrage at the inhuman conditions on the islands, Greek authorities agreed to send a ferry to carry them to the mainland.

On Friday, the ferry Eleftherios Venizelos carried about 2,200 migrants from the island of Lesbos to the port city of Piraeus on the mainland. Buses were waiting to carry the refugees, many of them families with young children, to train statements. Typically, they head northwards by train or bus to the city of Thessaloniki, hoping to travel through Macedonia and Serbia into Hungary and the Schengen zone. Reuters

Macedonia declares state of emergency along border with Greece

It was just a few days ago that I wrote about A train station in Macedonia that has become the new European migrant choke point. Two weeks ago, there were 500-600 migrants per day crossing the border into Macedonia from Greece, having arrived in the Greek city of Thessaloniki from Syria or Afghanistan or Iraq, through Turkey. But in the last few days, the number of migrants has increased to 3,000-3,500 per day.

Up until now, the Macedonian authorities have been sanguine about the migrants arriving from Greece, because almost none had any intention of remaining in Macedonia, but were planning to take the train to northern Serbia and then cross the border into Hungary. When they're in Hungary, they're in the Schengen zone, which means that they can travel from country to country with no visa or passport restrictions.

It's believed that the enormous surge in migrants arriving at the Macedonian border has been triggered by Hungary's announcement in June that they would build a fence along the border between Serbia and Hungary. Migrants have been rushing to cross into Hungary before the fence has been built.

But as of Friday, Macedonian border forces blocked migrants from crossing the border, beating them back with truncheons, riot shields, and teargas. Razor wire is now being rolled along the border to prevent people from entering. Macedonia has declared a state of emergency, meaning that the country's army will be called on to help deal with the crisis.

Human rights activists are expressing outrage. According to one, "Macedonian authorities are responding as if they were dealing with rioters rather than refugees who have fled conflict and persecution."

Macedonian authorities say that going to permit a limited number of migrants to enter Macedonia each day.

Unless I'm misunderstanding the situation, that means that within a few days there are going to be perhaps tens of thousands of migrants on the Greek side of the border, waiting to enter Macedonia. This might not end well. BBC and CNN

New fires and masses of dead fish still plague Tianjin China


Masses of dead fish wash up on river shore in Tianjin
Masses of dead fish wash up on river shore in Tianjin

Four new fires broke out on Friday morning at the site of the massive explosions in Tianjin, China, two weeks ago ( "13-Aug-15 World View -- Massive explosion in Tianjin highlights China's dismal industrial safety record")

New fires keep arising from the blast site, which is scattered with smoldering chemicals and flammable substances. Almost 5,000 soldiers and armed police officers have been sent to Tianjin to clean up the tons of dangerous chemicals.

Chinese officials had declared the air and the drinking water around Tianjin to be safe, but then tests showed that cyanide in the water and air were hundreds of times higher than acceptable levels.

Masses of dead fish, numbering in the thousands, were found on Friday to be piling up on the shores of a river in Tianjin, six kilometers from the site of the explosions. Chinese officials say that dead fish are normal this time of year, but local residents say that they've never before witnessed so many dead fish in the area.

The disaster has caused China's State Council to order nationwide inspections of facilities handling dangerous chemicals and explosives. According to government announcements, more than 100 chemical firms across seven provinces have been told to suspend operations or shut down due to safety violations in the recent days." Xinhua and Asia Times and Shanghaiist

Wall Street stocks in free fall on Friday

The Dow Jones Industrial Average fell 530 points on Friday, the biggest one-day plunge in years, as part of a global selloff. (See "21-Aug-15 World View -- Kazakhstan joins the 'currency wars' as global stocks plummet".) China's Shanghai stock index fell another 4.3% on Friday, adding to the 8.2% plunge in the preceding three days. Britain's FTSE index fell 2.8%.


S&P 500 Price/Earnings ratio at astronomically high 21.63 on August 21 (WSJ)
S&P 500 Price/Earnings ratio at astronomically high 21.63 on August 21 (WSJ)

Generational Dynamics predicts that we're headed for a global financial panic and crisis. According to Friday's Wall Street Journal, the S&P 500 Price/Earnings index (stock valuations index) on Friday morning (August 21) was at an astronomically high 21.63. This is far above the historical average of 14, indicating that the stock market is in a huge bubble that could burst at any time. Generational Dynamics predicts that the P/E ratio will fall to the 5-6 range or lower, which is where it was as recently as 1982, resulting in a Dow Jones Industrial Average of 3000 or lower.

Millions of people invested in China's stock markets when the bubble was being created. In fact, the Chinese government encouraged people to pour their life savings into the stock market, and many elderly people did so with their life savings. When the bubble was growing, no one could conceive that one day the bubble would implode, and that's what it's doing now.

Similarly, few people seem to believe that the Wall Street bubble could ever implode, but it's 100% certain that it will. The timing cannot be predicted, but it's possible that it's happening right now.

A lot of American investors are going to stay up late on Sunday evening (Monday morning in China) to see what happens to the Shanghai stock exchange on Monday. Whichever way Shanghai goes, it's possible that Wall Street will follow in the same direction. India.com and Fox Business

(Comments: For reader comments, questions and discussion, see the 22-Aug-15 World View -- Macedonia declares state of emergency along border with Greece thread of the Generational Dynamics forum. Comments may be posted anonymously.) (22-Aug-2015) Permanent Link
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21-Aug-15 World View -- Kazakhstan joins the 'currency wars' as global stocks plummet

Global stock markets plummet over currency devaluations

This morning's key headlines from GenerationalDynamics.com

Kazakhstan's tenge currency crashes 23 pct, leading the global 'currency wars'


Kazakhstan copper mine. Kazakhstan's copper is worth 23% more today than on Wednesday
Kazakhstan copper mine. Kazakhstan's copper is worth 23% more today than on Wednesday

Yesterday, we reported that China's yuan devaluation was causing currency chaos in Asia. On Thursday, that chaos deepened in Asia, and spread to global stock markets.

Thursday's most dramatic event was the crash in Kazakhstan's currency, devaluing by 23%.

Kazakhstan's economy has been hit from all sides. Its biggest export is oil, and the price of oil has fallen almost 60% in the last year, and is still falling. The 23% tenge devaluation means that now Kazakhstan will get about 23% more for its oil. Russia and China are its top trading partners, and both Russia and China have already had substantial currency devaluations against the US dollar. The 23% tenge devaluation will help Kazakhstan's balance of trade with these and other countries.

The global currency war that we discussed last week ( "12-Aug-15 World View -- China's yuan devaluation a humiliating setback for 'China dream'") seems to be in full swing. South Africa's rand, Brazil's real, and Malaysia's ringgit currencies all fell to multi-year lows against the US dollar in the last week.

That's only going to be the start, according to a new report by Morgan Stanley that lists the top ten troubled currencies: Taiwan dollar, Singapore dollar, Russian ruble, Thai baht, South Korean won, Peruvian sol, S. African rand, Chilean peso, Colombian peso, Brazilian real.

According to Morgan Stanley's foreign exchange strategy head Hans Redeker: "It’s all about vulnerability. Major victims of the policy change this time are currencies of countries with high export exposure and export competitiveness with China." A 1930s-style global currency war, or "race to the bottom," appears to be in full swing.

So far, the United States dollar is not directly affected by the devaluations, but that may have to change. All of these currency devaluations have been against the US dollar, which is the international reserve currency, which means that as the other currencies have been getting weaker, the US dollar has been getting stronger. Currency devaluations are a zero-sum game, in that one country's devaluation is another country's revaluation.

The global devaluations and the dollar's strengthening are going to affect America's balance of trade with other countries, which means that the US will be able to export fewer goods. This will affect the US economy, as hinted by the sharp Wall Street plunges on Wednesday and Thursday, and that effect will grow as the devaluations continue, so that at some point the US may have to devalue as well, and join the race to the bottom. Bloomberg and Reuters and Bloomberg(8/16)

Global stock markets plummet over currency devaluations

China's Shanghai stock market index plummeted 8.2% in the last three days (Tuesday-Thursday). As those who have been following the situation in China will recall, China's stocks are in huge bubble that began to implode on June 12, with the index quickly plummeting 30% within a couple of weeks.

The Chinese Communist Party (CCP) went into full-scale panic, and poured hundreds of billions of dollars into the stock market to prop it up, and also passed regulations making it illegal for large companies to sell stocks, or for the media or bloggers to use words like "panic."

So the significance of the 8.2% fall in the last three days, beyond just the fact that a lot of elderly Chinese are losing their life savings, is that the CCP is rapidly losing more and more credibility, and chances of a "people's rebellion" against the CCP are increasing.

Other stock markets followed suit. Wall Street stocks sold off broadly, as did European and Asian shares.

The S&P 500 price/earnings ratio (stock valuation index) is still above 21, far above the historical average of 14, indicating a huge Wall Street stock market bubble. China's bubble had to implode sooner or later, and the same is true of Wall Street. It's possible that it's happening right now. Guardian (London) and Reuters

(Comments: For reader comments, questions and discussion, see the 21-Aug-15 World View -- Kazakhstan joins the 'currency wars' as global stocks plummet thread of the Generational Dynamics forum. Comments may be posted anonymously.) (21-Aug-2015) Permanent Link
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20-Aug-15 World View -- China's yuan devaluation causes currency chaos in Asia

Slovakia will accept 200 migrants -- but only if they're Christian

This morning's key headlines from GenerationalDynamics.com

Slovakia will accept 200 migrants -- but only if they're Christian


Syrian migrants leave from Bodrum, southwest Turkey, early on Wednesday, hoping to reach Greece's Kos island (AFP)
Syrian migrants leave from Bodrum, southwest Turkey, early on Wednesday, hoping to reach Greece's Kos island (AFP)

With the European Union receiving hundreds of thousands of migrants, mostly arriving in Greece and Italy, the European Commission has been trying get agreement from the member states to agree to resettle the migrants equitably. On July 20, the Commission reached agreement on resettling 40,000 migrants to different countries. However, even that low target has not yet been met, as individual member states only committed to accepting 32,000, with the remainder to be decided later in the year.

On Wednesday, the plan received another blow, when Slovakia announced that it would accept 200 migrants for resettlement, but only if they're all Christians. According to the plan, Slovakia will ask each migrant to name his religion upon arrival, and Muslims would be turned away.

A government spokesman explained that there are now so few Muslims in Slovakia that any new additions would not even want to remain there, and would transit through the country to Germany, where there are already large numbers of Muslims:

"We want to really help Europe with this migration wave but... we are only a transit country and the people don't want to stay in Slovakia.

We could take 800 Muslims but we don't have any mosques in Slovakia so how can Muslims be integrated if they are not going to like it here?"

One EU official said that turning away Muslims would be "discriminatory and of dubious legality." The Slovakian government statement is provoking outrage, as it challenges the European Union's multiculturalism ideal. Europa and BBC and Daily Sabah (Turkey)

China's yuan devaluation causes currency chaos in Asia

The euro currency has devalued 20% against the dollar this year, but that devaluation is not causing as much worldwide concern as China's devaluation last of the yuan currency by 4.4% against the dollar. ( "12-Aug-15 World View -- China's yuan devaluation a humiliating setback for 'China dream'")

The reason why China's devaluation is so disruptive is because it affects the balance of trade throughout Asia. If China's yuan currency is devalued 4.4%, then a businessman in any other country purchasing goods from China will have to pay roughly 4.4% more, and if he sells goods to China, he'll receive roughly 4.4% less money (in his own country's currency). That means that his prices are a lot less competitive, and China's are a lot more competitive.

On Wednesday, two Asian countries, Vietnam and Kazakhstan, devalued their own currencies. Vietnam devalued its dong currency by 1%, and Kazakhstan devalued its tenge currency by 4.5%.

Kazakhstan has been especially hurt by the 50% fall in oil prices in the last year. Kazakhstan depends on oil revenues, and requires an oil price of at least $86 per barrel to balance its budget. Oil prices are now getting close to $40 per barrel.

Oil isn't the only commodity whose prices are collapsing. This was highlighted on Wednesday when the Switzerland based global mining giant Glencore Plc announced a disastrous earnings fall of 29%. The collapse was blamed on copper, aluminum and coal prices all at multi-year lows. And the reason that commodities prices have been collapsing is because of a slowdown in the economy of China, the world's largest importer of commodities. So this brings us back full circle to China's devaluation, and a possible vicious cycle.

As one analyst on BBC pointed out, mining companies like Glencore and Rio Tinto are part of the manufacturing infrastructure that keeps the world running, and produces things like cars and trains. If Facebook disappeared tomorrow, then nothing much would happen. But if Glencore or Rio Tinto disappeared, then the effects on business could be, in the words of the analyst, "apocalyptic." Bloomberg and Reuters and Bloomberg

(Comments: For reader comments, questions and discussion, see the 20-Aug-15 World View -- China's yuan devaluation causes currency chaos in Asia thread of the Generational Dynamics forum. Comments may be posted anonymously.) (20-Aug-2015) Permanent Link
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19-Aug-15 World View -- A train station in Macedonia becomes the new European migrant choke point

Chinese fear thunderstorms will bring new explosions and death in Tianjin

This morning's key headlines from GenerationalDynamics.com

A train station in Macedonia becomes the new European migrant choke point


Migrants in Gevgelija Macedonia railway station desperately try to get onto train to Serbia (EPA)
Migrants in Gevgelija Macedonia railway station desperately try to get onto train to Serbia (EPA)

The railway station in Gevgelija Macedonia has become the latest choke point for waves of Middle East migrants escaping violence in Syria, Iraq and Afghanistan, and hoping to establish residence in Europe. The migrants travel from Turkey through Greece to the Gevgelija train station, then take the train to Belgrade, Serbia, and move on to the border with Hungary.

Macedonia and Serbia are NOT part of the European Union's "Schengen zone," which permits free travel across borders. However, Hungary IS a Schengen country. So if a migrant can reach Hungary, then he can freely travel to any other Schengen country, such as Germany or France. However, the UK is NOT a Schengen country, so he cannot freely travel there.

As we reported two weeks ago, Hungary is speeding up construction of a 109 mile fence along Hungary's border with Serbia, to prevent exactly the kind of migrant traffic that's occurring in Gevgelija. Some 120,000 migrants have crossed from Serbia into Hungary this year alone, and so the government is using prisoners and unemployed people to build the fence as quickly as possible.


Migrants from Syria and Afghanistan travel to Turkey, through Istanbul to Greece, through Greece to Macedonia, where they take the train to Belgrade Serbia, and then walk or hitchhike 100 miles to Hungary's border.
Migrants from Syria and Afghanistan travel to Turkey, through Istanbul to Greece, through Greece to Macedonia, where they take the train to Belgrade Serbia, and then walk or hitchhike 100 miles to Hungary's border.

Several weeks ago, there were about 1,000 migrants making this trip each day. But ever since Hungary announced the building of the border fence, the number has doubled to 2,000 per day. Now Hungary is planning to send thousands of police officers to the border with Serbia to prevent migrants from entering Hungary.

This isn't the only way to the Schengen countries, of course. Hundreds of thousands of migrants travel to Libya, and risk death crossing the Mediterranean, in the hope of being rescued by Italy's navy. But the path through Turkey to the Gevgelija is completely overland, so many migrants prefer it. Daily Mail (London) and Reuters and Schengen Visa Info

Surging numbers of migrants on EU borders

The number of migrants at the EU's borders reached a record high of 107,500 in July. This figure was up from 70,000 in June, which was also a record high. Germany has seen a wave of migration from Syria and the Balkans, and now says it could receive as many as 750,000 asylum seekers this year.

Only two EU countries, Germany and Sweden, take in the majority of refugees, but other countries are being pressured to take their share. BBC

Chinese fear thunderstorms will bring new explosions and death in Tianjin

As we reported yesterday, the weather report for Tianjin China calls for thunderstorms on Wednesday, followed by several days of additional raid. This water could react with the hundreds of tons of deadly sodium cyanide and calcium carbide to produce new explosions and deadly gases.

According to a Twitter tweet (unconfirmed), the USA embassy in Beijing is sending out the following message:

"The following unconfirmed text message is said to have originated at the Embassy:

For your information and consideration for action. First rain expected today or tonight. Avoid ALL contact with skin. If on clothing, remove and wash as soon as possible, and also shower yourself. Avoid pets coming into contact with rains, or wet ground, and wash them immediately if they do. Rise umbrellas thoroughly in your bath or shower once inside, following contact with rain. Exercise caution for any rains until all fires in Tianjin are extinguished and for the period 10 days following. These steps are for you to be as safe as possible, since we are not completely sure what might be in the air. Remember the brave firefighters and their families along with all those suffering from the accident in Tianjin. Stand strong together China!"

However, officials say that there have been no substantial leaks of sodium cyanide, and that all waterways leading into the sea from the blast site have been sealed off.

As of Tuesday, 50 firefighters were confirmed killed and 52 others were among the 57 missing, making the disaster the deadliest ever for Chinese first-responders. About 1,000 firefighters responded to the disaster.

The Chinese Communist Party has moved rapidly to correct any problems by arresting Yang Dongliang, head of the State Administration of Work Safety. At times like this, it's good to know that the person causing the problem is no longer at large, and we can all feel safe. AP and Weather Channel and Twitter - DanWatanabe and Radio Free Asia

(Comments: For reader comments, questions and discussion, see the 19-Aug-15 World View -- A train station in Macedonia becomes the new European migrant choke point thread of the Generational Dynamics forum. Comments may be posted anonymously.) (19-Aug-2015) Permanent Link
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18-Aug-15 World View -- Report: Comprehensive Hamas - Israel peace agreement is 'imminent'

Perpetrator unknown for bombing in downtown Bangkok Thailand

This morning's key headlines from GenerationalDynamics.com

Thunderstorms in Tianjin China may release hydrogen cyanide


Thunderstorms are forecast on Wednesday in Tianjin China (Weather Channel)
Thunderstorms are forecast on Wednesday in Tianjin China (Weather Channel)

Last week's disastrous explosions in Tianjin, China, occurred in a warehouse containing toxic industrial chemicals including hundreds of tons of sodium cyanide, which emits deadly hydrogen cyanide when mixed with water, and calcium carbide, which explodes on contact with water.

Wednesday's weather forecast calls for thunderstorms, followed by five more days of rain. Want China Times and Weather Channel

Report: Comprehensive Hamas - Israel peace agreement is 'imminent'

Details are beginning to emerge of an imminent agreement, first reported last week, mediated by former British prime minister Tony Blair, between Hamas and Israel. According to reports, the agreement has been endorsed by Hamas's Shura Council, the movement's highest deliberative body, and Hamas's leader Khaled Mashaal. Israel's government is not commenting.

The terms of the reported deal are:

The Palestinian Authority (PA/PLO), which governs the West Bank, is opposed to the deal because it excludes the PA, and does take into account the needs of the West Bank. A PA press statement asks:

"Why has the land corridor with the West Bank, known as the ‘safe passage,’ not been proposed before anything else, given that the PLO delegation raised the issue forcefully? Is Gaza a humanitarian issue [only] or is it part of the Palestinian homeland?"

The deal was negotiated with Qatar and Turkey. Concerns have also been raised that Egypt did not participate. Times of Israel and Jewish Telegraphic Agency

Perpetrator unknown for bombing in downtown Bangkok Thailand

Thailand is in shock over the bomb explosion in Bangkok on Monday. The pipe bomb was planted in the busiest part of the shopping district, near the Erawan Shrine, a Hindu shrine that's also a big tourist attraction. There were 19 people killed, mostly Asian tourists.

No one has claimed responsibility for the bombing, and analysts are suggesting several possibility:

This attack was large enough to shock all of Thailand, but it's not the first attack. Two pipe bombs exploded outside a luxury shopping mall in the same area in February, but caused little damage. Bangkok Post and BBC and Bangkok Post (4-Aug)

(Comments: For reader comments, questions and discussion, see the 18-Aug-15 World View -- Report: Comprehensive Hamas - Israel peace agreement is 'imminent' thread of the Generational Dynamics forum. Comments may be posted anonymously.) (18-Aug-2015) Permanent Link
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17-Aug-15 World View -- Suicide attack in Pakistan means no politician is safe

Tianjin explosion poses new threats to China's government

This morning's key headlines from GenerationalDynamics.com

Tianjin explosion poses new threats to China's government


Picture shows huge crater where explosions took place, with apartment buildings nearby (Reuters)
Picture shows huge crater where explosions took place, with apartment buildings nearby (Reuters)

China is overdue for its next "people's rebellion," and so nothing frightens Chinese Communist Party (CCP) officials more than angry people. And the Chinese people are expressing fury over last week's massive industrial explosion in Tianjin, and the stonewalling by officials.

Last Wednesday's series of explosions killed at least 112 people. More than 700 have hospitalized, and dozens are still missing. Dozens of the dead are firefighters who sprayed water on a warehouse to put out the fire, and apparently ignited an explosion when the water mixed with calcium carbide.

On Friday, there were reports that the warehouse contained between 100 and 700 tons of sodium cyanide. Sodium cyanide can be "rapidly fatal" if it's inhaled or ingested. If it's dissolved or burned, then it gives off the highly poisonous gas hydrogen cyanide. Regulations permit only 10 tons of sodium cyanide to be stored in a warehouse. If there's a rainstorm before these chemicals are cleaned up, then there could be many further deaths.

As usual in Chinese society, the disaster exposed massive corruption. All of these dangerous chemicals were stored close to a high-rise apartment complex, in violation of Chinese law. This is raising speculation about possible corruption and criminal negligence, and an official cover-up.

In fact, CCP officials are actively trying to cover up the situation by suppressing news. There was a televised press conference on Friday, but the coverage cut away when questions were about to begin. Journalists who attended the press conferences said that propaganda officials gave no answers to questions, beyond "Let me check." Security personnel were physically harassing foreign media trying to speak to family members of the missing. Some people were joking that local television in Tianjin was showing cartoons during much of the crisis.

There are still hundreds of firefighters trying to put out the still smoldering fire in Tianjin.

At the same time, Chinese authorities are trying to put out a raging fire in online social media. Online users are furious at CCP officials because family members are not being told anything and official negligence is being covered up. Posted messages called the situation "A real life Pinocchio," and demanded the truth, as well as severe punishment for responsible officials.

The widespread criticism is casting doubt on the credibility of the CCP, something that officials fear very much. And this disaster comes just as China's economy is slowing and the stock market bubble is collapsing. This is a potent combination for social discord. Globe and Mail (Toronto) and BBC and AP

Suicide attack in Pakistan means no politician is safe

Two suicide bombers were used on Sunday to target Shuja Khanzada, a senior government official, Home Minister of Punjab province in Pakistan. Khanzada was holding a Jirga (meeting) in his home with about 100 people. Once suicide bomber stood outside the home, and the other went inside in the meeting. The resulting explosions caused the large concrete slabs that made up the roof to collapse, trapping people inside. Khanzada and 17 others were killed, while dozens were injured.

Several terrorist groups claimed responsibility, but the most likely perpetrator was Lashkar-e Jhangvi (LeJ). I've written about LeJ many times. It's dedicated to the extermination of all Shia Muslims, especially the Hazara ethnic group.

Late in July, LeJ's leader Malik Ishaq was killed in gunfight while he was in police custody. It's believed that the gunfight was a setup by the police to allow them to kill Ishaq, rather than return him to jail.

Shuja Khanzada has been vigorously attacking militant groups in Punjab province, so an attack on him is not a surprise. However, this attack may have occurred at this time because of the perception that Khanzada was responsible for Ishaq's death.

What's remarkable is that Khanzada was certainly going to be targeted by militants, and yet had no protection at all, since two suicide bombers had no trouble approaching him.

Sunday's attack sends an unmistakable message to Pakistan's political leadership across the country that no one is safe. If there are other successful operations targeting terrorist or extremist groups, then they can and will retaliate. There is no safe ground, and no one is safe. Pakistan Today and Express Tribune (Pakistan)

(Comments: For reader comments, questions and discussion, see the 17-Aug-15 World View -- Suicide attack in Pakistan means no politician is safe thread of the Generational Dynamics forum. Comments may be posted anonymously.) (17-Aug-2015) Permanent Link
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16-Aug-15 World View -- Germany ends its Patriot missile deployment in Turkey

Russian women increasingly marrying Chinese men

This morning's key headlines from GenerationalDynamics.com

Russian women increasingly marrying Chinese men


A big, blond Russian little girl is a favorite wife in China (Wenhuebao)
A big, blond Russian little girl is a favorite wife in China (Wenhuebao)

It seems like a match made in heaven. There's a shortage of men in Russia because of super-high mortality rates, and there's a shortage of women in China because of the decades-old "one child policy."

According to the Hong Kong paper Wenhuebao, "Russian beauties are a good choice for Chinese men." The article says that Chinese men have “every chance” to find a wife in Russia because “there are few men in that country” and more than half of the women work. Consequently, many Russian women would like to marry and have children.

"In the [Russian] Far East, the number of Russian-Chinese marriages is much greater than you can imagine. Many [Russian] girls from this region think that only in China will it be possible for them to find happiness. [Thus], it is obvious that Russian girls very much need Chinese men."

The article adds that Russian girls like the fact that few Chinese men "drink wine, which is extremely important for the Russian girls."

The article also recommends to Chinese men that they seek out wives in Singapore, Japan, South Korea and Africa. However, the poorest choices for Chinese men are Vietnamese women, according to the article, because of the language barrier, and because they're only in it for the money. Window on Eurasia / Paul Goble and Wenhuebao (Hong Kong) (Trans)

Germany ends its Patriot missile deployment in Turkey

Germany stationed batteries of Patriot missiles in Turkey, 60 miles north of the border with Syria, in January 2013. Turkey requested the help from NATO after a Turkish jet had been shot down by Syrian forces in June 2012, and Syrian shellfire killed Turkish civilians four months later. The Patriot missiles would have been used to shoot down Syrian missiles coming into Turkey from Syria.

Germany now says that it will withdraw the Patriot missiles in January 2016. Germany gives as reasons that the deployment is expensive. In addition, German's Defense Ministry says, "The decision was taken after the present assessments made by the NATO in June 2015, which concluded that the threat against Turkish territories by Syrian ballistic missiles is very low."

In 2013, additional Patriot missile batteries were sent to Turkey by the United States and the Netherlands. Early this year, the Netherlands withdrew their Patriot missiles, and they were replaced by units from Spain. Deutsche Welle (Berlin) and Today's Zaman (Istanbul)

(Comments: For reader comments, questions and discussion, see the 16-Aug-15 World View -- Germany ends its Patriot missile deployment in Turkey thread of the Generational Dynamics forum. Comments may be posted anonymously.) (16-Aug-2015) Permanent Link
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15-Aug-15 World View -- Japan's Shinzo Abe blames WW II on the Smoot-Hawley Tariff act

Brief generational history of Japan

This morning's key headlines from GenerationalDynamics.com

Japan's Shinzo Abe blames WW II on the Smoot-Hawley Tariff act


Shinzo Abe looks down during his speech on Friday (Getty)
Shinzo Abe looks down during his speech on Friday (Getty)

Japan's prime minister Shinzo Abe on Friday gave his long-awaited speech commemorating the 70th anniversary of VJ day, ending World War II. It was closely watched by Asian countries, especially Korea and China, to see if he'd renew the apologies of his predecessors for Japan's brutality during WW II, and particularly for Japan's use of Korean and Chinese "comfort women."

Abe did not apologize again, though he expressed profound grief. What was really interesting was the historical perspective of his speech, particularly his claim that Japan's actions in World War II were triggered by the Smoot-Hawley Tariff Act, the June 1930 law passed by Congress that erected enormous trade barriers and worsened the Great Depression.

I've said many times in the past that the Smoot-Hawley Act could be considered the beginning of World War II, so it's interesting to me that Abe is implying the same thing.

In Friday's speech, Abe said:

"After World War I, which embroiled the world, the movement for self-determination gained momentum and put brakes on colonization that had been underway. It was a horrible war that claimed as many as ten million lives. With a strong desire for peace stirred in them, people founded the League of Nations and brought forth the General Treaty for Renunciation of War. There emerged in the international community a new tide of outlawing war itself.

At the beginning, Japan, too, kept steps with other nations. However, with the Great Depression setting in and the Western countries launching economic blocs by involving colonial economies, Japan’s economy suffered a major blow. In such circumstances, Japan’s sense of isolation deepened and it attempted to overcome its diplomatic and economic deadlock through the use of force. Its domestic political system could not serve as a brake to stop such attempts. In this way, Japan lost sight of the overall trends in the world.

With the Manchurian Incident, followed by the withdrawal from the League of Nations, Japan gradually transformed itself into a challenger to the new international order that the international community sought to establish after tremendous sacrifices. Japan took the wrong course and advanced along the road to war.

And, seventy years ago, Japan was defeated."

Abe left out many imperialistic acts that occurred earlier, such as annexing Korea and part of China in 1910.

The "major blow" that Japan's economy suffered was the Smoot-Hawley Tariff Act. The Great Depression was hurting Japan just as much as it was hurting America but, in addition, Japan's exports of its biggest cash crop, silk, to America were almost completely cut off.

The "Manchurian Incident" to which Abe refers, or "Mukden Incident," occurred a year later. On September 18, 1931, an explosion destroyed a section of railway track owned by Japan in the city of Mukden in Manchuria. Japan blamed Chinese nationalists, though many believe that the Japanese military planted the bomb to provide a pretext. Either way, Japan invaded Manchuria.

Abe said that Japan had suffered enormously for its mistakes in WW II:

"On the 70th anniversary of the end of the war, I bow my head deeply before the souls of all those who perished both at home and abroad. I express my feelings of profound grief and my eternal, sincere condolences.

More than 3 million of our compatriots lost their lives during the war: on the battlefields worrying about the future of their homeland and wishing for the happiness of their families; in remote foreign countries after the war, in extreme cold or heat, suffering from starvation and disease. The atomic bombings of Hiroshima and Nagasaki, the air raids on Tokyo and other cities, and the ground battles in Okinawa, among others, took a heavy toll among ordinary citizens without mercy. ...

Upon the innocent people did our country inflict immeasurable damage and suffering. History is harsh. What is done cannot be undone. Each and every one of them had his or her life, dream, and beloved family. When I squarely contemplate this obvious fact, even now, I find myself speechless and my heart is rent with the utmost grief."

Having learned its lesson, according to Abe, Japan turned into a pacifist nation, and vowed to never let anything like that happen again. He said that it should not be necessary for future generations to continue to apologize:

"In Japan, the postwar generations now exceed 80 per cent of its population. We must not let our children, grandchildren, and even further generations to come, who have nothing to do with that war, be predestined to apologize. Still, even so, we Japanese, across generations, must squarely face the history of the past. We have the responsibility to inherit the past, in all humbleness, and pass it on to the future.

Our parents’ and grandparents’ generations were able to survive in a devastated land in sheer poverty after the war. The future they brought about is the one our current generation inherited and the one we will hand down to the next generation. Together with the tireless efforts of our predecessors, this has only been possible through the goodwill and assistance extended to us that transcended hatred by a truly large number of countries, such as the United States, Australia, and European nations, which Japan had fiercely fought against as enemies.

We must pass this down from generation to generation into the future. We have the great responsibility to take the lessons of history deeply into our hearts, to carve out a better future, and to make all possible efforts for the peace and prosperity of Asia and the world."

International Business Times and Dept. of State

Brief generational history of Japan

Japan was almost completely isolated for centuries, but in 1853, US Commander Matthew Perry brought four warships to Edo (Tokyo). There was a brief naval battle that the Americans won easily. In 1854, Japan signed a treaty with the US that opened up several Japanese ports in a limited way. In the next two years, Japan signed similar treaties with Great Britain, Russia and the Netherlands.

This humiliating defeat triggered a crisis civil war in Japan that was finally resolved in 1868, when the family that had ruled Japan since 1603 was overthrown. The new emperor took the name Meiji ("enlightened rule"), and the crisis war climax is known as the "Meiji Restoration."

Generational Awakening eras, which begin around 15 years after the end of the preceding crisis war, are always a reaction to the crisis war by a rising post-war generation rebelling against their war survivor parents. (America's last generational Awakening era was the 1960s-70s.)

Young people in the 1890s rebelled against the isolation of pre-war Japan, and also took note of the successful colonization of many countries by Britain, France, and other countries. Japan entered an imperialist era, and from 1894-1910, Japan engaged in a series of wars against China and Russia, resulting in one victory after another. In the treaties resulting from these wars, Japan was given Taiwan, Korea, and southern Manchuria, along with other territories. By the way, Japan was not considered to be an enemy of the West at this time, but was thought to be an advanced, "westernized" nation.

Japan became giddy with its military successes, and in the 1920s, turned into a completely militaristic state. There was censorship of the press, complete state control by the military, and open plans for military expansion into China and Russia. Japan felt insulted by America's 1924 decision to block immigration by the Japanese, and then hurt by the 1930 Smoot-Hawley Tariff Act, which devastated Japan's economy and was considered almost an act of war. Japan went to war in Manchuria in 1931, and was at war continually until the end of World War II.

After surrendering, almost overnight, the Japanese people reverted to their old non-imperialistic selves they used to be before Commodore Perry's visit. The country became strongly pacifist and disbanded its armed forces.

Today, Japan is torn between two generational crisis eras. One of them is World War II, which was a disaster for Imperialistic Japan; and the other is the civil war following Commodore Perry's visit, which was a disaster for isolationist Japan.

Today, Japan is a pacifist nation, while China has become an Imperialist nation, and an existential threat to Japan. Japan has to struggle to find a way to reject both its isolationist past and its Imperialist past, and still be prepared for the inevitable war with China. The reinterpretation of Japan's pacifist constitution to permit "collective self-defense" is an important part of that struggle. And Friday's speech is an attempt to describe, in words, a pathway between those two imperatives.

(Comments: For reader comments, questions and discussion, see the 15-Aug-15 World View -- Japan's Shinzo Abe blames WW II on the Smoot-Hawley Tariff act thread of the Generational Dynamics forum. Comments may be posted anonymously.) (15-Aug-2015) Permanent Link
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14-Aug-15 World View -- With rise of ISIS, violence flares in Central Asia's Fergana Valley

Brief generational history of Uzbekistan

This morning's key headlines from GenerationalDynamics.com

Violence flares in Central Asia's Fergana Valley


Kyrgyzstan, which has disputed borders with both Uzbekistan in the Fergana Valley, and with Tajikistan in the Isfara Valley
Kyrgyzstan, which has disputed borders with both Uzbekistan in the Fergana Valley, and with Tajikistan in the Isfara Valley

Uzbekistan, Kyrgyzstan and Tajikistan have sent troops and officials to a Fergana Valley (or Ferghana Valley) border regions where there are violence is increasing in border disputes. Negotiations are ongoing to prevent the further spread of violence.

The densely populated Fergana Valley sits at the intersection of Uzbekistan, Tajikistan, and Kyrgyzstan. In 2009, I wrote about the rise of the al-Qaeda linked Islamic Movement of Uzbekistan (IMU), and about the importance of the Fergana Valley to the U.S. for Afghan war logistics. (See "Islamist Uzbeks lead terrorists in Pakistan and Afghanistan" from 2009.)

In 2010, there was extremely bloody violence in the Fergana Valley on the Kyrgyzstan side of the border. A U-shaped region stretching along the border between the cities of Osh and Jalalabad was devastated, causing hundreds of deaths, thousands of injuries, and hundreds of thousands of refugees. ( "15-Jun-10 News -- Uzbekistan closes border to refugees from Kyrgyzstan")

Almost all of the casualties were Uzbek victims of Kyrgyz violence, including violence by the Kyrgyz army. Some people blame Josef Stalin for the carnage because, in the 1920s and 1930s, Kyrgyzstan, Uzbekistan and Tajikistan were established as Soviet republics, and divided by arbitrary borders in the Fergana Valley. These arbitrary boundaries, which ignored ethnic realities, created the ethnic tensions and rivalries that are the basis of the current violence and atrocities that began occurring after the collapse of the Soviet Union in 1991.

In the last few weeks, violence has been flaring separately across Kyrgyzstan's disputed borders with Uzbekistan and Tajikistan. Two days ago, there was a shootout along the border of Tajikistan and Kyrgyzstan, which resulted in the injury of six Tajiks. And in late June, an Uzbek border guard was wounded in a shootout on the border of Uzbekistan and Kyrgyzstan. Both food and water are available in the Fergana Valley, but not enough to meet the needs of local residents. As a result, residents are blocking roads and waterways that cross the disputed borders.

These conflicts are raising concerns that either or both might spiral out of control into a repeat of the 2010 violence around Osh and Jalalabad.

Unfortunately, there does not exist any durable solution to these border conflicts short of all-out war. Each of the ethnic groups -- Uzbeks, Tajiks and Kyrgyz -- has enclaves in all three countries where ancestors have been living for centuries, and ethnic hatred runs deep.

In the last century, population in the Fergana valley has increased five-fold. There is plenty of water in the valley, but still not enough for the rapidly growing population. Due to poverty and government corruption, the Fergana Valley is becoming a hotbed of discontent, led by Islamic radicals. Trend Agency (Azerbaijan) and The Diplomat and Strategy Page and Jamestown

Brief generational history of Uzbekistan

The Uzbeks are one of the many tribes that have populated Central Asia for centuries, and the wars they fought were mainly with one another until the Russians conquered the region in the late 1800s. Although the wars in Central Asia were primarily ethnic, it's worth noting that the residents are mostly Sunni Muslim, and the Russians are Orthodox Christian.

Uzbekistan's last generational crisis war was World War I and the Bolshevik Revolution of 1917.

World War II thus occurred during a generational Awakening era for the Uzbeks. Thus the Uzbeks stayed out of the war, and in fact carried out a "humanitarian mission" during the war, by sheltering in their families the hundreds of thousands of refugees from the fascist occupied territories. There were hundreds of thousands of refugees from Russia, Ukraine, Baltic States, Poland, and other countries.

As part of Stalin's Soviet Union, Uzbekistan became a cotton powerhouse starting in the 1920s. In support of the cotton trade, millions of ethnic Russians began pouring into the country, especially into the fertile Fergana Valley.

The old Uzbek / Russian fault line became critical again, starting in the 1980s with the Russian invasion of Afghanistan. At that time, Uzbek militants began joining the Pashtuns in Afghanistan to fight against the Soviets. When the Soviet Union collapsed in 1991, Uzbekistan became an independent republic. A consequence was a great deal of financial hardship for the Russians in the Fergana Valley. The result was the first signs of Islamic fundamentalism in Uzbekistan when some unemployed young Muslims seized the Communist Party headquarters in the city of Namangan in the Fergana Valley.

The leaders of this terrorist action, Tohir Yuldeshev and Juma Namangani, eventually made their way to Afghanistan in 1996, after the Taliban had taken control of the government. They joined Osama bin Laden and al-Qaeda, and formed the Islamic Movement of Uzbekistan (IMU). The IMU has been playing an important role in terrorist acts in Afghanistan and Pakistan.

Rise of ISIS raises militant Islamist concerns in Central Asia

While Central Asian countries have always been concerned about Islamist militancy, the rise of the self-described Islamic State (IS or ISIS or ISIL or Daesh) is raising concerns about new, more dangerous threats.

The International Crisis Group think tank estimates 4,000 people have traveled to Syria to join ISIS. The Islamic Movement of Uzbekistan (IMU) last week pledged allegiance to ISIS, only days after the death of the Taliban leader Mullah Omar was announced. These developments are raising fears of destabilization of the Central Asian countries.

As a result, authorities are taking draconian measures to stamp out militant Islam. Uzbekistan has banned beards, outlawed Islamic dress, shut restaurants that refuse to sell alcohol and warned teahouses not to celebrate the nightly end of the Ramadan fast with "Iftar" meals. In Kyrgyzstan, where the authorities vet preachers to ensure mosque sermons do not stir up unrest, there have been shootouts between the secret police and militants.

However, these harsh measures risk a backlash in the form of even more young Muslims traveling to Syria to join ISIS.

One researcher, who has interviewed ISIS militants in Central Asia, found that poverty was not the primary motivation for joining ISIS. Nor were they particularly knowledgeable about Islamic tenets for fighting in such a war (somewhat refuting the popular belief that jihadists are being trained in radical madrassas). Many joined for reasons of social justice -- to help Muslim brothers, to fight a regime that oppresses them, to defend the weak. Others chose to join because of adventure, romanticism, love (especially women), their wish to become heroes, or just because they feel the caliphate is the right place for a good Muslim life and they want to contribute to its development. Reuters and Eurasia Net and The Diplomat

(Comments: For reader comments, questions and discussion, see the 14-Aug-15 World View -- With rise of ISIS, violence flares in Central Asia's Fergana Valley thread of the Generational Dynamics forum. Comments may be posted anonymously.) (14-Aug-2015) Permanent Link
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13-Aug-15 World View -- Massive explosion in Tianjin highlights China's dismal industrial safety record

Greece's island Kos moves to center of Europe's migrant crisis

This morning's key headlines from GenerationalDynamics.com

Massive explosion in Tianjin highlights China's dismal industrial safety record


Tianjin China
Tianjin China

A massive series of industrial explosions occurred early on Wednesday in Tianjin in China. There was one large explosion, equivalent to 3 tons of TNT, and followed by an enormous explosion a few minutes later, equivalent to 21 tons of TNT. The explosions were felt ten miles away. Hundreds of people were hospitalized. The area where the blast happened has many factories, but also worker dormitories and apartment buildings.

Tianjin has a population of 15 million, the fourth biggest city, behind Shanghai, Beijing, and Guangzhou. It's a major industrial hub for China, with hundreds of Fortune 500 companies based there.

Bribery and corruption are common in China, and factory owners often use it to evade regulations, with the result that there are frequent building catastrophes. In July, 15 people were killed and more than a dozen injured when an illegal fireworks warehouse exploded in northern Hebei province. And at least 71 were killed in an explosion at a car parts factory in Kunshan, near Shanghai, in August last year.

The Tianjin disaster is the third in a series of major recent humiliations for China in its attempt to displace the United States as a world economic and military leader. First, China's huge stock market bubble has been imploding, and China has almost destroy the Shanghai stock market as a market by using regulations and a tsunami of money to prop it up. And then, in the last few days, China effectively declared war on the world's currencies with a surprise 2-3% devaluation of the yuan (renminbi) currency. As of Thursday, China has devalued its currency each day for three days in a row. AFP and Al Jazeera

Greece's island Kos moves to center of Europe's migrant crisis

Europe is facing its biggest refugee crisis since World War II. With over 200,000 migrants having arrived in Europe this year alone, including 124,000 in Greece, the news focus has moved from place to place, including Italy, Athens, Hungary, and Calais.

Focus is now moving to the Greek island of Kos, where migrants have arrived from Turkey, usually having escaped from Syria or Afghanistan.

Kos has a population of 33,000, and around 7,000 migrants are now waiting to apply for immigration papers. On Tuesday, police beat back migrants with truncheons and sprayed them with fire extinguishers and teargas to prevent a stampede as they were being relocated to a local football stadium after camping along roads and beaches for weeks.

The migrants, including women, children and the elderly, are locked in the football stadium for hours, in the open air under an extremely hot sun, without access to washing facilities or toilets, according to reports. International humanitarian organizations are speaking of "totally shameful" conditions.

Greece's government is sending a cruise liner with a capacity for at least 2,500 people, converted with a reception center, to process migrant arrivals. In addition, riot police from Athens have been dispatched to Kos. The extra police deployment came after the island's mayor warned of "bloodshed." Kathimerini and AFP

(Comments: For reader comments, questions and discussion, see the 13-Aug-15 World View -- Massive explosion in Tianjin highlights China's dismal industrial safety record thread of the Generational Dynamics forum. Comments may be posted anonymously.) (13-Aug-2015) Permanent Link
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12-Aug-15 World View -- China's yuan devaluation a humiliating setback for 'China dream'

China shocks the world with 2% currency devaluation

This morning's key headlines from GenerationalDynamics.com

China shocks the world with sharp currency devaluation


People's Bank of China
People's Bank of China

The ripples coming out of China's early Tuesday morning currency devaluation are turning out to be larger than one might have expected. China devalued the yuan (renminbi) currency by 2% against the dollar. This means, for example, that Chinese-manufactured goods being sold in the United States, or any other country, will now be 2% cheaper. It also means that any goods manufactured in the US or Japan or any other country being sold in China will now be 2% more expensive.

Obviously, this has big implications for global trade. It means that China's goods will sell better in countries around the world, and that other countries' goods will sell worse in China. So what's good for China will be bad for everyone else.

So stocks on Wall Street and in Europe fell sharply on Tuesday. But the implications go farther than that.

According to an analyst in India:

"The devaluation will affect India's exports not only to China but to other countries also with increasing competitiveness of Chinese exports.

This may swell the trade deficit further, which is already touching $50 billion, as imports from China may increase particularly as China is having excessive capacity in diverse sectors of manufacturing."

India's rupee currency fell sharply against the dollar, apparently because currency traders are expecting India's central bank to be forced to devalue the rupee as well to compete with China. Other currencies fell sharply on Tuesday for the same reason: the euro, the Japanese yen, the Brazilian real and the Turkish lira.

There was a "currency war" during the Great Depression of the 1930s, and the countries that moved the fastest to devalue their currencies were the countries that suffered the least unemployment. During the last ten years, there have been concerns raised occasionally about a new currency war. The China yuan devaluation is raising those concerns to a fever pitch.

And with good reason. It's quite possible that central banks in China's neighbors in Asia will be the first to be forced to devalue their own currencies to compete with China. Europe may then follow suit, in what was called in the 1930s the "race to the bottom." Devaluation of all of these currencies will make the dollar stronger, which could eventually crush American exports and harm American multinational firms, so the US may be forced to follow suit.

Right now, this is just speculation, but it's a concern that's being expressed widely today.

I've been amazed the past few years with the willingness of governments to paper over problems by blanketing the problems with a tsunami of money. Trillions of dollars have been thrown into global stock markets by quantitative easing, and Wall Street stocks are in a huge bubble. Obamacare is a financial disaster held together by the $710 billion Medicare insurance fund, which has essentially been thrown into the garbage with nothing to show for it.

The claim by politicians is always that the tsunami of money is only temporary, because it buys time for the problems to solve themselves. Thus, flooding the stock market with money is OK, because soon economic growth will take over. Flooding Obamacare with money is OK, because soon the various Rube Goldberg Ponzi Scheme businesses will become self-sustaining.

Those assumptions are now provably wrong, and the only way to keep things from collapsing is to keep the tsunami going and growing. But even a tsunami eventually runs out of water.


S&P 500 Price/Earnings ratio at astronomically high 21.69 on August 7 (WSJ)
S&P 500 Price/Earnings ratio at astronomically high 21.69 on August 7 (WSJ)

From the point of view of Generational Dynamics, a major global financial crisis is coming, and something will trigger it. China's stock market bubble is imploding. Global trade is slowing significantly. The S&P 500 price/earnings ratio is at an astronomically high 21.69, indicating a major Wall Street stock market bubble.

At some point, something will trigger the global financial crisis. Maybe the China devaluation will be the trigger, by creating a domino effect of some kind. Or, maybe the central banks of the world will find a way to increase the tsunami of money still further, flooding the problems for a while longer. They're certainly going to try -- though of course that's exactly what would create a currency war. All we can do is watch to see what happens next. Reuters and Bloomberg and New Delhi TV

Yuan devaluation a humiliating setback for 'China dream'

The "China dream" is for China to replace the United States militarily, by taking control of the Pacific and Indian Oceans, and also to do so financially, by replacing the dollar with the Chinese yuan as the global reserve currency. This is the second disastrous setback to the "China dream" within the last month.

First, in order to prove that it can replace the United States economically, China has to prove that it can provide a world-class stock market that can operate free of government intervention. And that objective is completely in shreds, after the multi-trillion dollar tsunami of money that was used to intervene in the Shanghai stock market, almost completely destroying it as a market.

And now China has its second disaster with the surprise yuan devaluation, effectively declaring war on other countries' currencies.

The humiliating devaluation was a move of almost complete desperation. China's economy is in serious trouble, and that's not the worst of it. China has a history of massive "people's rebellions" against an oppressive government, the last one being Mao's Communist Revolution that ended in 1949. From the point of view of Generational Dynamics, China is now overdue for the next one, and a Chinese financial crisis could be the trigger. Bloomberg

(Comments: For reader comments, questions and discussion, see the 12-Aug-15 World View -- China's yuan devaluation a humiliating setback for 'China dream' thread of the Generational Dynamics forum. Comments may be posted anonymously.) (12-Aug-2015) Permanent Link
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11-Aug-15 World View -- Vladimir Putin increasingly trapped as Russia's GDP plunges 4.6%

Europe's bond yields go negative

This morning's key headlines from GenerationalDynamics.com

Wave of violent terrorist attacks strike across Turkey


Turkish soldiers patrol near the border with Syria last month (AP)
Turkish soldiers patrol near the border with Syria last month (AP)

Terrorist opened fire at the U.S. Consulate in Istanbul, Turkey, on Monday. No one was killed during the assault, but one of the two female attackers was killed by police as she fled. A far left terrorist group, the Revolutionary People's Liberation Army-Front (DHKP-C) took credit for the attack.

Earlier Monday, an overnight bomb attack at a police station in Istanbul injured three policemen and seven civilians and caused a fire that collapsed part of the three-story building. Unknown assailants later fired on police inspecting the scene of the explosion, sparking another gunfight with police that killed a police officer and two assailants. No one has claimed responsibility, but government sources blame the terrorist Kurdistan Workers' Party (PKK).

Also on Monday, four policemen were killed in southeastern Turkey when terrorists fired at a helicopter, and when an armored vehicle was attacked by a roadside bomb. Once again, the PKK was blamed.

Things seem to be changing very quickly in Turkey, ever since the July 20 massive terror attack on Suruç. Since then Turkey has rapidly changed from a country determined to avoid war to a wars on multiple fronts, fighting the self-described Islamic State (IS or ISIS or ISIL or Daesh) in Syria and Iraq, the PKK in northern Iraq and southeastern Turkey, and now the DHKP-C in Istanbul. It's amazing how quickly things can change.

The Revolutionary People's Liberation Army-Front (DHKP-C) is listed as a terrorist organization by the United States and Turkey, and was responsible for a suicide bombing of the US embassy in Ankara in 2013. Both the PKK and the DHKP-C are far left terrorist organizations, and they've cooperated in the past, although it's not known whether Monday's attacks were coordinated by the two groups. Today's Zaman (Istanbul) and Hurriyet (Ankara) and AP

Vladimir Putin increasingly trapped as Russia's GDP plunges 4.6%

Russia's recession deepened substantially in the second quarter, as the gross domestic product (GDP) shrank by 4.6% compared with a year earlier.

Earlier estimates that the GDP would fall only 3.6% were based on the assumption that oil prices would be above $60 per barrel. But oil has continued to fall, and Russian oil is now selling for just $57 per barrel, down 47% from a year earlier. Russia relies on oil and gas for about half of its budget revenue. This has caused the ruble currency to lose about 20% of its value since mid-May, 43% in the past 12 months.

Russia's president Vladimir Putin is increasingly trapped, running out of options. This is particularly true in Ukraine. Russia invaded and annexed Crimea, and has invaded and controls eastern Ukraine. But instead of a glorious return to Novorossia (New Russia), Russia is stuck in a massive economic quagmire in Ukraine that's further draining Russia's treasury.

Putin badly needs a relaxation of the Western sanctions that were imposed after the annexation of Crimea, but for that to happen, he would need to climb down in Ukraine, a move that would undermine the whole rationale for his rule and infuriate the nationalist supporters who make up his base. AFP and Bloomberg and RFE/RL

Europe's bond yields go negative

Germany's bond yields are below zero. France's two-year bond yields are less than -0.2%. In fact, $1.5 trillion of securities issued by eurozone countries have negative yields. That 23% of the market.

Normally when you purchase a bond, it's like a savings account that pays interest. If the yield is 2%, then if you sell the bond a year later, you could expect to have earned 2% interest.

But when a bond's yield is negative, that means that you lose money when you sell it. You buy the bond for $1,000, and then a year later you sell it for $998.

Why would anyone do that, you may ask? If you're a big institution with millions of dollars, then you have to put it somewhere. With a negative bond yield, it means that you're putting it somewhere safe, and you're paying someone to keep it safe.

Eurozone inflation was at 0.2% in July, well below the 2% target set by the European Central Bank (ECB). The eurozone had four months of deflation before April. The ECB is considering more quantitative easing to try to prevent any further deflation. Bloomberg and Reuters

(Comments: For reader comments, questions and discussion, see the 11-Aug-15 World View -- Vladimir Putin increasingly trapped as Russia's GDP plunges 4.6% thread of the Generational Dynamics forum. Comments may be posted anonymously.) (11-Aug-2015) Permanent Link
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10-Aug-15 World View -- Japan's Shinzo Abe 'insults' Korea in plans for commemorating end of WW II

Palestinians promise to continue efforts to pursue Israeli 'criminals'

This morning's key headlines from GenerationalDynamics.com

Japan's Shinzo Abe raises controversy at Hiroshima commemoration


Doves fly over the Atomic Bomb Dome in Peace Memorial Park in Hiroshima on Thursday (Reuters)
Doves fly over the Atomic Bomb Dome in Peace Memorial Park in Hiroshima on Thursday (Reuters)

Japan has been holding a series of very emotional commemorations, 70 years after American forces dropped atomic bombs on two Japanese cities, bringing World War II to an end. On Thursday there was a commemoration in Hiroshima, and on Sunday it was in Nagasaki.

Japan's prime minister Shinzo Abe called for a nuclear-free world in his speech on Thursday:

"Here today, at the opening of the Hiroshima Peace Memorial Ceremony on the 70th anniversary of the atomic bombing, I reverently express my sincere condolences to the souls of the great number of atomic bomb victims.

I also extend my deepest sympathy to those still suffering from the aftereffects of the atomic bomb even now.

Seventy years have passed since that morning. A single atomic bomb dropped here in Hiroshima deprived a tremendous number of people, numbering around 140,000, of their precious lives and turned the city into ruins. In this catastrophe, even those who narrowly escaped death suffered unspeakable hardships in the days to come.

Looking around the city of Hiroshima today, we see that this City of Water has undergone a robust restoration and transformed itself into an International City of Peace and Culture. This morning as we mark 70 years since the atomic bombing, I once more profoundly contemplate how precious peace is.

As the only country to have ever experienced the horror of nuclear devastation in war, Japan has an important mission of realizing a world free of nuclear weapons by steadily carrying out a succession of realistic and practical measures. We also have a duty to communicate far and wide the catastrophic humanitarian impact of nuclear weapons, across generations and beyond national borders."

However, there was some controversy because Abe's speech omitted mention of the "three non-nuclear principles": Japan will not build or maintain nuclear weapons, and will permit any nuclear weapons on its territory. Activists expressed concern that the last of these three principles will be negated by passage of security legislation that will re-interpret the pacifist constitution that permits military action only in self-defense. (See "5-May-14 World View -- Japan debates 'collective self-defense' to protect America and Japan")

The two commemorations have revived the decades-old moral debate over whether America should have used nuclear weapons at all, since so many civilians were killed, first by the explosion and then afterwards by radiation poisoning.

From the point of view of Generational Dynamics, the fact that nuclear weapons were used is no surprise at all. During a generational crisis war, the value of an individual human life keeps falling, until the explosive climax of the war. At that time, the value of a human life is almost zero, and any means or method or weapon will be used to end the war, irrespective of civilian casualties. In fact, in WW II this was already apparent long before the nuclear weapons were dropped. In 1944, the Allies sent tens of thousands of soldiers onto the beaches of Normandy, knowing that thousands would be shot down and killed like fish in a barrel. The firebombing of Hamburg, Dresden and Tokyo in 1944 and 1945 actually killed more civilians than the nuclear weapons did.

Some of the criticism directed at President Truman for authorizing the atomic bombings was that Japan was about to surrender anyway, because the Soviet Union was entering the war against Japan. A historical analysis on the BBC made by Dr. Anthony Best, professor at London School of Economics, specializing in the history of Japan, made the following points:

Generational Dynamics predicts that there will be no nuclear-free world, and that by the time that the climax of the next world war is reached, every nuclear weapon in the world will have been used as a weapon somewhere. BBC and Japan Times and Shingetsu News Agency

Japan's Shinzo Abe 'insults' Korea in plans for commemorating end of WW II

On Thursday, Japan's prime minister will give a speech commemorating the 70th anniversary of the end of World War II, when Japan surrendered, several days after the bombing of Nagasaki.

The planned statement is major news in South Korea, where officials are waiting to see if Abe will apologize for Japan's use of Korean and Chinese "comfort women" during World War II. Two of Abe's predecessors have apologized, and both Korea and China are urging Abe to use words such as "aggression," colonial rule," "remorse" and "apology" in the upcoming statement.

However, Abe is apparently going to be guided by a report submitted last week by "The Advisory Panel on the History of the 20th Century and on Japan’s Role and World Order in the 21st Century," a panel established by Abe in February to provide input to Thursday's statement. The report recommends that Abe express remorse, but not apologize.

According to an editorial in the Korea Times, the panel's recommendations actually insulted the Koreans by differentiating between China and Korea, and claiming that "The Korean governments' policy on Japan has vacillated between 'reason and emotion.'" According to the editorial, "It befits all modifiers Japan is infamous for cunning, crafty and sly." Arirang (Seoul) and Korea Times and Japan Focus

Palestinians promise to continue efforts to pursue Israeli 'criminals'

Palestinians are calling for revenge after the second victim of last weekend's 'Jewish terrorism' died on Saturday. ( "1-Aug-15 World View -- Tensions with Palestinians soar after brutal Israeli settler 'price tag' attack")

An 18-month-old Palestinian boy was killed last weekend when attackers used Molotov cocktails to set two homes on fire in the West Bank. On Saturday, the child's father died. The brother and mother are still being treated in a hospital.

The brutality of the Jewish settler "price tag" attack has shocked even most Israelis. Israel's prime minister Benjamin Netanyahu has promised that the "Jewish terrorists" would be brought to justice, but so far no one has been charged.

However, three Israelis have been given "administrative detention," and this has caused controversies of its own. Israel holds hundreds of Palestinians in administrative detention, but this is the first time it's been used to detain Jews. Furthermore, the three Israelis were not linked to last weekend's attack.

Israel defends its use of detention for up to six months without trial, saying it is needed to stem violence and allow for further investigation in cases where there is insufficient evidence to prosecute, or where going to court would risk exposing secret informants.

However, human rights activists in Israel object to the use of administrative detention against either Israelis or Palestinians. According to activist Sarit Michaeli:

"These recent government actions look more like an attempt to divert attention and appease public outrage following this terrible attack in Duma than a real effort to enforce the law on settlers who attack Palestinians.

There is a very long-term and clear unspoken policy to not enforce the law in these situations, by the Israeli authorities, to turn a blind eye, to not conduct proper police investigations into these matters, and therefore it's very hard to see how a couple of arrests will change that."

The Palestinian Authority government said Saturday it is planning to continue its diplomatic and legal efforts to pursue Israeli “criminals.”

A spokesman for the government in Ramallah said the father's death is "further proof of the gravity of the crime committed by a group of settler terrorists," adding that the "presence of Israeli occupation is the reason for all crimes committed against our people. The only way to stop these crimes is by ending this occupation." Jerusalem Post and Reuters and Jerusalem Post

(Comments: For reader comments, questions and discussion, see the 10-Aug-15 World View -- Japan's Shinzo Abe 'insults' Korea in plans for commemorating end of WW II thread of the Generational Dynamics forum. Comments may be posted anonymously.) (10-Aug-2015) Permanent Link
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9-Aug-15 World View -- Haiti's parliamentary elections promise little besides chaos

Mulattos versus Noirs in Haiti

This morning's key headlines from GenerationalDynamics.com

Haiti's parliamentary elections promise little besides chaos


Haiti after the January 2010 earthquake
Haiti after the January 2010 earthquake

Today (Sunday), Haiti will hold its first parliamentary elections since the massive January 2010 earthquake that killed more than 200,000 Haitians, and devastated the entire country.

The elections were supposed to be held in 2011, but they were postponed repeatedly because toxic Haitian politics, led by president Michel Martelly, a former carnival singer known as "Sweet Micky." Martelly was elected in 2011 as a supporter of the majority "noirs," or descendants of slaves. The Parliament dissolved itself in January of this year, and since then Martelly has been governing by decree. Martelly is still popular, but these days he's accused of being too authoritarian, more in league with the minority "mulattos," supported by international élites.

More than 1,800 candidates from dozens of parties will be on the ballots on Sunday, running for 138 open legislative seats. It will take days or weeks to count the ballots and determine the winners, and then there will be runoff elections on October 25. October 25 is also the day when presidential elections will take place. Martelly will not be eligible to run for another term, but there will be more than 50 other candidates for voters to choose from. If necessary, a presidential runoff election will take place on December 27.

It's hoped that with fresh leadership, the country can finally begin to recover from the 2010 earthquake.

There has already been huge amounts of money donated to rebuilding Haiti after the earthquake, but it doesn't seem to have done much good. Bill Clinton and the Clinton foundation raised millions of dollars. Celebrities organized high-profile benefits. The American Red Cross raised almost $500 million, promising to rebuild homes, schools and infrastructure. According to a recent investigation, the actual number of permanent homes built through the Red Cross in Haiti is six. Thanks to the investigation, Red Cross officials have been in the process of making excuses. The money appears to have gone into the pockets of crony organizations in the form of grants which the Red Cross says can't be publicly disclosed. Apparently, these were all American organizations, not Haitian organizations, so little of the $500 million seems to have reached Haiti.

Because of the massive numbers of candidates, few people expect the elections to produce the kind of leadership that Haiti needs, or that Haiti will anytime soon be able to completely recover from the devastation of the 2010 earthquake. International Business Times and BBC and Chicago Tribune and NPR

Mulattos versus Noirs in Haiti


Light-skinned mulatto girl, with dark-skinned noir girl (AfroEurope)
Light-skinned mulatto girl, with dark-skinned noir girl (AfroEurope)

During the 1700s, Haiti was an extremely wealthy French colony, thanks to crops sugar, rum, coffee and cotton -- and thanks to the efforts of 500,000 slaves that the French had imported from Africa.

By the end of the 1700s, there were three groups of Haitians: The "whites," native Europeans; the "noirs" or "blacks," native black Africans whom the French imported as slaves; and the "mulattos," the children of mixed European and African blood.

At that time, the mulattos were theoretically free, but in practice had as few rights as the noirs. In 1791, the noirs and the mulattos united in a violent slave rebellion that led to a 13-year civil war, resulting in formal recognition, in 1804, of Haiti as the second Republic in the Western hemisphere. However, the United States didn't grant Haiti diplomatic recognition until 1862 -- when Lincoln's Emancipation Proclamation freed America's slaves during the Civil War.

Today the mulattos are a small French-speaking minority, under 5% of the population, generally light-skinned, but a "market-dominant" minority, controlling well over 50% of the nation's wealth. The noirs generally live in extreme poverty, and speak Creole, a mixture of French and African language elements. (Other different variations of Creole are spoken throughout the Caribbean, including parts of Louisiana.)

After the whites were overthrown in 1804, the mulattos became the new élite class. There was a new crisis civil war in the late 1840s, followed by several decades of peace and the growth of a Haitian intellectual culture. However, there was one bloodless coup after another, resulting in a succession of dozens of Presidents.

The 1915 coup was different, in that it turned into a major generational crisis rebellion. With total anarchy breaking out, President Woodrow Wilson eventually felt it necessary to take complete control of all governmental and financial institutions in Haiti.

The American armed forces remained in Haiti for 20 years, withdrawing only in 1934.

American armed forces came back in 1994, when it appeared that Haiti was once again heading for anarchy. The same thing happened in 2004. Now, since the earthquake, things are worse than ever.

Haiti is one of the most densely populated countries in the world, and is the poorest nation in the Western Hemisphere, with 60% of the population living under the poverty line, earning less than $2.44 a day. Racist hatred between the mulattos and noirs still runs deep in Haiti. Haiti is in a generational crisis era, and between the poverty and the racism, the future does not look good for the country. AfroEurope (Dec-2012) and The Star (Myanmar)

(Comments: For reader comments, questions and discussion, see the 9-Aug-15 World View -- Haiti's parliamentary elections promise little besides chaos thread of the Generational Dynamics forum. Comments may be posted anonymously.) (9-Aug-2015) Permanent Link
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8-Aug-15 World View -- UNHCR: Greece's islands Kos, Chios, Lesbos are in 'total chaos' over migrants

Hungary speeds up construction of anti-migrant border fence

This morning's key headlines from GenerationalDynamics.com

Hungary speeds up construction of anti-migrant border fence


Hungary's border fence is to be completed by end of August (Reuters)
Hungary's border fence is to be completed by end of August (Reuters)

According to Hungary's prime minister Viktor Orbán, who is personally disliked by other EU leaders, more than 100,000 migrants have crossed into Hungary from outside the EU since the start of 2015. Most of the migrants have crossed into Hungary from Serbia, which is not an EU country.

On June 17, Hungary announced that it would build a 175km (109 mile) steel border fence along the Serbian border to keep migrants from entering Hungary. ( "25-Jun-15 World View -- Hungary and Austria in disagreement over migrants")

The fence was originally scheduled for completion by the end of November, but now construction has been sped up, with the intention of building it by the end of August. The government is using prisoners and unemployed people to build the fence as quickly as possible. In addition, Hungary plans to deal with migrants caught cutting through the fence by "punishing [them] in an exemplary manner," including prison sentences.

But in a sense, building the fence is backfiring. As word spread among migrants planning to come to Hungary that the fence was being built, many of them sped up their plans. As a result, daily numbers of migrants caught by police have been rising steadily, from 300 a day in April to 400 daily in May, to 1,500 a day since mid-July. BBC and AP

UNHCR: Greece's islands Kos, Chios, Lesbos are in 'total chaos' over migrants

Although Italy has been the country most in the news recently with regard to migrants arriving in Europe, with Calais France close behind, the country that's actually had to deal with the most migrants is Greece.

About 124,000 migrants have arrived in Greece this year, about 50,000 in July alone. In most cases, they arrive via Turkey mostly from Syria, Iraq and Afghanistan. Their first point of arrival in Greece is usually three Greek islands: Kos, Chios and Lesbos.

The UNHCR (UN High Commissioner for Refugees) agency said on Friday that the situation on the three Greek islands is "total chaos," with inadequate accommodation, water and sanitation. According to Vincent Cochetel, the European director of the agency, the facilities for refugees on the Greek islands were "totally inadequate," and Greece must "lead and coordinate" the efforts of the EU countries:

"On most of the islands there is no reception capacity, people are not sleeping under any form of roof. So it's total chaos on the islands.

After a couple of days they are transferred to Athens, there is nothing waiting for them in Athens."

Greece's prime minister Alexis Tsipras has been highly critical of European officials on the issue of Greece's bailout, and is demanding aid to handle the tsunami of refugees: "The EU is being tested on the issue of Greece. It has responded negatively on the economic front - that's my view. I hope it will respond positively on the humanitarian front." BBC and Reuters

(Comments: For reader comments, questions and discussion, see the 8-Aug-15 World View -- UNHCR: Greece's islands Kos, Chios, Lesbos are in 'total chaos' over migrants thread of the Generational Dynamics forum. Comments may be posted anonymously.) (8-Aug-2015) Permanent Link
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7-Aug-15 World View -- As Iran rises in the Mideast, Kurds benefit in Iraq and Syria

Puerto Rico default triggers selloff in municipal bond funds

This morning's key headlines from GenerationalDynamics.com

As Iran rises in the Mideast, Kurds benefit in Iraq and Syria


Kurdish women fighting ISIS in Iraq (AFP)
Kurdish women fighting ISIS in Iraq (AFP)

While the Iran nuclear deal has thrown the entire Arab world into political disarray, and while Turkey is increasingly at war with the terrorist Kurdistan Workers’ Party (PKK), the "moderate" Kurds are looking at what is apparently the best chance they've had in decades to get a Kurdish state.

The Arabs, Iran, Turkey, the al-Assad Syrian regime, the Kurds, and the U.S. are all involved in the war in Syria and Iraq in one way or another, all with completely different objectives. But they all have one thing in common: They're all fighting the so-called Islamic State (IS or ISIS or ISIL or Daesh) -- more precisely, they're all fighting ISIS and using the fight against ISIS as a cover for their own objectives.

The Kurds are one of America's key allies in Iraq and Syria in the fight against ISIS, and have benefited from airstrikes from the US-led coalition. With the help from these airstrikes, the Kurds have successfully taken control of substantial territory in northern Syria and Iraq, along Turkey's border.

Furthermore, the Kurds are getting substantial help from Iran. Reports are that Iran convinced the regime of Syria's president Bashar al-Assad to grant the autonomy and de facto local independence to the Kurds in Western Syria, and Iran convinced the Shia-led government in Iraq to give the a higher level of autonomy to the Kurds in Iraq.

As we wrote in "26-Jul-15 World View -- Turkey bombs ISIS targets in northern Syria to set up 'safe zone'", the Kurds in northern Syria are separated into two large enclaves, one in the east up the border with Iraq, and one in the west. If the Kurds can unite those two regions, then it can declare the entire region a Kurdish state, possibly including parts of Iraq, southeastern Turkey, and even northwestern Iran.

Even without a Kurdish state, Turkey would face on its southern border a stable and sustainable alliance headed by Iran, with the al-Assad government in Syria, Hezbollah, the Shia-controlled government, and Kurdish forces. This would give Iran control of a strip of land from Iran to the Mediterranean, isolating Turkey from the rest of the Mideast, and almost encircling Turkey with Iran's allies.

With or without a Kurdish state, this would be intolerable to Turkey. That's why Turkey needs its 110-km wide "safe zone" in northern Syria, separating the two Kurdish enclaves. The announced purpose of the "safe zone" was to provide a refuge to Syrians from ISIS, but that's not as important an objective as providing a refuge to Turkey from Iran and the Kurds. Geopolitical Monitor and Al Arabiya

Saudi Arabia suffers deadliest terrorism attack in years

A suicide bomber struck a Sunni mosque in the southwestern city of Abha in Saudi Arabia on Thursday, killing at least 13 people, 10 of whom were security or police forces. There have been previous attacks on Shia mosques in Saudi Arabia's east, perpetrated by the ISIS-linked Najd Province terrorist group. Since this time the target was a Sunni mosque in a city on the border with Yemen, the initial reactions were to suggest that the perpetrators were Houthi terrorists from Yemen, where the Saudis are fighting a war against the Iran-backed Houthis.

However, a previously unknown Sunni terrorist group, identifying itself as ISIS-linked "Hijaz Province," claimed responsibility for the terrorist attack. The "Hijaz" name is a reference to the historic western part of Saudi Arabia that is home to Islam's holiest sites of Mecca and Medina.

The attack was devastating, and it was the deadliest attack against Saudi security personnel in years. It's certain to increase demands, both domestically and internationally, for the Saudis to become more heavily involved in fighting ISIS in Syria, possibly putting troops on the ground.

These demands will come at a time when Saudi Arabia, popularly thought to be one of the richest countries in the world, is running out of money, forcing the government to borrow money by issuing bonds. The loss of reserves is caused by a sharp rise in military spending and a collapse in oil prices, the main source of revenue. Saudi Gazette and AP and CNN

Puerto Rico default triggers selloff in municipal bond funds

Individual investors pulled $308 million from municipal bond funds in the last week, in a reaction to Puerto Rico's failure to make a $58 million debt repayment on Tuesday, putting Puerto Rico in technical default.

Puerto Rico is seeking to restructure its $72 billion of debt, which is widely held because the 10% interest is "triple-tax free," meaning that you can earn 10% interest every year and not have to pay federal, state or municipal tax on the interest you collect.

In the midst of the growing economic crisis, a severe drought is causing a water shortage, and is forcing businesses to temporarily close, public schools to cancel breakfast service and people to find creative ways to stay clean amid sweltering temperatures. Bloomberg and VOA

(Comments: For reader comments, questions and discussion, see the 7-Aug-15 World View -- As Iran rises in the Mideast, Kurds benefit in Iraq and Syria thread of the Generational Dynamics forum. Comments may be posted anonymously.) (7-Aug-2015) Permanent Link
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6-Aug-15 World View -- U.S. program to train Syrian rebels appears near collapse

Hundreds of migrant deaths in Mediterranean highlight Libya-Calais relationship

This morning's key headlines from GenerationalDynamics.com

Hundreds of migrant deaths in Mediterranean highlight Libya-Calais relationship


Migrants in raft rescued from capsized boat on Wednesday (AFP)
Migrants in raft rescued from capsized boat on Wednesday (AFP)

In the latest mass migrant death in the Mediterranean Sea, a boat from Libya with 600-700 migrants capsized just as rescue boats were approaching. Apparently the migrants became excited by the approaching rescue inflatable boats, and all crowded on one side of their ship, causing it to capsize and sink within a couple of minutes.

Most of the deaths were of people who were in the cabin below deck. Traffickers charge migrants a lower "below deck" fare than they charge migrants to remain on deck. However, traveling below deck in a massively overcrowded boat brings a much high risk of death.

Migrants are crossing the Mediterranean in massive numbers this summer. In a single weekend in June, Italian authorities rescued 5,800 migrants. The total number to have arrived by boat from Libya into Italy and France is over 100,000 so far this year.

In the meantime, the migrant crisis in Calais, France, is continuing unabated. ( "31-Jul-15 World View -- 'Swarm' of migrants causing crisis at Eurotunnel from France to Britain")

There are now some 5,000 migrants camping out in the migrant camp known as "The Jungle" on the outskirts of Calais, which is near the entrance to the Eurotunnel that connects France to Britain through the English Channel.

It's believed that many of the 5,000 migrants around Calais were among the 100,000 that crossed the Mediterranean to Italy and Greece. It's suspected that authorities in France and Italy, wanting to get rid of the problem, actively encouraged the migrants to go north to Britain.

Illegal migrants may try to make their homes in any of the European countries, but Britain is a favorite destination because of liberal welfare and medical services policies, and because they prefer an English-speaking country. Irish Times and Telegraph (London)

U.S.-trained Free Syrian Army's Division 30 suffers major defeat

The al-Qaeda linked Jabhat al-Nusra (al-Nusra Front) has delivered a stinging defeat to the U.S.-trained Free Syrian Army Division 30, just days after it entered the battlefield for the first time. Of the 50-60 man division, seven men, including three of the group’s leaders, were captured and taken prisoner on Wednesday of last week by al-Nusra. On Friday, al-Nusra killed one more man, and wounded 8 others. Then on Monday of this week, five more men were captured.

In June of last year, the Obama administration announced a program costing $500 million, later increased to $1.1 billion, to train 5,000 "moderate" rebel fighters per year in Syria to fight the so-called Islamic State (IS or ISIS or ISIL or Daesh).

However, last month, Secretary of Defense Ash Carter was asked by Congress how many of the 5,000 had been trained in the last year, and he answered that only 60 had been trained.

Those 60 trained rebels made up the Free Syrian Army Division 30, the division that was decimated by al-Nusra in a series of attacks in the past week, putting the viability of the division and of the entire rebel-training program into question.

According to reports, the attacks by al-Nusra were a surprise to the American military, because they believed that al-Nusra would "welcome Division 30 as an ally in its fight against the Islamic State."

In fact, after last Friday's fighting, Division 30 put this statement on its Facebook page: "Division 30’s command calls, for the second time, on our brothers in Jabhat al-Nusra to cease these actions, preserve the blood of Muslims and protect unity." However, that was followed by the new al-Nusra attack on Monday. Guardian (London) and Middle East Eye and Vox

US program to train rebels in Syria appears flawed from the start

On Wednesday, the BBC World Service broadcast an interview with Captain Ammar al-Wawi, one of the remaining survivors of Division 30. My transcription:

"How come Daesh was created in a very short time, 6 to 12 months, then fights the entire world in Iraq and Syria, and occupies 50% of both Syria and Iraq with no international support, but this plan backed by many countries, trains only 54 fighters in 6 months?

The Americans are ready to train and form a national army of 15,000 fighters, and they say they're ready to back it financially and militarily. In addition to the air cover.

The truth is that in the six months only 60 fighters have been trained, so if only 60 fighters get trained every 6 months, we'll need decades to train 15,000."

The BBC also spoke to Robert Ford, the US Ambassador to Syria until last year, and was asked whether the rebel training program is off to a bad start (my transcription):

"Yes, it's a terrible start, it's an awful start. The program from the beginning had a serious structural problems. The entire vision of the program made little sense, when they insisted that the fighters the Americans would train pledge -- in writing no less -- that they would only fight the Islamic State, and never fight the Assad regime, even though, as your correspondent mentioned, the Assad regime has been fighting them for four years, killing far, far, far more Syrians than the Islamic State ever did, as awful as the Islamic State is. ...

Second problem is - the Americans didn't have a good sense before they started as to whether or not they would provide close air support, and there were the delays that you talked about. ...

And the bigger problem, though, really is, will people that the United States trains, but who pledge to fight only IS -- will they be viewed as loyal patriotic Syrians fighting in this horrible civil war by the other groups, or will they be viewed as American stooges, and basically as an American fifth column, and therefore, they will be more or less on their own all the time? ...

You're not going to be able to bomb the Islamic State into oblivion. We've just had stories based out of American intelligence sources earlier this week on the AP that American intelligence estimates that the IS basically replaced all of their casualties from American bombing with new recruits during the past year."

Right now, the $1.1 billion Obama administration program to train "moderate" Syrian rebels to fight ISIS appears to be collapsing, and it's not clear if the administration is able to do anything to save it. BBC

(Comments: For reader comments, questions and discussion, see the 6-Aug-15 World View -- U.S. program to train Syrian rebels appears near collapse thread of the Generational Dynamics forum. Comments may be posted anonymously.) (6-Aug-2015) Permanent Link
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5-Aug-15 World View -- Britain's National Health Service (NHS) faces existential financial crisis

Criminality and fraud in Veterans Administration and Obamacare

This morning's key headlines from GenerationalDynamics.com

Criminality and fraud in Veterans Administration and Obamacare


Veterans Affairs plaque
Veterans Affairs plaque

I've told a number of people that I was researching an article on Healthcare.gov, the greatest IT (information technology) disaster in history. I have in fact found a great deal of criminal fraud in the Healthcare.gov web sites software development projects, but I haven't finished the article yet because I've expanded it substantially to include an economic analysis of Obamacare. I hope to have it done within the next couple of weeks.

By way of introduction, it's worthwhile reviewing what's happened with the Veterans Administration healthcare system.

In 2006, far-left NY Times columnist Paul Krugman wrote the following, describing the Veterans Administration (VA) health care system:

"[The VA's] success story is one of the best-kept secrets in the American policy debate. ... [Conservative] pundits and policy makers ... can’t handle the cognitive dissonance."

Krugman is not known for his intelligence, or for much else besides his loony left ideology. After Krugman wrote this, the horror show of the VA health system began to come out in the media.

We now know that the VA system is loaded with fraud, corruption, lying, and unbelievably poor health care services. Since this has been well-reported in the media, we won't do more than list some of the well-documented problems:

The bottom line is that apparently no one in the VA actually gave a damn about medical care for veterans.

This appears to be exactly what's happening in Obamacare, according to the research that I'll be reporting within a couple of weeks.

There will also be a separate article posted on my web site on academic research into the general problem of sabotage, fraud and subversion in software development projects. This will be of interest to academic researchers and software development managers. Forbes (23-May-2014) and St Louis Today (8-Jul-2014)

Britain's National Health Service (NHS) faces existential financial crisis


UK National Health Service (NHS) launch leaflet, July 1948
UK National Health Service (NHS) launch leaflet, July 1948

Those who favor copying the United Kingdom's single-payer National Health Service (NHS) should be aware that on Monday it was announced that NHS is facing an existential financial crisis. NHS health care providers are forecasting a deficit of over $3 billion in 2015-16. The deficit is growing rapidly, and the NHS is being required to find $35 billion in "efficiency savings" by 2020.

According to a letter sent on Monday to NHS from David Bennett, head of the Monitor agency that monitors the NHS:

"As you know, the NHS is facing an almost unprecedented financial challenge this year. Current plans are quite simply unaffordable. As I have said before, if we are to do the best we can for patients we must leave no stone unturned in our collective efforts to make the money we have go as far as possible."

This week, the NHS is being told to take the following steps in response to the financial crisis:

These minor tweaks to the NHS system will not come anywhere close to providing the required $35 billion in "efficiency savings." A massive restructuring will be required.

According to the Labor Party's health secretary Andy Burnham:

"This is a sign of a serious deterioration in NHS finances. It suggests that the financial crisis in the NHS is threatening to spiral out of control and hit standards of patient care.

The suggestion that hospitals can ignore safe staffing guidance will alarm patients and the Government must decide if it will overrule this advice.

Morale in the NHS is already at an all-time low and doctors have lost confidence in the Health Secretary.

It will raise further questions about how the Government can possibly fulfil commitments on a seven-day NHS without the money to back it up."

Not surprisingly, with so much money involved, the NHS is filled with criminality and fraud, just as in the case of Obamacare and the Veterans Administration. A study last year by Portsmouth University found that fraud alone is costing the NHS something like $8 billion a year. Some of the fraudulent activities include:

Not surprisingly, "the NHS in recent years has stopped measuring its own losses," according to the report. When an organization stops collecting early warning data, that's a sure sign that a problem is turning into a full-scale disaster.

Britain's dentistry services have already become so bad that many people are buying "do-it-yourself (DIY) dentistry kits" that can be obtained from local stores. According to one resident, "DIY dentistry is fairly common round here. They sell a lot of those first aid kits ... and you’ve got people taking care of their whole family’s teeth with them."

The NHS financial crisis is so enormous that nobody doubts that it will seriously impact patient care. The NHS is facing a massive restructuring.

By American standards, an 18-week waiting time is ridiculously long, and now the NHS is scrapping even that waiting period. Any American who uses the NHS as a model has to be a total moron. Independent (London) and BBC and Independent (London) and BBC (24-Mar-2014) and Guardian (3-Apr-2015)

Summary of Obamacare findings

The following is a brief summary of my findings that I will be posting within a couple of weeks:

UK's National Health Service, Veteran's Administration health care, and Obamacare all share the same things: fraud, criminality and worsening health care. Unfortunately, there's little chance that any lessons will be learned.

By the way, I'm perhaps uniquely qualified to do this analysis. I'm an apolitical, non-ideological, highly analytical writer. I have decades of experience in software development (Resume: http://www.jxenakis.com/resume). And I also have decades of experience as a tech journalist, including two years as Boston Bureau Chief of InformationWeek Magazine, and ten years (part time) as Technology Editor for CFO Magazine (Examples: http://ww2.cfo.com/author/john-xenakis/).

(Comments: For reader comments, questions and discussion, see the 5-Aug-15 World View -- Britain's National Health Service (NHS) faces existential financial crisis thread of the Generational Dynamics forum. Comments may be posted anonymously.) (5-Aug-2015) Permanent Link
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4-Aug-15 World View -- US in major weapons sale to Saudis to compensate for Iran nuclear deal

Russia isolates itself further by vetoing MH17 investigation

This morning's key headlines from GenerationalDynamics.com

Russia isolates itself further by vetoing MH17 investigation


Screen grab of Buk missile system in Ukraine in July of last year.  (Ukraine Security Service)
Screen grab of Buk missile system in Ukraine in July of last year. (Ukraine Security Service)

Last week, Russia vetoed a United Nations Security Council resolution, proposed by Malaysia, to authorize an impartial investigation into the shooting down of a passenger airliner on July 17 of last year. It was Malaysian Airlines flight MH17, carrying 280 passengers and 15 crew members, when it crashed in east Ukraine near the border with Russia, killing everyone on board. All others voted in favor of the resolution, except for abstentions from Russia's three "allies": China, Venezuela and Angola.

Immediately after the MH17 airliner was shot down last year, Igor Strelkov, the commander of the Russian invasion forces in east Ukraine, tweeted the following to brag about the kill:

"We shot down AN-26 [military transport] near the city Torez, Donetsk People's Republic ... We warned, don't fly in our sky."

Later, when Strelkov learned that he had shot down a passenger plane, not a military plane, the tweet was taken down, but by then it was too late. Strelkov had already admitted about shooting down the plane -- actually bragged about it. Later evidence showed that the Russians had shot down the passenger airliner with a Russian Buk surface-to-air missile launched from the area controlled by the Russians in east Ukraine.

There followed a blast of Russian propaganda, attempting to confuse the issue and pin the blame elsewhere. The claims by Russia controlled media included:

That was followed by Putin's army of paid Russian trolls, whose job was to harass people like me who were describing what was really going on. I was targeted by no less than three of the trolls on different web sites in one week, and I've had frequent attacks by Russian trolls since then.

So Russia's veto of a resolution to set up an international tribunal to investigate the MH17 disaster is consistent with Russia's policies for the last year.

However, this time Russia received an additional humiliation: Russia's so-called ally China did not join Russia in vetoing the resolution; instead, China abstained, as did Russia's other "allies," Venezuela and Angola.

The fact that even Russia's allies did not join in voting against the resolution was a major defeat for Russian diplomacy, and indicates that even these countries refused to be associated with covering up as horrendous a crime as shooting down an airliner filled with passengers.

Russia is becoming increasingly isolated in the international community because its economy is cratering, mainly because of the collapse in oil prices. Russia Today and Jamestown

US in major weapons sale to Saudis to compensate for Iran nuclear deal

US Secretary of State John Kerry was in Doha, Qatar, on Monday, visiting the foreign ministers of the six-nation Gulf Cooperation Council (GCC). The GCC members are extremely anxious over the nuclear deal with Iran. As I wrote last month in "19-Jul-15 World View -- Behind the scenes in the Iran nuclear deal", the Iran nuclear deal is forcing yet another realignment in the Arab world, as it deteriorates into war.

Kerry on Monday told the GCC ministers that the United States had "agreed to expedite certain arms sales that are needed and that have taken too long in the past."

The arms sales that Kerry referred to were announced earlier this week. A $5.4 billion weapons deal involves the sale of PAC-3 Missiles as part of the upgrade of the Royal Saudi Air Defense Force. An additional $500 million sale includes ammunition, tracers, artillery shells and mines. Some of these weapons will resupply Saudi's military in Yemen, where the Saudis are fighting a proxy war with Iran.

And so, with the Mideast deteriorating into war, the Iranians will receive billions in sanction relief to purchase weapons, while the Saudis are going to receive US weapons. There is now apparently a major arms race going on between the Arabs and Iran.

As I've been writing for years, Generational Dynamics predicts a full-scale sectarian war in the Mideast, with Iran an ally of the West fighting the Sunni Arabs. AFP and Middle East Eye and Reuters and Sputnik News (Moscow)

(Comments: For reader comments, questions and discussion, see the 4-Aug-15 World View -- US in major weapons sale to Saudis to compensate for Iran nuclear deal thread of the Generational Dynamics forum. Comments may be posted anonymously.) (4-Aug-2015) Permanent Link
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3-Aug-15 World View -- Turkey returns to war with the Kurdish PKK

Venezuela's collapsing economy receives $5 billion from China

This morning's key headlines from GenerationalDynamics.com

Big losses expected Monday when Greece's stock market reopens


An old man carrying newspapers stands in front of a row of Greek flags in Athens (Kathimerini)
An old man carrying newspapers stands in front of a row of Greek flags in Athens (Kathimerini)

The Athens stock market will open again on Monday, and analysts are expecting pent-up selling pressure to knock 20% or more off the Athens general index. According to one analyst, "The possibility of seeing even a single share rise in [Monday's] session is almost zero."

Also on Monday, new negotiations are to begin between Greece and the lending institutions over such things as fiscal adjustment, privatizations, bank recapitalization and structural reform, including pension overhauls. The objective is to reach agreement by August 11, when a new Eurogroup summit can give its approval. Greece has to secure a fresh bailout payment by August 20, when it has to make a payment to the European Central Bank, or again face default. Reuters and Kathimerini

Puerto Rico to default on Tuesday

As expected, Puerto Rico missed a $58 million bond payment on Saturday, but because the deadline was Saturday, Puerto Rico has until the end of Tuesday to make the missed payment. However, governor Alejandro García Padilla told journalists in San Juan on Friday, "We don’t have the money."

Puerto Rico faces $635 million in debt-service payments this month, and has to make $5.4 billion in bond payments through next summer, leaving little for services such as trash pickup, road maintenance, education and other government functions. It's expected that the default will cause an extremely chaotic international crisis. International Business Times

Venezuela's collapsing economy receives $5 billion from China

With inflation and shortages increasing in Venezuela, shoppers are breaking into supermarkets to see scarce consumer staples including milk, rice and flour. In one such incident on Friday in the southeastern city of Ciudad Guayana, one person was killed in the mêlée, and dozens were arrested.

As usual, president Nicolás Maduro blamed it on the United States, particularly on U.S. General John Kelly, Marine Corps commander of the Southern Command, who predicted in February that there would be a "social implosion" in Venezuela in July. According to Maduro:

"You all know that a military general of the United States doesn't predict. He orders and the battered Venezuelan right-wing executes."

Venezuela's economy is in a state of rapidly increasingly hyperinflation, with the currency losing 32% of its value in the black market in the last month alone. The inflation rate is well into the triple digits, though precise figures have not been published. Businesses are quickly switching over the dollar currency as a result.

Venezuela's economy has been collapsing because of huge socialist spending programs begun by Maduro's predecessor Hugo Chávez, and because the price of oil has plunged to below $50 per barrel. Oil is the main export of Venezuela and provides most of the country's foreign currency.

However, on Friday Venezuela announced that it has received $5 billion in funding from China, according to a long-standing agreement. China is Venezuela's primary financier and has lent the nation more than $46 billion to be repaid in oil, after accords signed with late president Hugo Chávez in 2007. Reuters and Bloomberg (16-Jul) and Latin American Herald Tribune and Reuters

Venezuela in border dispute with Guyana

Venezuela's economic collapse has affected the country's relations with their neighbor Guyana. An 1897 treaty between Venezuela and Guyana (then British Guiana), set the borders between the two countries, but Venezuela wants to repudiate the treaty, now that ExxonMobil estimates that it has found 700 million barrels of crude oil in Guyana's waters. Jamaica Observer

Turkey returns to war with the Kurdish PKK

Two weeks ago, Turkey was determined to avoid war. Turkey's announcement that it will make its airbases available to warplanes fighting the so-called Islamic State (IS or ISIS or ISIL or Daesh), and its decision to join the US-led coalition fighting ISIS, were greeted in the West as a sign of new hope.

But now Turkey is mainly embroiled in a new war with the Kurdistan Workers’ Party (PKK), both in northern Iraq and in southeast Turkey. While the West is bombing ISIS targets, Turkey is bombing PKK targets.

Turkey and the separatist terror group PKK fought an off and on civil war for almost four decades, but finally agreed to a ceasefire in 2012. On July 20, there was a massive terrorist attack in the town of Suruç, and on July 23, Turkey declared war on PKK.

Turkey has launched airstrikes on PKK camps in northern Iraq for the first time since 2012. The Kurdistan Regional Government (KRG) in northern Iraq, which governs the civilian Kurdish population in northern Iraq, and has been a U.S. ally in fighting against ISIS, is complaining that the airstrikes are killing civilians.

Turkey did an investigation, and said that the airstrikes targeted PKK bunkers, and that therefore there were no civilians killed.

The KRG has responded by asking the PKK to "withdraw its fighters from the Kurdish region so to ensure the civilians of Kurdistan don't become victim of that fighting and conflict."

For its part, the PKK on Sunday sent a suicide bomber in an explosive-laden tractor to an army outpost in southeastern Turkey. Two soldiers were killed, along with the suicide bomber.

The net result of all this is that the Turkish people are now facing the renewal of a conflict that they thought and hoped was over for good. The other result is that the Turks and the US are now fighting two completely different enemies in the same region. This situation can be spun, of course, but it looks like a total mess to me.

As I've been writing for years, Generational Dynamics predicts a full-scale sectarian war in the Mideast, with Iran an ally of the West fighting the Sunni Arabs. Furthermore, there's no jihadist war against the West, at least not yet, since the number of Christians killed by Muslims is minuscule compared to the number of Muslims killed by Muslims, especially in the Mideast. Events are moving very rapidly, changing on almost a daily basis. We don't know what's going to happen next week, but Generational Dynamics tells us what the destination is, and the destination is not good. Zaman (Istanbul) and Hurriyet (Ankara) and Zaman and Hurriyet

(Comments: For reader comments, questions and discussion, see the 3-Aug-15 World View -- Turkey returns to war with the Kurdish PKK thread of the Generational Dynamics forum. Comments may be posted anonymously.) (3-Aug-2015) Permanent Link
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2-Aug-15 World View -- Taiwan student commits suicide over 'fine-tuning' textbook controversy

Afghan Taliban in crisis over successor to Mullah Omar

This morning's key headlines from GenerationalDynamics.com

Afghan Taliban in crisis over successor to Mullah Omar


Funeral for Mohammad Omar at a mosque in Peshawar, Pakistan, on Friday (AP)
Funeral for Mohammad Omar at a mosque in Peshawar, Pakistan, on Friday (AP)

The announcement that Afghan Taliban leader Mullah Mohammad Omar died two years ago has resulted in tensions among various tribal factions over the selection of a successor. ( "30-Jul-15 World View -- Bizarre Mullah Omar death announcement seals fate of Afghan peace talks")

The Taliban chose Omar's second in command, Mullah Akhtar Mansour. This weekend, they were supposed to take part in peace talks with the Afghan government and the Haqqani network about ending the violence in Afghanistan.

Those peace talks have been postponed, and an audio message delivered by Mansour on Saturday seems to indicate that they will be postponed indefinitely (my transcription):

"We won't have to ask friends to be tolerant, and prevent divisions. Rest assured, there'll be no problems. If we face any problems in the future, we'll seek guidance from religious scholars, and we'll act accordingly.

Friends ask me if I've prepared for this role. I've told them that the responsibility I was given after the death of Mullah Omar is like carrying a mountain on your shoulders. But I accepted it, because it is a time of service, not a time of kingship.

Our struggle will continue until the Islamic system in the country is established. The enemy's propaganda about peace process and dialog -- all this is too much. They have used money, the media, false religious scholars and other means to weaken the jihad, and shatter our unity. We will ignore all this. We'll continue this jihad until an Islamic system is established in the country."

The speech was apparently made on Thursday to a group of Mansour's supporters.

Tribal leaders were not consulted before the secretive appointment of Mansour, and there are enormous tensions. The Afghan Taliban is thought to be at an existential crisis because of tribal divisions, and because some of the more radical Taliban groups may defect from Mansour and join the so-called Islamic State (IS or ISIS or ISIL or Daesh). BBC and Gulf News

Taiwan student commits suicide over 'fine-tuning' textbook controversy

Dai Lin, a high school student who had campaigned against "fine-tuning" changes being made to Taiwan's high school textbooks and curriculum, was found dead in his room lying in bed. Since he was lying next to a pan of lighted charcoal, which generates carbon monoxide and so is one of the top methods of suicide in Asia, it's believed that Lin took his life intentionally, in order to call attention to his anti-curriculum changes campaign.

Some of the proposed curriculum changes are minor corrections, but others of them appear to change history in order to favor making Taiwan part of China, as opposed to Taiwan being a fully independent nation.

One of the most controversial changes is that references to "China" are changed to "mainland China". According to activists, "China" and "Taiwan" are separate entities, while "mainland China" implies that Taiwan is part of China.

Other changes go deep into Taiwan's history. A proposed change from the "Qing Dynasty" to the "Qing Court in the Cheng Family Dynasty" implies that during this historical period, China had territorial ownership of Taiwan, which activists say is untrue.

These seemingly minor textual changes cut deeply into the major political fault line of Taiwan -- whether it will be recognized as an independent nation separate from China, or whether it will merely be another province of China.

The changes are favored by the current ruling nationalist party KMT (Kuomintang), which is the modern day incarnation of Chiang Kai-shek's original nationalist party of soldiers that fought against Mao Zedong's Communist Revolution and lost, and fled to Hong Kong, then a British colony, and from there to Formosa (Taiwan) in 1949, at the conclusion of the civil war. The KMT position has always been that Taiwan would reunite with China.

A strong pro-independence movement, especially among young people, began with the 1989 Tiananmen Square massacre in Beijing, which people in Taiwan viewed with horror. This proved to be a catalyst in turning many Taiwanese people against Beijing, bringing about the creation of the Democratic Progressive Party (DPP), which beat the KMT and won national elections in 2000.

The KMT regained power after a DPP corruption scandal in 2006. But in November of last year, KMT suffered disastrous losses in local elections across Taiwan, and DPP may win the next presidential election, to be held on January 16. ( "30-Nov-14 World View -- Taiwan voters choose independence from China")

The proposed curriculum changes have generated student protests in cities across Taiwan. Last week, protesters in the capital city Taipei broke into the offices of the Ministry of Education, which is sponsoring the curriculum changes. Many protesters, including Dai Lin, were arrested.

In his final Facebook post, Lin wrote:

"Wish me happy birthday. 8 5 12 16. I have only one wish: that the Minister [of Education] withdraw the curriculum guidelines."

Lin's friends later "decoded" the numbers 8-5-12-16 as corresponding to the letters for "h-e-l-p" in the English alphabet.

Lin's suicide will energize the anti-curriculum change activists, but it seems clear that the adjustments will be in force in the fall semester, while KMT is still in power.

During the years 2000-2006 when DPP was last in power, there were repeated threats of invasions by Beijing officials. In fact, in 2005 China passed a new law to provide legal justification for a Chinese invasion of Taiwan if there's any move at all towards independence from China. ( "China's 'Anti-Secession' law infuriates Taiwan")

Things have been a lot more peaceful since KMT came to power in 2006. But if DPP comes to power again in January, then we can expect additional invasion threats from China, as well as increased determination by young people in Taiwan to be fully independent. Taipei Times and National Institutes of Health and China Policy Institute Blog - UK

(Comments: For reader comments, questions and discussion, see the 2-Aug-15 World View -- Taiwan student commits suicide over 'fine-tuning' textbook controversy thread of the Generational Dynamics forum. Comments may be posted anonymously.) (2-Aug-2015) Permanent Link
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1-Aug-15 World View -- Tensions with Palestinians soar after brutal Israeli settler 'price tag' attack

Five 'Hilltop Youth' extremists charged with 'price tag' Church arson

This morning's key headlines from GenerationalDynamics.com

Hamas promises revenge for Palestinian baby burned to death


Ali Dawabsheh, the baby killed in the fire, and the damaged home (Ynet)
Ali Dawabsheh, the baby killed in the fire, and the damaged home (Ynet)

An 18-month-old Palestinian boy was killed early Friday in a night-time arson attack in the West Bank. The attackers used Molotov cocktails to set two homes on fire in the West Bank, and wrote graffiti saying "Revenge" in Hebrew on the walls. The parents of the baby and his 4-year-old brother suffered burns and had to be hospitalized.

The attack is thought to be a "price tag" attack by violent Jewish settlers.

I've described price tag attacks several times in the past few years. The phrase "price tag" is frequently used by far-right Israeli settlers to denote revenge attacks against Palestinians or IDF soldiers in response to moves by the Israeli government to evacuate illegal West Bank outposts, or as retribution for attacks by Palestinians. The attacks have usually been against mosques or other property, and sometimes even Christian property, but they've occasionally crossed the line into violence against Palestinians.

This attack on an innocent Palestinian family, burning a baby alive, is a major escalation in the price tag attacks, and the worst such attack since a Palestinian teen was murdered by Israeli settlers in July of last year.

Israel's Prime Minister Benjamin Netanyahu called it a "clear terrorist attack":

"I am shocked by this horrible criminal act. This is a clear terrorist attack. Israel takes a tough stance against terrorism regardless who the perpetrators are. I have instructed the security forces to use all means at our disposal to capture the killers and bring them to justice as soon as possible. Israel is united in its opposition to such terrible and heinous acts. On behalf of the citizens of Israel, I would like to commiserate with the family of Ali Dawwabshe and wish a speedy recovery to the injured family members."

However, Palestinian Authority president Mahmoud Abbas called the attack "a crime against humanity," and Hamas has called for an "exceptional" revenge attack against Israelis. YNet and Palestinian News Network and Jewish Press

High tensions are reminiscent of prelude to last year's Gaza war

On June 10 of last year, three Israeli teens were abducted and later found to be killed in the West Bank. Israeli online campaigns were calling for revenge against the Arabs. After the three Israeli teens were kidnapped, and before their dead bodies were discovered, one web site called for the killing of one Arab an hour until the teens were released.

A Jerusalem Post editorial said that Israelis are fed up with dead Jews, though it didn't suggest how the problem can be remedied:

"But something changed with the murder of these three innocent teens. It was not just the senselessness of the act; three defenseless teen boys killed for no reason other than that they were Jewish, for no other purpose but to indulge Palestinian hate. Rather, it was a feeling that this had happened one too many times. That there was a critical mass of dead Jews that had now been reached, beyond which the Israeli public and the world Jewish community is not prepared to mourn anymore."

Their dead bodies were found on June 30 of last year. Israel's prime minister Benjamin Netanyahu said the next day that the three were "kidnapped and murdered in cold blood by animals" and promised: "Hamas will pay."

On July 2, a 15-year-old Palestinian teen named Abu Khdeir was abducted, burnt and killed. The autopsy found soot in his respiratory canal, indicating that he was burnt alive. It's thought that the lynching of Khdeir was in revenge for the deaths of the three Israeli teens, and may have been triggered by Netanyahu's threat.

The lynching triggered massive riots and demonstrations by Palestinians in East Jerusalem and the West Bank, and may also have triggered the barrage of rocket attacks from Gaza. Israeli officials moved quickly to investigate and find the murders of Khdeir in the hope of cooling the tensions between Israelis and Palestinians. Six young Jewish extremists were arrested for the murder four days later, which quieted the rioting.

The murderers of the three Israeli teens were believed to be hiding out in the West Bank, but the Palestinian Authority did nothing to bring them to justice. The murderers were never found. [Correction: Two of the killers died in a shootout with Israeli soldiers on September 23. The third was sentenced to three life sentences. Jerusalem Post 6-Jan-2015](Paragraph modified. 1-Aug)

Violence between Israelis and Palestinians began to increase after these incidents. Both the Israeli and Palestinian populations wanted revenge. There was street violence in Jerusalem, and a barrage of rockets from Gaza into Israel. Within a couple of days, Israeli troops were massing on the Gaza border, and Israeli warplanes were targeting "Hamas terror sites" in the Gaza Strip. After a few more days, Israel and Gaza were at full-scale war.

In the aftermath, Hamas said that it was only trying to foment an "intifada," not a war. ( "22-Aug-14 World View -- Hamas says it didn't intend to start the Gaza War")

Things today are different for Hamas and the Arab world. The Gaza War split the Arab world into supporters of Hamas and de facto supporters of Israel. There was a conflict in Syria, but the so-called Islamic State (IS or ISIS or ISIL or Daesh) was only beginning to be felt.

Today, the Arab world is trying to unify. The Iran nuclear agreement has already unified much of the Sunni Arab world against Iran. There's now a war in Yemen that the Sunni Arabs and Iranians are fighting by proxy. ISIS has become much more powerful today than it was a year ago, and the Syria/Iraq wars are growing in intensity. As we've written several times recently, the Arab world is disintegrating into war.

So it's quite possible that Hamas does not want another war with Israel at this time. On the other hand, the burning alive of an 18-month-old baby by Israeli extremists is probably going to cause riots and revenge attacks. And those may spiral into another war whether either side wants it or not. Jerusalem Post (5-July-2014)

Five 'Hilltop Youth' extremists charged with 'price tag' Church arson

Police arrested on Wednesday five "Hilltop Youth" activists who allegedly were behind the June 18 arson at the Church of the Multiplication of the Loaves and Fishes at Tabgha on the shores of the Kinneret (Sea of Galilee).

The Hilltop Youth are third generation terrorist Israeli settlers who are living in Jewish settlements in the West Bank hilltops. It's believed that the arson attack on the Church was a "Price Tag" attack.

The blog of the head of the group on the “Jewish Voice” site on May 20 of this year sought to encourage attacks on Christian religious sites and stated:

"Only those who deny idolatry and fight against Christianity and aspire to remove the churches from the Holy Land – they are called Jews."

According to the Israeli police:

"This group operates in the context of an ideological infrastructure composed of a limited number of hilltop youth activists. This infrastructure has operated since 2013 and holds to an extremist ideology that aspires to change the regime and bring about the redemption via various stages of action.

The infrastructure sought to hit ‘weak points’ in the State of Israel in order to arouse dialogue and win adherents and also tried (unsuccessfully) to disrupt the May 2014 visit of Pope Francis."

It had been hoped that the arrest would strike a fatal blow to the "hilltop youth" terrorist movement, but that was before Friday's price tag attack that killed the 18-month-old Palestinian boy. Jewish Press and Jewish Telegraphic Agency

Palestinian teen shot and killed by Israeli army near Gaza border fence

Israeli soldiers shot dead a Palestinian teenager near the border fence in the northern Gaza Strip on Friday. An Israeli spokesman said that several suspects approached the fence, and did not heed calls by soldiers to stop. Israel enforces a 300-meter-(1,000-foot)-deep, security no-go zone on the Gaza side of the fence. The frontier has been largely quiet since a 2014 war between Israel and Palestinian militant groups in which more than 2,100 Palestinians and 73 Israelis were killed. Reuters

(Comments: For reader comments, questions and discussion, see the 1-Aug-15 World View -- Tensions with Palestinians soar after brutal Israeli settler 'price tag' attack thread of the Generational Dynamics forum. Comments may be posted anonymously.) (1-Aug-2015) Permanent Link
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31-Jul-15 World View -- 'Swarm' of migrants causing crisis at Eurotunnel from France to Britain

Kent, England, under financial pressure from lone children seeking asylum

This morning's key headlines from GenerationalDynamics.com

Thousands of migrants in Calais France causing Eurotunnel crisis


Left: Migrants in Calais walk to Eurotunnel over tracks (AP); Right: Migrant hides under truck to Britain (Reuters)
Left: Migrants in Calais walk to Eurotunnel over tracks (AP); Right: Migrant hides under truck to Britain (Reuters)

An estimated 5,000 migrants are staying in temporary refugee camps near Calais, France. Most are from Syria, Somalia, Sudan and Eritrea. There are smaller groups from Ethiopia, Egypt, Afghanistan, Iraq, Iran and Afghanistan. There have been 110,000 migrants so far this year who have crossed the Mediterranean from North Africa to Italy and Greece.

Starting earlier this week, there have been what officials are calling an "invasion" by thousands of migrants trying to cross the Eurotunnel from Calais to Britain each night. According to Jacques Gounon, the chairman of Groupe Eurotunnel:

"This isn't a case of a passenger not paying for their ticket, we are facing systematic and massive invasions, maybe even organized ones. This is a problem of numbers, it's not a problem of quality, it's a problem of quantity.

Regardless of the huge investment we have made and are continuing to make to protect the boarding paths, there's a problem of quantity (of policing) when you consider the size of the first trans-Channel operator which is the Channel Tunnel."

Groupe Eurotunnel says that it has invested more than $175 million in physical resources, including fences, cameras and infra-red detectors, as well as personnel. However, large numbers of migrants have been walking along railroad tracks to the Eurotunnel. Others wait until a truck (lorry) going to Britain stops for any reason, and then hides under the trailer. These maneuvers are extremely dangerous, and there have been several deaths this week.

Officials have been building fences to prevent migrants from reaching the Eurotunnel tracks, but migrants cut holes through the tunnels as soon as they're built or repaired. A chain saw can be purchased from a local hardware store for less than $50.

According to the UN Secretary-General's Special Representative for International Migration Peter Sutherland:

"Anybody who thinks that by erecting borders and fences in some way a particular state can be protected from alleged ‘floods’ – which are anything but floods of migrants – is living in cloud cuckoo land."

Irish Independent and Telegraph (London) and Express (London) and Guardian (London)

Britain's PM Cameron's 'swarm of migrants' remarks causing outrage

There is widespread outrage over remarks by Britain's prime minister David Cameron:

"We have to deal with the problem at source and that is stopping so many people from travelling across the Mediterranean in search of a better life. That means trying to stabilize the countries from which they come, it also means breaking the link between travelling and getting the right to stay in Europe.

This is very testing, I accept that, because you have got a swarm of people coming across the Mediterranean seeking a better life, wanting to come to Britain because Britain has got jobs, it’s got a growing economy, it’s an incredible place to live. But we need to protect our borders by working hand in glove with our neighbors, the French, and that is exactly what we are doing."

The comments drew widespread criticism. The Refugee Council said it was "awful, dehumanizing language from a world leader."

Acting opposition Labor leader Harriet Harman said:

"He should remember he is talking about people, not insects.

I think it's a very worrying turn that he appears to be wanting to be divisive and set people against, whip people up, against the migrants in Calais when what he should have been doing, and should have been doing months ago and was warned to be doing, is to get the situation sorted out with the French. ...

I don't think there should be any question of us sending in our army. The French themselves have got troops as well as a large police force."

Another Labor politician called it "nothing short of disgraceful." Guardian (London) and AFP and Daily Mail (London)

Number of lone children migrants to Britain soaring

Kent, England, is facing financial problems for having to care for hundreds of lone children migrants seeking asylum. Kent is the British endpoint of the Eurotunnel opposite Calais, and so Kent ends up with the responsibility of taking care of the children.

The number of lone migrants under age 18 has doubled in the past three months has doubled to 605. The result is that Kent is struggling to find the additional £5.5 million ($8.6 million) needed to care for them. Kent's costs are reimbursed by London at £112 a day last year but that has fallen to £91 per child. In addition, each child receives £10 a week "pocket money." Kent Online and Belfast Telegraph

(Comments: For reader comments, questions and discussion, see the 31-Jul-15 World View -- 'Swarm' of migrants causing crisis at Eurotunnel from France to Britain thread of the Generational Dynamics forum. Comments may be posted anonymously.) (31-Jul-2015) Permanent Link
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30-Jul-15 World View -- Bizarre Mullah Omar death announcement seals fate of Afghan peace talks

Lashkar-e-Jhangvi leader Malik Ishaq killed in gunfight in Pakistan

This morning's key headlines from GenerationalDynamics.com

Lashkar-e-Jhangvi leader Malik Ishaq killed in gunfight in Pakistan


The death of Malik Ishaq (Pakistan Today)
The death of Malik Ishaq (Pakistan Today)

Malik Ishaq, the leader of Pakistan's most extreme terror group, Lashkar-e-Jhangvi (LeJ), responsible for thousands of civilian deaths, mostly Shia Muslims, was killed on Wednesday in a gunfight with police.

I've written many times about Pakistan's al-Qaeda linked terror group Lashkar-e-Jhangvi (LeJ), which is dedicated to the extermination of all Shias, and particularly the Hazara ethnic group, in the same way that the Nazis were dedicated to the extermination of all Jews.

According to an LeJ statement issued in 2013:

"Our mission [in Pakistan] is the abolition of this impure sect and people, the Shias and the Shia Hazaras, from every city, every village, every nook and corner of Pakistan. Like in the past, [our] successful Jihad against the Hazaras in Pakistan and, in particular, in Quetta is ongoing and will continue. We will make Pakistan their graveyard-- their houses will be destroyed by bombs and suicide bombers. ... Jihad against the Shia Hazaras has now become our duty. ... We will rest only after hoisting the flag of true Islam on the land of the pure -- Pakistan."

LeJ has conducted numerous horrific terrorist attacks against targets like Shia mosques during Friday prayers and Shia marketplaces, and I've reported on a number of them.

LeJ chief Malik Ishaq, was arrested a week ago, along with his two sons. The police interrogated him, and then took him in a convoy to aid the police in recovering weapons and explosives. Three water coolers filled with explosives, detonators, Kalashnikov assault rifles, 12 pistols and four hand grenades were seized during the raid, according to police.

As the convoy was returning, it was allegedly attacked by some 12-15 gunmen, and succeeded in freeing Ishaq. In the subsequent shootout, Ishaq, his two sons, and 11 other militants were killed. There's some controversy, because the police claim that Ishaq was killed by the attackers, rather than by the police. There are claims that the police staged the gunfight in order to kill Ishaq, who might have been freed by a court, as he has in the past.

Ishaq was also accused of masterminding, from behind bars, the 2009 attack on the Sri Lankan cricket team in Lahore, which wounded seven players and an assistant coach, and killed eight Pakistanis. (From 2009: "Cricketing world in shock after attack on Sri Lanka team in Pakistan")

This attack was extremely humiliating to Pakistan, not only because of the attack itself, but also because Pakistan was stripped of its right to co-host the 2011 cricket World Cup, and no international cricket was played in Pakistan for years. It was only in May and June of this year that international cricket returned to Pakistan, when the Zimbabwe team visited for a series of games. Pakistan Today and BBC and Express Tribune (Pakistan)

Bizarre Mullah Omar death announcement seals fate of Afghan peace talks

The death of Mullah Mohammed Omar, who has been the spiritual head of the Taliban and al-Qaeda since the late 1990s, was confirmed on Wednesday in a bizarre announcement that said he's been dead for years. Some reports said he died in 2012, others in 2013; one said he died of tuberculosis in Karachi, others that he died in Afghanistan near the Pakistan border.

With American coalition troops set to pull out of Afghanistan at some unspecified time in the near future, the hope has been that the Taliban will stop making terrorist attacks and will agree to peace talks with the Afghan government, so that the pullout won't turn into another major humiliation, like the pullout from Iraq.

The problem is that there are multiple tribal groups within the Taliban, including some that had pledged allegiance to the so-called Islamic State (IS or ISIS or ISIL or Daesh). The hope was that Omar would serve to unite all the Taliban groups to agree to a peace deal with the Afghan government in Kabul, but the (announcement of the) death of Omar now makes that even more impossible. In fact, with Omar's death kept a secret for 2-3 years, some analysts are saying word of his death was leaked by a tribal group wanting to torpedo any peace talks. GEO TV (Pakistan) and CNN and Reuters

Mullah Omar's impossible conditions for Afghan peace talks

In June 2013, Secretary of State John Kerry announced that "peace talks" with the Afghan Taliban would begin in Doha, Qatar. As Kerry was making the announcement, the Taliban themselves were giving a press conference in Doha, Qatar, announcing the return of the "Political Office of the Islamic Emirate of Afghanistan." This was the name of the country Afghanistan when the Taliban ruled it, prior to September 11, 2001. The so-called "peace talks" collapsed the next day. ( "20-Jun-13 World View -- Afghan peace talks collapse day after they're announced")

It's been the same story over and over for the Afghan-Taliban "peace talks" (and incidentally, also for the Pakistan-Taliban "peace talks"). The Taliban always express interest in "peace talks," setting all sorts of conditions, and continuing with full-scale war against the Afghan government, and making it clear to everyone that there will be no peace talks.

Mullah Omar has been the great hope for peace talks -- that he would bring about unity among all the Taliban tribal groups, and they would all sign on to a peace deal, so that the American-led military coalition could withdraw without being humiliated.

In fact, it was just two weeks ago that an Eid (end-of-Ramadan) message supposedly from Mullah Omar that contained a reference to "political endeavors" was interpreted by desperate politicians as approving the peace process.

According to Afghan President Ashraf Ghani:

"The whole nation wants peace. During the past 14 years we tried to hold face-to-face talks but could not succeed. But it has happened now and the second round of talks will be held within a few weeks."

We now know that the message could not have been from Omar.

The first meeting was held, and the Taliban presented their demands for further talks: The complete withdrawal of foreign troops from Afghanistan, removing the names of Taliban commanders from a US Department of State blacklist, and the exchange of prisoners. None of these conditions can be met by the West. Express Tribune (Pakistan) and Deutsche Welle and Bloomberg

(Comments: For reader comments, questions and discussion, see the 30-Jul-15 World View -- Bizarre Mullah Omar death announcement seals fate of Afghan peace talks thread of the Generational Dynamics forum. Comments may be posted anonymously.) (30-Jul-2015) Permanent Link
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29-Jul-15 World View -- Iran blamed for terrorist bombing in Bahrain

Puerto Rico expected to default on Saturday

This morning's key headlines from GenerationalDynamics.com

Iran blamed for terrorist bombing in Bahrain


Comments by Iran's Supreme Leader caused Bahrain to recall its ambassador (AP)
Comments by Iran's Supreme Leader caused Bahrain to recall its ambassador (AP)

A bomb on Tuesday exploded outside a girls' school in the Shia village of Sitra, killing two policemen and wounding six. This was the first bombing in Bahrain in several months, and the worst since March 2014.

Bahrain is governed by Sunni tribal leaders, although the population is 2/3 Shia. In February 2011, during the chaotic start of the "Arab Awakening," peaceful Shia protesters in Bahrain were met by extreme violence, when police smashed into demonstrators with guns, clubs and teargas. (See "18-Feb-11 News -- Bahrain's government chooses the massacre scenario.")

Iran has long been accused of interfering in Bahraini affairs, and in particular of supporting the Shia opposition. According to Bahrain media, "Early information suggests that the explosives used in today’s terrorist attack are of the same type that were recently intercepted coming from Iran."

On Saturday, Bahrain had recalled its ambassador to Iran after Iran's supreme leader Ayatollah Seyed Ali Khamenei said that the nuclear deal Tehran agreed with the West would not alter its support for the governments of Syria and Iraq, nor its backing for "oppressed people" in Yemen and Bahrain, and the Palestinians. Khamenei's comments provoked widespread outrage in Bahrain. Reuters and Gulf News and The National (UAE, 7/25)

Puerto Rico expected to default on Saturday

As expected, Puerto Rico is expected to be in default on Saturday, unable to make a $58 million payment due on Friday to bondholders.

Puerto Rico's governor Alejandro García Padilla announced last month that the island territory will be unable to pay off its $72 billion in debts, so Saturday's bankruptcy will not be a surprise.

Many people have invested in Puerto Rico bonds because they pay 10% interest (yields) and because under federal law they're "triple-tax free," meaning that you can earn 10% interest every year and not have to pay federal, state or municipal tax on the interest you collect. It's a sweet deal, provided that Puerto Rico doesn't go bankrupt, because if it does, then you lose most or all of your initial investment.

A default will hurt a huge number of ordinary investors. 52% of all U.S. municipal bond funds hold credit tied to Puerto Rico. Even if individual investors don't individually own PR bonds, they own them through their 401k's or other investment funds, which have been boosting returns by purchasing the PR bonds. These funds will all lose significant principal in a PR default.

The situation is expected to be chaotic and painful, since Puerto Rico cannot file for bankruptcy (as Detroit did) under U.S. law. CNBC and Prensa Latina

China's government to continue buying stocks to stabilize markets

The Shanghai composite index on Tuesday fell 1.68%, after falling 8.48% on Monday, after massive intervention by the China Securities Regulatory Commission (CSRC). There were a variety of interventions, including massively buying shares, preventing some stocks from being traded, forbidding large companies from selling shares, and forbidding any Chinese media from using words like "plunge" that could cause people to panic. The plunge was a sign to many investors that the Chinese Communist Party is losing control of the stock market.

The CSRC announced that it will continue buying stock shares, in the hope of keeping the market from crashing.

Many ordinary Chinese investors are complaining that they're "trapped in the stock market." These means that they can't sell without losing a lot of money, so they have to hope that government will intervene sufficiently to push up the market again, to the point where the CAN sell. This situation highlights the danger: Every time the CSRC intervenes so massively that they push the market up, many investors immediately sell, pushing the market down again. Xinhua and Reuters and CNN

(Comments: For reader comments, questions and discussion, see the 29-Jul-15 World View -- Iran blamed for terrorist bombing in Bahrain thread of the Generational Dynamics forum. Comments may be posted anonymously.) (29-Jul-2015) Permanent Link
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28-Jul-15 World View -- China faces nightmare political scenario with stock market plunge

Turkey-US 'ISIS-free zone' in Syria becomes increasingly controversial

This morning's key headlines from GenerationalDynamics.com

US military says China is lying about its artificial islands


Numerous Chinese dredging vessels around an artificial island in May 2 photo taken by American P-8A Poseidon surveillance aircraft
Numerous Chinese dredging vessels around an artificial island in May 2 photo taken by American P-8A Poseidon surveillance aircraft

Adm. Harry Harris, commander of U.S. Pacific Command, indicated that China has been consistently lying by denying the military purpose of the artificial islands they're building in the South China Sea:

"They are building ports that are deep enough to host warships and they’re building a 10,000-foot runway at Fiery Cross Reef. A 10,000-foot runaway is large enough to take a B-52, almost large enough for the Space Shuttle, and 3,000 feet longer than you need to take off a 747. So, there’s no small airplane that requires a runway of that length. They’re building revetted aircraft hangars at some of the facilities there that are clearly designed, in my view, to host tactical fighter aircraft. ...

Most countries choose to pursue diplomatic means to address their disputes. China, on the other hand, is changing the status quo in the region through aggressive coercive island building without meaningful diplomatic efforts toward dispute resolution or arbitration. China is changing facts on the ground...essentially, creating false sovereignty ... by building man-made islands on top of coral reefs, rocks, and shoals. These activities are harming the environment and will not strengthen any country’s legal claims to disputed areas in the South China Sea."

One of the excuses that China has been giving is that other countries have also built artificial islands. But according to Harris:

"While Vietnam, Malaysia, the Philippines and Taiwan have also conducted land reclamation in the South China Sea, their total — approximately 100 acres over 45 years — is dwarfed by the size, scope and scale of China's massive buildup."

He added that China has reclaimed almost 3,000 acres in only 18 months, resulting in enormous harm to the fragile ecosystem. Defense One and Stars and Stripes

China state TV shows mock military attack on Taiwan

Earlier this month, Chinese state TV ran video of People's Liberation Army soldiers storming a mock-up of Taiwan's presidential palace during a major military exercise in northern China.

China has frequently made it clear that Taiwan is sovereign territory of mainland China, and there will be a military attack if Taiwan makes any kind political change to become more independent. As a result, Taiwan's pro-China and pro-Independence governments have for years been following a careful dance not to antagonize China too much, while also maintaining a sufficient arm's length from China. Nonetheless, China has made it clear that, at some point, Taiwan will have to return to the mainland.

It's hard to know what to make of the mock attack on Taiwan's presidential palace appearing on state TV. Was it an intentional signal that a military invasion is close? Or was it left in the video unintentionally? A YouTube link to the video is given below, and the mock attack segment runs from about 3:01 to 3:04 (that is, only three seconds).

A Chinese military attack on Taiwan will bring the U.S. into war China within hours. Even if the U.S. appeases China and doesn't require, something that I believe is almost vanishingly unlikely, then increased tensions in the region will spiral into war before long. Business Insider and YouTube

China faces nightmare political scenario with stock market plunge

China's stock market appears to have been recovering since July 9, after falling 30% since June 12, due an imploding bubble. As I wrote in "25-Jul-15 World View -- Commodities and world trade volume plunge as China pumps stock market", China has all but destroyed the Shanghai stock market as a market, by massively intervening to keep the bubble from imploding further. A bubble never implodes only halfway, so there was never any chance that the intervention would work.

On Monday, the Shanghai composite index plunged 8.5%, the greatest one-day market plunge since 2007, and so now the Chinese Communist Party (CCP) faces a double humiliation. First, it's now clear to a lot of people that the stock market will crash, and that millions of people, especially elderly people, will lose their life savings.

And second, it's now clear that the great, powerful CCP is not powerful enough to control the stock market. This may be enough to cause a panic or even a rebellion.

Typically in these situations, there are wild gyrations. The index may fall 10% one day and rise 10% the next day. There might be a bounce back on Tuesday. On the other hand, more than 1,700 stocks fell by the daily 10% limit on Monday, indicating that they would have fallen even more if allowed. This would indicate a further plunge on Tuesday. Either way, the bubble must continue imploding at some point. (At this writing, on Monday evening ET = Tuesday morning in Shanghai, the market has already fallen 4%, and stocks are down across Asia. Commodities continue to fall.)

The CCP is now going to be considering what further desperate measures they can try. The government has already poured some $800 billion into the market within a few days. As a last resort, the CCP may have to "print" a lot of money and purchase stock shares from anyone who wants to sell them.

China's history is filled with huge, massive internal rebellions (civil wars). The last three were the White Lotus Rebellion (1796-1805) and the Taiping Rebellion (1852-1869), Mao's Communist Revolution (1934-49), killing millions or tens of millions of people each time. These occur at regular intervals, with each new one occurring at about the time that the survivors of the preceding one die off. From the point of view of Generational Dynamics, it's time for the next one and, in fact, it's a bit overdue. The CCP officials are aware of that even if they don't know anything about generational theory. Bloomberg and Asia Times

Turkey-US 'ISIS-free zone' in Syria becomes increasingly controversial

Turkey last week announced US warplanes could use Turkey's Incirlik and Diyarbakir air bases to launch attacks on the so-called Islamic State (IS or ISIS or ISIL or Daesh) in Syria. The terms of the US-Turkey agreement that led to that announcement are becoming clearer, and are generating controversy.

The heart of the agreement is that the US and Turkey will work together to create an "ISIS-free zone" in Syria along a portion of the border with Turkey. This was being called a "safe zone" last week, but that name has apparently been abandoned so as not to provoke Syria's president Bashar al-Assad. The term "no-fly zone" has been abandoned for the same reason.

As we wrote in "26-Jul-15 World View -- Turkey bombs ISIS targets in northern Syria to set up 'safe zone'", the Kurds in northern Syria are separated into two large enclaves, one in the east up the border with Iraq, and one in the west. If the Kurds can unite those two regions, then it can declare the entire region a Kurdish state, something that Turkey will not tolerate.

The proposed "ISIS-free zone" is the region separating the two Kurdish enclaves, and so the objective of the Turks seems to be to create it actually as an "ISIS-free and Kurdish-free zone." This severely complicates the US coalition's mission in Syria, since the Kurds are supposed to be our allies. Pro-Kurdish activists are accusing Turkey and the US as being in a joint plan to kill Kurds as well as ISIS.

It's worth pointing out that there are no good guys in Syria. Bashar al-Assad is a genocidal monster who's used "industrial strength" torture, barrel bombs and Sarin gas on innocent women and children. The Kurdish PKK is a far left revolutionary terrorist group that has been bombing and murdering innocent civilians for decades. And of course ISIS and al-Nusra are bloody jihadists who decapitate innocent civilians just for fun. There's really no one to root for here. However this "ISIS-free zone" gets sorted out, all we can really do is watch as the Syria continues to deteriorate, until we're finally drawn in and forced to fight someone, whoever we feel is our enemy at the time. Hurriyet (Ankara)

(Comments: For reader comments, questions and discussion, see the 28-Jul-15 World View -- China faces nightmare political scenario with stock market plunge thread of the Generational Dynamics forum. Comments may be posted anonymously.) (28-Jul-2015) Permanent Link
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27-Jul-15 World View -- Turkey invokes Nato article 4 with 'territorial integrity and security' threatened

Syria's Bashar al-Assad admits that regime army is in decline

This morning's key headlines from GenerationalDynamics.com

Syria's Bashar al-Assad admits that regime army is in decline


Grim Bashar al-Assad gives national speech on Sunday (SANA/AP)
Grim Bashar al-Assad gives national speech on Sunday (SANA/AP)

As we've been reporting since April, the army of Syria's president Bashar al-Assad has been increasingly showing signs of collapse, losing one major city after another either to the so-called Islamic State (IS or ISIS or ISIL or Daesh) or to the al-Qaeda linked Jabhat al-Nusra (al-Nusra Front).

On Sunday, a clearly weakened Bashar al-Assad gave a nationally televised speech that was almost a speech of desperation. He said that there have been so many defections and desertions, that the army's fighting strength has been cut deeply. As a result, the regime has had to retreat from some regions of the country in order to hold on to other regions of the country.

According to al-Assad:

"If we thought we will be victorious in all the battles everywhere at the same time ... this is unrealistic and impossible. We are forced to give up areas to move those forces to the areas that we want to hold onto. ...

Are the Syrian armed forces able ... to defend the homeland? Yes, it is certainly capable.

But the army in the first degree is a matter of manpower which would then utilize the weapons and ammunition. Everything is available but there is a lack of manpower."

The last sentence is presumably an allusion to the massive flows of heavy weapons that Russia is supplying to the genocidal dictator.

The question of what percentage of Syria the regime still controls was discussed by several analysts on the BBC. According to some reports, the regime controls only 25% of the country. That may be true, but much of the other 75% is most desert and far-flung rural areas where there are few people. Among the major cities and other strategic regions, the regime controls more than 25%, but less than 50%.

Right now, the regime controls Damascus, Homs and strongholds of Assad's minority Alawite sect in coastal areas. If there are any further losses to ISIS or al-Nusra, then those will be very significant. So the question is: Was al-Assad admitting past losses, or was he preparing the public for future, more significant losses? That question is unanswered. Telegraph (London) and Reuters and ARA News (Syria) and LA Times

Al-Assad announces general amnesty for Syria's army deserters

Sunday's speech by Bashar al-Assad comes one day after state media announced, on Saturday, a decree for a general amnesty for military deserters who violated the country's compulsory military conscription law. Deserters have two months to turn themselves in to take advantage of the amnesty.

It's not believed that this decree will result in a flood of defectors and deserters returning the army, if that's what al-Assad is hoping for. Daily Star (Beirut) and BBC

Turkey invokes Nato article 4 with 'territorial integrity and security' threatened

Citizens of Turkey are bewildered by the breathless speed of events. In less than a week, Turkey has turned from a country determined to avoid war into a country fighting two enemies in two countries. Turkey's warplanes are bombing Kurdish PKK strongholds in northern Iraq and ISIS strongholds in northern Syria, with the threat of bombing Kurdish PYD strongholds in northern Syria, where they are fighting ISIS. In addition, security forces over the weekend arrested over 400 people in cities across the country, accusing them of been PKK militants, and a scheduled political rally in Istanbul in support of Kurdish rights was ordered cancelled in order to avoid violence.

On Sunday, Turkey invoked Nato's Article 4, which allows member states to request a meeting if they feel their territorial integrity or security is under threat.

Nato Secretary General Jens Stoltenberg called a Nato meeting for Tuesday, to be attended by all 28 member nations. According to a statement by Stoltenberg:

"Turkey requested the meeting in view of the seriousness of the situation after the heinous terrorist attacks in recent days, and also to inform Allies of the measures it is taking. NATO Allies follow developments very closely and stand in solidarity with Turkey."

Article 4 is less potent than Article 5, which recognizes an attack against one or more members as an attack against all. Today's Zaman (Istanbul) and AP and Nato

(Comments: For reader comments, questions and discussion, see the 27-Jul-15 World View -- Turkey invokes Nato article 4 with 'territorial integrity and security' threatened thread of the Generational Dynamics forum. Comments may be posted anonymously.) (27-Jul-2015) Permanent Link
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26-Jul-15 World View -- Turkey bombs ISIS targets in northern Syria to set up 'safe zone'

Turkey - PKK 'peace process' threatened by new Turkish war policy

This morning's key headlines from GenerationalDynamics.com

Thousands of pro-Kurd demonstrators march in Paris


Protesters in Paris carrying a banner saying, 'Stop Erdogan's double game' (AP)
Protesters in Paris carrying a banner saying, 'Stop Erdogan's double game' (AP)

More than 1,000 Kurds and leftist Turks have marched in Paris to protest airstrikes by Turkey on Kurdish militant camps in northern Iraq. One banner held high at Saturday's march read, "To hit the PKK is collaborating with ISIS." AP

Turkey - PKK 'peace process' threatened by new Turkish war policy

Turkey's rapidly changing policy towards the war in Syria seems to have become more risky, complex and dangerous every day for the last six days, ever since Monday's terror attack on Suruç killing 32 mostly young pro-Kurdish activists who were discussing plans to help rebuild the town of Kobani, which the Kurds had captured from ISIS in January. No one has claimed responsibility for the Suruç attack, but Turkish officials believe that the so-called Islamic State (IS or ISIS or ISIL or Daesh) is responsible.

The Kurdistan Workers’ Party (PKK), a communist separatist terror group advocating a separate Kurdish state of Kurdistan to be formed out of regions from Syria, Turkey and Iraq, has been conducting terrorist attacks against Turkish government officials for decades, including kidnapping, bombings and assassinations. Turkey and the PKK agreed to a ceasefire and "peace process" in 2013.

But now, that peace process is in jeopardy, after Turkey's major U-turns and changes in foreign policy this week. Many people in Turkey fear a full-scale return to hostilities between the armed forces and PKK.

Early on Saturday, Turkish warplanes launched attacks on PKK strongholds in the Kandil mountains in northern Iraq, near the border with Turkey. These attacks were an almost daily occurrence before the ceasefire agreement.

Turkey's pro-Kurdish Peoples' Democratic Party (HDP) issued a statement criticizing Turkey's president Recep Tayyip Erdogan for "mixing the fight against the Kurdish people with the fight against ISIS," and added:

"The AKP [Erdogan's Justice and Development Party] government, state institutions and the army have unfortunately taken steps that aborted the solution and peace process, as well as the effective ceasefire.

A plan to win back a single party majority again by creating a nationalist and militarist climate, making an impression of engaging in a comprehensive struggle against terrorism is a plan to burn the country."

According to a statement on the PKK web site: "The truce has no meaning anymore after these intense air strikes by the occupant Turkish army," alluding to the separatist claim that Turkey is striking the "independent state of Kurdistan." Hurriyet (Ankara) and AP and Hurriyet

Turkey bombs ISIS targets in northern Syria to set up 'safe zone'

In addition to the airstrikes in northern Iraq, Turkey's warplanes have been striking ISIS targets in northern Syria, with the stated objective of setting up a "safe zone" or a "no-fly zone."

This concept has a long history. Ever since the tsunami of Syrian refugees began flooding across the border into Turkey in 2011, Turkish officials have suggested that there may be a need to set up a "no-fly zone" in northern Syria to which the refugees could flee without having to cross into Turkey. However, this suggestion was never implemented, mainly because Turkey didn't want to enter the war in Syria, and Syria's president was loudly objecting to any talk of Turkey striking Syrian territory.

Like so many other things, this policy has been completely reversed since Monday's attack on Suruç. Turkey is now planning to strike at both ISIS and PKK targets in northern Syria.

Prime minister Ahmet Davutoglu on Saturday gave the following explanation for the need for "natural safe zones":

"Unfortunately Turkey is surrounded by a ring of fire.

In such an atmosphere, Turkey tries to keep her democracy and development alive... these operations have carried a message to the countries in the region and to international circles: whatever happens in Syria and Iraq, in our border regions, we will not allow them to threaten Turkey's security and will not hesitate to take necessary measures."

This has generated accusations that Turkey is using the that attacks on ISIS are a thinly veiled cover for planned attacks on Kurdish (PYD) forces in Syria.

The Kurds in northern Syria are separated into two large enclaves, one in the east up the border with Iraq, and one in the west. A major objective for the Kurds fighting ISIS in Syria is to control the region between the two enclaves and declare the united region a Kurdish state, something that Turkey will not tolerate.

Turkish sources say that there are currently no plans for airstrikes to target the Kurdish Democratic Union Party (PYD) forces in Syria, which are thought to be linked to the PKK in Turkey. But those plans could change if the Kurds gain more control of the border with Turkey. This was the meaning of Davutoglu's statement that "whatever happens in Syria and Iraq, in our border regions, we will not allow them to threaten Turkey's security and will not hesitate to take necessary measures."

However, Turkmen in northern Syria claim that they're being driven out of their homes by Kurdish PYD forces, and they are requesting help from Turkey's government. Hurriyet (Ankara) and BBC and AP and Anadolu (Turkey)

Arab News: Turkey is lying about the attack in Suruç

An analysis in the Arab News says that the evidence points away from the claim that ISIS was responsible for the attack in Suruç, and points to the PKK as the perpetrator:

The columnist concludes darkly that the attack was a conspiracy involving Turkey, the PKK, and the United States, although no evidence of that was presented.

I believe that Turkey's new policies this week are potentially explosive. I've been saying for a long time that there is no war of Muslims versus the West, at least not yet. What there is is a massive and increasing war of Muslims versus Muslims, that's becoming significantly worse every week. Many analysts are pointing to the US nuclear deal with Iran as forcing Sunni Muslim governments to become more militarily aggressive (in Syria and Yemen). As we wrote last week in "19-Jul-15 World View -- Behind the scenes in the Iran nuclear deal", the Iran nuclear deal is forcing yet another realignment in the Arab world, as it deteriorates into war. Turkey's new policies advance that trend even further. Arab News

(Comments: For reader comments, questions and discussion, see the 26-Jul-15 World View -- Turkey bombs ISIS targets in northern Syria to set up 'safe zone' thread of the Generational Dynamics forum. Comments may be posted anonymously.) (26-Jul-2015) Permanent Link
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25-Jul-15 World View -- Commodities and world trade volume plunge as China pumps stock market

Turkey's warplanes bomb ISIS and PKK strongholds in Syria

This morning's key headlines from GenerationalDynamics.com

Turkey's warplanes bomb ISIS and PKK strongholds in Syria


Turkish soldiers patrol near the border with Syria on Friday (AP)
Turkish soldiers patrol near the border with Syria on Friday (AP)

Just a week ago, it was Turkey's clearly stated policy to stay out of the war in Syria. But as we wrote yesterday in Syria's war comes to Turkey after Monday's terror attack on Suruç, Turkey no longer has any choice but to respond.

In a major policy reversal earlier this week, Turkey will let the US use Incirlik Air Base to fight the so-called Islamic State (IS or ISIS or ISIL or Daesh) in Syria, something that had been refused all along.

But perhaps the biggest change is that now Turkey's warplanes will join the U.S.-led coalition airstrikes against ISIS targets in Syria. Turkey has already begun striking targets in Syria, but is doing so without violating Syria's air space. Turkish officials did not rule out doing so in the future.

However, Turkey has taken on an even more ambitious task of airstrikes against both ISIS targets and Kurdish PKK targets in Syria. If I understand this correctly, Turkish warplanes will be striking at Kurdish militias in Syria, perhaps the same militias that are fighting against ISIS in Syria. This comes as Kurds in Turkey are accusing president Recep Tayyip Erdogan of allegedly helping ISIS in the fight over the Syrian city of Kobani. If Turkish warplanes are going to be striking Kurdish militias that are fighting ISIS, then those accusations are going to become much louder.

As of this week, Turkey is now embarking on an extremely dangerous course of action. Generational Dynamics predicts that the entire Mideast is headed for a major regional war, and that war seems to come much closer every week. AP and Anadolu Agency (Turkey) and Washington Post

Commodities and world trade plunge, signaling stock market decline

For the first time since the financial crisis of 2008, commodities and trade figures are signaling a warning for the global economy.

Gold has collapsed to five year lows. Copper just hit a six year low. Oil prices have had the worst price crash in 45 years. World trade volume has been declining sharply for five months.

Some analysts blame the plunge on the appreciating dollar and China's failing economy. Whatever the reason, forecasts are that the trends will continue for the rest of the year. Analysts are mixed about the consequences, but with so many declining signals, a decline in US stocks of 30-50% would not be a surprise to some.


S&P 500 Price/Earnings ratio at astronomically high 21.18 on July 24 (WSJ)
S&P 500 Price/Earnings ratio at astronomically high 21.18 on July 24 (WSJ)

Generational Dynamics predicts that we're headed for a global financial panic and crisis. According to Friday's Wall Street Journal, the S&P 500 Price/Earnings index (stock valuations index) on Friday morning (July 24) was at an astronomically high 21.18. This is far above the historical average of 14, indicating that the stock market is in a huge bubble that could burst at any time. Generational Dynamics predicts that the P/E ratio will fall to the 5-6 range or lower, which is where it was as recently as 1982, resulting in a Dow Jones Industrial Average of 3000 or lower. Zero Hedge and Market Watch and Bloomberg

China's stock market partially 'recovers' after destruction

As we reported several times, China's Shanghai Composite stock market index peaked on June 12, and then plunged 30% in the next four weeks. It has now recovered about 1/4th of what it lost, because of extraordinary intervention by China's government:

The "China dream" is for China to replace the United States militarily, by taking control of the Pacific and Indian Oceans, and also to do so financially, by replacing the dollar with the Chinese yuan as the global reserve currency. In order to do that, China has to prove that it can provide a world-class stock market that can operate free of government intervention.

For that objective, the last month has been a disaster. China has effectively destroyed the Shanghai stock market as a market. China has absolutely no credibility left in its ability to provide a world-class stock market.

And that's not the worst of it. Where is China going to go next? China has intervened massively to prop up an imploding bubble. China may have bought a few weeks' time, but that bubble is going to implode, wrecking the savings of millions of ordinary people, often older people, who invested their life saving in the stock market when the bubble was growing. China has a history of massive "people's rebellions" against an oppressive government. The last one was Mao's Communist Revolution that ended in 1949. From the point of view of Generational Dynamics, China is now overdue for the next one. Quartz and Straits Times and Investors.com

(Comments: For reader comments, questions and discussion, see the 25-Jul-15 World View -- Commodities and world trade volume plunge as China pumps stock market thread of the Generational Dynamics forum. Comments may be posted anonymously.) (25-Jul-2015) Permanent Link
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24-Jul-15 World View -- In major reversal, Turkey will let US use Incirlik to fight ISIS in Syria

Turkey's politics become vitriolic after Suruç massacre

This morning's key headlines from GenerationalDynamics.com

Turkey's politics become vitriolic after Suruç massacre


Erdogan with his son Bilal and daughter Sümeyye (Reuters file)
Erdogan with his son Bilal and daughter Sümeyye (Reuters file)

In the fallout of Monday's terrorist attack on Suruç by the so-called Islamic State (IS or ISIS or ISIL or Daesh), Turkey's politics are becoming increasingly vitriolic.

Kurds are blaming President Recep Tayyip Erdogan for either supporting ISIS, or at least for not doing anything to stop them. As we wrote yesterday in Syria's war comes to Turkey after Monday's terror attack on Suruç, there is no credible evidence that Erdogan has been supporting ISIS, but before ISIS came into existence, he may have been providing weapons to anti-Assad forces that later became part of ISIS.

Turkey's politics have never been pleasant, but the Suruç massacre appears to have created a split between the Kurds and pro-Erdogan activists that's even more vitriolic than before.

A mainstream Turkish newspaper fired well-known newspaper columnist Kadri Gürsel on Thursday, because he sent a tweet that criticized President Recep Tayyip Erdogan. The tweet said:

"It is shameful that foreign leaders call the person who is the number one culprit of ISIL terrorism in Turkey and convey their condolences over the Suruç bombing."

Gürsel is referring to Erdogan as the "number one culprit," and the foreign leaders are Barack Obama and other leaders who called Erdogan to convey their condolences over Monday's terrorist attack on Suruç by the so-called Islamic State (IS or ISIS or ISIL or Daesh).

It's believed by some that Gürsel was fired under orders from Erdogan, as the newspaper is headed by a close Erdogan associate. Erdogan has been infuriated by journalists who have criticized him, and he has allegedly ordered the firing of many of them.

A recently published report has claimed that Erdogan's daughter Sümeyye Erdogan has been linked to ISIS, and is currently running a 'covert' hospital exclusively to treat wounded ISIS terrorists. Erdogan issued a statement that did not directly address the specific charges, but said:

"Every day, a new one is being added to ‘perception management’ operations aimed at harming our country’s image by creating an impression of a relation between Turkey and the terrorist organization, Daesh.

Groundless claims that try to show our President Mr. Recep Tayyip Erdogan, his son Bilal Erdogan and his daughter Sümeyye Erdogan in relation with Daesh, which have been immorally released in the recent days, are part of a smear campaign conducted against Turkey and are all lies."

With many Kurds, after the Suruç massacre, blaming Erdogan for the supporting ISIS terrorists, Erdogan struck back on Thursday. He accused leaders of the pro-Kurdish People's Democratic Party (HDP) of supporting the Kurdistan Workers’ Party (PKK) terrorists who killed two policemen in southeastern Turkey earlier in the week. In a statement, Erdogan said:

"It’s disgraceful for circles - who have openly expressed that they rely on the terror organization - to not be able to show courage to condemn and instead remain silent on the PKK’s brutal terror acts."

The HDP leadership expressed its regret over the shooting, but did not condemn the PKK. Today's Zaman (Istanbul) and Hurriyet (Ankara) and International Business Times

In major reversal, Turkey will let US use Incirlik to fight ISIS in Syria

In the fallout of Monday's terrorist attack on Suruç by the so-called Islamic State (IS or ISIS or ISIL or Daesh), Turkey has made a major reversal, and will allow American warplanes to launch attacks against ISIS in Syria from Incirlik Air Base.

It's believed that ISIS was behind the suicide bombing in Suruç, targeting a large meeting of mostly young pro-Kurdish activists who were discussing plans to help rebuild the town of Kobani, which the Kurds had captured from ISIS in January. There were 32 dead and more than 100 others injured.

Turkey is a member of Nato, and Incirlik Air Base is a joint U.S.- Turkish installation that houses the U.S. Air Force's 39th Air Base Wing. However, Turkey's president Recep Tayyip Erdogan has in the past refused to permit American warplanes take off from Incirlik to fight ISIS for two reasons:

US warplanes fighting ISIS currently have to leave from Iraq or Jordan or other Arab nations. Using Incirlik would allow US warplanes to move more quickly and efficiently.

In a potentially major strategic change in the fight against ISIS in Syria, Turkey and the US will set up a 90 km no-fly zone, 40-50 km deep into Syria's territory. The no-fly zone will prevent ISIS or the al-Qaeda linked Jabhat al-Nusra (al-Nusra Front) from gaining territory in the region.

Warplanes from the Bashar al-Assad regime in Syria will not be permitted within the no-fly zone, and those which violate this will be targeted. AP and Washington Post and Hurriyet (Ankara)

Turkish soldier killed by ISIS in first gunfight across Syrian border

For the first time, there was a gunfight between Turkish soldiers and ISIS militants across the border between Turkey and Syria. Five ISIS militants approached the border and fired on Turkish soldiers. Turkey returned fire, and also used artillery to fire at suspected ISIS positions. CNN

(Comments: For reader comments, questions and discussion, see the 24-Jul-15 World View -- In major reversal, Turkey will let US use Incirlik to fight ISIS in Syria thread of the Generational Dynamics forum. Comments may be posted anonymously.) (24-Jul-2015) Permanent Link
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23-Jul-15 World View -- Syria's war comes to Turkey after Monday's terror attack on Suruc

Greece's parliament approves European lender reform demands

This morning's key headlines from GenerationalDynamics.com

Riots and violence across Turkey after Monday's suicide bombing in Suruç


The Suruç suicide bomber is thought to have been radicalized in this building, a teahouse called 'Islam,' which closed eight months ago, and is now an advertising office. (Hurriyet)
The Suruç suicide bomber is thought to have been radicalized in this building, a teahouse called 'Islam,' which closed eight months ago, and is now an advertising office. (Hurriyet)

Protesters rioted and clashed with police in Istanbul and other cities across Turkey in anti-government demonstrations protesting the policies of Turkey's president Recep Tayyip Erdogan, whose policies many people blame for Monday's massive terrorist attack in the town of Suruç, on Turkey's border with Syria. It's believed that the so-called Islamic State (IS or ISIS or ISIL or Daesh) was behind the suicide bombing in Suruç, targeting a large meeting of mostly young pro-Kurdish activists who were discussing plans to help rebuild the town of Kobani, which the Kurds had captured from ISIS in January. There were 32 dead and more than 100 others injured.

Turkish police have identified Seyh Abdurrahman Alagöz, a 20-year-old Turkish male Kurd as the person behind the suicide bombing. Another female suspect has yet to be identified. It's believed that Alagöz went to Syria six months ago to join ISIS.

Police detained 49 protesters in multiple locations in Istanbul, and seized three hand-made cluster bombs, 203 Molotov cocktails, a pump-action rifle, a blank-firing pistol, 125 pieces of ammunition, two firework-launching platforms and 40 boxes of fireworks. Today's Zaman (Istanbul) and Hurriyet (Ankara) and Telegraph (London)

PKK kills 2 Turkish police officers in retaliation for Suruç blast

The military wing of Turkey's outlawed Kurdistan Workers’ Party (PKK) said on Wednesday that it had killed two Turkish police officers in a town on the Syrian border as a reprisal for Monday's suicide bombing in Suruç. According to a web site statement: "A punitive action was carried out... in revenge for the massacre in Suruç."

The killings took place in Ceylanpinar, a Turkish district that has been severely affected by fighting between rival factions across the border in Syria.

Turkey has been for decades the target of terrorist attacks by the Kurdistan Workers’ Party (PKK), although in recent years the PKK has been talking about a peace agreement in return for greater freedoms for Kurds in Turkey. Hurriyet (Ankara) and Today's Zaman (Istanbul)

Syria's war comes to Turkey after Monday's terror attack on Suruç

Monday's massive terrorist attack in the town of Suruç, on Turkey's border with Syria, has polarized the Turkish people, especially the Turkish Kurds, into believing that Erdogan has allowed Syria's civil war to come to Turkey.

Turkey's president Recep Tayyip Erdogan has said many times in the past that the Kurds are more dangerous than ISIS, but Erdogan may have to change his tune after Monday's attack. According to an MP from Turkey's pro-Kurdish People's Democratic Party (HDP), being interviewed on the BBC:

"People are incredibly angry. They are angry that Turkey is turning into Syria. They're shocked, they're angry, and they're particularly angry at Mr. Erdogan, who is the president of Turkey, for his support to all kinds of groups in Syria, and they blame him for also supporting ISIS."

The MP responded to the statement that it's now believed that Monday's suicide bomber was a Kurd who had joined ISIS:

"Many Kurdish people join ISIS. Even in my home town, hundreds of youth went there are joined them, and definitely one needs to work on this kind of issue. It's going to get dangerous. There are so many nobodies who want to be somebody, and they [ISIS] are somehow able to recruit those people. Very openly they're doing all kinds of campaigns here, recruiting events, even in my home town, and they always even do military training in the hills around my home town. And they have all kinds of support."

The evidence given that Erdogan supports ISIS consists of his statements that the Kurds are more dangerous than ISIS, and also that Erdogan did nothing to support the Kurds in the fight in Kobani. Erdogan has furiously denied any support for ISIS, and no real evidence has been presented that he has.

The real story is probably much more nuanced.

I've been writing since 2011 that Syria's president Bashar al-Assad was a genocidal psychopath who was using torture and mass slaughter, killing innocent women and children who were peacefully protesting, to try to exterminate the Sunnis in Syria. A few months later, some occasional news stories began to appear about Sunni jihadists from other countries, from Asia to the Caucasus to North Africa, who were coming to Syria to fight al-Assad. ISIS didn't exist at that time, but I speculated that if these foreign jihadists kept arriving, then they would form a terrorist fighting force in Syria, and then return to their countries and use their terrorist skills at home.

At that time, according to analysts, Erdogan was willing to arm any group in Syria that was fighting against al-Assad. Erdogan did not believe that he was arming ISIS, since ISIS didn't exist; he believed that he was arming anti-Assad forces. As it turned out, he was arming anti-Assad forces some of which later turned into ISIS.

Erdogan's Syria policy has had the objective of regime change, removing al-Assad, with secondary objectives of defeating ISIS and of preventing the Kurds from forming any kind of Kurdistan state in Syria, because they would also demand part of Turkey for Kurdistan.

So those have the elements of Erdogan's foreign policy towards Syria, but now that policy is backfiring and falling apart. Now Turkey is threatened with terror attacks by both PKK Kurds and ISIS, the latter including ISIS Kurds. That is that Syria's war is now in Turkey, and many Kurds blame Erdogan for the rise of ISIS, while other disaffected Turkish Kurds are joining ISIS, possibly with the purpose of a war against Erdogan's government. AP and Lowy Institute (Australia)

Greece's parliament approves European lender reform demands

Greece's parliament worked deep into the night, and early on Thursday morning approved resolutions demanded by lenders as prerequisites for opening negotiations for a third bailout, for 86 billion euros.

The approved reforms will affect the courts, the civil procedure code, and the banks, causing them to adopt a regulatory system used by other European Union countries.

Greece's prime minister Alexis Tsipras urged MPs to endorse the reforms:

"Conservative forces within Europe still insist on their plans to kick Greece out of the euro. We chose a compromise that forces us to implement a program we don’t believe in and we will implement it, because the choices we have are tough."

As a separate matter, Greece is planning for the reopening of the Athens Stock Exchange, after being closed for four weeks. However, severe restrictions on buying and selling will be in place to prevent a complete stock market crash.

Prolonged restrictive measures could lead to a downgrade by MSCI Inc. to “standalone market,” a designation that includes Jamaica, Botswana, Zimbabwe and mainland China, from emerging market. That might mean trading and prices would decline even further and Greek companies would be cut off from a crucial source of funding. Kathimerini and Bloomberg

(Comments: For reader comments, questions and discussion, see the 23-Jul-15 World View -- Syria's war comes to Turkey after Monday's terror attack on Suruç thread of the Generational Dynamics forum. Comments may be posted anonymously.) (23-Jul-2015) Permanent Link
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22-Jul-15 World View -- Greece's Tsipras lashes out at his own party as new vote approaches

Burundi's president Nkurunziza continues to provoke Hutu-Tutsi tensions

This morning's key headlines from GenerationalDynamics.com

Burundi's president Nkurunziza continues to provoke Hutu-Tutsi tensions


Refugees from Burundi arrive at the Nyarugusu refugee camp in western Tanzania (Reuters)
Refugees from Burundi arrive at the Nyarugusu refugee camp in western Tanzania (Reuters)

Burundi's Hutu president Pierre Nkurunziza took office in 2005 apparently won re-election on Tuesday in an election that the international community considered to be non-credible.

Burundi is in a generational Awakening era, one generation past the end of a bloody, genocidal civil war, the 1994 war between Hutus and Tutsis in Rwanda and Burundi. Now, all the old hatreds that gave rise to the war are being inflamed again, particularly in the younger generations. This is raising fears that the civil war will be revived in all its fury, something that can't happen in a generational Awakening era because the survivors won't permit it.

Nkurunziza is a Hutu who apparently is doing his best to stoke those old hatreds with Tutsis. He ran for a third term, in violation of the constitution, and he's responded to Tutsi protests with brutality and violence. More than 140,000 people, almost all Tutsis, have fled to neighboring countries, and are living in squalid refugee camps.

It may be that Nkurunziza is planning to copy the technique of Zimbabwe's Robert Mugabe. Mugabe is best known for his 1984 genocidal pacification campaign known as "Operation Gukurahundi" (The rain that washes away the chaff before the spring rain). During that campaign, accomplished with the help of Mugabe's 5th Brigade, trained by North Korea, tens of thousands of people, mostly from the Ndebele tribe, were tortured and slaughtered.

Nkurunziza is showing every sign of going down the same road as Mugabe, and planning an "Operation Gukurahundi" to torture and slaughter any from the Tutsi tribe who oppose his grab for power. Now that Nkurunziza has won an illegal third term, the new "Operation Gukurahundi" may not be far off. International Business Times and BBC and France 24

Greece's Tsipras lashes out at his own party as new vote approaches

Greece got through last week's crisis by means of a parliamentary vote on Wednesday that approved increased taxes and pension changes, reforms that prime minister Alexis Tsipras supported only because European officials were "holding a knife at my neck." And Greece was rewarded with a bridge loan that kept Greece from defaulting two days ago, and also allowed Greece's banks to reopen on the same day.

That was last week's crisis. Time to move on to this week's crisis. The European creditors are demanding a second vote by parliament, on a mix of tax hikes, market reforms and spending cuts demanded by the lenders. The plan is that this package will pass Greece's parliament today (Wednesday), and then on Friday negotiations can begin with the lenders on an 86 billion euro bailout package. The negotiations are supposed to be completed by August 20.

Many people in Tsipras's far left Syriza party are furious about the direction the country is taking. Since about 40 of the Syriza MPs abandoned Tsipras in last Wednesday's vote, Tsipras has had to reorganize by firing some Syriza ministers and appointing a minister from the ANEL Independent party, thought by some on the left to be xenophobic, and another minister from the right of center New Democratic party.

On Tuesday evening, Tsipras lashed out at his critics in the Syriza party by taking a hard line:

"Up until today I've seen reactions, I've read heroic statements but I haven't heard any alternative proposal. Syriza as a party must reflect society, must welcome the worries and expectations of tens of thousands of ordinary people who have pinned their hopes on it. ...

If some believe that an alternative leftist plan is Schäuble’s plan, or grabbing the stock of European Central Bank note, or giving IOUs to pensioners, let them explain to the Greek people."

The references are to a plan by Germany's finance minister Wolfgang Schäuble for Greece to leave the euro currency ("Grexit"), and other plans to transit to a drachma or IOU-based economy. Instead, Tsipras said that he supports "a compromise, but one which keeps us alive so we can keep on fighting." Kathimerini and BBC and Reuters

Where will Greece's 86 billion euro bailout come from?

But OK, even if all goes well in today's vote, and even if the negotiations that begin on Friday, where is the money coming from for the 86 billion euro bailout?

As long-time readers know, I've been saying for years that no solution exists to the Greece crisis. It's not that no one has been clever enough to find a solution. It's that no solution exists to be found. More and more, the paradoxes and contradictions of five years of "kicking the can down the road" are becoming apparent.

The International Monetary Fund (IMF) contributed about a third of the funding of the two previous bailouts in 2010 and 2012, but threw Europe under the bus last week by saying that the IMF would not participate in the third bailout unless the Europeans agree to write off part of Greece's debt -- something that German Chancellor Angela Merkel, among others, has said will not happen.

And so, given that contradiction, there will have to be some imaginative fudging to find a way to provide the money for the next bailout.

I wrote a couple of times in the past that it was my personal belief (not a Generational Dynamics prediction) that, one way or another, Greece would remain in the eurozone. That was before the repeated convulsive crises of the last few weeks that brought Greece several times right to the edge of the Grexit cliff.

But now it's even less likely that Greece will leave the eurozone. After going through the past few horrendous weeks of pain, it's almost unthinkable to throw it all away. For that reason, there's little doubt that a way will be found to provide that next bailout. It's really not that hard. Just find somebody willing to pay for it. Kathimerini and Politico Europe

(Comments: For reader comments, questions and discussion, see the 22-Jul-15 World View -- Greece's Tsipras lashes out at his own party as new vote approaches thread of the Generational Dynamics forum. Comments may be posted anonymously.) (22-Jul-2015) Permanent Link
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21-Jul-15 World View -- Philippines reinforces grounded ship to challenge China in South China Sea

Kurds blame Erdogan for ISIS terrorist attack in southeastern Turkey

This morning's key headlines from GenerationalDynamics.com

Kurds blame Erdogan for ISIS terrorist attack in southeastern Turkey


Anti-Erdogan demonstrators in Taksim Square in Istanbul on Monday (Reuters)
Anti-Erdogan demonstrators in Taksim Square in Istanbul on Monday (Reuters)

A massive terrorist explosion in southeastern Turkey on Monday killed 31 and wounded hundreds. It's believed that it was triggered by an 18-year-old female suicide bomber.

It occurred in the town of Suruç, which is on the border with Syria, just across the border to the Syrian town of Kobani.

In January, Kurdish militias scored a major victory over the Islamic State (IS or ISIS or ISIL or Daesh) by driving all ISIS forces out of Kobani.

Because of the importance of Kobani, ISIS has been trying to retake the town since then. A month ago, ISIS killed dozens of Kurds, mostly civilians, in a brutal attack on Kobani. The ISIS militants disguised themselves in Kurdish YPG uniforms, so they were undetected, until they opened fire. President Recep Tayyip Erdogan by some opposition politicians, especially from the opposition pro-Kurdish People's Democratic Party (HDP), of hating the Kurds and of helping ISIS launch the attack agains the Kurds in Kobani. Erdogan was outraged, and said that HDP politicians "are carrying out a slander and black propaganda campaign in the wake of this nefarious attack."

The bomb attack in Suruç targeted a large meeting of pro-Kurdish activists who were discussing plans to help rebuild the town of Kobani. They had been chanting slogans and were holding a large banner with the words "We defended it together, we are building it together," when the suicide bomber exploded her load.

HDP party politicians condemned Erdogan for not taking enough steps to prevent terrorism on Turkish soil. On Monday, there were demonstrations in Istanbul by protesters who blamed the government for the ISIS suicide bombing. Some activists chanted slogans against Erdogan and the ruling AK Party, including: "Murderer ISIS, collaborator Erdogan and AKP." Police in Istanbul fired teargas and water cannon when the demonstration turned violent. Hurriyet (Ankara) and Zaman (Istanbul) and Daily Mail (London)

Philippines reinforces grounded ship to challenge China in South China Sea

With China building illegal artificial islands in the South China Sea, the Philippines government is retaliating by reinforcing a naval vessel, the BRP Sierra Madre, that was beached on Second Thomas Shoal in 1999. In order to challenge China's claims of sovereignty over the entire South China Sea, including regions that had belonged to other countries for centuries, the Philippines government has kept the beached ship staffed with a small group of marines.

This has gone on for years, and has infuriated the Chinese. There are at least China coast guard cutters nearby constantly, to interdict any resupply attempts to the ship. Any supplies or replacement personnel can arrive only by running past China's blockade.

For years, the beached ship has kept a low profile, but in view of China's increasingly aggressive and hostile moves, the Philippines government is beginning to provide more "maintenance" to the vessel, with cement, welding tools and other reinforcing materials brought past the Chinese blockade.

China's foreign ministry accused the Philippines of illegal activities, repeating that the entire South China Sea is China's sovereign territory:

"China strongly protests and firmly opposes such an act. ...

The relevant activity fully exposed the Philippines’ hypocrisy and that it is a double dealer. It once again proved that the Philippines is truly a troublemaker and rule-breaker in the region."

The Philippines government is also restoring the former US naval facility in Subic Bay to be a full-fledged military base, for the first time since the US Navy was thrown out from the base. The Philippines will station new fighter jets and two frigates early next year. US Naval Institute and AFP and Reuters

(Comments: For reader comments, questions and discussion, see the 21-Jul-15 World View -- Philippines reinforces grounded ship to challenge China in South China Sea thread of the Generational Dynamics forum. Comments may be posted anonymously.) (21-Jul-2015) Permanent Link
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20-Jul-15 World View -- Possible rapprochement in the works between Hamas and Saudi Arabia

Greece's banks to reopen at start of another stormy week

This morning's key headlines from GenerationalDynamics.com

Car bombs target Hamas and Islamic Jihad in Gaza


One of five cars in Gaza blown up by explosions in Gaza early Sunday morning (AFP)
One of five cars in Gaza blown up by explosions in Gaza early Sunday morning (AFP)

There were five explosions in Gaza on Sunday from bombs placed underneath five cars parked in front of their owners' homes. The explosions were evidently coordinated, as they occurred almost simultaneously. There were no reports of serious injuries. The cars belonged to members of the armed branches of two different militant groups in Gaza, Hamas and Islamic Jihad. The two groups issued a joint statement on Sunday saying:

"The culprits of the violence are in the camp of traitors. ...

Guilty hands are attempting to attack the resistance by blowing up its fighters' vehicles, which only serves the occupier and its objectives."

The "occupier" is Israel. The "resistance" are Hamas and Islamic Jihad.

The statement is ironic because has reportedly been in peace talks with Israel for a five year truce while, on the other hand, Hamas has launched a crackdown on Salafist groups in Gaza, with as many as 100 members or supporters arrested and jailed.

It's believed that the bombs were placed by one of the smaller militant groups in Gaza that have declared allegiance to ISIS. AP and Daily Mail (London)

Possible rapprochement in the works between Hamas and Saudi Arabia

The increasing influence of Iran through last week's nuclear agreement with the West and of the Islamic State (IS or ISIS or ISIL or Daesh) are causing further shifts in Mideast relationships. Relations between Hamas and Saudi Arabia have been particularly strained because of Hamas's close relationship with Iran and because Saudi Arabia sided with the Palestinian Authority in its conflicts with Hamas.

However, a meeting of Friday between Hamas chief Khaled Meshaal and Saudi Arabia's new king Salman bin Abdulaziz al Saud is being viewed as a possible "game changer" in the relationship between the two. According to a Hamas official, Salah al-Bardawil, "We sensed that there is a readiness in Saudi Arabia to support the Palestinian cause."

It's thought that the rapprochement signals that Hamas has decided to distance itself from Iran, and that the Saudis will help rebuild Gaza, which is still devastated from last summer's 60 day war with Israel.

As we wrote yesterday in "19-Jul-15 World View -- Behind the scenes in the Iran nuclear deal", the Iran nuclear deal is forcing yet another realignment in the Arab world, as it deteriorates into war. Events seem to be moving more quickly in recent weeks. Jerusalem Post and Reuters

Greece's banks to reopen at start of another stormy week

The European lenders have approved a bridge loan for Greece, to prevent bankruptcy for a few weeks, and are providing liquidity so that Greece's banks can reopen on Monday for the first time in three weeks. Greek citizens have been restricted to ATM withdrawals of only 60 euros per day, but now there'll be a small lightening of the rules: They will be permitted to take an entire week's withdrawals -- 420 euros -- in a single day, so they won't have to stand in line at the ATM every day.

It'll be anything but smooth sailing this week. Austerity measures are being imposed on Greece. But these are the same kinds of austerity measures that the Greek people voted down in a referendum, and they're the measures that prime minister Alexis Tsipras said that he doesn't believe in, but had to accept because the European lenders were "holding a knife at my neck."

In fact, nobody believes any more that the austerity measures will work. Germany's finance minister Wolfgang Schäuble is calling for a temporary "Grexit" -- for Greece to leave the eurozone and use a different currency for up to five years. But German Chancellor Angela Merkel has completely ruled out any Grexit, and she's apparently pushing for a new 86 billion euro bailout for Greece, which will kick the can down the road for a while. In the past she's been adamantly opposed to forgiving any part of Greece's debt, but she's indicated a willingness to consider restructuring the Greek debt in the fall, possibly by extending the payment schedule out for decades. Kathimerini and Bloomberg

(Comments: For reader comments, questions and discussion, see the 20-Jul-15 World View -- Possible rapprochement in the works between Hamas and Saudi Arabia thread of the Generational Dynamics forum. Comments may be posted anonymously.) (20-Jul-2015) Permanent Link
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19-Jul-15 World View -- Behind the scenes in the Iran nuclear deal

The Arab world is disintegrating into war

This morning's key headlines from GenerationalDynamics.com

Behind the scenes in the Iran nuclear deal


President Barack Obama and Ayatollah Seyed Ali Khamenei (AFP)
President Barack Obama and Ayatollah Seyed Ali Khamenei (AFP)

I like to reference Debka's newsletter because it contains valuable insights into what's going on, but it's written from Israel's point of view, and sometimes gets things wrong. This week's subscriber-only newsletter (sent to me by a subscriber) contains an analysis of the behind the scenes activities that led to the Iran nuclear deal:

Generally, the Debka view is consistent with my article "15-Jul-15 World View -- Arab views of Iran nuclear deal", including the fact that Iran is becoming America's ally, and the Sunni Arabs will America's enemy. Debka

The Arab world is disintegrating into war

The same Debka newsletter points out that the number of conflicts in the Arab world is larger than the number of Arab nations involved in the conflicts:

On the other hand, the United Arab Emirates (UAE) and Oman have lined up behind the Iran nuclear deal and have maintained good relations with Iran. In particular, the UAE expects to gain from the Iran's post-sanctions import and export trade by having Dubai become the biggest free port in the Gulf.

Debka says that the Arab governments are, like Israel, in a state of disarray after being swept aside by the Iran deal, and in a state of gloom over all the wars going on. The Arab nations need to focus on creating a new Arab regional structure to replace the outdated Arab League.

As we've been saying for many years, the Mideast is headed for a major regional ethnic and sectarian war with 100% certainty, and events seem to bring that war closer every week. This is particularly true of last week's major event, the Iran nuclear deal.

It's impossible to predict the sequence of political events that will lead to this regional war, but the concept of "a new Arab regional structure" suggests one possibility. My expectation is that, sooner or later, the Arab states will unite with ISIS to fight Iran, Syria and Hezbollah, and this new Arab regional structure may be the political mechanism that brings all these Sunni and Arab elements together to fight Iran. Debka

Saudi Arabia conducts major anti-terrorism sweep against ISIS

In a major anti-terrorism sweep across the country, Saudi Arabia has arrested 431 people believed to belong to ISIS cells, "as part of a scheme managed from troubled areas abroad and aimed at inciting sectarian strife and chaos." According to the Saudi statement statement:

"The number of arrested to date was 431 ... detainees, most of them citizens, as well as participants holding other nationalities including Yemeni, Egyptian, Syrian, Jordanian, Algerian, Nigerian, Chadian, and unidentified others.

What combines these cells (which were subjected to security restrictions by not making direct contacts among themselves) is the belonging to the terrorist ISIS organization in terms of the adoption of thought, takfir of society and bloodshed, and then exchanging roles to implement the plans and objectives dictated from abroad."

There have been several terrorist attacks on Shia mosques in eastern Saudi Arabia, and the purpose of the announcement in part was to make it clear to the Shia's in the east that the government is doing something. The Saudis claim that they've thwarted six additional planned attacks on Shia mosques.

The fact that over 400 people have been arrested gives an idea of the scale of threat that the Saudis face in ISIS. Saudi Press Agency and AP and Arab News

Massive bomb attack in Iraq market kills over 130

ISIS has claimed responsibility for a massive bomb attack in a crowded open-air market in Khan Bani Saad, a mostly Shia town 20 miles northeast of Baghdad. The death toll is 130 and climbing, making it the biggest ISIS civilian terror attack in the country.

A man in a truck pulled up to the marketplace in the extreme summer heat and said he was selling ice at a discount to celebrate the end of Ramadan. He lured over 100 people to the truck, and the detonated at least one ton of explosives.

Khan Bani Saad is in Diyala province, which borders Iran. It's the only province in Iraq where Iranian jets are known to have conducted airstrikes against ISIS earlier this year. CNN and AP

(Comments: For reader comments, questions and discussion, see the 19-Jul-15 World View -- Behind the scenes in the Iran nuclear deal thread of the Generational Dynamics forum. Comments may be posted anonymously.) (19-Jul-2015) Permanent Link
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18-Jul-15 World View -- China reacts harshly to Japan's plans for 'collective self-defense'

European officials prepare to negotiate Greece's next bailout

This morning's key headlines from GenerationalDynamics.com

China reacts harshly to Japan's plans for 'collective self-defense'


Anti-government rally in Tokyo on Friday (AFP)
Anti-government rally in Tokyo on Friday (AFP)

As we reported two days ago, Japan's prime minister Shinzo Abe is pushing through the parliament a law that would reinterpret the clause in Japan's "pacifist" constitution that the military could be used only in Japan's self-defense to include "collective self-defense," which would allow Japan to use the military in defense of an ally anywhere in the world. For example, if an American warship were attacked by China near Japanese waters, then Japan would be prohibited from defending it, unless collective self-defense were allowed.

The reinterpretation is unpopular in Japan according to polls, and there have been large public demonstrations opposing it. Those who oppose it say that the self-defense clause was part of a constitution that was wonderful gift given by the United States to Japan at the end of World War II, and that it should not be changed. However, Abe has expressed the view that the constitution is a humiliation imposed on Japan by its American conquerors.

The reinterpretation is being triggered by the rise and increasing belligerence of China's military. The United States has pressured Abe to make the reinterpretation, saying that it's important for the security of Japan itself.

Not surprisingly, Chinese officials are outraged. China was invaded by Japan prior to World War II, and China uses that invasion to justify its own massive military buildup, while at the same time using it to condemn any military actions by Japan. China is blasting the reinterpretation as a "nightmare scenario," and the Foreign Ministry issued a statement saying:

"[The reinterpretation is] an unprecedented move since the Second World War ... [which] may lead to significant changes in Japan’s military and security policies. It is fully justified to ask if Japan is going to give up its exclusively defense-oriented policy or change the path of peaceful development that has been long pursued after the Second World War."

The Chinese News Service was considerably more dramatic and blunt:

"By fatally slashing Japan's seven decades of pacifism, like a Shogun's shoulder to waist "kesagiri" finishing move, in the very year marking the 70th anniversary of the end of World War II, Prime Minister Shinzo Abe on Thursday realized his dream of abandoning postwar order and switching his country back into war mode.

Despite majority of population's opposition, the country's ruling coalition led by the historical revisionist rammed through a series of controversial security bills in Japan's all-powerful lower house Thursday, marking a backward move meaning the historically bloodied "samurai sword of Japan" could once again be wielded by its troops in every corner of the world."

I checked out the meaning of "kesagiri," and it's described as follows: The swordsman cuts his opponent diagonally from the opponents' right armpit to his left shoulder, then reverses the blade and cuts downward from opponents left shoulder to his right hip. After that, the swordsman shakes the blood off the blade and sheaths his sword.

This sounds like something that Sun Tzu, the author of the ancient Chinese classic The Art of War, might approve of. The Diplomat and Chinese News Service and Akban School of Martial Arts

European officials prepare to negotiate Greece's next bailout

On Friday, Germany's parliament overwhelmingly approved the 7 billion euro bridge loan so that Greece won't go bankrupt in the next two or three weeks.

Germany's finance minister Wolfgang Schäuble is being widely identified as the bad guy in the negotiations, the hardliner who's making everyone suffer, particularly the Greeks. According to a dramatic but scathing article in the left wing periodical Der Spiegel:

"He then inhaled, flashing a pugnacious smile and turned his wheelchair around. He then prepared for battle of a kind he had never before fought in his long political career -- a battle against the Greek government, against American economists, against large swathes of European public opinion and also, to some extent, against the chancellor herself.

Had it been up to Schäuble, Germany would have shown the Greeks the euro-zone door long ago. His problem, however, is that the chancellor doesn't share this sentiment. Merkel rejects his insistence because she doesn't want to go down in history as the government leader responsible for the disintegration of Europe.

If it were any other minister that had so persistently refused to endorse her line, she would likely have got rid of him long ago. But she can't do that with Schäuble. His hard line is precisely what makes him so popular among the Germans."

So apparently it's not just Schäuble who's the bad guy. It's all those Germans who like Schäuble's hard line.

At any rate, the bridge loan has been OK'ed, and the Emergency Liquidity Assistance (ELA) for the banks has been OK'ed, and so Greece won't go bankrupt next week, and Greece's banks may or may not reopen next week.

You thought that the hard part was over, but that was all the easy part. Now the hard part really starts.

This crisis has been going on for five years. There have been two previous bailouts, in 2010 and 2012, totaling 240 billion euros. Now negotiations are supposed to begin on a third bailout, for 80 billion euros. The bailout money has been supplied by three institutions -- -- the European Commission (EC), European Central Bank (ECB) and International Monetary Fund (IMF), formerly known as the "Troika".

The problem now is that the IMF will not participate in the third bailout, because the debt is unsustainable. The Europeans must be willing to write off a substantial portion of Greece's debt before the IMF will participate in a new bailout. But German Chancellor Angela Merkel has said that writing off any portion of the debt is a red line that will not be crossed.

To add to the fun, there's even another deadline that's been set: European officials are saying that a new Memorandum of Understanding (MoU) must be signed by August 10 between Greece and the Troika.

So, here we go! Prepare yourself for another few weeks of daily crises. Der Spiegel and AFP and Irish Times

(Comments: For reader comments, questions and discussion, see the 18-Jul-15 World View -- China reacts harshly to Japan's plans for 'collective self-defense' thread of the Generational Dynamics forum. Comments may be posted anonymously.) (18-Jul-2015) Permanent Link
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17-Jul-15 World View -- ISIS-linked terrorists sink Egyptian navy ship amid Suez Canal expansion

Both Greece and Germany in political disarray after IMF bailout statement

This morning's key headlines from GenerationalDynamics.com

ISIS-linked terrorists sink Egyptian navy ship


Convoy of ships passing through Suez Canal
Convoy of ships passing through Suez Canal

The ISIS-linked "Sinai Province" terrorist group sank an Egyptian navy ship in the Mediterranean Sea near Gaza and Sinai. They claim to have fired a rocket at the ship, setting it on fire and sinking. Some news reports confirm this, but the Egyptian military says that there was only an exchange of gunfire that caused the ship to catch on fire.

The attack comes just two weeks after Egypt said it was in a 'state of war' in northern Sinai, following July 1 when the same group conducted simultaneous coordinated terror attacks at 15 different locations in Sinai. According to Egyptian officials, at least 300 militants launched that offensive, of whom 100 were killed. The military said that 17 soldiers had been killed, but other reports put the death toll much higher.

The new attack appears to be a significant escalation by terrorists linked to the Islamic State (IS or ISIS or ISIL or Daesh). Daily Star (Beirut) and Al Ahram (Cairo)

Attack on Egypt's navy boat comes amid plans for Suez Canal expansion

What Egyptian officials most fear is a terrorist attack on a commercial vessel in the Suez Canal that forces the canal to close for a period of time. Last month, Egyptian authorities arrested 13 Muslim Brotherhood suspected of planting bombs around the canal. Last year there was a failed RPG (rocket-propelled grenade attack) on a vessel. If the attack had succeeded in hitting the bunker of a tanker, the canal would have been closed for a week for environmental cleanup.

Early in August, Egypt will announce the completion of a Suez Canal expansion project. The expansion will be second channel along a portion of the canal, making two-way traffic possible in that portion. This will reduce the average transit time of vessels from 18 hours to 11 hours, and it will increase the number of vessels transiting the canal each day from 49 to 97.

There's another reason for the Suez Canal expansion project, a somewhat ironic one. The Muslim Brotherhood was involved in the original construction of the canal in 1936 giving them a rare understanding of the waterway and one they exploited to make the RPG attack. So the expansion project is altering the infrastructure, including tunnels, so the Brotherhood can’t use its knowledge of its inner workings to attack the canal. [Correction: This paragraph was sourced from the Journal of Commerce article linked below, but it's not correct as the Suez Canal was constructed between 1859 and 1869.](Paragraph modified. 17-Jul)

Helenic Shipping News and Journal of Commerce

Both Greece and Germany in political disarray after IMF bailout statement

As I wrote yesterday, the International Monetary Fund (IMF) has essentially thrown Europe under the bus, by declaring that Greece's debt is "unsustainable," and that the IMF therefore could not participate in a third bailout, unless the Europeans forgive and write off a large part of Greece's existing debt. That IMF statement thrown European negotiations over a new 80 billion euro bailout for Greece into disarray.

It focused the mind of Greece's prime minister Alexis Tsipras. Greece's economy is in desperate straits, with conditions as bad as the 1930s Great Depression. The average Greek is 40% poorer than five years ago. The unemployment rate is 25%, with youth unemployment at 50%. Tsipras realized that his and Greece's situation was so desperate that he had to capitulate and accept whatever deal the Eurogroup offered it. But that also triggered the resignation of several of Tsipras's ministers, especially after a third of the MPs Tsipras's own far left Syriza party deserted him in the final vote. The result is that Tsipras will have to make widespread changes to his government, assuming his government can survive.

The IMF statement also gave more ammunition to Germany's finance minister Wolfgang Schäuble, who has taken a hard line against simply bailing Greece out again. His position, which he repeated on Thursday, is that voters in Germany and some other eurozone countries will not accept reducing Greece's outstanding debt, either by forgiving part of it or by extending the payments out for decades, since the voters will see that as rewarding Greece's profligacy. The concern is that other countries, such as Italy, Spain, Portugal or even France, will get into trouble some day, and also demand that their debt be written off.

Schäuble claims that the only way to save the euro is to give Greece a "time out" for up to five years, meaning that Greece will return to the drachma or an IOU-based currency until the economy stabilizes, and then can return to the euro.

German Chancellor Angela Merkel is opposing any "time out" for Greece, and this has resulted in a split between Merkel and Schäuble, and also a split in Merkel's conservative party, the Christian Democratic Union (CDU).

Just as Tsipras needed MPs from opposition parties to get the parliament to accept the Eurogroup deal on Wednesday, Merkel on Friday is expected to depend on votes from opposition parties to pass the approval of a bridge loan to prevent Greece from defaulting next week. The bridge loan of 7 billion euros is needed by Monday to allow Greece to make debt repayments to the IMF and the European Central Bank (ECB). The German parliament is expected to approve the bridge loan on Friday.

Greece got some additional good news on Thursday, when the ECB announced that it will again provide a limited amount of Emergency Liquidity Assistance (ELA), to last for a week. Greece's banks have been closed for two weeks now, and this will permit them to reopen next week. However, there apparently will still be a limit of 60 euros per day in ATM withdrawals.

Once Monday arrives, the crisis will continue with chaotic negotiations over the new 80 billion euro bailout for Greece. But after the IMF has thrown Europe under the bus, and after Schäuble has said Greece has to have a "time out," you should expect the shouting to continue. It's not clear to me personally how it makes sense to negotiate a new bailout when the IMF is like the child who yelled that "the Emperor is naked," leaving everyone else no choice but to face reality. Kathimerini and Reuters

(Comments: For reader comments, questions and discussion, see the 17-Jul-15 World View -- ISIS-linked terrorists sink Egyptian navy ship amid Suez Canal expansion thread of the Generational Dynamics forum. Comments may be posted anonymously.) (17-Jul-2015) Permanent Link
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16-Jul-15 World View -- Mexico's first 'historic' attempt to re-privatize oil industry flops

Japan's Shinzo Abe pushes 'collective defense' bill for vote

This morning's key headlines from GenerationalDynamics.com

Greece approves harsh reforms as IMF throws Europe under the bus


Alexis Tsipras addressing parliament on Wednesday
Alexis Tsipras addressing parliament on Wednesday

After a day of violence in the streets outside Greece's parliament, and bitter screaming and shouting inside the parliament, Greece's parliament passed a set of harsh reforms that prime minister Alexis Tsipras said that he's supporting only because European officials were "holding a knife at my neck."

The reforms included increased taxes and pension reforms that were harsher than the reforms that voters rejected ten days ago in a national referendum. A total of 229 MPs voted for the reforms, while 64 voted against. The vote was overwhelmingly in favor of the reforms only because Tsipras formed a coalition with opposition parties. Of the MPs in Tsipras's far left Syriza party, 32 voted against the reforms, and 6 abstained. Some of Tsipra's ministers have been forced to resign with the result that the Syriza party may no longer exist, and Tsipras may have to scramble to stay in power. However, Tsipras has been quoted as saying that he will not resign.

Greece's communist party led labor union street riots in Syntagma (Constitution) Square outside the parliament building. Protesters were throwing rocks and Molotov cocktails at police, who were firing tear gas at the protesters.

With Greece having fulfilled the demands of the Eurogroup, the Eurogroup can now go ahead and approve by Monday a 6 billion euro bridge loan that will allow Greece to avoid bankruptcy for a few weeks. After that, negotiations can begin on the terms of an entirely new bailout loan, for 86 billion euros.

However, this all comes as the International Monetary Fund (IMF) has essentially thrown Europe under the bus, by saying that it will not participate in the new bailout loan, which would mean that the eurozone would have to provide the loan entirely by itself.

The reason for the IMF decision was that the IMF had done the math and determined that Greece's debt was "not sustainable." This will be no surprise to regular readers, as I've been saying for years that no solution exists to Greece's debt crisis. However, it is a surprise that someone official is finally saying so.

The IMF is saying that the Europeans must make the debt sustainable, and so they must write off a significant portion of the debt, or else stretch out the repayments for several decades, meaning in effect that it will never be paid off. Germany, Finland and the Baltic states oppose writing off any portion of the debt.

In a related note, CNBC economist Steve Liesman has just returned from a trip to Germany. He said that when you speak to Germans about the situation, you begin to sympathize with them not wanting to keep bailing Greece out over and over. He said that many Germans believe that Greeks developed a culture of not paying taxes because they were governed by the Turkish Ottomans for four centuries, and didn't want to pay taxes to the Ottomans. With a culture of not paying taxes, there's no point in continuing to bail them out. Independent (London) and Kathimerini and AFP

Japan's Shinzo Abe pushes 'collective defense' bill for vote

Japan's prime minister Shinzo Abe is promising to better his explain the terms of his security bills, amid large demonstrations shouted opposition to the bills outside the parliament building, while opposition lawmakers yelled and waved signs in frustration.

Since the end of World War II, Japan has had a "pacifist" constitution, prohibiting any military action except in response to a direct attack on Japan itself. Shinzo Abe has stated that he wants to remove this restriction from the constitution, but opposition would prevent him from doing so.

So he's made a decision to "reinterpret" the self-defense clause of the constitution to allow for what is called "collective self-defense." I discussed this issue in detail in "5-May-14 World View -- Japan debates 'collective self-defense' to protect America and Japan".

Under international law, if a nation's ally is attacked by another country, then the nation may use its armed forces in defense of its ally. This is known as "collective self-defense," and it particularly can be invoked by either of two countries that have a mutual defense agreement, such as the mutual defense agreement signed by Japan and the United States. However, many people in Japan interpret the constitution's self-defense restriction to mean that collective self-defense is prohibited in Japan's constitution. Abe's reinterpretation makes collective self-defense possible, but has generated heated opposition.

On Wednesday, Abe's Liberal Democratic Party (LDP) members were able to cut off debate in a key committee. The security bill would then be debated in the lower and upper house before it becomes law. AFP and Shingetsu News Agency (Japan)

Mexico's first 'historic' attempt to re-privatize oil industry flops

Mexico on Wednesday attempted to auction off the rights to drill for oil in 14 different locations ("exploration blocks") in the Gulf of Mexico. However, oil companies were definitely unenthusiastic, as the 14 were "shallow water" blocks that had previously been drilled for decades by Mexico's government-run oil monopoly, Pemex. As a result, major oil companies, such as Exxon Mobil Corp., Chevron Corp. and Total SA, refused to participate, and only two of the 14 blocks were actually auctioned off, to a consortium of smaller companies.

Mexico nationalized its entire oil industry in 1938, following a series of labor disputes and crippling national strikes by labor unions demanding greater pay, amid political claims that the foreign oil companies were stripping Mexico of its national resources, with almost no financial benefit to Mexicans. The oil companies retaliated by organizing an international boycott of Mexican goods, including Mexican oil. With the start of World War II, the boycotts were resolved. But the nationalization became a symbol of great national pride and liberation from American imperialism. The calendar date of March 18th, 1938, is remembered throughout the country as the day of "Expropiación Petrolera" (Oil Expropriation). All oil assets were turned over to a state-owned monopoly called Petróleos Mexicanos, today called Pemex. The nationalizing also served as a model for other countries to subsequently nationalize their own oil industries.

As always happens with state monopolies, Pemex has been plagued with corruption. In recent years, oil production has plummeted, and it's been increasingly clear that Pemex was top-heavy with bureaucracy, and lacked the expertise to improve production. Mexico had been the world world's fifth bigger oil produced, but dropped to tenth.

Despite opposition from most Mexicans, Mexico's president Enrique Peña Nieto fought for a change in the constitution and laws to re-privatize the energy industry. In 2013, 75 years after the nationalization, Nieto announced the auctions, now being referred to as "historic."

Unfortunately, Nieto may have waited too long. Since 2013, oil prices have fallen over 50%, making much oil exploration uneconomic. Even Pemex decided not to bid in Wednesday's auction.

There will be more auctions later this year, but it's becoming clear that Nieto has to offer much more favorable financial terms to the oil companies if he wants the auctions to succeed, and any such changes will bring stiff domestic opposition. Bloomberg and MexOnline and Forbes and Dallas News

(Comments: For reader comments, questions and discussion, see the 16-Jul-15 World View -- Mexico's first 'historic' attempt to re-privatize oil industry flops thread of the Generational Dynamics forum. Comments may be posted anonymously.) (16-Jul-2015) Permanent Link
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15-Jul-15 World View -- Arab views of Iran nuclear deal

Generational Dynamics view of Iran nuclear deal

This morning's key headlines from GenerationalDynamics.com

Arab views of Iran nuclear deal


Saudi Deputy Crown Prince Mohammed bin Salman, a vocal critic of the Iran nuclear deal (Politico)
Saudi Deputy Crown Prince Mohammed bin Salman, a vocal critic of the Iran nuclear deal (Politico)

Media from Saudi Arabia and other Arab countries were completely silent on Tuesday, following the announcement of the Iran nuclear deal. According to one Israeli analyst: "There’s an [Arab] sense of disappointment mixed with shock. These countries, and especially Saudi Arabia, are trying to come to terms with the materialization of their worst fears."

There was a brief statement from the Saudi Press Agency:

"The Kingdom of Saudi Arabia has always believed in the importance of reaching a deal regarding Iran's nuclear program that ensures preventing Iran from obtaining nuclear weapons and at the same time includes a specific, strict and permanent mechanism for inspecting all sites - including military ones - along with a mechanism for rapidly and effectively re-imposing sanctions in case Iran violates the deal, an official source said in a statement following the nuclear deal between Iran and the P5+1 group. ...

Under the nuclear deal, Iran has to use its resources in serving its internal development and improving the conditions of the Iranian people, rather than using these resources in destabilizing the region which is an act that will be strictly faced by the region's countries."

The statement emphasizes two major areas of Arab concern: That Iran may develop a nuclear weapon for use on the Arabs, and that Iran will use the money from lifting sanctions to further destabilize the region.

Frank Gardner, the BBC security correspondent, listed three major area of concerns for Arabs:

The Saudis recall that under the Shah of Iran, prior to the 1979 Great Islamic Revolution, Iran was the big US ally in the Middle East. After 1979, the Saudis became the big ally, and now Iran is returning to its prior role.

According to Gardner: "What I fear is that Sunni hardliners will say, right, OK, we need to now support Sunni extremists in the Middle East, as a bulwark against Shia extremists and Shia militias, which will extend and prolong the wars and conflicts in Iraq and Syria." Saudi Press Agency and Times of Israel

Another Arab view of Iran's nuclear deal

Marwan Bishara is the senior political analyst for the Qatar-based al-Jazeera, and he appears on both the English and Arabic channels. He's a good analyst, though he's consistent with Qatar's policies in that he's stridently anti-American, anti-Israeli, and anti-Palestinian Authority, while he's pro-Hamas. Thus, he provides a good overview of Arab opinion (my transcription):

"It's important for everyone, and I'll add that it will affect everything in the Middle East, and everything in terms of western relations to the Middle East, in so many ways.

Everything from the energy markets to the arms race - the economic well-being of citizens in Iran to the elections in the United States, from security in Saudi Arabia and the Gulf region, to the war in Yemen. from ISIS, and the developments in Iraq and Syria, to what's going on in Israel, Lebanon, Palestine, Egypt, North Africa, and so forth.

So I think probably every aspect of the political strategic life of the Middle East region will change, and the world's approach to the Middle East region will change with it."

BBC correspondent Frank Gardner, quoted above, said that a Saudi concern is that Iran will replace Saudi Arabia as America's big strategic partner. Bishara expressed the same concern in a more colorful way:

"My idea is that we're going to be seeing slowly the phasing out of Iran as the bogeyman and the phasing in of ISIS.

For our viewers around the world, it's good to remind everyone that for the last 5 or 6 decades, every 10 years, Washington and the West in general have had a bogeyman in the region. So in '58 it was Nasser of Egypt, in '68 it was Yasser Arafat of Palestine, '78 it was Ayatollah Khomeni, in '88 it was Saddam Hussein, in '98 it was Osama Bin Laden, back in 2009 it was again Iran's Ahmadinejad, and now we're going to al-Baghdadi and ISIS.

The Saudis and the rest of the Arab world in general are probably happy that Iran's nuclear program has been verifiably limited to civilian development. But everyone is worried about what the rest of the deal means in terms of a strategic opening for Iran."

Bishara's colorful description doesn't have all the dates right, but it expresses the view that the "bogeyman" target will move from Iran to ISIS, and implies that, at the same time, Iran will be the US partner, while the Saudis may be blamed for ISIS.

What's most interesting about Bishara statements is that he foresees major changes throughout the Mideast because of the Iran nuclear deal. He doesn't detail what those changes are, but it's easy to guess what he means: Iran will use the billions of dollars that Iran will now receive, to worsen the wars in Yemen, as well as the conflicts in Syria and Iraq; Iran will support terrorist organizations throughout the region, from North Africa to Bahrain. Bishara sees these and other changes as having major effects in the Mideast, far broader than anyone is saying. Politico and DPA

Generational Dynamics view of Iran nuclear deal

As long-time readers know, I've been saying for almost ten years that Iran would be our ally in the coming Clash of Civilizations world war. This has actually been pretty obvious since the early 2000s, when Iranian college students were holding pro-West and pro-American demonstrations. Those college students are today increasingly in positions of power.

Ten years ago, the prediction seemed preposterous to most people, but we've all watched it coming true in the last couple of years, as those college students are now in their 30s. The Iran nuclear deal is a big step forward in that prediction, for the reasons outlined above by Frank Gardner and Marwan Bishara.

In recent weeks, as it's becoming more and more apparent that the Generational Dynamics analyses are coming to pass, I've been getting a lot more questions. I've been discussing these issues at length for years, but here's a summary:

Putting all this together, America will be allied with India, Iran, and Russia against China, Pakistan, and the Sunni Arab states.

So I agree with Marwan Bishara when he says that there will be massive changes throughout the Mideast following the Iran nuclear deal, from regime change in Iran to bigger sectarian Sunni-Shia conflicts throughout the region, finally ending up in all-out war.

Congratulations to my readers for sticking with all this

Every once in a while I receive a very nice e-mail message, and would like to share it with everyone:

"Every few months I feel compelled to write you. First and foremost I thank you for your HARD WORK. I see what you do collecting, sorting, packaging and sending out a concise snapshot of what's really going on in the world. I don't waste my time watching news on television since they are always chasing the cheap and easy stories that come in the form of press releases from the White House. Because of your e-mails, I knew about Syria two years before ABC, NBC, or CBS talked about what was going on. Just now, people are taking notice of China's financial problems."

The writer is one of the almost 500 people who receive the daily Generational Dynamics World View article by subscribing to the daily e-mail message. Others subscribe to the RSS Feed. Some tens of thousands read it on the Generational Dynamics web site or the Breitbart National Security web site.

I'd also like to congratulate you, Dear Reader, for sticking with this. It's not easy going to read these articles, since the news isn't good. I can tell you that there are many people who couldn't find Iran on a map if their lives depended on it, and who go to their happy places when someone gives them bad news. You, Dear Reader, are definitely not in that category.

The American mainstream media just slavishly prints whatever the White House tells them to print, and so it's almost always good news, even if it almost always turns out to be wrong. But I issued a challenge in 2005 to anyone to find any web site, any politician, any analyst, or any journalist that has a more successful predictive record than my web site. Several people have taken up that challenge, but none has succeeded because no such web site or politician or journalist exists. The Generational Dynamics methodology is a major breakthrough in analyzing and relating historical events to current events, and its predictions have been almost 100% correct over 12 years.

So I hope that you will continue reading the daily World View articles, and that you will use the information to take whatever actions you can to protect yourself, your family, your community and your nation. That's the only thing that can make this effort worthwhile.

(Comments: For reader comments, questions and discussion, see the 15-Jul-15 World View -- Arab views of Iran nuclear deal thread of the Generational Dynamics forum. Comments may be posted anonymously.) (15-Jul-2015) Permanent Link
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14-Jul-15 World View -- China cracks down on 'peizi' or 'fund-matching' stock market businesses

Emotions running high over Eurogroup ultimatum to Greece

This morning's key headlines from GenerationalDynamics.com

Thousands die in sectarian herder-farmer clashes in Nigeria


Herd of African cattle (AFP)
Herd of African cattle (AFP)

Boko Haram violence in Nigeria has left over 600 dead in the last six weeks. Since Boko Haram began operating in 2002 they have caused over 13,000 deaths.

And yet, Boko Haram is not the only source of violence in Nigeria. What has been going on for years is sectarian violence between Muslims and Christians. Much of the sectarian violence occurs in Jos, in the Plateau region in central Nigeria.

Jos is in the middle of Nigeria, right on the fault line between Muslims who live in the north and Christians who live in the south.

The northern part of Nigeria is mostly Muslim, because of centuries of migration from the Maghreb, the region in northern Africa that was conquered by Arab Muslims in the centuries following the death of Mohammed.

The southern part of Nigeria, especially around the Port Harcourt area, is predominantly Christian, following centuries of colonization by the Europeans, taking advantage of opportunities for mining and the slave trade. Over time, many of the southern tribes were converted to Christianity.

In the middle of Nigeria is the city of Jos, heavily populated by both Muslims and Christians. There are frequent really horrific attacks by Muslim gangs against Christians, and by Christian gangs against Muslims.

Although these are nominally secular attacks, religion is not the core reason for the attacks. The Christians are almost all farming tribes that settled long ago. In the last few decades, Muslim nomadic Fulani cattle herders from the north have been moving south looking for new pastures and water for their herds.

Battles between farmers and herders occur in country after country, as I've described many times in Central African Republic, Rwanda, Sudan, and even America in the 1800s. The farmers accuse the herders of letting the cattle either their crops, while the herders accuse the farmers of planting on land that's meant for grazing. If the farmers put up fences, then the herders knock them down.

In one refugee camp in Wende, south of Jos, there are thousands of people who have lost their homes and become "Internally Displaced People" (IDPs) because of clashes between herders and farmers. Strategy Page and All Africa and All Africa (2-Jul)

Emotions running high over Eurogroup ultimatum to Greece

Many citizens of Greece are accepting the demands that the Eurogroup is making of Greece in return for bailout money, while others are furious, feeling that they've been betrayed and sold out by prime minister Alexis Tsipras, who agreed to demands that were harsher than the ones that had been rejected just a week earlier in a nationwide referendum.

There are big disagreements by analysts about the demands that the Eurogroup has put on Greece before any new bailout money can be provided. If Greece's parliament passes the first round of laws Wednesday, then they will receive a bridge loan that will allow the banks to re-open and keep Greece from defaulting. Most analysts are expecting parliamentary approval on Wednesday, as Tsipras's far left Syriza party is being joined by the right of center New Democracy party in voting to accept the deal. After that, Greece's parliament will have pass additional laws to receive an additional 86 billion euros in bailout money. This will kick the can down the road, but there may be an additional crisis at any time if the committed reforms are not implemented.

According to far left NY Times political commentator Paul Krugman:

"The trending hashtag ThisIsACoup is exactly right. This goes beyond harsh into pure vindictiveness, complete destruction of national sovereignty, and no hope of relief. It is, presumably, meant to be an offer Greece can’t accept; but even so, it’s a grotesque betrayal of everything the European project was supposed to stand for."

The first terms of the deal have to be enacted by Greece's parliament by Wednesday. Well-known investor Wilbur Ross, whose consortium last year invested 1.7 billion euros in Greek banks, said that this deal is the best thing for Greece and Europe, in an interview with CNBC (my transcription):

"I believe it will go through [in the parliament], and I think maybe in some ways it's more important that there will be a change in the political situation in Greece. So I think it will not only be enacted, I think it will be implemented. ...

I think that Greece needed societal reform, and that's what's coming as part of this package. They're not calling it that, but that's really what it is. There was a lot of dysfunctionality in the way that both the economy and society were structured. Those are now being addressed. In terms of moral hazard, if there's one thing that a politician wants, it's to be re-elected, and if I'm right, there'll be sufficient changes in the political scene - that will be a deterrent from other countries from playing games with the EU. So I totally disagree with the notion that there's anything here that will encourage bad behavior on the part of the other euro countries. ...

As for the amount of the debt itself, what Greece really needs is to get to a primary budget surplus, because right now they're going cash negative every month, without reference to any interest or principal. A lot of these reforms will cure that."

The last sentence refers to the fact that even if the entire debt were written off, and Greece was debt free, then Greece would immediately go back into debt, and would have to borrow more money.

Those who favor the deal point to privatizations of the seaports and airports as favoring growth in Greece, since they would remove a huge source of fiscal losses, and turn them into profit-making entities that would benefit the entire country and Europe. Reuters

China cracks down on 'peizi' or 'fund-matching' stock market businesses

China's stock market bubble that caused stock prices to rise by a factor of 250% before the bubble began to burst on June 12 is being blamed on "peizi" or "fund-matching" businesses that allow individual citizens to lend money to stock market investors in an unregulated manner. As of June 17, the outstanding margin loans in Chinese stock markets reached 2.26 trillion yuan (US$364 billion), which is equivalent to 4.1% of the total market value.

Ordinary people deposit money into the peizi funds, which do business online. All this money is pooled, and investors can then borrow money from the pool to invest in stocks, using the purchased stocks as collateral. The depositors earn a fixed rate of about 1%-1.2% per month, and the financing firms earn a fee. The rest of the money from increases in the value of the stock shares goes to the investors.

You don't have to be a rocket scientist to see what could go wrong with this. The peizi business are allowing leveraged margin loans of something like ten times the amount of margin that's permitted by regulated brokers. This allows stocks to be traded quickly between investors, bidding up the prices and creating a stock market bubble, which is what happened.

If stock prices start falling, as they have since June 12, then investors who pledged stocks as collateral have to sell the stocks in order to maintain the margin requirements. This creates a vicious cycle, where falling stock prices cause margin calls, margin calls cause stock sales, and stock sales cause falling stock prices. This was the major characteristic of American's 1929 stock market crash, and in fact it's a characteristic of the bursting of most asset bubbles.

The China Securities Regulatory Commission (CSRC) has been promising for months to crack down on peizi companies, and has finally begun to do so in the past week. Three such companies (Miniu98.com, Xunqianwang and Quchaoguwang) shut down their peizi services on Monday because of the CSRC crackdown.

The Shanghai Composite stock market index plunged 30% in the days following June 12, but then recovered almost 10% in the last three trading days (Thursday, Friday, Monday). There is widespread fear in China, sometimes approaching a state of panic, that the index will start to fall rapidly once more. This is a well-founded fear. The stock market bubble has burst but has only partially fallen. When stock market bubbles burst, they never stop collapsing until they overshoot the index value at the time the bubble started to expand, so it's likely that the cumulative fall will be 60-75% before it's over. The Australian and Want China Times (17-Dec-2014) and Want China Times (22-Jun-2015)

(Comments: For reader comments, questions and discussion, see the 14-Jul-15 World View -- China cracks down on 'peizi' or 'fund-matching' stock market businesses thread of the Generational Dynamics forum. Comments may be posted anonymously.) (14-Jul-2015) Permanent Link
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13-Jul-15 World View -- France-Germany split over 3-day ultimatum to Greece leads to flared tempers

China police crack down ahead of another volatile week in stocks

This morning's key headlines from GenerationalDynamics.com

France-Germany split over 3-day ultimatum to Greece leads to flared tempers


(L-R) Greece's PM Alexis Tsipras, European Commission president Jean-Claude Jüncker, France's president François Hollande, Belgium's PM Charles Michel, at Eurogroup in Brussels on Sunday (Reuters)
(L-R) Greece's PM Alexis Tsipras, European Commission president Jean-Claude Jüncker, France's president François Hollande, Belgium's PM Charles Michel, at Eurogroup in Brussels on Sunday (Reuters)

With Greece almost out of cash, Eurogroup members are split into two sharply divided factions, the hardline group led by Germany, and the anti-German group led by France.

Saturday's Eurogroup meeting of eurozone finance ministers ended abruptly late at night after Germany's finance minister Wolfgang Schäuble got into a loud shouting match with Mario Draghi, the head of the European Central Bank (ECB). The nature of the fight was not reported, except that it ended with Schäuble shouting "I'm not stupid!"

However, Greece's credibility is so low, after months of lying and evasion, that even its supporters have to demand some kind of proof that Greece will meet its commitments. Germany is demanding that Greece meet certain conditions by Wednesday, or else the solution will be a "temporary Grexit," meaning that Greece leaves the eurozone for a period of time up to five years. However, France is opposed to any "Grexit" plan.

A political commentator on the BBC said that France and Italy, along with the European Commission, are against the hardline position that the Germans are taking. However (my transcription):

"But the number of people who fall into what you might call the German camp is large and is growing. It includes in particular all of the central and eastern European countries that are in the euro, Finland, the Slovaks, the Slovenes, the Baltic states. The Spanish and the Portuguese have been quite tough on the Greeks. So my guess is that whatever emerges is probably going to be a little bit closer to the German line than to the French line, but I think we're probably NOT going to see this idea of a temporary Grexit, because there are alternatives."

The popularity of France's president François Hollande has been plummeting in the last year. He hopes to improve his approval ratings by taking the anti-German side in the Greece debate, but that's causing political controversy within France itself. According to former president Nicolas Sarkozy: "We need Hollande to get his act together and restore unity with German Chancellor (Angela) Merkel."

There's one thing that seems increasingly clear: That the move two weeks ago by Greece's prime minister Alexis Tsipras to call a referendum has backfired in the sense that it made it much harder to reach an agreement. In particular, Greece's economy has deteriorated significantly in the last two weeks.

The Greek people are very resilient, and they will do well whatever happens. But there's a great deal of sadness internationally over the suffering that will occur in Greece no matter how the next few days unfold,

The European Union leaders summit that had been originally scheduled for Sunday was canceled because of the bitter Eurogroup split. AFP and Reuters and Kathimerini

Eurogroup imposes harsh demands on Greece to remain in eurozone

A document containing the the Eurogroup conditions to keep Greece in the eurozone has been leaked. The demands of Greece are harsh, but there are many sections of the documents that are in square brackets, indicate that the Eurogroup ministers could not agree on that section.

The document requires that the proposals be implemented by passing legislation in Greece's parliament by Wednesday, a feat that Greece's prime minister Alexis Tsipras may not be able to accomplish in a short time frame.

Some of the demands are as follows:

The Eurogroup ministers are referring to these demands, including the three-day ultimatum, as a "trust building exercise."

But the Greek people, already torn between fear and fatalism, are furious at the new demands, calling them Germany's plan to humiliate Greeks and Greece. Many Greeks are pointing out that Germany had half of its debt forgiven after World War II, and one of the countries that forgave Germany's debt was Greece.

The next three days will be very stormy. Kathimerini and AFP and Reuters

China police crack down ahead of another volatile week in stocks

China's regulators took extraordinary measures last week to slow the fall of the plummeting stock market, and apparently succeeded on Thursday and Friday, when stocks rebounded 10%, after falling 30% since June 12.

As of Friday, trading in about 1,400 firms - nearly half of the total traded on the Shanghai and Shenzhen exchanges - was suspended in order to prevent further bloodletting. By Sunday evening, about 260 had announced they would resume trading on Monday, raising fears of a new slide.

Meanwhile, in an effort to pin the blame on someone for the stock market slide, China's Ministry of Public Security has launched a task force to investigate "malicious short-selling." This refers to illegal practices such as spreading rumors to induce panic selling, taking advantage of inside information to dump shares before others, colluding with other institutions in bulk share sell-offs to send down prices, and churning - selling and buying the same shares at affiliated accounts to rig prices. Market manipulators could face up to 10 years in prison and heavy fines.

Beijing police said on Sunday that they had detained a 29-year-old man for spreading rumors that a person had jumped off a highrise in Beijing's Financial Street after incurring heavy losses in the stock market. Police claimed that the picture and video posted online were actually of a man falling off a building in east China's Jiangsu Province, and the cause is still unknown. China News Service and South China Morning Post

(Comments: For reader comments, questions and discussion, see the 13-Jul-15 World View -- France-Germany split over 3-day ultimatum to Greece leads to flared tempers thread of the Generational Dynamics forum. Comments may be posted anonymously.) (13-Jul-2015) Permanent Link
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12-Jul-15 World View -- Pope Francis in Paraguay alludes to 1860s War of the Triple Alliance

Distrust of Greece dominates indecisive Eurogroup meeting on Saturday

This morning's key headlines from GenerationalDynamics.com

Pope Francis in Paraguay alludes to 1860s War of the Triple Alliance


Pope Francis and Paraguay's President Horacio Cartes meet inside the López Presidential Palace, in Asunción, Paraguay on Friday.  The palace was named after president Carlos Antonio López, the father of president Francisco Solano López, who launched the War of the Triple Alliance (AP)
Pope Francis and Paraguay's President Horacio Cartes meet inside the López Presidential Palace, in Asunción, Paraguay on Friday. The palace was named after president Carlos Antonio López, the father of president Francisco Solano López, who launched the War of the Triple Alliance (AP)

Pope Francis met with Paraguay's President Horacio Cartes as part of his Latin American tour in the capital city of Asunción.

During his speech Pope Francis praised the women who rebuilt Paraguay after the War of the Triple Alliance devastated the entire country, killing almost all of the men. According to the Pope:

"On their shoulders, mothers, wives, widows have been able to pull forward their country. God bless the Paraguayan woman."

The War of the Triple Alliance is an interesting war from the point of view of generational theory. The war was launched against the triple alliance of Uruguay, Brazil and Venezuela by Paraguay's president Francisco Solano López, who is considered a hero by some, and an insane dictator by others.

López felt insulted, in common with Uruguay, in September 1864 when Brazil intervened in Uruguay without objection from Argentina.

López turned his hurt feelings into a decision to come to Uruguay's aid militarily, but he vastly overrated Paraguay's potential as a military power. He had expected Uruguay and Argentina to side with him in fighting Paraguay, but they weren't interested, instead signing the Treaty of the Triple Alliance, vowing to destroy López's government.

This was a generational crisis war for Paraguay, but a non-crisis war for the three allies, and all four countries fought the war in typical fashion for their generational eras. The allies would have ended the war quickly with little damage, but López didn't know when to quit. Paraguay's soldiers exhibited suicidal bravery, especially considering that Solano López shot or tortured so many of them for the most trivial offenses. By 1867 Paraguay had lost 60,000 men to casualties, disease, or capture, and another 60,000 soldiers were called to duty. Solano López conscripted slaves, and infantry units formed entirely of children appeared. The war was a complete disaster for López. He apparently went completely insane and suffered hallucinations of a vast conspiracy against him.

Allied troops entered Asunción in January 1869, but Solano López held out in the northern jungles for another fourteen months until he finally died in battle. The year 1870 marked the lowest point in Paraguayan history. Hundreds of thousands of Paraguayans had died. Destitute and practically destroyed, Paraguay had to endure a lengthy occupation by foreign troops and cede large patches of territory to Brazil and Argentina.

As regular readers know, Generational Dynamics predicts that China is preparing to launch a preemptive attack on the United States, and is manufacturing thousands of missiles and submarines with no other purpose than to attack American cities, military bases, and aircraft carriers.

The Chinese are very sure of themselves at this time in history. They believe that the US is weak, and unwilling to fight. They see America's weakness in the South China Sea and in the Mideast, and they conclude that either we won't fight back or that they'll knock us out quickly. Like Francisco Solano López and the 1864 Paraguayans, the Chinese vastly underestimate their enemies and vastly overestimate their own military capabilities.

Yes, they will launch hundreds or thousands of missiles, including many nuclear weapons, but that won't be the end of the war. The Chinese will be wracked by their own internal civil war. They will have Pakistan and the Sunni Arabs as allies, but they'll have India, Iran, Russia, Japan, Vietnam and the Philippines as enemies. China's army has never fought an external war, and they will make many mistakes that the United States will not. It's not possible to predict whether the US will survive, but it's quite possible that a devastated United States will end up winning the war, and China will end up being as destitute and destroyed as Paraguay was in 1870. And it will be what they deserve for launching the war in the first place, just as it was for Paraguay. Telesur TV and Library of Congress Country Study: Paraguay

Distrust of Greece dominates indecisive Eurogroup meeting on Saturday

A meeting on Saturday of the Eurogroup of eurozone finance ministers ended with no agreement on providing any further bailout money to Greece. It's clear that in the last few months there has been a complete loss of goodwill and trust between Greece and the eurozone.

According to Eurogroup chairman and Dutch finance minister Jeroen Dijsselbloem, referring to the proposal submitted by Greece:

"We are still far away. It looks quite complicated. On both content and the more complicated question of trust, even if it's all good on paper the question is whether it will get off the ground and will it happen. So I think we are facing a difficult negotiation. ...

There is still a lot of criticism on the proposal, reform side, fiscal side, and there is of course a major issue of trust. Can the Greek government be trusted to do what they are promising, to actually implement in coming weeks, months and years. I think those are the key issues that will be addressed today."

It's widely believed that whatever reforms Greece agrees to will never be implemented. There are reports that Finland's parliament has already rejected Greece's proposal.

Germany is taking a very hard line, and could make it's proposal by amending it as follows, with agreement from Greece's parliament:

In my personal opinion, these three items, particularly the second one, look more like a pathway to war than to a bailout. Can you imagine the reaction to having a German official order Greece's parliament around?

In the alternative, Germany's finance minister Wolfgang Schäuble has been floating the idea of a five-year eurozone "time out" for Greece, after which it could return to the eurozone.

Greece has requested enough bailout money to last three years. Others are saying that Greece would only get enough money to get through the summer months, and the whole thing would start again. But this would "kick the can down the road," which has been what's happened every time for years. Bloomberg and AFP and Reuters

France and Italy welcome Greece's proposals

Not everybody is against Greece. France and Italy have welcomed the Greek proposals and suggest that they would be acceptable.

France's economy minister Emmanuel Macron and Italy's Prime Minister Matteo Renzi both said that they are reasonably optimistic that an "aid for reforms" deal can be worked out. However, France's finance minister Michel Sapin was cautious on Saturday:

"Confidence has been ruined by every Greek government over many years which have sometimes made promises without making good on them at all. Today we need to have confidence again, to have certainty that decisions which are spoken of are decisions which are actually taken by the Greek government."

The Eurogroup of finance ministers met long into Sunday morning without reaching a conclusion. They'll try again to reach agreement on Sunday afternoon. If they fail, then there will be a summit of European Union leaders who will decide what to do next. Bloomberg and Reuters

(Comments: For reader comments, questions and discussion, see the 12-Jul-15 World View -- Pope Francis in Paraguay alludes to 1860s War of the Triple Alliance thread of the Generational Dynamics forum. Comments may be posted anonymously.) (12-Jul-2015) Permanent Link
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11-Jul-15 World View -- China's stock market looks increasingly like America in 1929

Worldwide concerns are growing about China's stock market crash

This morning's key headlines from GenerationalDynamics.com

Concerns are growing about China's stock market crash


China's small investors hold their heads as their life savings drain away (Corbis)
China's small investors hold their heads as their life savings drain away (Corbis)

The world has been focused this week on the financial crisis in Greece, but the financial crisis in China has the potential to be much more significant for the world. The Greek crisis is arguably just political, but a stock market crash is something that's almost completely out of control of any government.

Chinese officials are breathing a sigh of relief today, because China's stock markets rebounded 10% on Thursday and Friday, after falling 30% since June 12. It's not an exaggeration to say that government officials have been panicking as much as investors have.

Chinese officials have taken desperate measures to stop the stock market crash. They've reduced interest rates, so that it's easier to borrow money to invest in stocks. They've forbidden large investors from selling any stocks for six months. Half the companies on the stock market have suspended trading, for fear that if they're allowed to trade, then their prices will fall. Margin rules have changed in the last couple of days to let people borrow a lot more money, and use it to buy stocks.

So now the Chinese are praying that the market won't start falling again. China's stock market increased by 250% in the year preceding June 12, and was in a huge bubble. So far, the bubble has only partially popped, and bubbles never only pop partially. In fact, what they always do is overshoot their old indexes on the way down (applying the Law of Mean Reversion).

It's been a traumatic month for small investors, two-thirds of whom have not even finished high school. Some are retired, some are migrants. All of them have lost confidence.

As long-time readers know, Generational Dynamics predicts that China is headed for two wars -- an internal civil war, the first major civil war since the Communist revolution, and an external war, leading a world war with the United States, their first world war since World War II. These two wars are not inconsistent with each other, any more than the Communist Revolution and World War II were not inconsistent with each other.

A stock market crash triggering a Chinese economic depression would be enough to trigger an internal rebellion. One way that Chinese officials might try to externalize the internal rebellion would be to attack Japan or Vietnam or India or the United States.

So a major stock market crash in China could have far-reaching effects on the rest of the world. And China does appear to be in the middle of a major stock market crash. Reuters and Guardian (London)

China's stock market looks increasingly like America in 1929

China's stock market looks more and more like America's in the 1920s, leading up the crash in 1929, according to Andy Xie, former Morgan Stanley Chief Asia-Pacific Economist, and former World Bank Economist, when he was interviewed on Bloomberg TV.

According to Xie, the current stock market rebound might last for a while, but then it could fall again sharply, so that it goes down "in waves."

Xie compares what's happening in China today to "pump and dump schemes" of the 1920s. The perpetrators would buy shares of a stock at a low price, and then pump up the price of the stock by means of a media hype campaign of some type, encouraging people to buy the stock. The perpetrators would then dump their stock shares at the high price, which would collapse the price for the people who had fallen for the hype campaign. Pump and dump schemes were made illegal after the 1929 crash, but they're still practiced regularly on CNBC today.

According to Xie, China's stock market bubble was backed almost exclusively in this way, with no real economic fundamentals in play (my transcription):

"In the 1920s the US market was manipulated by all these pump and dump guys, before the government started to regulate the market. And they organized trusts to pump certain stocks.

In China it's become ubiquitous. The extent is far greater that what had happened in the United States in the 1920s.

It's been going on for 20 years. More and more people keep joining the dark side, and the people are losing money quicker -- every cycle you lose money quicker than the previous one.

So this time around, people with the real cash, didn't really join in. You see [in the media] all the pictures of the people going in there. These are really like a lot of young people, who just got their first job, not much money, and so that's why this market has been so dependent on margin loans. ... Even at the top of the market, only about 20% of the market capitalization are liquid shares.

So this market has not been pumped by real money. It's been pumped up by the loans. And the loans are borrowed by those guys who have been pumping. So at the end of the day, they look around, all they see are people are like them. So what are you gonna do? You keep doing that, and you borrow more, and hope one day the real money will come in."

According to Xie, the real market crash is not in stocks, but in the real estate market, which is 30-40 times as large as the stock market.

"The property market really burst a couple of years ago, but it's been covered up by the financial system -- not foreclosing on developers who go into default.

The stock market ride has raised the hope of these developers that they could somehow get money from the stock market.

So everything would be fine. But the stock market is small compared to the property market. China's debt is like 200 trillion renminbi. The stock market at the peak was 6 trillion. So the big game is not the stock market. The stock market offers the hope that if it keeps going up, then it will bail out everybody. ...

It's fair to say that most developers are technically bankrupt. ... Even when you look at Shanghai and Beijing, where markets are supposed to be very good - that's what people really think - but the sales are down 70-80%.

The property market has been the driving force in [the economy].

Electricity production is flat. ... You look at the consumption of whatever commodity - it's down. China's imports are down at a double digit rate, and exports are flat. You look at freight traffic - real freight traffic is down. It's difficult to see what's going on.

What the stock market did was to raise hope. Something was going up. And if it kept going up, eventually it would pull everything up.

That hope was dashed a few days ago."

Investopedia

(Comments: For reader comments, questions and discussion, see the 11-Jul-15 World View -- China's stock market looks increasingly like America in 1929 thread of the Generational Dynamics forum. Comments may be posted anonymously.) (11-Jul-2015) Permanent Link
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10-Jul-15 World View -- Both Greece and European leaders seem poised to compromise

UK advises all Britons to leave Tunisia

This morning's key headlines from GenerationalDynamics.com

Both Greece and European leaders seem poised to compromise


Does Wolfgang Schäuble's broad grin mean that he's ready to compromise? (Kathimerini)
Does Wolfgang Schäuble's broad grin mean that he's ready to compromise? (Kathimerini)

It's not certain yet, but the Game of Chicken that Greece and the Europeans have been playing with each may finally be coming to an end, with both sides screeching to a halt before the collision.

Greek officials, led by prime minister Alexis Tsipras, submitted written reform proposals just minutes before the midnight (22:00 GMT) Thursday deadline demanded by the European leaders.

The proposals include tax increases on shipping companies, increases in VAT taxes, some privatizations, phasing out solidarity grant for pensioners by 2019, and defense spending cuts. The proposals are thought to contain around 12 billion euros worth of reform measures.

The package that Tsipras rejected before calling last week's referendum, which is also the package that the referendum vote rejected, called for a smaller amount, 8 billion euros, of reform measures.

However, Tsipras isn't being as generous as might first appear, and he is definitely not capitulating. As part of his proposal package, he's seeking 53.5 billion euros in a new bailout package, and a restructuring of Greece's large debt burden. The restructuring would involve stretching out the payment timeline for decades, meaning that the current repayment amounts will be smaller.

The proposal will be reviewed over the weekend first by the Eurogroup of finance ministers, and then by an EU summit on Sunday. If it's not considered adequate, it will be rejected.

Even if the EU summit accepts it, it's still not a done deal. The package has to be approved by Greece's parliament, and by several European parliaments.

It had previously been thought that Tsipras would never win approval for any such package because the communists and far left segments of his own Syriza party would block it. However, Tsipras is now allying with opposition parties, and he evidently has enough votes to get it passed.

As for the European parliaments, including Germany's Bundestag, a lot will depend on what German Chancellor Angela Merkel and Germany's Finance Minister Wolfgang Schäuble. If they support the package, then it's thought that the parliaments will fall in line.

Merkel has said in the past that the "red line" for her was that there can be no "haircut," meaning that no portion of Greece's debt can be entirely forgiven. That problem is evaded in Tsipras's proposal by keeping the nominal debt the same, but stretching out the payments so far that the debt, in actuality, will almost certainly never be repaid.

So it's believed that if Merkel and Tsipras can both personally endorse this proposal, then the national parliaments will fall in line.

You may recall, Dear Reader, that I said a couple of times in the past that my personal prediction (not a Generational Dynamics prediction) was that, one way or another, Greece would remain the in the eurozone. That prediction was really just based on a personal feeling. Since that time, I've been thinking about why I had that feeling.

I've been following news stories closely and writing about them for years, and one thing that's characterized the last 10-15 years, as opposed to the years following WW II, is that almost no one wants to make a hard decision, because they don't want to bear the responsibility of possible failure.

In this case, Tsipras and Merkel are being forced to choose. Neither of them wants to go down in history as the person responsible for the breakup of the euro currency union. Neither does anyone else. From that, the conclusion must be that, one way or another, Greece will remain in the eurozone.

Meanwhile, there'll a lot of hard bargaining over the weekend, and it's still possible that the negotiations will collapse. Kathimerini and BBC and Kathimerini

UK advises all Britons to leave Tunisia

It looks like the terrorists have won, at least in Tunisia.

Just four days after Tunisia declared a 'state of war,' following a terror attack in Sousse on June 26, and an attack on the Bardo Museum in Tunis on March 18, Britain is advising all of its citizens to leave Tunisia because "a further terrorist attack is highly likely."

According to the statement by the UK Foreign Office:

"Since the attack in Sousse, we have been working closely with the Tunisian authorities to investigate the attack and the wider threat from terrorist groups in Tunisia. Although we have had good co-operation from the Tunisian government, including putting in place additional security measures, the intelligence and threat picture has developed considerably, reinforcing our view that a further terrorist attack is highly likely. On balance, we do not believe the mitigation measures in place provide adequate protection for British tourists in Tunisia at the present time and we have therefore changed our travel advice accordingly."

According to Tunisia's Tourism Ministry, travel and tourism was 15% of Tunisia's GDP in 2014. 473,000 jobs are supported by travel and tourism, 13.8% of total employment. It's believed that the objective of the terrorist attacks was to cripple Tunisia's tourist industry, and the terrorists appear to have met their objective, at least for the time being. UK Foreign Office and BBC

(Comments: For reader comments, questions and discussion, see the 10-Jul-15 World View -- Both Greece and European leaders seem poised to compromise thread of the Generational Dynamics forum. Comments may be posted anonymously.) (10-Jul-2015) Permanent Link
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9-Jul-15 World View -- Greece's Alexis Tsipras compares himself to the tragic Antigone

Tunisia to build a wall and a moat along the border with Libya

This morning's key headlines from GenerationalDynamics.com

Greece's Alexis Tsipras compares himself to the tragic Antigone


Antigone - oil painting by Trung Cao
Antigone - oil painting by Trung Cao

According to reports, many officials in Brussels are worried that Greece's prime minister Alexis Tsipras is "sleepwalking to disaster."

A speech that Tsipras gave to the European Parliament in Strasbourg on Wednesday has raised those concerns. Tsipras said:

"We want an agreement that will bring a final end to the crisis and show there is light at the end of the tunnel. The money that was given to Greece [went to the Greek and European banks and] never went to the people. ...

In ‘Antigone,’ Sophocles taught us that there are times when justice for men is above the laws of men. This is such a moment."

It's really weird that Tsipras is referencing the tragic Antigone character. Antigone was famously the daughter of the incestuous relationship between Oedipus and his mother, Jocasta. Antigone's situation does resemble Tsipras's in some ways, but the story does not end well. This is from the Cliff Notes summary of Antigone:

"As the heroine of Antigone, Oedipus' daughter grapples with Fate on her own, not just as a child or a dutiful daughter. Her decisiveness and courage appear in stark contrast to Ismene's passive timidity, and, in this tragedy at least, overshadow even her brother Polynices' bold attempt to take Thebes. In championing the laws of the gods above the laws of the state, Antigone occupies the ultimate high moral ground, but she is not impervious to doubt. Just before she is led off to her death, Antigone mourns the life she is leaving by her own choice and even seems to regret her decision. The moment passes, however, and may represent simply a small proof of human weakness that makes Antigone's strength all the more dramatic."

So what should we make of Tsipras's reference to Antigone? She championed the laws of the gods above the laws of the state, and occupied the high moral ground, which I'm sure Tsipras feels is true of himself as well. But at the end:

"Antigone has hanged herself and Haemon, in desperate agony, kills himself as well. On hearing the news of her son's death, Eurydice, the queen, also kills herself, cursing Creon. Alone, in despair, Creon accepts responsibility for all the tragedy and prays for a quick death. The play ends with a somber warning from the chorus that pride will be punished by the blows of fate."

Is that where Tsipras sees himself and Greece going? Kathimerini and Cliff Notes and Trung Cao

Furious European MEPs plan for humanitarian aid for Greece

Greece's prime minister Alexis Tsipras received applause from the left-wing members of the parliament, and boos from the right-wing members. However, it's clear even those members of the European parliament (MEPs) who would like to help Greece are exasperated by his behavior, and this was reflected in some of their responses.

The liberal Jean-Claude Jüncker, the president of the European commission, was deeply offended by Tsipras's campaign rhetoric last week, and was extremely angry at Wednesday's meeting:

"I'm strongly rejecting all these accusations which were thrown to the public during the campaign that we are not respecting the dignity of the Greek people, that we are terrorists. I don't like this word. Who are they, and who do they think I am?

European Council President Donald Tusk spoke calmly, but firmly:

Until today I have avoided talking about deadlines. But tonight I have to say it loud and clear: that the final deadline ends this week."

Guy Verhofstadt, former prime minister of Belgium, and now leader of the Alliance of Liberals And Democrats for Europe (ALDE) in the European Parliament was shouting as he spoke:

"Greek political class didn't do enough themselves in the case of Greece. That is the problem today.

And I'm angry I have to tell you, I'm angry, because you are talking about reforms [[waving his hands for emphasis]] and WE NEVER SEE concrete proposals of reforms."

At this point, Tsipras has almost no credibility left, even with this supporters, because he's repeatedly lied.

He has now been told that he must have specific written proposals submitted by midnight Thursday, to give European Union leaders time to review them. There will be a meeting of EU (EU, not eurozone) leaders on Sunday to decide whether to approve the plan. The mood seems to be that nothing short of a major capitulation by Tsipras will be accepted.

If not, then all economic aid to Greece will end. Since this will mean the collapse of Greece's banks, the EU on Sunday will discuss humanitarian aid to Greece -- emergency handouts of food, water and other essential supplies -- something normally reserved for war zones and third world countries. AP and Business Insider

Tunisia to build a wall and a moat along the border with Libya

Last weekend, Tunisia's President Beji Caid Essebsi said the country was in a 'state of war' against terrorists, and imposed a 30-day state of emergency, after the terror attack that struck Sousse, Tunisia, on June 26. A terrorist with a Kalashnikov assault rifle strolled through the hotel grounds, opening fire at the pool and beach, reloading his weapon several times and tossing an explosive. He killed 37 people.

The investigation has revealed that the terrorist had been trained in Libya, and so Essebsi announced on Wednesday on state TV that the Tunisian army will build a 160 kilometer-long wall along the length of the country's border with Libya, with a moat next to it. The prime minister indicated that the wall would be made of sand and would be finished by the end of the year. He said security cameras and surveillance posts would be placed at regular intervals.

My personal belief is that a determined terrorist will find a way around a wall and a moat, but the government of Tunisia is desperate, and willing to try almost anything.

Tunisia would join Kenya which is planning a wall along its porous border with Somalia, following frequent infiltration by Somali militant group Al-Shabaab, which has carried out deadly attacks that has harmed the tourism-dependent economy.

Walls and fences are becoming very fashionable these days. As we reported last month, Hungary is setting aside $23.5 million to build a temporary security fence along Hungary's entire border with Serbia. The fence will be 4 meters high and 175 km long. VOA and Mail and Guardian Africa

(Comments: For reader comments, questions and discussion, see the 9-Jul-15 World View -- Greece's Alexis Tsipras compares himself to the tragic Antigone thread of the Generational Dynamics forum. Comments may be posted anonymously.) (9-Jul-2015) Permanent Link
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8-Jul-15 World View -- China halts trading on 1,000 companies as stock bloodbath continues

Report on Obama's plans for the Mideast strategy into total fantasy

This morning's key headlines from GenerationalDynamics.com

Greece's Tsipras shows up at Brussels empty-handed


Euclid Tsakalotos (R) exposes his personal notes to cameras, where they can be photographed and examined (AP)
Euclid Tsakalotos (R) exposes his personal notes to cameras, where they can be photographed and examined (AP)

Everyone is getting sick of this story, but it's so awful and so horrible every day that it's impossible to take your eyes off of it.

Tuesday's news is that Greece's prime minister Alexis Tsipras was to come to a meeting of eurozone leaders in Brussels with new proposals, but showed up empty-handed. Last week, during his referendum political campaign, he referred to eurozone leaders as "terrorists," and now he continues to be as offensive and contemptuous as possible to the people that he wants to provide his government with many billions of dollars.

Exasperated eurozone leaders gave Tsipras until Thursday to provide a written plan, and scheduled a full summit of all 28 European Union nations for Sunday.

According to France's president François Hollande: "It's not just the problem of Greece - it's the future of the European Union" that is at stake.

Thursday and Sunday are supposed to be the final, final deadlines, but we've heard that before, haven't we? BBC

Greece's finance minister tells himself not to gloat

An amusing sideshow to Tuesday's meeting in Brussels is related to the arrival of Greece's new finance minister Euclid Tsakalotos at the meeting. He held his papers with his personal notes on top, where they could be photographed and examined.

Tsakalotos is being especially mocked because of the notes reads "No triumphalism." This is being interpreted to mean that Tsakalotos wants to keep himself from openly gloating over the size of his government's referendum victory on Sunday. Perhaps he's unaware that his country staring into the abyss. Guardian (London)

Report on Obama's plans for the Mideast strategy into total fantasy

As I've said in the past, I didn't care much about President Obama's ridiculous promises during the 2008 campaign, such as saying that with his election the earth would heal and the tides would recede. I assumed he'd become more serious after the election. But then, after the election, I heard him say similar stuff, like his promise that the world would be a different place on January 21, the day after he took office. My reaction was that if Obama believed something so delusional, then we would be in a great deal of trouble. Now, six years later, Obama has had one foreign policy disaster after another, after evidently having no clue what's going on in the world, and now it's widely believed that he's so desperate to have a foreign policy achievement that he'll concede anything to Iran to get a nuclear agreement.

But now an article in Tuesday's WSJ describes Obama's Middle East strategy for the next 18 month, and it's so out of touch with reality that it's clear that he's learned absolutely nothing in six years.

According to the article, he's seen an Iran deal as a kind of "gateway" to bring about massive changes in the Mideast:

"The White House is crafting a Middle East strategy for the remaining 18 months of President Barack Obama’s term that would more forcefully address conflicts in Iraq, Yemen and Syria amid tensions over the conclusion of talks with Iran. ...

[S]enior administration officials said the president is intent on cleaning up leftover messes in the region before leaving office in 2017, including relations with key allies that have been strained by the Iran talks."

How is anyone supposed to react to this? This is completely delusional. As I've been writing since May 2003 in "Mideast Roadmap - Will it bring peace?", no peace plan can work because Generational Dynamics predicts that Arabs and Jews would be refighting the 1948 war that followed the partitioning of Palestine and the creation of the state of Israel. Since that times there have been four wars among various combinations of Israel, Hezbollah, and the Palestinians. And in recent years, there's been the war in and disintegration of Libya, the war in and disintegration of Yemen, and the rise of the Islamic State (IS or ISIS or ISIL or Daesh) in both Syria and Iraq, threatening neighboring states.

The idea that Obama wants to "[clean] up leftover messes in the region" in the next two years is utter fantasy, but it's exactly the kind of thing that Obama believes.

According to the article:

"White House officials see the conclusion of Iran talks as a gateway for Mr. Obama to press for a political resolution in Syria that would facilitate the exit of President Bashar al-Assad, a close Iranian ally.

“It’s something I’d expect to see more pickup on as the Iran talks conclude,” a senior administration official said. “There’s a growing sense that momentum has turned against Assad and that is feeding a belief that there could be more opening on the political track.”

The conclusion of talks would thrust the U.S. into unfamiliar territory in a volatile region where years of diplomacy with Tehran has left relations with America’s allies, including Israel and Saudi Arabia, deeply strained.

Those alliances could be further frayed if the U.S. takes steps toward a broader rapprochement with Iran, and U.S. officials face a significant task in smoothing regional strains."

Obama is a Generation-Xer who, like many Generation-Xers, believes that he's the smartest person in the room, no matter who else is in the room. He's particularly contemptuous of Boomers and older people in general. This includes the Saudi Arabia's new King Salman bin Abdulaziz al Saud who has been so often offended by Obama, that he snubbed Obama by not attending a Gulf Cooperation Council (GCC) meeting hosted by Obama. Salman and other Gulf leaders are in their 70s, and consider Obama to be a kid who has no clue what's going on in the Mideast. ( "15-May-15 World View -- Obama repudiates the Carter doctrine at bizarre GCC meeting")

So as Obama goes about "cleaning up the mess" in the Mideast, you can be certain that he's only going to insult and offend Salman and the others even more.

And the Iran nuclear deal is extremely alarming to the Saudis and other Arabs, because Iran is a mortal enemy. Obama's oratorical skills will be worthless to change that.

As for convincing Iran to help bring about the exit of Syria's president Bashar al-Assad, it's far more likely that the opposite will happen. The lifting of sanctions on Iran will increase Iran's income by tens or even billions of dollars, and much of that money will be redirected to Bashar al-Assad, as well as to the terrorist group Hezbollah.

Finally, the article says:

"In Yemen, where Saudi Arabia is fighting Iran-backed Houthi militants, White House officials are also considering ways to work with Tehran toward a diplomatic resolution. Iranian leaders view the conflict in Yemen as a low-cost opportunity to challenge Saudi Arabia, but less critical to Tehran’s future, one senior administration official said."

Once again, this is sheer delusion. Even without support from Iran, the Houthis will continue to fight the pro-Saudi Sunnis in Yemen, as well as the militias that form Al-Qaeda in the Arabian Peninsula (AQAP), which is headquartered in Yemen.

Some people may say that, as the saying goes, it's better to see the world as it should be, rather than as it is. History provides no support for this view, and Generational Dynamics says that it can only lead to disaster. WSJ and CNN and Politico

China halts trading on 1,000 companies as stock bloodbath continues


Chart comparing Shanghai Composite Index today to DJIA in 1929 (USA Today)
Chart comparing Shanghai Composite Index today to DJIA in 1929 (USA Today)

As we've been reporting, China appears to be in a state of panic over the 30% loss in stock share value since June 12, and analysts are comparing it to America's 1929 crash. Last week, China announced a 'Market Stabilization Fund' that was similar to an 'Organized Support' support fund that America announced just before the 1929 crash.

China's stock markets fell only slightly on Tuesday, and did not continue the kind of huge plunge that we've seen. However, there's a good reason for that, and it's not because investors are suddenly confident about Chinese stocks.

About 1,000 Chinese mainland-listed companies, or over a third of firms on the Shanghai and Shenzhen stock exchanges, suspended trading on Tuesday precipitated mainly by the continuous drop in share prices. So when the Shanghai Composite Index lost only 1.29% on Tuesday, it was because the prices of stocks for 1,000 companies were frozen, and owners of these shares were stuck with them, unable to sell them.

Many of the remaining companies were those able to benefit from the 'Market Stabilization Fund', where fund managers and brokers are investing $19 billion of their own money in stocks, in order to push up prices.

According to analysts, no reason was given for suspending trading on the losing stocks, but analysts say that "they wanted to sit out the market turbulence" that caused the decline. If they believe that, then they're in for a long wait.

Halting trading on stocks is extremely dangerous because it exacerbates the pressures that caused the losses in the first place, meaning that the fall will be far more precipitous when trading begins again. If trading remains halted for more than a few days, then a secondary market will be created, where investors trade the losing stocks outside the stock market, and that can cause additional harm.

As of this writing on Tuesday evening ET, Wednesday morning in China, the Shanghai Stock Exchange opened 4-7% down. Since trading is still halted on over 1,300 stocks, it appears that the desperate policies to halt the bloodbath have failed. China News Service and Breitbart and USA Today

(Comments: For reader comments, questions and discussion, see the 8-Jul-15 World View -- China halts trading on 1,000 companies as stock bloodbath continues thread of the Generational Dynamics forum. Comments may be posted anonymously.) (8-Jul-2015) Permanent Link
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7-Jul-15 World View -- Surge in Boko Haram attacks raises questions about new president of Nigeria

Greece's crisis deepens as German position hardens

This morning's key headlines from GenerationalDynamics.com

Greece's crisis deepens as German position hardens


Pro-Tsipras Greeks celebrate referendum win (Getty)
Pro-Tsipras Greeks celebrate referendum win (Getty)

Greece's prime minister Alexis Tsipras made several promises to the Greek people to secure their "NO" vote on the referendum. He promised that the eurozone leaders would immediately come to him with a new, more favorable proposal, and that the new deal would be signed within two days. He promised that the European Central Bank (ECB) would keep Greece's banks open with plenty of liquidity, and that the banks would re-open the day after the referendum. And he promised that the Greek people would keep their dignity.

Now the Greek people face the harsh light of reality. Even if everyone agreed to a new deal, it would take weeks to implement, because the German parliament would have to approve it. But Tsipras can't make any concessions after his overwhelming referendum victory, and the Germans, the Dutch and Finns are opposed to making any concessions at all. The ECB on Monday rejected any further liquidity infusions into Greek banks, and they'll have to remain closed for at least a few more days, and possibly many days. The 60 euro per day cap on ATM withdrawals will probably have to be reduced further, possibly to 10-20 euros per day.

Compounding the problem is that Greece is a different country than it was two weeks ago, a much poorer country. A country's economy is like a huge engine that can take weeks or months to come up to speed. Greece's economy has been almost completely shut down, so even if Tsipras's fantasy of a quick deal came true, it would still take months for Greece's economy to fully recover.

The eurozone leaders are meeting in Brussels on Tuesday, and Tsipras is supposed to make some proposals.

There's a great deal of irony about this. Tsipras made some commitments to the Eurogroup when he took power in January, and promised within a couple of weeks to submit proposals for meeting those commitments. He stalled and stalled, and never made those proposals.

Now he's back where he was -- he has to make proposals to the Eurogroup to meet his commitments. The referendum gained nothing, but it further impoverished the Greeks.

According to reports, he will "propose a deal based on the most recent set of proposals published by the European Commission." Well, he could have proposed that deal two weeks ago, and Greece will be a lot better off today.

If there is no deal, then the country will run out of money within a few days. At that point, the government will have to issue IOUs in lieu of salary and pension payments. These IOUs will serve as a "parallel currency" that can be used until the country returns to stability and can return to the euro. Kathimerini and BBC and CNBC and Kathimerini

Surge in Boko Haram attacks raises questions about new president of Nigeria

Like national leaders in other countries, Nigeria's new President Muhammadu Buhari made promises during his campaign that he is now finding himself unable to fulfill. During the campaign, his billboards read, "We will defeat Boko Haram."

But in a surge in violence, Boko Haram in the last week slaughtered more than 145 people in villages in the northeast, and bombed churches and mosques across Nigeria's north.

Buhari promised to crush Boko Haram, and he made some initial gains, with the Nigerian army recapturing most of the territories from the militants this year. But the recent attacks show that Nigeria is nowhere near defeating the jihadists. According to one Nigerian analyst:

"Most Nigerians expected something drastic, something dramatic, something concrete on the ground. They did not expect this spate of bombings across the country. They feel that OK, by now, Boko Haram should truly be a thing of the past. They do not seem to be impressed by the handling of the situation so far."

However a Buhari spokesman says that the president is working on a plan. Leadership News (Nigeria) and VOA and The Hindu (India)

(Comments: For reader comments, questions and discussion, see the 7-Jul-15 World View -- Surge in Boko Haram attacks raises questions about new president of Nigeria thread of the Generational Dynamics forum. Comments may be posted anonymously.) (7-Jul-2015) Permanent Link
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6-Jul-15 World View -- China announces 'Market Stabilization Fund' to stem stock market panic

Europe enters a dangerous period after Greece's Tsipras wins overwhelming victory

This morning's key headlines from GenerationalDynamics.com

Europe enters a dangerous period after Greece's Tsipras wins overwhelming victory


German Finance Minister Wolfgang Schäuble has suggested Greece could leave the Eurozone 'temporarily'
German Finance Minister Wolfgang Schäuble has suggested Greece could leave the Eurozone 'temporarily'

Greece's far left prime minister Alexis Tsipras won an overwhelming referendum victory on Sunday, with 61% of the voters favoring his position. No one knows what this means, except that it represents a major political victory for Tsipras, and a major humiliation for Merkel and the Eurogroup.

Tsipras's Syriza party won the victory in a campaign where he called the Germans "terrorists," and where promised that his victory would make the Eurogroup of eurozone finance ministers bend to his will and immediately give him a new bailout deal. He also promised that the banks would open on Tuesday.

The relations between Tsipras and other European leaders is now vitriolic, and it will be necessary for German Chancellor Angela Merkel and the others to swallow hard to force themselves not to shut out Tsipras completely. On the other hand, it may be politically impossible for Tsipras to compromise, after the overwhelming referendum victory. At the very least, the communists in his own governing coalition will not tolerate compromise.

Jeroen Dijsselbloem, head of the Eurogroup, said: "I take note of the outcome of the Greek referendum. This result is very regrettable for the future of Greece."

Germany's Economy Minister Sigmar Gabriel said:

"With the rejection of the rules of the euro zone ... negotiations about a program worth billions are barely conceivable. ...

Tsipras and his government are leading the Greek people on a path of bitter abandonment and hopelessness. ... [Tsipras has] torn down the last bridges on which Greece and Europe could have moved towards a compromise."

Germany's Finance Minister Wolfgang Schäuble said:

"Greece is a member of the eurozone. There's no doubt about that.

Whether with the euro or temporarily without it: only the Greeks can answer this question. And it is clear that we will not leave the people in the lurch."

As this suggests, EU leaders have drawn up emergency plans in cases Greece becomes insolvent, and the country is forced to leave the euro currency.

One part of this would be "humanitarian assistance," to help the Greek people survive.

The most important part of this would be a parallel currency, such as government IOUs. Unlike the euro, a parallel currency could be depreciated by Greece. According to Dr Jörg Krämer, Chief Economist at Commerzbank:

"If the Greek state were to become insolvent, it could pay its employees, pensioners and suppliers by means of promissory notes (IOUs) --- as the US state of California did in 2009. Banks would credit the recipients of these promissory notes with the equivalent value on separate accounts.

This parallel currency would allow the Greeks to pay their taxes. Moreover, the value of this parallel currency would depreciate significantly versus the euro, which would improve the price competiveness of goods produced in Greece.

A parallel currency would be legally possible if the Greek state avoided giving it the status of legal tender, prohibited by Article 128 of the Treaty on the Functioning of the European Union. But even without this status, a parallel currency could circulate if the state offered the possibility of using it to pay taxes."

Once the currency had become stable, Greece could return to the euro.

As I've said several times in the past, my expectation is that, one way or another, Greece is going to remain in the euro currency. But whether Greece stays in the euro or not, it's only going to be after multiple crises. Daily Mail and FxStreet and Reuters

China takes emergency measures to stem stock market panic

China appears to be in or close to a state of panic over the accelerating collapse of the stock market bubble since June 12, resulting in a 30% fall in the Shanghai Composite Index.

The "market stabilization fund" is tiny compared to the more than $3 trillion worth of market capitalization that the Chinese markets have lost in the past two weeks. Reuters and Business Times (Singapore) and Reuters

China's 'Market Stabilization Fund' mimics America's 'Organized Support' in 1929

A close reading of the classic book "The Great Crash - 1929" by John Kenneth Galbraith reveals that China is following the same path as America's 1929 panic.

During the year prior to June 12, China's stock market shares increased by 250%. Here's what happened in 1928, according to Galbraith:

"Brokers' loans reached four billion on the first of June 1928, five billion on the first of November, and by the end of the year they were well along to six billion. Never had there been anything like it before. ... People were swarming to buy stocks on margin -- in other words, to have the increase in price without the costs of ownership. This cost was being assumed, in the first instance, by the New York banks, but they, in turn, were rapidly becoming the agents for lenders the country over the and even the world around. ...

Never had there been a better time to get rich, and people knew it. 1928, indeed, was the last year in which Americans were buoyant, uninhibited, and utterly happy. It wasn't that 1928 was too good to last; it was only that it didn't last. ... As Walter Begehot once observed: 'all people are most credulous when they are most happy.'"

As in recent months in China, people were getting worried about a bubble and a recession by mid-1929, but everyone was optimistic:

"The official optimists were many and articulate. Thus in June, Bernard Baruch told Bruce Barton, in a famous interview published in The American Magazine [[June 1929]] that "the economic condition of the world seems on the verge of a great forward movement." He pointed out that no bears had houses on Fifth Avenue. Numerous college professors also exuded scientific confidence. In light of later developments, the record of the Ivy League was especially unfortunate. In a statement which achieved minor notoriety, Lawrence of Princeton said that "the consensus of Judgment of the millions whose valuations function on that admirable market, the Stock Exchange, is that stocks are not at present over-valued." He added: "Where is that group of men with the all-embracing wisdom which will entitle them to veto the judgment of this intelligent multitude?" [[WSJ, mid-1929]]

That autumn [1929] Professor Irving Fisher of Yale made his immortal estimate: 'Stock prices have reached what looks like a permanently high plateau.' [Fisher added: 'I expect to see the stock market a good deal higher than it is today within a few months']"

Until September or October of 1929, the decline in economic activity was very modest. But on Friday, October 18, the market fell 2.5%, and on Sunday, the NY Times headline read, "Stocks driven down as wave of selling engulfs the market."

That was the day of the announcement of "organized support" or, as the Chinese are calling it, a "market stabilization fund." According to Galbraith:

"Never was there a phrase with more magic than “organized support.” Almost immediately it was on every tongue and in every news story about the market. Organized support meant that powerful people would organize to keep prices of stocks at a reasonable level.

Opinions differed as to who would organize this support. Some had in mind the big operators like Cutten, Durant and Raskob. They, of all people, couldn’t afford a collapse. Some thought of the bankers — Charles Mitchell had acted once before, and certainly if things got bad, he would act again. Some had in mind the investment trusts.

They held huge portfolios of common stocks, and obviously they could not afford to have them become cheap. Also, they had cash. So if stocks did become cheap, the investment trusts would be in the market picking up bargains. This would mean that the bargains wouldn’t last. With so many people wanting to avoid a further fall, a further fall would clearly be avoided."

So that brings us to where China is today. Four days following the announcement of "organized support," the market began a full-scale panic.

So officials in China are going to be very nervously watching the market in the days to come, following the creation of the "market stabilization fund."

In lavish ceremony, the new King of Tonga is crowned -- by an Australian

The newly minted 56-year-old King Tupou VI of Tonga, Polynesia's only constitutional monarchy, was crowned on Saturday in a lavish ceremony costing $1.9 million. Tens of thousands of Tongans were in the streets chanting, "Long live his majesty, long live the queen."

What I found interesting about this story is that the crown was placed on his head by an Australian, not by a Tongan. By tradition, Tongans are forbidden to touch the head of the king. So a retired Methodist minister D'Arcy Wood, of Gisborne, Victoria, in Australia, placed the crown on his head.

News stories don't indicate whether or not Queen Nanasipau'u is allowed to touch her husband's head. Beyond that, I guess they're going to have to import a barber from Australia as well, whenever the King needs a haircut. Sydney Morning Herald

(Comments: For reader comments, questions and discussion, see the 6-Jul-15 World View -- China announces 'Market Stabilization Fund' to stem stock market panic thread of the Generational Dynamics forum. Comments may be posted anonymously.) (6-Jul-2015) Permanent Link
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5-Jul-15 World View -- Greece's referendum revives memories of a bloody civil war

Tunisia declares a 'state of war' as Mideast meltdown continues

This morning's key headlines from GenerationalDynamics.com

Greeks are deeply divided over Sunday's referendum


Greeks in Athens wait in line to use the ATM (Kathimerini)
Greeks in Athens wait in line to use the ATM (Kathimerini)

Greeks are deeply divided as they prepare to vote on Sunday on the referendum nominally whether to agree to the lenders' austerity plan in return for a new infusion of bailout cash.

News reports indicate that Alexis Tsipras's government has taken over all communications channels, plastering "OXI" (NO) posters all over Athens, and broadcasting Tsipras's speeches constantly. The polls indicate that Greeks are split, 44% for each side, with about 12% undecided. However, some analysts have pointed out that there's so much pressure to vote NO that people may be afraid to say YES to a pollster, which might suggest that many of the undecided voters will actually vote YES in the polling booth. This in fact happened in the case of case of the UK's May poll on Scotland's independence, where polls completely failed to predict the overwhelming vote to reject independence. ( "9-May-15 World View -- Britain's surprise election and Chaos Theory")

Some Greeks are using Bitcoins to circumvent the capital controls that have been imposed this week. BTCGreece is the only Greece-based Bitcoin exchange, and thousands of people have been depositing their euros. Then can then transfer the money out of Greece as Bitcoins, which is otherwise illegal.

Thousands of people will be unable to vote because they can't afford to travel to their home regions, usually where they were born. According to one woman who works in the tourism industry and would have to travel 220 miles from Athens to vote:

I don’t want to spend the money and I don’t want to vote. To travel all that way and to spend the money, for what? It’s not going to change anything. There is no good option for Greece."

Indeed, things may get worse very quickly after the referendum. The chairman of the National Bank of Greece, Louka Katseli, said that Greece's banks will completely run out of money on Monday evening. "Liquidity is adequate through the end of the bank holiday," according to Katseli. After that, it will depend on whether the European Central Bank (ECB) will extend more emergency liquidity assistance (ELA), and that may depend on the result of the referendum vote.

Exit polls should start coming out until 7 pm in Athens, or 1 pm ET on Sunday. Final results will probably be available on Monday. Kathimerini and Reuters and Bloomberg

Greece's referendum revives memories of a bloody civil war

Sunday's referendum is stirring several historical memories. The country hasn’t held a referendum since 1974, when 69 percent voted against the return of the former king after the fall of a military dictatorship.

However, for many older Greeks, the strongest memory is of Greece's bloody civil war following the expulsion of the Nazis after World War II. Al-Jazeera's Athens correspondent John Psaropoulos told how the referendum is stirring memories of the civil for his mother (my transcription):

"I came home very late the other night, and had a conversation with my mother, who remembers the civil war, 1946-49, fought in this country between the resistance to German occupation which had been predominately communist, and then after the departure of the German occupation, attempted to seize power by force.

And I said to her what do you think of the NO vote, which would strengthen the ruling left wing Syriza government. She says, I don't know, I greatly fear another civil war. I remember they did terrible things last time around.

She remembers when her local police station was besieged by the communist forces. The young policemen inside were convinced that if they walked out and surrendered the property, their lives would be spared.

Instead, they were taken to a mountain top which is just to my left here on the outskirts of Athens, and their throats were cut using cans -- food cans -- opened tins.

This is the sort of brutality that Greece remembers from the civil war. It's been a taboo subject for many decades, because it split families apart, it split the entire country.

This is the first time that the left wing has been in power, and that was the last time it made a serious bid for power. So people have been connecting the divisive events of 1946-49 with the present. It's not that Syriza now threatens to take up arms against half the nation, but people are wondering whether people who have made such a violent and ultimately unsuccessful bid for power, and now have come to it with such a great thirst, with a sense of historic vengeance - are capable of wielding it in a way that unites the country, rather than divides it."

From the point of view of Generational Dynamics, this is a very real concern. There have been huge rallies in Athens, with tens of thousands of extremely passionate demonstrators on each side. These rallies have been overwhelmingly peaceful, and no one really expects any violence next week, no matter which side wins the referendum.

But Greece's economy is a disaster, with no hope of improving for years. Those same opposing rallies, with tens of thousands on each side, could reappear in the weeks to come, and with a lot more venom.

Psaropoulos was asked what he thought would happen after the referendum. He gave a very pessimistic answer:

"Well, anything can happen this week. The entire country has been in hiatus for the last 7 days. Because banks have been closed, businesses have been semi-operational, a lot of them have actually sent people home for several days.

Now we're in a political hiatus as well. We don't know if the same government will be in office Monday night. We don't know whether Greece's creditors will continue to extend any kind of offer of financial assistance, a cash-for-reforms sort of program such as those that Greece has been dependent upon since 2010. Everything for the moment is up in the air. The degree of uncertainty is such that a lot of people are going out and stocking up on food.

An account I spoke to earlier today said, I'm afraid of the NO vote, but then again I know that if we vote yes to this package of austerity measures, none of my clients can possibly do them. 23% VAT on electricity and other utilities, impossible, she said. 100% of next year's tax income paid in advance this year, in addition to the current tax income - that's one of the measures on the austerity package going on the referendum tomorrow. .

Also impossible, she said. Nobody can possibly do these things.

So I think the best case scenario here is that the Greeks can ultimately come to some sort of deal that they can't fully honor, and only partially honor. I think those are the terms in which many people are thinking the day following this referendum here in Athens."

These last two sentences are interesting. This is exactly what I described yesterday has been happening all along, since 2010. Greece would promise to implement many reforms in order to get another bailout loan, but then Greece would implement as few of the reforms as possible. This would "kick the can down the road" a few more months, and then the whole cycle would start all over again.

It's interesting that Psaropoulos is putting this out as the best scenario to continue. That would mean that it's being talked about in Athens, and probably in Brussels as well, as the best way to continue, and to "kick the can down the road" once more.

Tunisia declares a 'state of war' as Mideast meltdown continues

Two days ago, I reported that leaders of Egypt and Kuwait were declaring that their countries were in a "state of war," thanks to terrorist activities. This followed terror attacks in Kuwait, France, Somalia and Tunisia on June 26.

Now Tunisia's President Beji Caid Essebsi on Saturday said that the country was in a "state of war." He declared a 30-day state of emergency powers. The declaration is linked to the terror attack that struck Sousse, Tunisia, on June 26. A terrorist with a Kalashnikov assault rifle strolled through the hotel grounds, opening fire at the pool and beach, reloading his weapon several times and tossing an explosive. He killed 37 people. There had also been an equally horrific terror attack at a museum in Tunis on March 18, killing 21 tourists and a policeman.

Essebsi gave a nationwide televised speech on Saturday:

"Tunisia faces a very serious danger and it should take any possible measures to maintain security and safety.

Terrorism is spreading. I believe, and I say this plainly and clearly. If this were to happen, which happened in Sousse. If this were to happen again, the country would collapse.

Now, we are on a state of war. We have to confront this with what is necessary to fight a war. Undoubtedly, in a way, the armed forces have a role, and they have to be on a state of alert. The national guard, the police. But this war is special."

When Essebsi said that "the country would collapse" if there were another similar attack, he may not have been exaggerating.

Tunisia depends heavily on its tourist industry. According to Tunisia's Tourism Ministry, travel and tourism was 15% of Tunisia's GDP in 2014. 473,000 jobs are supported by travel and tourism, 13.8% of total employment.

The two terrorist attacks specifically targeted foreign tourists, with the result that Tunisia's tourist industry has already been pretty much wiped out for the year. In this sense, the terrorists have already won. AFP and Reuters and Daily Mirror (London)

(Comments: For reader comments, questions and discussion, see the 5-Jul-15 World View -- Greece's referendum revives memories of a bloody civil war thread of the Generational Dynamics forum. Comments may be posted anonymously.) (5-Jul-2015) Permanent Link
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4-Jul-15 World View -- Greece heads for further chaos with referendum on Sunday

China hunts for 'stock manipulators' as market crashes

This morning's key headlines from GenerationalDynamics.com

Greece heads for further chaos with referendum on Sunday


A woman in Athens puts up referendum campaign posters.  'OXI' means 'NO' in Greek.  (Reuters)
A woman in Athens puts up referendum campaign posters. 'OXI' means 'NO' in Greek. (Reuters)

On Sunday, Greece will vote in a referendum to choose whether to accept Europe's last bailout deal, which has already expired on Tuesday and no longer exists. No one has any clue what a YES or NO vote will mean, except that it's essentially a referendum on Greece's prime minister Alexis Tsipras and his far left Syriza party.

Alexis has been campaigning non-stop, telling people nonsense -- that he guarantees that their pensions and salaries and bank accounts are safe, and that a NO vote will mean that the European creditors will have to back down, and give the Greeks back their dignity, with no more austerity. Others say that a NO vote will mean that Greece will leave the euro currency, and possibly even the European Union.

There have been huge rallies by YES and NO proponents in Athens. Polls show about 44% each for the YES and NO voters, with about 12% undecided.

Another bizarre twist occurred on Thursday, when the International Monetary Fund (IMF) issued a report saying that Greece's debt situation was far worse than previously reported, and is not sustainable. What's bizarre about it is that it was good news to Tsipras. According to Tsipras:

"Yesterday an event of major political importance happened. The IMF published a report on Greece's economy which is a great vindication for the Greek government as it confirms the obvious - that Greek debt is not sustainable."

So Tsipras's message is: "Hooray! The country is totally screwed, which is good for me! Yayyyyyyyy!"

Europeans are worried that if the far left wins in Greece because of this "bad news is good news for me" message from Tsipras, then far left and communist parties in Spain, Portugal and Italy will try the same thing.

If we can put aside Tsipras's glee for a moment, then to the rest of us it looks like a disaster either way, NAI or OXI. Kathimerini and BBC and Reuters

IMF report on Greece raising concerns about IMF's credibility

Thursday's report by the International Monetary Fund (IMF), described above, is raising questions about the credibility of the IMF, and its leader Christine Lagarde.

First, we have to look how we got here. Long-time readers know that I've been saying from the beginning that there is no solution to Greece's crisis -- not that no solution has been found, but that no solution exists. Other people have said similar things. And I've had lots of fun mocking European leaders who spoke nonsense, especially Jean-Claude Jüncker, who said, When it becomes serious, you have to lie. I've certainly had a lot of fun with that.

But the institutional lenders to Greece -- the European Commission (EC), European Central Bank (ECB) and International Monetary Fund (IMF), formerly known as the "Troika" -- have been engaged in a kind of game with Greece. The Troika would demand austerity reforms, Greece would promise to implement the reforms so that another partial bailout payment would be paid to Greece, but then Greece would implement as few of the reforms as possible. The "can would be kicked down the road" for a few months, at which time the process would start again.

When Alexis Tsipras came to power in January, he decided to call the Troika's bluff, and say: Your method won't work (because nothing can work), so I'm going to force you to do what I want (which is my far left agenda).

However, the Troika kept up the pretense that there exists a solution to the Greek crisis, and blamed Tsipras for being so unreasonable. But now the IMF report on Greece has undermined the Troika's pretenses, saying that Greece's growth is unsustainable. And Tsipras is jumping up and down with glee because, he says, they agree with him.

And that's causing problems for the IMF and Christine Lagarde. If I and other people have known since the beginning that Greece's debt is unsustainable, and there's no solution to the debt problem, then why didn't Lagarde speak up sooner? Was she lying? And why did she waste so much IMF money going to a lost cause?

Inquiring people want to know, and this is just one more element in the unending crisis in the Greece debt story. Australian Financial Review and Reuters

China hunts for 'stock manipulators' as market crashes

The Shanghai stock exchange index fell 6% on Friday, 10% for the week, and nearly 30% since June 12. The China Securities Regulatory Commission (CSRC) has been desperately trying different measures, such as cutting interest rates and allowing more stocks to be purchased on credit (margin), but the measures have been ineffective.

According to one Chinese analyst, "The government must rescue the market, not with empty words, but with real silver and gold. It's a disaster. If it's not, what is it?" What it is -- is a huge stock market bubble bursting.

Over 100 million Chinese investors, including many older people who have invested their life savings, have been spending 6 hours a day staring glumly at their mobile phones, watching the stock market index fall, and watching their own savings be destroyed. This feeds into the Chinese Communist Party's greatest paranoia - a people's rebellion.

Now the CSRC has set up a team to look at "clues of illegal manipulation across markets." This should be a laugh. Some poor slob who sold some stocks last week is going to be blamed and sent to jail.

When I wrote last week that, "It's well to remember that we don't know to this day what triggered the 1929 panic and crash," a web site reader wrote to say that Milton Friedman had written extensively about it. Actually, Milton Friedman has written extensively about the 1930s Great Depression, but nobody knows why the stock market panic occurred on the particular day, October 28, 1929, rather than a few months earlier or later.

Wall Street stocks are also in a large bubble, as I've described many times, with the S&P 500 Price/Earnings ratio at a historically high 21.3. What can happen in Shanghai can happen on Wall Street. If you have your life savings in stocks, it's not impossible that you too could lose 30% of your savings in three weeks. Reuters

(Comments: For reader comments, questions and discussion, see the 4-Jul-15 World View -- Greece heads for further chaos with referendum on Sunday thread of the Generational Dynamics forum. Comments may be posted anonymously.) (4-Jul-2015) Permanent Link
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3-Jul-15 World View -- Egypt's military brings the Sinai '100 pct under control' in 2nd day of fighting

Possible panic in China's stock markets

This morning's key headlines from GenerationalDynamics.com

Egypt's military brings the Sinai '100 pct under control' in 2nd day of fighting


Mourners carry flag-wrapped casket during the funeral of a slain soldier, in Alexandria, Egypt, on Thursday (Al-Ahram)
Mourners carry flag-wrapped casket during the funeral of a slain soldier, in Alexandria, Egypt, on Thursday (Al-Ahram)

The fighting in Sinai continued into a second day. Air strikes from Egypt's warplanes killed 22 militants in dawn raids on Thursday The situation in Sinai is now "100% under control," according to Egyptian officials. However, in the town of Sheikh Zuweid, where the militants attacked a string of army checkpoints on Wednesday, the army is still going from house to house, searching for extremists, and removing explosive booby traps and mines.

According to Egyptian officials, at least 300 militants launched the offensive on Wednesday, of whom 100 were killed, while 17 soldiers and security officers were killed.

The militants were from the terror group Ansar Bayt al-Maqdis (ABM - Ansar Jerusalem - Champions of Jerusalem), which has conducted numerous attacks in Egypt's Sinai, along the border with Israel and Gaza, and last year changed its name to "Walayat Sinai" (Sinai Province), meaning "Sinai Province of Islamic State," when it repudiated its allegiance to al-Qaeda and declared its allegiance to the Islamic State (IS or ISIS or ISIL or Daesh).

There's been a surge in violence across the Mideast since ISIS called for increased violence during the holy month of Ramadan. Egyptian officials are going beyond blaming ISIS, and placing the blame on the Muslim Brotherhood, which is a banned organization in Egypt. Al Ahram (Cairo) and BBC and AP

Israeli general says that Hamas is supporting terrorist group in Sinai

An Israeli Defense Forces (IDF) general says that Hamas is actively assisting the ISIS-linked Sinai Province terror group that conducted the huge terror attack in Sinai on Wednesday. According to Major General Yoav Mordechai:

"We have clear information that Hamas supports the Walayat Sinai organization, which belongs to ISIS.

In the latest attacks, Hamas gave assistance in the form of weapons and organization to the group that supports ISIS. We have examples of commanders in Hamas who took an active part in this aid. Wael Faraj, a battalion commander in Hamas's armed wing, smuggled wounded casualties from Sinai to Gaza."

However, other reports indicate that Egypt may not agree with this assessment. Jerusalem Post

ISIS attack on Hamas pushes Hamas and Egypt closer together

ISIS has released a video targeting Palestinians that calls Hamas heretical and accuses its officials of apostasy. The main charges appear to be too much interest in democracy, too close relations with the Shia Muslim Hezbollah and Iran, and refusal to govern by Sharia law.

According to the video:

"The Islamic State has its eyes set on Jerusalem and is getting closer day after day to Al-Aqsa Mosque along the path paved by Abu Musab Al-Zarqawi [the head of al-Qaeda in Iraq] and Sheikh Osama Bin Laden [the head of al-Qaeda].

A message to the tyrants of Hamas, you are nothing in our reckoning. You, Fatah and all the secularists, we count you as nothing. God willing, we shall uproot the state of the Jews. You are nothing but froth that will be gone as we move in. God willing, Gaza will be governed by Sharia despite you. ...

By Allah, we shall make your young and old weep just as we did very recently to your dogs, the apostates, the hypocrites and the liars, those who grew rotten beards in Yarmouk camp, those who fought against the law of God. By God, we shall do it again and Gaza will see the blood and the dismembered bodies."

Egypt's policy remains that many of the terrorist cells in Sinai are receiving people and supplies from Gaza, through illegal tunnels dug underneath the wall separating Gaza from Egypt.

However, with Hamas and Egypt having common interests in fighting ISIS, the possibility exists that Hamas can be convinced to support Sinai terrorism less. Egypt's media have sharply reduced the anti-Hamas rhetoric and incitement, and there have been reports in Arab media outlets of a "honeymoon" in relations between Hamas and Egypt. It's fair to assume that comes from Egypt's president Abdel al-Fattah al-Sisi.

Regional politics also play a part. Egypt used to be the main mediator between Israel and Gaza, but since last summer's Gaza war, when Egypt clearly sided with Israel, Hamas has turned to Qatar as a mediator, with reports of talks about a long-term ceasefire between Israel and Hamas. Egypt would like to return to its former central role as a mediator, and a cooling of hostilities would serve that purpose. Middle East Monitor and YNet (Israel)

Possible panic in China's stock markets

As of this writing on Thursday evening ET, Friday morning in China, the Shanghai stock market has fallen over 6%, and it's only been open for a little over an hour. Whether this is a full-scale panic remains to be seen.

The Shanghai index has fallen 30% since June 12.

(Comments: For reader comments, questions and discussion, see the 3-Jul-15 World View -- Egypt's military brings the Sinai '100 pct under control' in 2nd day of fighting thread of the Generational Dynamics forum. Comments may be posted anonymously.) (3-Jul-2015) Permanent Link
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2-Jul-15 World View -- Egypt in a 'state of war' in northern Sinai

Kuwait in 'state of war' with ISIS, will require nationwide DNA testing

This morning's key headlines from GenerationalDynamics.com

Egypt in a 'state of war' in northern Sinai


Egyptian army near Al-Arish in the Sinai peninsula on Wednesday (Reuters)
Egyptian army near Al-Arish in the Sinai peninsula on Wednesday (Reuters)

Egypt's Prime Minister Ibrahim Mahlab said, "We’re in a real state of war," at a cabinet meeting on Wednesday, as Egypt's army was fighting a protracted battle in northern Sinai with jihadist militants.

Egyptian F-16 warplanes and Apache helicopters attacked the militants' positions for several hours Wednesday afternoon and killed more than 90 jihadists, according to Egyptian sources. The militant assault targeted military and police personnel in two towns, El Arish and Sheikh Zuweid, located in northern Sinai near the border with Gaza and Israel. More than 70 Egyptian soldiers and policemen were also killed.

This was different from the "usual" terror attack that Egypt has been experiencing, in that it was a sustained militia attack on Egypt's security forces.

The militants were from the terror group Ansar Bayt al-Maqdis (ABM - Ansar Jerusalem - Champions of Jerusalem), which has conducted numerous attacks in Egypt's Sinai, along the border with Israel and Gaza, and last year changed its name to "Sinai Province," meaning "Sinai Province of Islamic State," when it repudiated its allegiance to al-Qaeda and declared its allegiance to the Islamic State (IS or ISIS or ISIL or Daesh).

Sinai Province has issued a statement claiming that they conducted simultaneous coordinated terror attacks at 15 different locations. They also claimed to have downed an Egyptian warplane with an anti-aircraft missile, but that claim was unconfirmed.

Wednesday's attack followed by two days the assassination of Egypt's top public prosecutor when a car bomb struck his convoy in Cairo. Egypt's president Abdel al-Fattah al-Sisi had already promised a crackdown in response to the bombing. It's now expected that he's going to be pressured to seek revenge for Wednesday's attack, the worst in Egypt's recent history. El Ahram (Cairo) and Bloomberg and El Ahram

Israel approves Egypt's military buildup in Sinai

The 1979 Camp David peace treaty between Egypt and Israel requires the approval of each country for the other to deploy additional military forces near their common border.

Following Wednesday's terror attack in North Sinai, Israel has reportedly decided to grant all Egyptian requests to reinforce troops in the Sinai Peninsula. Jerusalem Post

Kuwait in 'state of war' with ISIS, will require nationwide DNA testing

Kuwait's interior minister Sheikh Mohammad Al-Khaled Al-Sabah said on Wednesday:

"We are in a state of war. It's a war that had been decided with this cell. But there are other cells, and we will not wait for them to try their luck with us."

Al-Sabah was alluding to the Kuwait terror attack of last week, one of the four terror attacks that occurred in four countries on a single day. ( "27-Jun-15 World View -- Terror attacks in Kuwait, France, Somalia and Tunisia highlight growing sectarian war") All four attacks targeted Friday prayers at mosques during the holy month of Ramadan.

The terror group "Najd Province" claimed responsibility for a suicide bombing attack on the Imam Sadiq Mosque in Kuwait's capital city, Kuwait City, during Friday prayers, killing 27 people and wounding over 200. The terrorist wore a white robe that concealed the bomb, and was not prevented from entering the crowded mosque.

The name "Najd Province" refers to the central region of Saudi Arabia where the ultraconservative Sunni ideology of Wahhabism originated. Like "Sinai Province" in Egypt, the name was adopted when the militants pledged allegiance to ISIS. Al-Sabah was referring to "Najd Province" as the cell that triggered this war.

The first step in Kuwait's war against ISIS is a new law that requires mandatory DNA testing on all of the country's citizens and foreign residents. The interior ministry will establish a DNA database of all 1.3 million citizens and 2.9 million foreign residents. The database will be used to make quick identification and arrests during terror attacks, according to the law's sponsors.

Anyone who refuses to give a DNA sample will be jailed for one year, and anyone who gives a fake sample can be jailed for seven years.

As we reported last week, Tunisia is responding to the terror attack it suffered by closing 80 mosques that are "spreading venom."

What we're seeing is a broad trend where leaders of countries where terror attacks have occurred are being forced by public opinion to take repressive measures, in the hopes of preventing future terror attacks. Today we've described such repressive measures in Egypt, Kuwait and Tunisia. It's not thought that any of the repressive measures will prevent "lone wolf" terror attacks, which are becoming increasingly common.

Generational Dynamics predicts that the Mideast is headed for a major generational crisis war, refighting the bloody, genocidal 1948 war that followed the partitioning of Palestine and the creation of the state of Israel, and expanding to a full-scale sectarian war between Sunnis and Shias. International Business Times (London) and AFP

(Comments: For reader comments, questions and discussion, see the 2-Jul-15 World View -- Egypt in a 'state of war' in northern Sinai thread of the Generational Dynamics forum. Comments may be posted anonymously.) (2-Jul-2015) Permanent Link
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1-Jul-15 World View -- France reverses policy, will sell advanced defense weapons to Georgia

What were you doing last night at 23:59:60?

This morning's key headlines from GenerationalDynamics.com

France reverses policy, will sell advanced defense weapons to Georgia


French Crotale (rattlesnake) anti-aircraft missile system
French Crotale (rattlesnake) anti-aircraft missile system

Ever since Russia invaded Georgia in 2008, annexing two Georgia provinces, Abkhazia and South Ossetia, it's been an unwritten European Union policy not to sell advanced weapons to Georgia, for fear of angering Russia and increasing tensions.

However, there's little support for such a policy anymore, after Russia invaded Ukraine, and annexed Ukraine's Crimea peninsula. As a result, France has agreed to sell Georgia "advanced air defense systems." The exact weapons systems to be supplied are top secret, but it's known that the supplier will be ThalesRaytheonSystems (TRS), which is a joint venture of the French defense electronics group Thales and US arms maker Raytheon. The company produces a range of ground-based surveillance radars, air defense command-and-control systems, as well as cyber capabilities.

Supplying just radars to Georgia would not be a big deal, as France supplied radars to Georgia after the end of the 2008 war with Russia. The unknown is whether the weapons will include either anti-aircraft systems or advanced anti-missile systems.

First discussions with France last year about the air defense deal triggered a major political crisis in Georgia. Former Defense Minister Irakli Alasania, who initiated the process of purchasing French air defense units, was unexpectedly fired last year, and made the sensational accusation that the deal was sabotaged by the prime minister, presumably at Russia's request.

Alasania claimed last year that the air defense systems to be purchased from France would be able to shoot down not only any type of Russian aircraft, but also even Russian ballistic missiles of the "Iskander" type. This claim was significant because Russia fired an Iskander missile into Georgia on August 12, 2008, killing dozens of civilians and a Dutch cameraman.

However, the current Georgia government is making no mention of Alasania's statement, causing the political opposition to be suspicious that the new deal with France was watered down to meet demands by Russia. EurasiaNet and Georgian Journal and Jamestown

Greece joins Zimbabwe and Cuba in missing an IMF payment

At midnight on Tuesday, June 30, Greece became the first "developed" nation to miss a payment to the International Monetary Fund (IMF), joining the ranks of "undeveloped" nations, including Zimbabwe and Cuba, that have also missed IMF payments.

Greece is now "in arrears" in payments to the IMF, but is not "in default." The three major credit-rating companies have said failure to pay the IMF doesn't constitute a default because that term is reserved for private-sector creditors. Greece has requested an extension for payment to the IMF, but it's thought to be unlikely that the IMF will grant the request.

Earlier in the day, a panicky prime minister Alexis Tsipras made a desperate last gasp proposal to the Eurogroup to request a new 2-year bailout program. The Eurogroup rejected it immediately.

It now appears that there will be several days of arguing and posturing on the part of both the Greek government and the European leaders. Right now, it seems the most significant next event will be the referendum on Sunday.

Since the referendum refers to a bailout plan that no longer exists, no one knows what YES means or what NO means. So it's now being widely assumed that YES will mean that Greece will remain in the eurozone, and NO means that Greece should leave the eurozone. As I wrote yesterday, my personal opinion, not a Generational Dynamics prediction, is that one way or another Greece will remain in the eurozone, even if the referendum vote is NO. Bloomberg and Kathimerini

Congress may enable bankruptcy courts for Puerto Rico

With $72 billion in debts and an extremely weak economy, Puerto Rico is in an economic death spiral, and may run out of cash within a few weeks, and be unable to pay salaries, pensions and other government expenses.

The White House has stated that there are no plans to bail out Puerto Rico.

Puerto Rico currently is barred by U.S. law from using Chapter 9 of the federal bankruptcy code, a last-resort tool that enables municipalities to resolve their debt in court. Detroit and other municipalities have used the bankruptcy courts to resolve their own debt issues, but Puerto Rico is barred from doing that.

Congressional leaders, led by New York Senator Charles Schumer, are considering a bill that would give Puerto Rico access to the bankruptcy courts.

A Puerto Rico bankruptcy, whether handled by a bankruptcy court of not, would have major consequences for Americans. Two-thirds of pension and retirement funds are holding Puerto Rico bonds, and these funds stand to lose billions of dollars. Bloomberg and NY Daily News

What were you doing last night at 23:59:60?

The above headline may look like it contains a typo, since the last second of every day is supposed to be 23:59:59. But on Tuesday, June 30, the last minute of the day was 61 seconds long, rather than 60. Most days are 86400 seconds long, but Tuesday was 86401 seconds long. The extra second was added as 23:59:60 GMT, or 7:59:60 ET.

Historically, an earth day has for centuries been defined as 84600 seconds long. But as it turns out, the rotation of the earth is a variable fraction of a second longer than that. Furthermore, the amount of variation can depend on things like earthquakes. The leap second is added at irregular intervals, by international agreement, to make up for that variation.

The fact that the dates of the leap seconds cannot be predicted in advance causes severe problems for some computer software developers.

Even in 1972, the time of the first leap second, system programmers for IBM mainframe operating systems had to deal with problems associated with leap seconds.

But today, the problems are much more severe. The guidance system for a rocket or missile may fail because of an added second at an unexpected time.

Real time financial systems have to deal with potentially thousands of transactions per second, and if a leap second is thrown into the mix, any financial system might make an incorrect computation or even crash.

For that reason, many stock exchanges decided to shut down their trading systems for a few minutes before and after Tuesday evening's leap second. Better to be safe than sorry. Bloomberg and Time Service Dept., U.S. Naval Observatory

(Comments: For reader comments, questions and discussion, see the 1-Jul-15 World View -- France reverses policy, will sell advanced defense weapons to Georgia thread of the Generational Dynamics forum. Comments may be posted anonymously.) (1-Jul-2015) Permanent Link
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30-Jun-15 World View -- Turkey and Jordan separately plan invasions of Syria

Greece's chaos continues as banks are closed

This morning's key headlines from GenerationalDynamics.com

Greece's chaos continues as banks are closed


Greeks rally in Athens on Monday in favor of 'NO' vote on referendum (Kathimerini)
Greeks rally in Athens on Monday in favor of 'NO' vote on referendum (Kathimerini)

With Greece's banks closed, citizens stood in long lines at ATMs, where they are limited to withdrawals of 60 euros per person per day. Thousands of pro-government protesters gathered in Syntagma (Constitution) Square in Athens on Monday to demand that citizens vote "NO" on Sunday's planned referendum. An anti-government rally is expected on Tuesday, to demand a vote of "YES".

One commentator is describing Greece's referendum this way: If you want to be executed vote YES; if you would rather commit suicide say NO. Another says that only God can save Greece now.

It's really hard to believe the farcical proceedings going on with the Greece crisis. On Monday Greece's government finally released the wording of the referendum question to be asked on Sunday:

"Should the proposal that was submitted by the European Commission, the European Central Bank and the International Monetary Fund at the Eurogroup of June 25, 2015, which consists of two parts that together constitute their comprehensive proposal, be accepted?"

It's referring to the Eurogroup proposal that's been withdrawn. What are we to make of this?

Greece's prime minister Alexis Tsipras has referred to the June 25 proposal using the words "blackmail," "humiliation" and "ultimatum," making it clear that he would like Greeks to vote "No."

So what happens if the Greeks vote "No"? Tsipras seems to believe he can go to the Eurogroup and say, "See? I won the referendum. Give me all the bailout money I want, and I'll spend it as I please." What do you think the Eurogroup of eurozone finance ministers will respond to that demand?

What happens if the Greeks vote "Yes"? I heard a Syriza spokesman on the BBC say that they still wouldn't agree to the Eurogroup proposal. So what's the point of a referendum if the results are going to ignored?

One analyst has suggested that Tsipras chose the above wording for an emotional reason -- not to make sense, but to link this referendum to Benito Mussolini’s October 1940 ultimatum to occupy Greece, which the Greeks firmly rejected.

I've been asked to state my opinion as to whether Greece will remain in the euro currency.

This is certainly NOT a Generational Dynamics prediction, but my personal opinion is that Greece will, one way or another, remain in the euro currency. The reasoning is that even if Greece issues drachmas, there's no way to expel Greece from the euro. There are even off-the-wall scenarios possible, where the drachma would simply be equivalent to, say, one-tenth of a euro, or something like that, probably with a variable exchange rate.

Another possibility is that the Game of Chicken is still being played. The June 30 date may be a day of default, but otherwise it has apparently become somewhat meaningless now, and the next crucial date will be July 6, the day after the referendum. Some formula may yet be found to reach an agreement at the last moment. However, this would just "kick the can down the road" for three or four months, and new negotiations on a new bailout loan would have to begin immediately.

Whatever scenario unfolds, it's going to be horrible for the Greek people, and dangerous for the global financial system. Kathimerini and Forbes and Greek Reporter

Turkey considers invasion of Syria to prevent a Kurdish state

Turkish officials are sending shock waves through the Mideast by notifying Nato and US officials that they are preparing plans to invade Syria for humanitarian reasons.

By itself, this would be a significant escalation of the war in Syria. But it also comes at a time when Jordan is considering its own invasion of Syria to create a buffer zone (see next story), and at a time when Israel is considering entering the Syrian war to protect the Druze community.

Turkey's stated objective is to create a buffer zone in Syria for refugees who are targeted by the Islamic State (IS or ISIS or ISIL or Daesh), but it's believed that the real reason is the prevention of a Kurdish state along Turkey's border in Syria.

Over the weekend, Turkey's president Recep Tayyip Erdogan said:

"We will never allow the establishment of a state in Syria’s north and our south. We will continue our fight in this regard no matter what it costs."

At a separate event, prime minister Ahmet Davutoglu said that Turkey would take "all measures" to protect its borders:

"No one should be concerned that the fire would spread to Turkey. Even if we are in power for one second, we won't remain silent; we will take all necessary measures. State structures will implement these measures. No one is more important than the comfort and peace of Turkey."

The triggering event for these concerns was the stunning victories of the Kurdish YPG militias in the ISIS stronghold of Raqqa province, especially the seizure of the town of Tal Abyad, which is right on Turkey's border. ( "24-Jun-15 World View -- US aligns with Kurds and Shias in Syria and Iraq, angering Turks and Saudis")

According to reports, some 18,000 soldiers are expected to take part in the operation to take place on both sides of the border, with plans to establish a 110-km long and 28-km wide buffer zone.

A Turkish invasion of Syria would have significant implications for Europe and Nato. Since Turkey is a member of Nato, the invasion would technically mean that Nato was at war in Syria.

Reports indicate that Turkey will first try to get diplomatic support of its Nato allies and US-led coalition forces. Failing that, "Plan B" will come into plan, and Turkey will create a buffer zone on its own, and will train and equip the Free Syrian Army. Daily Sabah (Turkey) and Telegraph (London) and Hurriyet (Turkey) and Today's Zaman (Turkey)

Jordan makes plans for Syria invasion to protect its northern border

While Turkey considers an invasion of Syria to create a buffer zone in Syria's north, Jordan is considering an invasion to create a buffer zone in Syria's south. This is apparently a completely separate plan, with the joint timing a coincidence.

As in the case of Turkey, the stated object would be humanitarian, for the protection of refugees. Like Turkey, Jordan is hosting millions of Syrians who have been forced to flee their homes to escape the fighting.

The plan is to bolster rebels from the anti-Assad Southern Front alliance and the Free Syrian Army, many of whom have already received US-supplied training in Jordan. It's not clear to what extent Jordan's own army will participate, or whether Jordan will also build a militarized zone that will separate the buffer zone from the Syrian government forces in the north. However, this would be a significant escalation of Jordan's involvement in Syria, and would contradict oft-repeated statements by Jordanian officials that they would stay out of the war.

As we've been writing for many months, there is a growing trend of Muslims killing Muslims in the Mideast, heading for a major sectarian war that will engulf the region. Middle East Eye and Times of Israel

(Comments: For reader comments, questions and discussion, see the 30-Jun-15 World View -- Turkey and Jordan separately plan invasions of Syria thread of the Generational Dynamics forum. Comments may be posted anonymously.) (30-Jun-2015) Permanent Link
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29-Jun-15 World View -- Global financial crisis -- Greece, China, Puerto Rico

How complex systems fail

This morning's key headlines from GenerationalDynamics.com

China makes desperate move to prevent stock market crash


People's Bank of China
People's Bank of China

As we've been reporting, China's stock markets have been in free fall since June 12, falling almost 20% in a couple of weeks.

Desperate Chinese officials are scrambling to stop the implosion and restore the bubble, and so the People's Bank of China (PBOC) made a major move, cutting interest rates sharply, to a record low. This makes more money available to banks, which officials hope will flow into the stock markets and prop up stock prices.

According to a Nomura analyst quoted by ZeroHedge:

"The policy easing should be viewed as a measure to contain the risk of a hard landing or systemic crisis rather than one to achieve faster growth. In this case, the stronger-than-expected monetary easing may help stem the decline in the equity market following a 10.6% drop over the past two trading days. The positive wealth effect of the equity market on consumption or aggregate demand is limited in China, but an equity market collapse would hurt millions of mid-class households and pose great danger to the economy and social stability."

In other words, the purpose of the policy measure is to prop up the stock market, but will have little effect on growth, which is the "normal" purpose of interest rate easing. Whether it will even succeed in propping up the stock market and preventing "an equity market collapse" remains to be seen in the next few days.

As of this writing on Sunday evening ET (Monday morning in Shanghai), stocks are up 2%, though it's been bouncing in and out of negative territory. Bloomberg and ZeroHedge and Reuters

Puerto Rico's governor says the island's debts are 'not payable'

In an admission that will have wide-ranging financial repercussions, Puerto Rico's governor Alejandro García Padilla has announced that the island territory will be unable to pay off its $72 billion in debts. According to Padilla:

"The debt is not payable. There is no other option. I would love to have an easier option. This is not politics, this is math."

This was not a surprise. As I wrote in March, a bankruptcy was a virtual certainty, probably as early in July.

Many people have invested in Puerto Rico bonds because they pay 10% interest (yields) and because under federal law they're "triple-tax free," meaning that you can earn 10% interest every year and not have to pay federal, state or municipal tax on the interest you collect. It's a sweet deal, provided that Puerto Rico doesn't go bankrupt, because if it does, then you lose most or all of your initial investment.

The unemployment rate is 13.7%. Only 700,000 of the 3.5 million people, or 20%, work in the private sector. The other 80% either are on welfare, or they receive unemployment or other aid, or they work for the government. Year after year, Puerto Rico sells more and more bonds, and investors eat them up because of the high tax-free yields. But now their string has run out. NY Times and Reuters

Greece's Tsipras appeals for calm after banks are forced to close

Greece's banks will be closed indefinitely, starting on Monday, after the European Central Bank (ECB) announced that it will end liquidity funding that was being used to prevent a Greek banking collapse.

As we reported yesterday, Greece's prime minister Alexis Tsipras suddenly terminated negotiations with the European lending institutions, surprising everyone, and called for a referendum of the Greek people on July 5. The Eurogroup of eurozone finance ministers met without Greece present, to take steps for the protection of the eurozone.

They announced the termination of Greece's bailout program, but left open the question of whether the European Central Bank (ECB) would continue the Emergency Liquidity Assistance (ELA) program. Greeks have been withdrawing billions of euros from their savings accounts in recent weeks, as much as a billion euros each day in the last week. This has been made possible by the ECB's ELA program, which provided liquidity to the Greek banks so that withdrawals were possible.

On Sunday, the ECB announced that the ELA would be terminated immediately. Tsipras went on nationwide tv and appealed for calm, saying that everyone's savings, salaries and pensions were safe. He announced that the banks and stock markets would not open on Monday, and would remain closed at least until July 7.

Tsipras also announced that capital controls would be imposed. ATMs will be open on Monday, but bank withdrawals will be sharply limited, to as little as 60 euros per person per day.

On July 5 there is supposed to be a national referendum in Greece. The referendum will be a vote on a bailout proposal that has already been terminated, and will no longer exist. There's a lot of hopin' and prayin' going on, but no matter what analysts say, no one has any clue what will happen. Kathimerini and Market Watch

How complex systems fail

When complex systems fail, it's seldom because of one problem, because each potential problem has usually been foreseen and a workaround developed.

Catastrophic system failures when several problems occur at once, and interact in a way that was not predictable.

Today we have major financial crises in China, in Europe and in Puerto Rico. In each case, officials have made some preparations. But can the global financial system handle all three simultaneously?

As I've been reporting regularly, the S&P 500 price/earnings ratio is far above historical norms, indicating that Wall Street stocks are deeply into bubble territory. That bubble is going to burst. There's no way to predict whether the current group of problems will be the catalyst, but sooner or later it will happen.

It's well to remember that we don't know to this day what triggered the 1929 panic and crash, and so we have no way of knowing what will trigger the next panic, but we can be sure it's coming.

At this writing on Sunday evening ET, Asian stocks are mostly falling, and Wall Street futures are down 1-1.5%.

(Comments: For reader comments, questions and discussion, see the 29-Jun-15 World View -- Global financial crisis -- Greece, China, Puerto Rico thread of the Generational Dynamics forum. Comments may be posted anonymously.) (29-Jun-2015) Permanent Link
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28-Jun-15 World View -- Greece's Tsipras rejects 'extortionate ultimatum' and ends bailout negotiations

Tunisia will close 80 mosques that are 'spreading venom'

This morning's key headlines from GenerationalDynamics.com

Furious Eurogroup members plan Greece's default after Tsipras ends bailout negotiations


Alexis Tsipras giving nationally televised speech early on Saturday (Kathimerini)
Alexis Tsipras giving nationally televised speech early on Saturday (Kathimerini)

Members of the Eurogroup of eurozone finance ministers on Saturday unanimously rejected a demand to grant a 2-month extension to the existing bailout program, after Greece's government walked out of the negotiations.

Early Saturday morning, Greece's prime minister Alexis Tsipras surprised everyone, even members of Greece's negotiating team, by tweeting that he was ending the negotiations and calling for a snap referendum of the Greek people on July 5 to determine whether to accept the Eurogroup's bailout conditions. This would be the first time Greece has held a national referendum since 1974.

Tsipras addressed Greece's parliament in a nationally televised speech:

"I call on you to decide whether we should accept the extortionate ultimatum that calls for strict and humiliating austerity without end, and without the prospect of ever standing on our own two feet, socially and financially. We never considered giving in. ... These [Eurogroup] proposals prove that certain partners are not interested in reaching a viable and beneficial agreement for all parties, but rather the humiliation of the Greek people."

The parliament approved the referendum in a vote late Saturday night. However, many people are saying this referendum, if it is held, would really be a historic vote on "Grexit," whether Greece should remain in the euro, or even in the European Union. One commentator quoted an anonymous Eurogroup official as saying, "Tsipras is like a cowboy who walks into a saloon, takes his gun out of his holster, points it at his own head, and shouts, 'Do as I say or I'll shoot!'"

Tsipras's announcement was a complete surprise to the Eurogroup members, since they had been negotiating almost 24 hours a day all week, and there had never been any mention of a referendum. The Eurogroup members were said to be furious at Tsipras's betrayal. They met again without Greece, after Greece walked out, with the stated purpose of making plans to guarantee that the rest of the eurozone would not be hurt by Greece's actions and possible default or Grexit.

German minister Sigmar Gabriel said: "There must be a clear program. And what he (Tsipras) would like – for Europe to send €20 or €30 billion in aid programs to Greece, but without any conditions – Europe cannot accept."

However, many European officials say that they stand ready to negotiate if Greek officials change their minds. According to Germany’s finance minister Wolfgang Schäuble:

"We have no basis for further negotiations. Clearly we can never rule out surprises with Greece, so there can always be hope. But none of my colleagues with whom I've already spoken see any possibilities for what we can now do. ...

We decided today that we will not extend the second program. We did not decide to end the euro zone membership of Greece."

As I've been saying for weeks, the logic of the Game of Chicken is that there will be no deal until one minute to midnight on June 30, when a 1.5 billion euro debt payment is due to the International Monetary Fund (IMF). One angle is that if Greece misses the June payment, then the IMF has the choice of calling it a default, or just saying that Greece is "in arrears," and give them another month. But after Greece walked out of the talks, Eurogroup members apparently are now expecting Greece to default. Kathimerini and AFP and Guardian (London)

Greece's chaos may begin as early as Monday

Greece's people are close to panic, wondering what will happen next week, even on Monday. There were long lines on ATM machines on Saturday, since many Greeks do not feel confident that the banks will even be open on Monday.

One question that the Eurogroup left open on Saturday was when the Emergency Liquidity Assistance (ELA) program would be terminated. The ELA is money that the European Central Bank (ECB) has been supplying to the Greek banking system, as Greeks have withdrawn billions of euros in the last few weeks. On the day that the ELA is terminated, severe capital controls will be implemented, meaning that withdrawals will be limited to a small amount each day. Some banks are already setting limits.

Another question on everyone's mind is this: If the referendum is held on July 5, exactly what will the Greeks be voting on, inasmuch as the Eurogroup has announced that the entire program will end on at midnight on Tuesday, June 30? Will they be voting on some bailout deal, or will they be voting on their entire future in Europe?

Greece's institutional lenders -- the European Commission (EC), European Central Bank (ECB) and International Monetary Fund (IMF) have been demanding for months that Greece reduce pension payments by increasing the retirement age over time, cut the defense budget, reduce the public payroll, reduce planned tax increases on businesses, and increase the VAT (value added tax) in some areas.

Since Alexis Tsipras and his far left Syriza government came to power in January, he's added public employees, increased taxes on businesses, and refused to touch the retirement age.

As I've said many times in the last few years, no solution exists for the Greek debt problem, and that's why no solution has been found, or will be found. But even if some kind of deal can be agreed on, presumably at one minute to midnight on Tuesday, all it will do is kick the can down the road for a few weeks. The deal under discussion is for the last €7.2 billion tranche of the second bailout loan. Greece needs a third bailout loan, and that will begin negotiations all over again in a few weeks, something that is so painful, both sides are wondering whether it's worth it.

The long-suffering Greek people are watching all this drama and are pretty sure of only one thing: That things are about to get a lot worse. Irish Times and Reuters and Bloomberg and Kathimerini

Tunisia will close 80 mosques that are 'spreading venom'

Tunisia's Prime Minister Habib Essid accused 80 mosques of "spreading venom," and announced that they would all close, as part of a clampdown on security. This follows Friday's terrorist attack on a beach in the Sousse holiday resort in which 38 people were killed.

Many Tunisians are demanding to know why stronger security measures weren't taken after the March terrorist attack on a museum in the capital city Tunis. ( "19-Mar-15 World View -- Beneath the surface, Tunisia is a terrorist breeding ground")

As I wrote at the time, some 3,000 Tunisians have traveled to Iraq and Syria to join the Islamic State (IS or ISIS or ISIL or Daesh), more than any other country in the world, and Tunisian preachers are extremely skillful at convincing young men to join ISIS. So the charge that some Tunisian mosques are "spreading venom" is widely believed.

However, many analysts question how effective closing mosques will be. According to one analyst, the closures will end up creating a two sets of mosques:

"You will have a parallel religious sphere where people don’t go to the mosques because they think the mosques only tell us what the state would like us to hear, so they go to private meetings. Once you have this parallel market, radical ideas can spread much more quickly, because you have no control."

Nonetheless, after Friday's terrorist attack, one of the worst in decades, people are going to be demanding that the government "do something."

As I reported yesterday, there were four major terrorist attacks on Friday, the others being in Somalia, Kuwait and France. This kind of widespread terrorism is going to increase demands in many countries to take steps, even if the steps won't work, to prevent further terrorist attacks. Indeed, it's thought to be impossible to stop "lone wolf" terrorist attacks, such as the ones in Tunisia, Kuwait and France on Friday.

As I've been writing for years, nationalism and xenophobia are increasing in country after country as the World War II survivors die off, as the generational Crisis era deepens. We've seen this in story after story -- Russia's xenophobia towards Caucasian Muslims, Europeans toward Jews, Roma and Muslims, Chinese towards Americans and Japanese, Sunni and Shia towards each other, and so forth. Note that Generational Dynamics does not make a moral judgment about these trends, any more than a weather forecaster makes a moral judgment about an approaching rainstorm. But Generational Dynamics predicts that this nationalism and xenophobia will continue to increase in country after country, and lead to World War III. This global increase in xenophobia and nationalism is a trend that cannot be stopped, certainly not be closing a few dozen mosques. CS Monitor and BBC

(Comments: For reader comments, questions and discussion, see the 28-Jun-15 World View -- Greece's Tsipras rejects 'extortionate ultimatum' and ends bailout negotiations thread of the Generational Dynamics forum. Comments may be posted anonymously.) (28-Jun-2015) Permanent Link
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27-Jun-15 World View -- Terror attacks in Kuwait, France, Somalia and Tunisia highlight growing sectarian war

China's stock markets continue their free-fall

This morning's key headlines from GenerationalDynamics.com

Al-Qaeda linked al-Shabaab launches massive terrorist attack in Somalia


Dead bodies on the beach after terrorist attack in Tunisia (CNN)
Dead bodies on the beach after terrorist attack in Tunisia (CNN)

The al-Qaeda linked terror group al-Shabaab attacked an African Union base in the village of Lego in Somalia, killing dozens and taking complete control of the village and the region. The base is part of the Amisom peacekeeping force.

The dawn raid started with a suicide bomber driving a car loaded with explosives into the entrance of the base, and then dozens of militants armed with machine guns and rocket-propelled grenades began their assault.

According to an al-Shabaab spokesman, "The Black Islamic flag is flying over the main base of Amisom in Lego this morning and the dead bodies of the enemy are scattered around the area, the mujaheddin fighters have taken all their military supplies."

Al-Shabaab had previously promised to step up its attacks during the holy month of Ramadan. AP and AFP

ISIS-linked terrorists attack Shia mosque in Kuwait City, killing 27

The terror group "Najd Province" claimed responsibility for a suicide bombing attack on the Imam Sadiq Mosque in Kuwait's capital city, Kuwait City, during Friday prayers, killing 27 people and wounding over 200. The terrorist wore a white robe that concealed the bomb, and was not prevented from entering the crowded mosque.

The name "Najd Province" refers to the central region of Saudi Arabia where the ultraconservative Sunni ideology of Wahhabism originated. It claims to be an affiliate of the Islamic State (IS or ISIS or ISIL or Daesh). The group also claimed responsibility for bombing attacks at two Shia mosques in Saudi Arabia in late May, killing 26 people.

Kuwait is a predominantly Sunni Arab nation, where 1/3 of the population is Shia.

ISIS has been openly promoting a sectarian war between Shias and Sunnis, and the attacks on Shia mosques are meant to trigger that war. KUNA - Kuwait News Agency and AP

France in shock after beheading and attack at US-owned factory

The French people have barely recovered from the Charlie Hebdo terrorist attack in Paris in January ( "11-Jan-15 World View -- France officials criticized for not stopping Charlie Hebdo terror attack").

So it's certain that Friday's attack on the US-owned Air Products factory is going to inflame the French people's anxieties and lead to demands for further action for protection from terrorists.

The suspect, Yassin Sahli, accelerated the van he was driving, and rammed it into a warehouse containing canisters of acetone, liquid air and gas, resulting in an explosion that was seen miles away. The explosion killed two people.

What was particularly grisly about the attack was the discovery of a severed head hanging from a fence after the blast. There were two black flags with Islamic writing hanging near the victim's head. The decapitated body was found later in the suspect's van.

The suspect was recognized as working for a delivery service that made regular deliveries to the factory, so he was never questioned on arrival. The decapitated body was that of his boss at the delivery company.

The suspect has been married for ten years, and has three children. His wife and sister have also been arrested. France24 and CNN

Terrorist gunman creates bloodbath in Tunisia, killing 37

A gunman disguised as a tourist opened fire at a Tunisian hotel in Sousse on Friday, killing 37 people. According to some reports, he arrived at the beach in a boat, and hid his weapons in an umbrella. He removed the weapon, a Kalashnikov assault rifle, from the umbrella and strolled through the hotel grounds, opening fire at the pool and beach, reloading his weapon several times and tossing an explosive.

ISIS claimed responsibility for the attack. In a tweet, a spokesman said: "Our brother, the soldier of the Caliphate, Abu Yihya al-Kairouni, reached his target the Imperial hotel despite the security measures."

As in the case of France, shocked Tunisians are just barely recovering from a previous terror attack, at a museum in the capital city Tunis in March. ( "19-Mar-15 World View -- Beneath the surface, Tunisia is a terrorist breeding ground") Friday's attack was the worst terrorist attack in Tunisia since 2002.

It's thought that ISIS is targeting Tunisia because Tunisia is the major success story of the "Arab Spring," which actually began in Tunisia in 2011. However, unlike other Arab countries, Tunisia has been a successful secular democracy. The terror attack actually targets Tunisia's tourist industry, which accounts for 15% of its GDP and most of its foreign currency revenues. BBC and Reuters

Analysis of Friday's four terror attacks

Some commentators are describing Friday's attacks as a further Muslim attack against the West, but it's very hard to find much evidence of that. The attack in Tunisia targeted Tunisia's tourist industry, even though most of the victims were European tourists. The attack in France is ambiguous because the suspect killed his boss, so it may have been motivated by workplace violence rather than by ideology. However, the attacks in Kuwait and Somalia were clearly targeted at other Muslims.

As I've been writing for months, there is no Muslim war against Christians and the West -- at least not yet. The number of Christians being killed by Muslims is minuscule compared to the vast number of Muslims being killed by Muslims in the Mideast, North Africa and Asia.

Other commentators are wondering if all four attacks are coordinated by ISIS, and there's a little evidence of that, though not much. ISIS has made a general call for more terror attacks during the holy month of Ramadan, especially on Fridays, when the mosques are packed for Friday prayers. Al-Shabaab has made a similar call. So it's possible that the four attacks were not coordinated, but coincided because of the opportunity of the first Friday in Ramadan. At any rate, ISIS claimed credit for only the attacks in Kuwait and Tunisia, and al-Shabaab is al-Qaeda linked, not ISIS linked.

Finally, many commentators are confused about why ISIS would want to trigger a sectarian war between Sunnis and Shias. I've explained this many times, but now is a good time to repeat it.

For the west, the major generational crisis war of the last century was World War II. Almost every policy of almost every Western government has been a reaction to something that happened during WW II. It's significance cannot be overestimated.

However, WW II was NOT the most significant war to the Muslims in the Mideast. For them, the generational crisis wars were the collapse of the Ottoman Empire around 1920, along with associated wars such as Iran's Constitutional Revolution in the 1900s, and then Iran's 1979 Great Islamic Revolution, along with associated wars such as the Iran/Iraq war, Syria's civil war and Lebanon's civil war, all in the 1980s. Those two groups of wars were far more significant in the Mideast than World War II, and almost every policy of almost every Mideast country has been a reaction to something that happened during those wars.

For ISIS, and previously for al-Qaeda, the most significant war was Iran's 1979 revolution, which threw out a secular government and replaced it with a hardline Shia near-dictatorship. For Sunni jihadists, this is the dream war that they want to mimic, by triggering a violent Shia-Sunni civil war in any of a number of countries, expecting it to lead to a hardline Sunni dictatorship.

To them, and to Westerners who say that they would like a sectarian Mideast war because it would mean more Muslims killing Muslims, I would tell you: Be careful what you wish for. And I promise you that if you survive, then you'll regret having ever wished for such a thing.

At any rate, this will not be the last day with four terrorist attacks. If anything, ISIS and al-Qaeda will try to repeat their "success" in days to come.

China's stock markets continue their free-fall


What's happening in Chinese markets? (CNN)
What's happening in Chinese markets? (CNN)

As we reported a week ago on Friday, China's huge stock market bubble began to burst, and the Shanghai stock market index plunged 13% for one horrible week.

This past week has been just as horrible. On Friday alone, the index fell 7.4%. Hundreds of individual stocks fell 10%, the maximum amount permitted, suggesting that the index might have fallen much farther. The index reached its peak on June 12, and has fallen 19% since then.

In the year preceding June 12, the stock market index surged 250%, creating a huge stock market bubble. Individual Chinese, many of them older citizens, poured their life savings into the stock market in search of high returns. As one analyst said, "This is going to end in tears." Bloomberg

(Comments: For reader comments, questions and discussion, see the 27-Jun-15 World View -- Terror attacks in Kuwait, France, Somalia and Tunisia highlight growing sectarian war thread of the Generational Dynamics forum. Comments may be posted anonymously.) (27-Jun-2015) Permanent Link
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26-Jun-15 World View -- Turkey denies responsibility for ISIS massacre on Kurds in Kobani

European leaders prepare for Greece to default

This morning's key headlines from GenerationalDynamics.com

Pakistan gives 'Save the Children' a partial reprieve


A guard stands in front of the locked and sealed Save the Children office in Islamabad (The Nation)
A guard stands in front of the locked and sealed Save the Children office in Islamabad (The Nation)

Pakistan is now permitting Save the Children to reopen its headquarters office in the nation's capital Islamabad, as well as 13 of 73 offices across the country. Save the Children will be forbidden from operating in the Federally Administrated Tribal Areas (FATA), Balochistan, Gilgit-Baltistan and other sensitive areas.

Pakistan's government has shut down the aid organization Save the Children, locked and seized their office building in Islamabad, and gave them 15 days to leave the country.

On June 11, Pakistan unexpectedly shut down Save the Children, sealing all its offices, giving them 15 days to leave the country. The interior minister announced that it was clamping down on non-government organizations (NGOs) that provide aid:

"We will not allow anyone to work under the table. We will not allow any NGO to work in this country against Pakistan’s interests, culture and values."

No explanation was given for closing Save the Children, and government officials were accused in the media of paranoia and xenophobia. Pakistan began to back off almost immediately, and now has allowed some of the offices to reopen.

Pakistan's campaign against NGOs is believed to have been triggered by the American administration bragging in 2011 that a vaccination program in Pakistan was used as a cover to locate and capture Osama bin Laden. Save the Children says they had nothing to do with that, but since 2011, every foreign aid program has come under suspicion. Pakistan Today and Nation (Pakistan) and BBC

Turkey denies responsibility for ISIS massacre on Kurds in Kobani

The Islamic State (IS or ISIS or ISIL or Daesh) on Thursday killed dozens of Kurds, mostly civilians, in a brutal attack on Kobani. The ISIS militants disguised themselves in YPG uniforms, so they were undetected, until they opened fire. The is attack is apparently in revenge for recent gains by Kurdisk YPG militias.

As we reported just two days ago, Kurdish YPG militias have inflicted some major military defeats on ISIS in the latter's stronghold province Raqqa in northern Syria. The YPG victories were attained in combination with forces from the US-backed Free Syrian Army (FSA), and supported by hundreds of airstrikes from the US coalition.

In Turkey, the pro-Kurdish People's Democratic Party (HDP) accused the government of president Recep Tayyip Erdogan of allowing of playing a part in the ISIS victory. It's not known where the ISIS militants came from before entering Kobani, and some HDP officials are suggesting that they crossed over from Turkey with the help of the Turkish government.

An outraged Erdogan accused the HDP of being a "tool of the Bashar al-Assad regime and some international lobbies which are enemies of Turkey," and said:

"We see that the circles close to the separatist organization [Kurdistan Workers' Party (PKK)], I mean prominent figures from the political party [HDP], are carrying out a slander and black propaganda campaign in the wake of this nefarious attack. They are trying to provoke our nation with these completely baseless claims .... I am saying this openly once again, nobody can dare to show Turkey on the same line with terrorism."

The HDP described the ISIS attack on Kobani as a massacre and blamed it on Turkish state support for the militants, a claim which was strongly denied by the Turkish government. Daily Mail (London) and Today's Zaman (Istanbul)

European leaders prepare for Greece to default

The high stakes Game of Chicken being played out in Brussels took new steps forward on Thursday as a Eurogroup meeting of eurozone finance ministers ended without any decision. Another Eurogroup meeting will be held over the weekend.

Greek citizens have withdrawn billions of euros from the Greek banking system in recent weeks. To keep the banking system from collapsing, the European Central Bank (ECB) has been providing money to the banks in the form of its Emergency Liquidity Assistance (ELA).

Plans are being made to end the ELA on Monday, if there's no deal over the weekend. In that case, capital controls would be imposed on Greek banks, meaning that Greeks would be severely limited in the amount of money they would be allowed to withdraw.

If that's a European threat that's directed at Greece, then the Greeks have their own threats directed at Europe. First, the Greeks can threaten to go to Moscow for a bailout, which would give Russia sweet revenge for the European sanctions imposed on Russia. And second, Greece could send all the African and Syrian migrants in Greece across the borders into other European countries.

Actually, the negotiations are continuing to follow the Game of Chicken scenario. The logic of the Game of Chicken, where two cars race towards each other at top speed to see who veers first to avoid a collision, is that neither car veers until the last nanosecond, if at all. So if we're really following that scenario, then we shouldn't expect a deal until Tuesday, which is supposed to be the final, final, final deadline. Kathimerini and Irish Examiner

(Comments: For reader comments, questions and discussion, see the 26-Jun-15 World View -- Turkey denies responsibility for ISIS massacre on Kurds in Kobani thread of the Generational Dynamics forum. Comments may be posted anonymously.) (26-Jun-2015) Permanent Link
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25-Jun-15 World View -- Hungary and Austria in disagreement over migrants

Palestinians to submit war crimes charges against Israel to ICC

This morning's key headlines from GenerationalDynamics.com

Hungary and Austria in disagreement over migrants


A group of Afghans rest after crossing illegally from Serbia into Hungary near the village of Asotthalom, Hungary (Reuters)
A group of Afghans rest after crossing illegally from Serbia into Hungary near the village of Asotthalom, Hungary (Reuters)

With migrants from Africa and Syria flooding into Europe, disagreements are arising among the European Union countries on dealing with them.

In the case of Hungary, prime minister Viktor Orbán, is personally disliked by other EU leaders, has said that the country is being overwhelmed by migrants, with more than 60,000 having crossed in Hungary from outside the EU since the start of 2015, which is more than any other EU country. Most of the migrants have crossed into Hungary from Serbia, which is not an EU country.

In the last week, Orbán has announced three measures to control the number of migrants in Hungary:

VOA and International Business Times (London) and SpyGhana

Britain and France face migrant crisis in port of Calais

That's not the only current conflict between EU countries over the migrant crisis. France and Britain have been pointing the fingers of blame at each other over a major crisis in the French port of Calais, which is the location of the entrance to the Channel Tunnel that connects France to Britain.

There's been a flood of migrants into Calais, wanting to reach Britain to take advantage of the generous benefits. Migrants have been burning tires and using other methods to slow the trucks trying to travel to Britain, and then jumping into the trucks while they're stopped, hoping that they won't be detected until they reach Britain.

One 20-year-old migrant was quoted as saying:

"My future would be better if I get to England. I need to get to England. I came here via Turkey and Greece and now I'm living in the jungle in Calais. The situation here is very bad.

But life in Syria was worse. Our homes were destroyed and our government used chemical weapons against us. I need a better life in England and I will do whatever it takes."

Some officials are expressing the fear that jihadists and terrorist would hide in the crowd of migrants in Calais, and use the chaos to travel to the UK. Telegraph (London)

Palestinians to submit war crimes charges against Israel to ICC

The Palestinian Authority (PA) on Thursday will submit to the International Criminal Court (ICC) in The Hague files describing alleged war crimes by Israel.

According to reports, there will be charges in three areas:

With regard to the third item, we reported last year in July, while the war was in progress, that Palestinian lawyers are saying that they are on solid grounds in some areas, but that Hamas would face war crimes charges themselves, for shooting rockets indiscriminately into Israel from heavily populated Gaza neighborhoods, and for storing weapons in civilian neighborhoods. Both of these are war crimes.

Although the accusations will be embarrassing to Israel, they're not expected to have any legal force, and any investigation that occurs will likely not begin for many months. Reuters and YNet and Guardian (London)

(Comments: For reader comments, questions and discussion, see the 25-Jun-15 World View -- Hungary and Austria in disagreement over migrants thread of the Generational Dynamics forum. Comments may be posted anonymously.) (25-Jun-2015) Permanent Link
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24-Jun-15 World View -- US aligns with Kurds and Shias in Syria and Iraq, angering Turks and Saudis

Syrian Kurd militias deal a heavy blow to ISIS

This morning's key headlines from GenerationalDynamics.com

Syrian Kurd militias deal a heavy blow to ISIS


Raqqa province in Syria. Kurdish forces have defeated ISIS in Tal Abyad, Ain Issa and Liwa 93 military base, and taken control of all three.  (Reuters)
Raqqa province in Syria. Kurdish forces have defeated ISIS in Tal Abyad, Ain Issa and Liwa 93 military base, and taken control of all three. (Reuters)

The Kurdish YPG militias in Syria, combined with forces from the US-backed Free Syrian Army (FSA), have succeeded in a string of dramatic and significant victories over the Islamic State (IS or ISIS or ISIL or Daesh) in their stronghold in Raqqa province.

On Monday, YPG/FSA forces took full control of the town of Ain Issa, as well as the Liwa-93 military base, following last week's seizure of the border town of Tel Abyad.

These are significant victories for a couple of reasons. First, it leaves the Kurdish forces poised to strike at the city of Raqqa itself, the self-declared capital of ISIS in Syria.

And second, it cuts off two important supply routes for ISIS, the north-south route from Raqqa to Turkey, and the east-west high running through Ain Issa, which links the city of Aleppo with the north-eastern province of Hasaka, which leads into Iraq, which makes these victories a significant blow to ISIS.

It's also significant that these victories were done in close coordination with the US and the US-led coalition, with the offensive backed heavily with dozens of coalition airstrikes.

The close cooperation between the US and the Syrian Kurds began last year in the battle over the Syrian town of Kobani, on the border with Turkey, with a victory by the Kurds. ( "27-Jan-15 World View -- Kurdish militias drive ISIS out of the Syrian town of Kobani") After that, the Kurdish forces began moving east toward Tal Abyad, while other Kurdish forces in eastern Syria began moving west. The two forces met near Tal Abyad last week, cutting off the main north-south road between Raqqa and Turkey. ISIS had been using that route to funnel foreign fighters and equipment into Syria and sell their black market oil.

Now the victories in Raqqa province are said to be a model for future cooperation between the US and the Kurds when fighting ISIS. According to Pentagon spokesman Col. Steve Warren:

"This fight ... has been an example of ISIL fighters breaking under the pressure delivered by coalition air power and capable and willing ground forces."

Hundreds of Syrian refugees in Turkey returned to their homes in Tal Abyad on Tuesday. They had fled to Turkey to escape the fighting between YPG and ISIS.

Both Syria's army and Iraq's army have shown little will to fight against ISIS, nor has Hezbollah. The strongest fighting on the ground against ISIS has been with the local groups, the Kurds and the Shia militias known as Hashid Shaabi (popular mobilization units). The US is cooperating with these groups, thus providing indirect support to the PKK and Iran, which are listed as terrorist groups and sponsors by the US State Dept.

Note: PYD = Kurdish Democratic Union Party in Syria. YPG = Kurdish People’s Protection Unit in Syria, armed wing of the PYD. YPJ = Women’s Protection Units in Syria. HDP = Kurdish Peoples' Democratic Party in Turkey, PKK = Kurdistan Workers' Party anti-government insurgents in Turkey. In Syria, YPG is the armed wing of the PYD, which is allied with the PKK in Turkey, which is considered a terrorist organization by the US. Peshmerga = Kurdish militias in Iraq. Be prepared for a quiz. Australian Broadcasting and USA Today and Today's Zaman (Istanbul)

Turkey's support splits between Kurds and ISIS

Turkey's president Recep Tayyip Erdogan has always made it clear that his top priority is to get rid of Syria's president Bashar al-Assad. Furthermore, the Kurdistan Workers' Party (PKK) is a separatist group fighting for an independent Kurdistan, taking pieces from Syria, Turkey and Iraq. The PKK considered a terrorist organization by both the US and Turkey, and there has been years of terrorist PKK violence in Turkey.

So Erdogan is not happy with the turn of events that have allowed the Kurds in eastern and western Syria to link up at Tal Abyad on the border with Turkey, with substantial support from US airstrikes.

Erdogan's opposition in Turkey is now saying that pro-Erdogan media is siding with ISIS against the Kurds. According to reports, officials in Erdogan's Justice and Development Party (AKP) have been praising ISIS and demonizing the Kurds.

A report in the pro-opposition Daily Zaman quotes the Sabah daily headline: "PYD is more dangerous than Daesh." Sabah also claimed that the PYD were not allowing Turkmens and Arabs from Tal Abyad to return to their towns and hinted that the real target of the Kurdish militants is actually Turkey.

Turkey's deputy prime minister Bülent Arinç says, "We see that there are signs pointing towards a kind of ethnic cleansing," by both the PYD and ISIS.

A Turkish state broadcaster said:

"Daesh attacks and kills those it captures. The PYD/PKK seize certain regions and force people living there to migrate. It doesn't matter who comes -- the [al-Assad] regime, Daesh or the PYD -- they are all persecuting civilians."

Today's Zaman (Istanbul)

US support for Kurds further alienates Saudi Arabia

Saudi media makes it clear that the Saudis are also pretty unhappy with US support for the Kurds and for Iran, while leaving Syria's president Bashar al-Assad untouched. There's nothing new about this, as the Obama administration has been relentless offensive to the Saudis, and has alienated them considerably. However, the support for the Kurds is one more step in the same direction.

According to a report in the Arab News:

"As you will remember, the coalition partners that remained silent during the four years of turmoil in Iraq and Syria immediately swung into action when Kobani was targeted last year and provided military assistance to the PYD/YPG forces in the region. ...

At the same time we issued this warning: The PYD, a terror organization, and its armed wing the YPG, are more dangerous than all the armed groups in Syria. The US must become aware of the growing communist threat.

Despite these warnings, very little has changed in the attitude of the US and its allies. The YPG now know the passcode that would open all doors for them. It used Daesh card in every area it advanced through, ensured that coalition planes would bomb the region and thus secured control of that territory. When events were portrayed in that manner in the international media, all developments were depicted as a victory; not a word was said about the civilians dying in the coalition attacks or local residents under threat by the YPG.

The same thing has now happened in the region of Tal Abyad. ... The code word “Daesh” was employed again and coalition planes horrifyingly dropped bombs on the local residents of Tal Abyad. The interesting thing is that the area had already been under Daesh control for a year. The only thing new in the area was the violence inflicted on the inhabitants by the coalition bombs and the YPG.

Certainly we in no way approve of the violence employed by Daesh in Syria and Iraq. But the point we wish to make here is that the YPG is playing the Daesh card to legitimize its own evil and to deceive the US in particular. The terrible thing is that the US secret state apparatus that has wanted to see a Great Kurdistan for the last 100 years is keen to believe in this scenario and believes that its objective is being attained."

In another Arab News editorial:

"Today, one can summarize Washington’s approach toward Iraq, Syria, and Lebanon as follows:

* In Iraq, it is supporting the ruling elite jointly brought to power by the 2003 US invasion and Iran’s expansionist policies.

* In Syria, the virtual disregard of human suffering and meaningless “red-lines” after four years and three months of the country’s popular uprising.

* In Lebanon, the tacit acceptance of Hezbollah’s hegemony after neutralizing the former battlefront with Israel through UN Security Council Resolution 1701.

In all three cases Washington’s policies have been underpinned by Obama’s all-out push for an “agreement” with Iran, and his exploitation of Daesh extremism as the perfect justification for such an agreement, eventually developing into a full-fledged alliance."

This is a good time to review where things stand. As I've been writing for years, we're headed for a Clash of Civilizations world war in which some of the "allies" will be the West, India, Russia and Iran, and some of the "axis" will be China, Pakistan, Turkey, Saudi Arabia and other Sunni Arab countries. In the Mideast, the US will be siding with the Shias against the Sunnis.

The events of the last year allow us to refine this, in that it's becoming increasingly clear that the Kurds will be aligned with the Shias and the West against the Sunnis.

I've written about this many times, at length. In brief, the explanation is as follows: China is allied with Pakistan, which is allied with Saudi Arabia. The US is allied with India, which is a close ally of Russia, which is a close ally of Iran. Also, India's Hindus and Iran's Shia's have been allies all the way back to the Battle of Karbala in 680. ( "China 'betrays' Iran, as internal problems in both countries mount" from 2008.)

It's actually been pretty obvious for years that Iran would become our ally, because there large numbers of pro-American and pro-Western student demonstrations in the early 2000s. Although the old geezers who survived the 1979 Great Islamic Revolution refer to America as the Great Satan, the young people are overwhelmingly pro-Western, and are taking over as the Revolution survivors grow old and die off. Arab News and Arab News

Understanding men's moustaches in Turkey


Turkish Moustache Styles (Hurriyet)
Turkish Moustache Styles (Hurriyet)

According to a helpful analysis of moustache styles in Turkey, there are three main styles illustrated above:

Moustaches in both of the latter styles are generally trimmed short, in line with the advice of the Prophet Muhammad. Hurriyet (Ankara)

(Comments: For reader comments, questions and discussion, see the 24-Jun-15 World View -- US aligns with Kurds and Shias in Syria and Iraq, angering Turks and Saudis thread of the Generational Dynamics forum. Comments may be posted anonymously.) (24-Jun-2015) Permanent Link
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23-Jun-15 World View -- Afghan Taliban score major victories as US and Nato withdraw forces

Report: Greece's debt crisis being kicked down the road

This morning's key headlines from GenerationalDynamics.com

Report: Greece's debt crisis being kicked down the road


The wily Greek finance minister Yanis Varoufakis watches as Greek PM Alexis Tsipras grins broadly at something amusing said by European Commission president Donald Tusk (Kathimerini)
The wily Greek finance minister Yanis Varoufakis watches as Greek PM Alexis Tsipras grins broadly at something amusing said by European Commission president Donald Tusk (Kathimerini)

There are reports that Greek officials have finally made some concessions, especially raising taxes on businesses and wealthy individuals, and that the lending institutions are starting from those, and are close to making a deal that will allow Greece to make its 1.5 billion euro debt payment to the International Monetary Fund (IMF) on June 30.

If a "deal" is made, all it will do is kick the can down the road for a few weeks. The deal is for the last 7.2 billion euro tranche of the second bailout loan. That money will permit Greece to meet its IMF payment, as well as several other payments due in July and August, but no more.

What Greece needs is a third bailout loan. So assuming that this "deal" is concluded later this week, then negotiations on the new bailout loan will have to begin soon, and the drama will start all over again.

On Bloomberg TV on Monday, there was an interview with Anna-Michel Asimakopoulou, who is the finance minister for Greece's opposition New Democracy party, which was the government party before Alexis Tsipras's victory in January's election. Asimakopoulou expressed a great deal of bitterness about what Tsipras has done (my transcription):

"Mr. Tsipras in 5 months has managed to bring the real economy to a standstill, turn us into a recessionary cycle, undo every decent thing that has been done, and now we're facing the following choice: A deal, which is going to cost the Greek people 5 billion euros in measures, on the one hand, and the absolutely worst case scenario, which is no deal, which means we're facing uncharted waters, bankruptcy, and a possible Grexit [Greek exit from the eurozone]. ...

This is a critical thing for Greece's future. It's not a little bitty decision - it's a huge decision. He is not allowed to jeopardize our future in the eurozone - he doesn't have the mandate to do that. And yes, now people are taking money out of the banks, now the public sector has stopped making any payments towards anybody except for wages and salaries and we're not really sure that's gonna last. ...

Our main concern with this deal, assuming it happens and we hope it does, it's taxes, taxes and more taxes. There's nothing that will favor growth. We think growth is gonna come from the private sector, from businesses. We're all for privatizations. We don't want a bloated public sector. Mr. Tsipras has hired 5,000 people in the public sector in the last three months. That has a price tag, and the price tag is being paid by the Greek people."

Even if a deal is made, then it has to be sold to the Greek people, who have been promised no more austerity, and to the German people, who don't want to pay any more to bail out Greece.

As I've said repeatedly, no solution exists to Greece's debt crisis. I think everyone believes that the can will run out of road at some point, but we don't know when. Kathimerini and BBC

Afghan Taliban strikes Afghan parliament in Kabul

It's the start of the Afghan Taliban's summer offensive, and they've scored two major victories in the last three days: A major terrorist attack on the Afghan Parliament in Kabul on Monday, and the imminent takeover of a major Afghan city in northern Afghanistan, for the first time since 2001.

On Monday there was a terrorist attack captured on live TV in Kabul, the capital city of Afghanistan. A suicide bomber blew himself up outside the Afghan Parliament complex, bringing down a part of the roof, and then six other terrorists rushed in, armed with assault rifles and rocket propelled grenades, but they were not successful in breaching the compound's gates. All seven terrorists were killed, as was a woman civilian. 30 civilians were wounded.

The Parliament building is the most heavily guarded area in Kabul. Every time there's a successful terrorist attack in central Kabul, there's the usual commentary demanding an investigation about how terrorists were able to get so close to the center of power. But the situation seems to be worsening.

However, such attacks have been occurring with increased regularity, as the Nato and American forces have been withdrawn. The attack fits a pattern of high-profile assaults on heavily fortified buildings in the capital. Last month, car bombs targeted the Justice Ministry, and attackers stormed two guesthouses used by foreigners. Reuters and AFP and Hindustan Times

Afghan Taliban close to seizing the city of Kunduz

Taliban forces have captured two villages near the city of Kunduz in the last two days, and are close to seizing Kunduz itself, forcing tens of thousands of refugees to flee their homes. With a population of 300,000, this will be the first time since 2001, when American forces defeated the Taliban after 9/11, that the Taliban have been in control of a large city. Whoever controls Kunduz, a vast, rich agricultural region that was a former Taliban bastion, controls the roads to northeastern Afghanistan as well as smuggling and trade routes into neighboring Tajikistan and the rest of Central Asia.

The government in Kabul has dispatched reinforcements, including Afghan Special Forces and their U.S. advisers and trainers, to try to repel the insurgents and rescue about 75 soldiers and policemen trapped inside their district base. But the Afghan forces are spread very thin, fighting on several fronts. Washington Post and Stars and Stripes

(Comments: For reader comments, questions and discussion, see the 23-Jun-15 World View -- Afghan Taliban score major victories as US and Nato withdraw forces thread of the Generational Dynamics forum. Comments may be posted anonymously.) (23-Jun-2015) Permanent Link
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22-Jun-15 World View -- China's bubble stock market plunges 13% in one week

Tick-tock tick-tock, Greece's clock is running down

This morning's key headlines from GenerationalDynamics.com

China's bubble stock market plunges 13% in one week


Shanghai stock market composite index for five years until June 19 (Bloomberg)
Shanghai stock market composite index for five years until June 19 (Bloomberg)

The Shanghai stock market has been fairly steady for years, but last year it suddenly started surging into bubble territory, increasing by 250% in the last year.

Then, after reaching a peak of 5166 on Friday, June 12, it suddenly started plunging all of the last week, falling 13% to 4478 by Friday, June 19, including a 6.4% fall on Friday alone. This is the worst run in China's stock market since the 2008/09 financial crisis.

Chinese analysts are giving four reasons for the plunge:

However, Western analysts point to the explosive greater-than-exponential growth in "retail investor" stock trading accounts, especially in the last few months, for people who are investing their life savings over the internet. Many Chinese have been using the stock market bubble to make a living. According to one report, retail investors are prone to herding patterns of behavior when markets become stressed, which could lead to "periods of mass fund exodus."

ZeroHedge has done an analysis and discovered that Chinese officials are so worried about this situation that they've stopped releasing data about the number of new stock trading accounts. They've been providing this data for 8 years, but suddenly stopped on May 29. At that time, the number of retail stock trading accounts spiked to 4.3 million, but there's been no released data since then. Global Times (Beijing) and CNBC and ZeroHedge

Wall Street stock market bubble continues its surge


S&P 500 Price/Earnings ratio at astronomically high 21.73 on June 19 (WSJ)
S&P 500 Price/Earnings ratio at astronomically high 21.73 on June 19 (WSJ)

Wall Street stocks have surged further into bubble territory as well during the last year, just like Shanghai stocks, though they have not yet taken any serious plunge like the Shanghai stock exchange.

It's been a month since I reported that the S&P 500 Price/Earnings ratio (stock valuation index) was at an astronomically high 21.47 on May 15, indicating a huge stock market bubble. Since then it's shot up further to the ever more astronomical level of 21.73, according to the Wall Street Journal on Friday, June 19.

21.73 is far above the historical average of 14. Furthermore, it was 18 just a year ago, and has been increasing rapidly since then, indicating that the Wall Street stock market bubble is accelerating, just as the Shanghai stock market bubble has been accelerating during the last year. Generational Dynamics predicts that a panic will occur, and that the P/E ratio will fall to the 5-6 range or lower, which is where it was as recently as 1982, resulting in a Dow Jones Industrial Average of 3000 or lower.

Tick-tock tick-tock, Greece's clock is running down

Thousands of protesters gathered in Syntagma (Constitution) Square in Athens on Sunday to demand that Greece's government not give in to the demands of the lending institutions. Those demands are to increase taxes and reduce pension benefits by increasing the retirement age.

The protests were organized by left-wing parties and trade unions. According to polls, the Greek people want Greece to remain in the euro, but also want more benefits such as an increase in the minimum wage. In other words, the Greek protestors are demanding to return to the old days, when they could spend all they want with no care or worry.

That's the crux of the problem. A lot of people are recommending that the lending institutions just give in to the Greek government, and forgive their current debt. Unfortunately, everyone knows what would happen next. Greece would increase the minimum wage, increase pension benefits, hire more public employees, and soon end up owing just as much as before. That situation is politically untenable for the rest of Europe.

I've been saying for years that there's no solution to the Greek fiscal crisis. And by that I'm not saying that that the Greeks and the lending institutions haven't yet been clever enough to think up a solution. I'm saying that no solution exists. When no solution exists, then the Law of Unintended Consequences kicks in, and we may now be close to that time.

So on Monday there's going to be another Eurogroup meeting in Brussels. Usually, the Eurogroup meetings are attended by each eurozone country's finance minister. But Monday's meeting will be extraordinary in that eurozone heads of governments will be in attendance.

According to reports, Greece's government will be presented with two options: to either accept the reforms proposed by Greece’s lending institutions, potentially with some Greek amendments, or to prepare his country for a default.

Others have mentioned a third option: Kick the can down the road by providing a loan for just enough money to get through to the end of the year. In January there was a compromise that kicked the can down the road to June, so a new compromise would do the same until December, and then we would start all over again.

In 8 days, Greece has to pay 1.5 billion euros to the International Monetary Fund (IMF), or go into default. Tick-tock, tick-tock. Kathimerini and Irish Times and CNN

(Comments: For reader comments, questions and discussion, see the 22-Jun-15 World View -- China's bubble stock market plunges 13% in one week thread of the Generational Dynamics forum. Comments may be posted anonymously.) (22-Jun-2015) Permanent Link
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21-Jun-15 World View -- Russia makes a controversial deal to lease Siberia land to China

Russia's concerns about China's 'invasion' of the Far East continue

This morning's key headlines from GenerationalDynamics.com

Russia makes a controversial deal to lease Siberia land to China


Landscapes in Russia's Trans-Baikal territory (Itar-Tass)
Landscapes in Russia's Trans-Baikal territory (Itar-Tass)

Russia is planning to least to a Chinese company for 49 years 115,000 hectares (284,050 acres) of land to grow crops and rear livestock in eastern Siberia. The lease will be at the rate of 250 rubles (about $4.63) per hectare, totaling $26 million, plus investments worth around 3 billion yuans ($448 million).

The land is in in the Trans-Baikal region on the border with China in Russia's Federal District of Siberia. This announcement has provoked nationalists in Moscow and Siberia, who may welcome China's investments, but are unhappy with the influx of ethnic Chinese that would enter the region.

This caused an uproar in social media, with comments like, "China’s creeping expansion in Russia has begun" and "the Motherland is being sold out piece by piece."

This has forced Russian officials to call concerns about Chinese expansion a "myth." According to one Russian analyst:

"There are fears of irrational nature about China in society.

China is perceived in Russian consciousness as something alien and different compared with western culture. Besides, China is developing so swiftly that many Russians fear that it may suppress Russia. ...

[Also,] China possesses some of the world’s most advanced agricultural technologies and could help Russia in this respect."

However, other analysts are raising concerns about proposed terms of the deal that Russian officials are rarely mentioning: namely that the Chinese plan a "large-scale" migration to the leased Russian lands.

According to a Russian analysis, quoting Chinese media:

"Leasing Russian land to the Chinese , apparently, goes far beyond a purely agricultural enterprise.

China has its own requirements for the project: ... 'If you can't legally solve the problem of large-scale involvement of the Chinese labor force, any long-term cooperation with Chinese agricultural enterprises [is] out of the question," [according to China's] 'Huanqiu Shibao newspaper.' In other words, the Chinese say that the existing border and migration regime with Russia do not suit them. ...

[Russians] are wary of China's economic expansion in the light of China's territorial claims on Russia. ... Beijing is well aware that the issue of delivery of Russian land is not solved in the administration of the Trans-Baikal Territory. That is why Beijing calls a long-term transfer of land the "ideological emancipation" of Russia to China. ...

[The letter of intent for the lease] indicates that the project will be implemented only with "large-scale" Chinese migration to Russia. ... So, under these restrictions, Moscow will have to agree to the abolition of the existing border and migration regime for the Chinese.

Window On Eurasia / Paul Goble and Itar-Tass and Nezavisimaya Gazeta (Trans)

Russia's concerns about China's 'invasion' of the Far East continue

In my recent article "18-Jun-15 World View -- Russia's 'saber-rattling' nuclear threat may be directed at China, not Europe", I quoted an analyst who suggested that Russia's threat to add more than 40 ICBMs to its nuclear arsenal was made because of existential threats from China rather than from Europe.

Several web site readers said that this didn't make sense. One comment said:

"I don't see it. Vladivostok is the home of the Russian Pacific Fleet. Russia has over two dozen nuclear-armed submarines alone, swimming around. Eastern Russia is armed to the teeth to ward off and respond to US attack, a legacy of the Cold War. Russia has been granted port facilities in Vietnam, a long time ally. In addition, Russia has excellent commercial ties with China and has just signed a long term oil deal with them. China and Russia's interests are economically win-win. They each gain from each other's economic strength: raw material (Russia), manufacturing (China). They have a symbiotic economic and political interest in trade with the rest of the world, especially Europe. China would surely benefit from Russian collapse, but only if they could then expropriate, occupy, govern and defend a vast territory - and for what? They already have a sweet deal for the only thing Russia is useful for: raw materials."

It's true that Russia and China have managed to paper over their differences in the last few years, but Russia and China have had centuries of extremely bitter and violent relations, at least since the 13th century Mongol invasion of Russia. As recently as 1969 there was a border war between China and Russia, with the threat of a much wider war.

There is something that China values more than raw materials or even people: land. And that's what at issue in the Trans-Baikal deal in Russia's Federal District of Siberia described above.

The situation in Russia's Federal District of Far East -- which is even farther east than Siberia -- is particularly desperate for Russia. The Far East is an enormous region, but only 7.4 million Russians populate the region. This means that the region acts as a kind of "safety valve" for migrants from northeast China, with its population of 70 million.

According to some estimates, there are 2-5 million Chinese illegal immigrants living in Russia's Far East, and the number is increasing by a million or so every year.

For those who might enjoy some Schadenfreude at Russia's expense, consider the following: Russia justified last year's illegal invasion and annexation of Ukraine's Crimea peninsula by saying that Russia needed to protect all the Russian citizens living there.

So, as Chinese migrants pour into Russia's Far East, it won't be long before the Chinese can use Russia's argument against Russia: China has to annex Russia's Far East in order to protect all the Chinese citizens living there.

At any rate, the purpose of the article on Russia's nuclear saber-rattling was to make the point that Russia cannot win a conventional war with China in the Far East, and so would have to resort to nuclear weapons, just as Pakistan cannot win a conventional war with India, and would have to resort to nuclear weapons, which might be why Russia is adding nuclear ICBMs to its inventory. ABC News (2014) and Jamestown (2014)

(Comments: For reader comments, questions and discussion, see the 21-Jun-15 World View -- Russia makes a controversial deal to lease Siberia land to China thread of the Generational Dynamics forum. Comments may be posted anonymously.) (21-Jun-2015) Permanent Link
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20-Jun-15 World View -- The Gathering Storm: The accelerating surge in refugees, slaves and terrorists

Human slavery at the highest level in human history

This morning's key headlines from GenerationalDynamics.com

The Gathering Storm


Accelerating growth in refugees and displaced persons (UNHCR)
Accelerating growth in refugees and displaced persons (UNHCR)

When Winston Churchill wrote his monumental six-volume history of World War II, he titled the first volume The Gathering Storm, he described the signs that a world war was approaching. He particularly focused on the Nazis in Germany, and their massive increase in military power, particularly in air power, which Churchill foresaw would put Britain at existential risk.

I've written many articles about China's massive growth in military power, particularly in ballistic and hypersonic missiles, whose only purpose is to destroy American cities, military bases, and aircraft carriers. China is preparing to launch a war against the United States today, just as Hitler was preparing to attack Britain, and that's part of the Gathering Storm today.

But there's another aspect to the gathering storm -- the sudden accelerating world growth in refugees, slaves and terrorists. This is a major trend that's destabilizing the world, and brings us closer to the beginning of the Clash of Civilizations world war.

The sudden accelerating growth in refugees and displaced persons

As the above graph shows, the number of people forced to flee their homes was fairly steady throughout the 2000s, but since 2010, and especially since the Arab Awakening in the Mideast, the number has rapidly accelerated, growing exponentially. From 2000-2010, the number was around 40 million. But then the number started rapidly accelerating, reaching 60 million in 2014.

This shouldn't be a surprise to anyone who's been watching the news for the last year, as there's one refugee crisis after another, whether in Europe, in southeast Asia or the southern border of the United States.

The sources of these refugees and displaced persons are mainly the wars in Syria, Iraq, Sudan and Afghanistan.

A small percentage are Christian, such as those from Central America or Central African Republic, but most are Muslim, whether it's Muslims killing Muslims in the Mideast or Africa, or Buddhists killing Muslims in Myanmar (Burma).

I've mentioned this several times in the past, because it's quite remarkable. Most people focus on Muslim militias or jihadists killing people, but I believe that the most important fact is that Muslims are seemingly under attack around the world, usually by other Muslims. And this has led to millions more Muslim refugees around the world as well.

According to the UNHCR report, at least 15 conflicts have erupted or reignited in the past five years: eight in Africa (Côte d'Ivoire, Central African Republic, Libya, Mali, northeastern Nigeria, Democratic Republic of Congo, South Sudan and this year in Burundi); three in the Middle East (Syria, Iraq, and Yemen); one in Europe (Ukraine) and three in Asia (Kyrgyzstan, and in several areas of Myanmar and Pakistan).

According to UN High Commissioner for Refugees António Guterres:

"We are witnessing a paradigm change, an unchecked slide into an era in which the scale of global forced displacement as well as the response required is now clearly dwarfing anything seen before.

It is terrifying that on the one hand there is more and more impunity for those starting conflicts, and on the other there is seeming utter inability of the international community to work together to stop wars and build and preserve peace."

There's an irony to this. After World War II, the United Nations, along with the United States as Policeman of the World, was set up to try to "stop wars and preserve peace."

But today, the "utter inability of the international community" is caused on the one hand because two of the worst criminal nations -- China for annexing other countries' territories in the South China Sea, and Russia for invading and annexing parts of Ukraine, and also supplying weapons for Bashar al-Assad's genocide in Syria -- are on the UN Security Council, with veto power that prevents the UN from even attempting to stop conflicts. Working together and supporting each other, the criminal nations Russia and China have crippled the United Nations and made it a laughingstock.

As for the United States, Barack Obama is the first president to repudiate President Harry Truman's 1947 Truman Doctrine, which did much to preserve peace for decades, with the most damaging example being the flip-flop about the "red line" of al-Assad's use of chemical weapons.

In his book, "The Gathering Storm," Churchill tells his response to Hitler's occupation of Austria in March 1938:

"Europe is confronted with a programme of aggression, nicely calculated and timed, unfolding stage by stage, and there is only one choice open... either to submit, like Austria, or else to take effective measures while time remains to ward off danger. ...

If a number of States were assembled around Great Britain and France in solemn treaty for mutual defense against aggression; ...and if it were done in the year 1938... then I say that you might even now arrest this approaching war."

This is exactly what's happening today in Ukraine, the South China Sea and the Mideast. There's a Gathering Storm today, just as there was in 1938, and the result is going to be catastrophic. UNHCR and CS Monitor and National Churchill Museum

Human slavery at the highest level in human history


Countries with the highest numbers of slaves, by percentage of population (Washington Post)
Countries with the highest numbers of slaves, by percentage of population (Washington Post)

There's been a lot of nonsense written this week following the Charleston SC terrorist killing, as if the United States invented slavery. Slavery has existed since the start of the human race, and it still exists today. It's estimated that there are 30-40 million slaves in the world today, the highest number in history.

According to Free the Slaves, the African country Mauritania has the highest percentage of slavery in its population: 4%. India has the largest number of people in slavery: 14 million.

There's also slavery in the United States: it's estimated that there are 60,000 slaves in the US today. Would you like to own a slave? Well, you could travel to Mauritania and buy one there, as some people have done.

The most common forms of slavery are:

Other terms that describe slavery are: debt bondage, bonded labor, attached labor, restavec (a child in Haiti sent by her parents to work for someone else), forced labor, indentured servitude and human trafficking.

Today, the world has the highest number of refugees in history, and the highest number of slaves in history. I haven't seen any figures that relate these, there have been a number of news stories that describe the connection.

These stories describe how Islamic State (IS or ISIS or ISIL or Daesh) have been enslaving many of the people they capture in Syria and Iraq, such as the sexual slavery of Yazidi girls and women. Also, refugees fleeing from countries like Syria or Eritrea or Myanmar often promise to pay money to human traffickers to take them to other places, such as Indonesia, Australia or Europe. At some point during the journey, the traffickers may demand that the refugee call home to ask his family for money, and if that's not possible, then the refugee is sold into slavery.

Although slavery is illegal in every country in the world, slave owners, whether in the US or elsewhere, have very effective techniques for keeping control of their slaves, usually by telling them that their families will be killed if they cause trouble. Slaves in America are often forced to work as prostitutes or as migrant laborers.

India, with 14 million slaves, suffers from all forms of slavery. Although the caste system has become illegal, there are still many children who are born into slavery. Girls from underprivileged classes are particularly vulnerable to sexual slavery, sometimes under the guise of "child marriages." Washington Post and Free The Slaves and Walk Free

State Dept: Dramatic rise in terrorism from 2013 to 2014

According to a new report by the State Dept., the number of terrorist attacks increased 35% from 2013 to 2014, and the number of people killed by terrorist grew 81%.

More than 60 percent of all attacks took place in five countries: Iraq, Pakistan, Afghanistan, India, and Nigeria. And 78% of all fatalities due to terrorist attacks also took place in five countries: Iraq, Nigeria, Afghanistan, Pakistan, and Syria.

According to the report, the world's biggest national sponsor of terrorism is Iran. Iran has continued support for radical Palestinian groups in Gaza, Hezbollah in Lebanon and various groups in Iraq, including a Shiite militia designated as a terrorist group. According to the report, "In 2014, Iran continued to provide arms, financing, training, and the facilitation of primarily Iraqi Shia and Afghan fighters to support the Assad regime’s brutal crackdown that has resulted in the deaths of at least 191,000 people in Syria."

The report also singled out Boko Haram in northern Nigeria, with "a penchant for the use of brutal tactics, which included stonings, indiscriminate mass casualty attacks, and kidnapping children for enslavement."

From the point of view of Generational Dynamics, the world is going deeper and deeper into a generational Crisis era, and headed for a Clash of Civilizations world war. And as I've been writing for years, Generational Dynamics predicts that in the coming Clash of Civilizations world war, China, Pakistan and the Sunni Arab countries will be enemies of the West, including the U.S., India, Russia and Iran.

In this article, we've described three major trends -- the accelerating growth in the number of refugees, and the historically high numbers of slaves and terrorist acts -- that are contributing to the Gathering Storm that will lead to this war. We can't predict when it will start (or maybe, with the entire Mideast already in flames, it's started already), but we can be certain that it's coming. Washington Post and US State Dept.

(Comments: For reader comments, questions and discussion, see the 20-Jun-15 World View -- The Gathering Storm: The accelerating surge in refugees, slaves and terrorists thread of the Generational Dynamics forum. Comments may be posted anonymously.) (20-Jun-2015) Permanent Link
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19-Jun-15 World View -- Emergency Eurogroup summit called for Monday to deal with likely Greece default

Fistfight breaks out at Yemen peace talks in Geneva

This morning's key headlines from GenerationalDynamics.com

Fistfight breaks out at Yemen peace talks in Geneva


Hamza al-Houthi throws back a shoe thrown at him on Thursday (AFP)
Hamza al-Houthi throws back a shoe thrown at him on Thursday (AFP)

It looks like the United Nations sponsored Yemen peace talks in Geneva are not going to end the war in Yemen after all.

A news conference given by Hamza al-Houthi, the head of the Houthi delegation, was interrupted when an anti-Houthi protestor, a woman in a pink headscarf, threw a shoe at al-Houthi, calling him a "criminal." He caught the shoe and threw it back. There followed a fistfight between the Houthi supporters and protesters, before the latter were escorted out.

Meanwhile, the fighting is continuing in Yemen. There are daily air strikes by the Saudi coalition, mostly at Houthi targets in the capital city Sanaa. Iran-backed Houthis are battling Saudi-backed Sunni tribesmen in several places. Each side gives a daily press briefing explaining why they're the good guys and the others are the bad guys. Internet trolls on both sides abound. France24 and Daily Star (Beirut)

Report: Iran's Supreme Leader has fired Qassam Soleimani in Syria

According to a report in Debka's subscriber-only newsletter (sent to me by a subscriber), Iran's Supreme Leader Ayatollah Seyed Ali Khamenei has relieved Gen. Qassem Soleimani in charge of his Syria command. I like to reference Debka's newsletter because it contains valuable insights into what's going on, but it's written from Israel's point of view, and sometimes gets things wrong.

Soleimani is the commander of Iran's Al Qods Brigades and supreme commander of Iran forces in the Middle East. According to the report:

"This was taken as a major affront by the elite arm of the Revolutionary Guards Corps (IRGC).

The ayatollah's marching order left Soleimani in charge of Iran's military and intelligence operations in Iraq, Yemen and Lebanon for the time being, but excluded Syria, where military setbacks were piling up too critically to overlook. The Al Qods chief's promise of "major developments," on June 2 -- after he had rushed over to Damascus to deal with the crisis of Palmyra's fall to the Islamic State -- turned out to be empty rhetoric. His bravado in stating "In the next few days the world will be pleasantly surprised from what we (the IRGC) working with Syrian military commanders are preparing," was not been followed up. The suggested dispatch of thousands of Iranian troops to the Assad regime's rescue never materialized. ...

Since then, the plight of the Syrian regime has gone from bad to worse, with the Islamic State and Syrian rebels taking turns cutting off chunks of territory; Hezbollah stalled in its effort to dislodge rebel forces from the Qalamoun Mountains and, worse still, helpless to stem the war's spillover into Lebanon.

The Iranian command governing the two campaigns has ground to a halt pending Tehran's appointment of a new boss to replace Soleimani."

In fact, Soleimani didn't really do very well in Iraq, either. Originally, Soleimani and his Shia militias were going to recapture Tikrit from ISIS. He was going to do it within a few days, without the help of US airstrikes. Instead, Soleimani and his Shia militias had to retreat, and Soleimani fled to Tehran. Afterwards, the Iraqi army captured Tikrit with the help of US airstrikes. ( "24-Mar-15 World View -- Iraq's battle for Tikrit reaches a standstill, humiliating Iran") Debka (subscription)

Emergency Eurogroup summit called for Monday to deal with likely Greece default

Thursday was supposed to be the "drop dead" date for reaching a deal so that Greece could make its 1.6 billion euro debt payment to the International Monetary Fund (IMF) by June 30. According to analysts, Thursday's meeting of the Eurogroup finance ministers was the last chance to make a deal and still have time get the deal approved by the German parliament in time to release bailout funds to Greece by June 30.

However, Thursday's meeting ended with no deal. Greece has been asked to reduce pension costs by increasing retirement dates over the next ten years, and to increase its value-added tax. Greece's prime minister Alexis Tsipras has refused to do any of this. The discussions have become extremely acrimonious, and many European officials have expressed the feeling, one way or another, that they're sick of Greece, and don't care what happens.

According to one analyst I heard, Thursday wasn't really a final "drop dead" date. If a deal can be signed by June 30, then the European Central Bank (ECB) could offer Greece a bridge loan, enabling it make its payment to the IMF, until the deal is approved by Germany's parliament, according to this analyst.

This scenario would fit the logic of the "Game of Chicken" that's being played. The logic of the Game of Chicken, where two cars race towards each other at top speed to see who veers first to avoid a collision, is that neither car veers until the last nanosecond, if at all. So we won't actually know until the midnight deadline on June 30 whether Greece will default.

Another analyst pointed out that a default does not mean that Greece has to leave the eurozone. Greece could default within the eurozone and permit harsh capital controls on Greek banks, imposing great hardship on the Greek people for years to come. However, this may not be a politically possible solution, as the Greek people may prefer to return to the drachma currency instead. Either way, the result would be a huge nightmare. Kathimerini (Athens) and Telegraph (London) and Gulf News (Dubai)

(Comments: For reader comments, questions and discussion, see the 19-Jun-15 World View -- Emergency Eurogroup summit called for Monday to deal with likely Greece default thread of the Generational Dynamics forum. Comments may be posted anonymously.) (19-Jun-2015) Permanent Link
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18-Jun-15 World View -- Russia's 'saber-rattling' nuclear threat may be directed at China, not Europe

Hamas and Israel discuss a 5-year ceasefire

This morning's key headlines from GenerationalDynamics.com

Russia's 'saber-rattling' nuclear threat may be directed at China, not Europe


Putin news conference on Tuesday (Reuters)
Putin news conference on Tuesday (Reuters)

Russia's president Vladimir Putin on Tuesday said that Russia would add more than 40 intercontinental ballistic missiles (ICBMs) to its nuclear arsenal this year. As a reason, he expressed concern about anti-missile defenses that Nato is deploying in eastern Europe.

In fact, the US and Poland have been discussing the deployment of American heavy weapons in eastern Europe. Those discussions are a reaction to Russia's invasion and annexation of Ukraine's Crimean peninsula and Russia's invasion of east Ukraine.

Nato has condemned Putin's nuclear announcement as "saber-rattling." According to Nato Secretary-General Jens Stoltenberg:

"[Putin was] confirming the pattern and behavior of Russia over a period of time - we have seen Russia is investing more in defense in general and in its nuclear capability in particular."

However, according to an analysis by KGS, Europe is the least of Putin's worries, and that the nuclear announcement was really directed at China:

"China is Russia's existential threat. Russian doctrine makes clear that tactical nuclear weapons would be used to defeat a Chinese attack. The willingness to use nuclear weapons to stop a conventional attack is the key insight from Putin's statement.

NATO and the US announced that they will position heavy equipment for armored cavalry or armored infantry units in the Baltic members of NATO. The stated purpose is to deter and defeat Russian aggression against NATO members. The US can move soldiers much faster than heavy equipment. In this solution, the major delay is the time it takes civil airliners to fly from the US to Vilnius, Riga and Tallinn.

With reasonable and old fashioned intelligence warning, NATO could bring armored units with prepositioned equipment in the Baltics to full combat readiness faster than the Russians can field a combat attack force. NATO planners need to understand that in every race to mobilize, NATO beats Russia, provided US equipment is prepositioned.

That leads to the second part of the discussion. If the US and NATO are clever enough to find a way to stop Russian conventional forces, Russia has few military options other than nuclear escalation, tactical or strategic. That makes Russia's strategic position much like that of Pakistan.

After three general wars and two crises that approached general war, it is now clear that Pakistan cannot defeat India in a general conventional war. US intelligence analysts need to understand this as settled lore from decades of US intelligence experience: Pakistan cannot win a conventional war against India.

In the near-war crises of 2001-2002, India achieved full combat readiness in less than three weeks, while the Pakistan Army, under President General [Pervez] Musharraf, failed to achieve full combat readiness. Pakistan's failure to generate its conventional military power meant that its leaders thought they had no alternative to activating Pakistan's strategic nuclear missile forces to stop an Indian conventional attack..

That is the significance of Putin's message. Russia cannot defend the national territory without using nuclear weapons. Pakistan and North Korea are in precisely the same position. That position does not imply that a conventional confrontation must go nuclear. It means that such a confrontation could go nuclear.

Russia's nuclear threats are serious because of the weaknesses of Russia's conventional forces. A key question is how will NATO respond."

CS Monitor and Reuters and KGS Nightwatch (Subscription)

Chad bans the burka after two suicide bombings

Two suicide bombings targeting the presidential palace and police headquarters in Chad's capital city N’Djamena on Tuesday left 27 people dead and over 100 wounded. Although no one has claimed responsibility, few people doubt that the perpetrators were Boko Haram.

In reaction, there's been a major security clampdown in N'Djamena. Central areas have been sealed off, checkpoints have been set up across the city, and vehicles with smoked glass windows have been banned from the roads.

The most controversial security change has been the banning the burka and the full-face veil, because they're being used as "camouflage," making it possible to hide explosives within clothing. Boko Haram militants have increasingly been using female suicide bombers in Nigeria, as they are more likely to smuggle bombs into public places without detection.

The ban will apply everywhere, not just public places. Not only will the ban be enforce, but security forces will go into markets and burn all full-face veils sold in markets. AFP and Vanguard (Nigeria) and BBC

Mahmoud Abbas dissolves the Palestinian unity government

On April 23 of last year, the two major Palestinian factions signed a "Palestinian unity agreement," as a prerequisite to forming a State of Palestine. The agreement provided for a series of steps to unify the two factions into a common government. But now, after over a year of bitter disagreements, Palestinian president Mahmoud Abbas has announced that he's going to dissolve the unity government. According to a spokesman, "The government will resign in the next 24 hours because this one is weak and there is no chance that Hamas will allow it to work in Gaza."

It's not clear whether Mahmoud Abbas, born 1935, really means it, or whether it's a negotiating position. During the past few years, Abbas has said on several occasions that he personally would resign as president, but changed his mind later.

In fact, Hamas has already said that it would not accept the dissolution:

"Hamas rejects any one-sided change in the government without the agreement of all parties.

No one told us anything about any decision to change and no one consulted with us about any change in the unity government. Fatah [Abbas] acted on its own in all regards."

If the unity government is really dissolved, then it would put the entire State of Palestine issue into question, since you can't have a State of Palestine unless you have a government. Ma'an News (Bethlehem) and AFP and Khaleej Times (Dubai)

Hamas and Israel discuss a 5-year ceasefire

The threatened dissolution of the unity government comes at a time when there are reports that Hamas and Israel are negotiating a five-year ceasefire that would partially end the blockade of Gaza by opening a seaport.

Hamas is under pressure from a number of directions. Hamas was defeated in last summer's Gaza war, and got nothing out of it. Furthermore, Hamas is now one of the "older generations" in Gaza, and is finding it difficult to control the young militant Salafist groups. So Hamas officials may have decided that negotiating with Israel may be their best bet. However, few people believe that anything firm will come out of the negotiations.

There has been one immediate change. Because of the negotiations, Egypt has eased the restrictions on the Rafah crossing, and is permitting people to travel freely between Gaza and Egypt. Jerusalem Post

(Comments: For reader comments, questions and discussion, see the 18-Jun-15 World View -- Russia's 'saber-rattling' nuclear threat may be directed at China, not Europe thread of the Generational Dynamics forum. Comments may be posted anonymously.) (18-Jun-2015) Permanent Link
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17-Jun-15 World View -- China tests hypersonic missile designed to defeat American missile defenses

Greece's bitter PM Tsipras hurls ultimatums and insults at IMF

This morning's key headlines from GenerationalDynamics.com

China says it's finished building artificial islands in South China Sea


Numerous Chinese dredging vessels around an artificial island in May 2 photo taken by P-8A Poseidon surveillance aircraft
Numerous Chinese dredging vessels around an artificial island in May 2 photo taken by P-8A Poseidon surveillance aircraft

For the past year, China has been creating new, artificial islands in the South China Sea in regions which have historically belonged to other countries, particularly Vietnam and the Philippines. China has been using aggressive military tactics to deprive Vietnamese and Philippine fishermen of their historical fishing grounds, and made demands that the U.S. end its surveillance activities in international waters in the South China Sea. Tensions escalated substantially last month when China repeatedly demanded that an American P-8A Poseidon surveillance plane leave the area. ( "26-May-15 World View -- China says war with US in South China Sea is inevitable")

China now says that it's completed its artificial islands project. However, that doesn't mean that China is becoming less aggressive militarily; to the contrary, it means that China is moving on to the next phase, building military structures on the artificial islands.

According to Chinese media:

"The islands and reefs after completion will not serve as China's military outposts in the Nansha Islands. Apart from satisfying the need of necessary military defense, they will be mainly for civilian use."

These two sentences contradict each other. The first sentence says "no military outposts," but the second sentence mentions "satisfying the need of military defense," which means that the islands will be used as military outposts. This is no surprise to anyone, as China prepares for war with its neighbors and with the United States. VOA and Global Times (Beijing)

China tests hypersonic missile designed to defeat American missile defenses

China has confirmed the fourth test, on June 7, of the new Wu-14 hypersonic glide strike missile designed to defeat American missile defenses.

During a war, the hypersonic missile is carried up by an ordinary ballistic missile, but is then released while still in the atmosphere. It can then glide almost horizontally to its target at almost 8,000 miles per hour. It can easily change direction in flight, to evade missile defense. The systems provide enhanced precision, speed, range, maneuverability and multiple-targeting, and are capable of carrying a nuclear warhead. In actual practice, several will be launched at once, making a missile defense almost impossible.

According to Chinese analysts, the missile test was timed to send a threatening message to the American military to stop doing surveillance in the South China Sea. Washington Free Beacon

Greece's bitter PM Tsipras hurls ultimatums and insults at IMF

The relationship between Greece and its creditors has been getting more and more bitterly acrimonious with every day that passes by, as the "drop dead" date of June 30 approaches. On Tuesday, in a speech to Parliament, Greece's far left prime minister Alexis Tsipras accused the International Monetary Fund of "criminal responsibility":

"The time has come for the IMF’s proposals to be judged not just by us but especially by Europe.

The IMF has criminal responsibility for today’s situation. ...

Right now, what dominates is the IMF’s harsh views on tough measures, and Europe’s on denying any discussion over debt viability.

The fixation on cuts... is most likely part of a political plan... to humiliate an entire people that has suffered in the past five years through no fault of its own.

The time has come for the IMF’s proposals to be judged in public ... by Europe,” he told the MPs of his radical left Syriza party."

The IMF has insisted on further cuts to Greece's pension system, and a rise in value-added taxes.

Jean-Claude Jüncker, the president of the European commission, shot back by essentially accusing Tsipras of lying to the Greek people: "I don’t care about the Greek government, I do care about the Greek people. The debate in Greece and outside Greece would be easier if the Greek government would tell exactly what the Commission ... is really proposing." He indicated that Tsipras was lying about the value-added tax.

A spokesman for Greece's opposition New Democracy party, the party that governed Greece prior to Tsipras's victory in January, accused Tsipras of intentionally forcing Greece to leave the euro currency:

"The negotiations are not starting now; instead the mocking of the Greek people is reaching its peak. Mr Tsipras is pushing the country toward a dead end, the bill is becoming astronomical. Is it possible this was their secret agenda?"

Guardian (London) and Kathimerini and Bloomberg and Kathimerini

(Comments: For reader comments, questions and discussion, see the 17-Jun-15 World View -- China tests hypersonic missile designed to defeat American missile defenses thread of the Generational Dynamics forum. Comments may be posted anonymously.) (17-Jun-2015) Permanent Link
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16-Jun-15 World View -- France, Italy have bitter feud over migrants as quota system collapses

South Africa defies International Criminal Court, al-Bashir flies free

This morning's key headlines from GenerationalDynamics.com

EU's new migrant quota system appears to be near collapse


Migrants in Italy's border with France demanding that France let them in (EPA)
Migrants in Italy's border with France demanding that France let them in (EPA)

In late May, the EU government in Brussels enacted a quota system that would distribute some 60,000 migrants to different countries, based on a calculation that looked at each country's size, GDP and unemployment rate. France has a quota of 7,000. Germany has a quota of 8,700. Sweden has a quota of 1,300.

However, Britain and Ireland opted out, and Denmark and Poland said they also would do so. Then France became reluctant, and Italy was furious that it may be left to deal with the tsunami of migrants by itself. So now, just three weeks later, the whole quota system appears to be collapsing.

So Italy is threatening to retaliate by issuing so-called Schengen visas to migrants. The Schengen treaty is a core principle on which the European Union was founded, in that it permits free travel across borders throughout most of the EU. In fact, the EU is staging special events this week to celebrate 30 years of borderless travel in the Schengen area.

If this threat is carried out, and Italy issues thousands of Schengen visas to migrants, then the visas will cease to be honored, and another core part of the European Union will be over.

EU officials will meet on Tuesday in Luxembourg to try to resolve the problem. Guardian (London) and ITV (London)

France, Italy have bitter feud over migrants as quota system collapses

For several days, about 200 migrants from Africa have been trying to cross the border between France and Italy, but French police have been blocking their entrance.

That was just the latest incident in a continuing issue. In the preceding week, 1,439 illegal immigrants had been arrested by law enforcement authorities in France, and over 1,000 were forced to return to Italy.

French officials say that they're following the letter of the law, which says that migrants must be processed by the country in which the first land. According to France's interior minister Bernard Cazeneuve:

"The Dublin rules must be respected. When migrants arrive in France that have been through Italy and registered there, European law applies and that means they must be returned to Italy."

Italian officials are becoming increasingly furious that they're being forced to deal with the migrant problem almost alone. Even under the proposed quota system, only 24,000 immigrants from Italy would be distributed to other countries, a small fraction of the the 100,000 to 200,000 immigrants expected in 2015.

Italy's prime minister Mario Renzi said on Sunday that the severity of the crisis "should not be underestimated," adding, "Redistributing just 24,000 people is almost a provocation."

According to Renzi, if Italy does not receive help and solidarity from other EU members in welcoming immigrants, then Italy will institute a "Plan B that would be a wound inflicted on Europe." He didn't say what Plan B would entail. Vice News and Independent (London) and Reuters

South Africa defies International Criminal Court, al-Bashir flies free

As we reported yesterday, international law required South Africa to arrest Sudan's president Omar al-Bashir and turn him over to the International Criminal Court (ICC), which has charged him with war crimes for the rape, torture and slaughter of hundreds of thousands of civilians by the Sudan government forces in the Darfur genocide.

South Africa is a signatory to the ICC charter, and so was obligated to arrest al-Bashir while he was on South African soil attending an African Union summit. The case was even being contested in a South African court. But while this court was in session, al-Bashir was permitted to board his private jet and return to Sudan.

This incident throws the future of the ICC into doubt. The ICC depends on member countries to meet their commitments. The South African government violated the rulings of its own courts, as well as its contract with the ICC. CNN and Al Jazeera

(Comments: For reader comments, questions and discussion, see the 16-Jun-15 World View -- France, Italy have bitter feud over migrants as quota system collapses thread of the Generational Dynamics forum. Comments may be posted anonymously.) (16-Jun-2015) Permanent Link
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15-Jun-15 World View -- Darfur genocide overshadows women's empowerment summit in South Africa

Everyone prepares for the worst, as Greece bailout talks collapse again

This morning's key headlines from GenerationalDynamics.com

Darfur genocide overshadows women's empowerment summit in South Africa


One of the many huge refugee camps that house millions of displaced Darfurians
One of the many huge refugee camps that house millions of displaced Darfurians

This year's African Union leaders summit took place on Sunday in Johannesburg, South Africa, with the nice politically correct theme "A Year of Women Empowerment and Development towards Africa's Agenda 2063."

However, all the wonderful speeches about empowering women were overshadowed by demands that South Africa arrest one of the attending heads of state, Sudan's president Omar al-Bashir, who is wanted by the International Criminal Court (ICC) over alleged war crimes and crimes against humanity committed during the Darfur conflict in western Sudan.

The ICC arrest warrant was issued in 2009, but al-Bashir has never been arrested because Sudan is not a signatory to the ICC charter. Furthermore, al-Bashir has been going to great lengths over the years to make sure that he never travels to a country that IS a signatory to the ICC, since that country would be obligated under international law to arrest him and turn him over to the ICC.

So it's a very big surprise to a lot of people that al-Bashir decided to travel to the African Union on Saturday, since it's in South Africa, which IS a signatory to the ICC. Somehow, some way, al-Bashir must have received a guarantee from South African president Jacob Zuma that he wouldn't be arrested.

However, the plan has been at least temporarily thwarted because an activist group got a South African court to detain al-Bashir and prevent him from leaving the country until the court can decide whether South Africa is obliged to honor the ICC warrant.

There are sharp differences of opinion:

The court should read a decision on Monday or Tuesday. CNN and Mail & Guardian (South Africa) and Independent (South Africa)

History of Darfur genocide

The Darfur genocide has been in the news for over ten years. Seven or eight years ago, it was sometimes called "everybody's favorite African war" since George Clooney and other movie stars, and politicians like Susan Rice, Nancy Pelosi and Joe Biden have all made "Stop the genocide" and "Save Darfur" and "Enough is enough" part of a very stylish and progressive do-good campaign. During the 2007 Iraq surge, Joe Biden even wanted to withdraw all the forces from Iraq, and pour them into the Darfur war. The Darfur war was VERY chic and trendy, unlike the Iraq war.

Low level violence began in the 1970s between two ethnic groups, one of farmers (the "Africans") and the other of camel herders (the "Arabs"), in the usual disputes over land and water. The violence increased from year to year, and in the 1990s, Sudan's government in Khartoum delegated the responsibility of policing the region to the Arab Janjaweed militia, formed from certain groups of herders.

Violence continued to increase, and by 2003, it had turned into a full-scale generational crisis war. (A detailed history can be found in my 2007 article, "Ban Ki Moon blames Darfur genocide on global warming") At that point, the Janjaweed militias (herders) became extremely violent, with a program of massacres, mass murders, rapes, genocide and scorched earth.

As the slaughters and rapes continued, the glamorous politicians and movie stars paid visits and expressed outrage. However, the fun finally wore off, and in 2009 the International Criminal Court (ICC) issued an arrest warrant for Sudan's president Omar al-Bashir. According to the warrant:

"[T]here are reasonable grounds to believe that, insofar as it was a core component of the GoS [Government of Sudan] counter-insurgency campaign, there was a GoS policy to unlawfully attack that part of the civilian population of Darfur — belonging largely to the Fur, Masalit and Zaghawa groups — perceived by the GoS as ... opposing the GoS in the ongoing armed conflict in Darfur. ...

[T]here are also reasonable grounds to believe that, as part of the GoS's unlawful attack on the above-mentioned part of the civilian population of Darfur and with knowledge of such attack, GoS forces subjected, throughout the Darfur region, (i) hundreds of thousands of civilians, belonging primarily to the Fur, Masalit and Zaghawa groups, to acts of forcible transfer; (ii) thousands of civilian women, belonging primarily to these groups, to acts of rape; and (iii) civilians, belonging primarily to the same groups, to acts of torture."

The United Nations has mounted a massive peacekeeping force, to try to end the Darfur war, but in fact it's nowhere near over. In fact, a UN report in January indicates that the war considerably worsened in 2014, with more than 3,000 villages targeted by forces aligned with the Government of Sudan, destroying the villages and forcing 400,000 people to flee for their lives. ICC arrest warrant (PDF) and AP and DabangaSudan

Rwanda versus Darfur versus Central African Republic civil wars

The Darfur civil war and the Central African Republic (CAR) civil war are ongoing wars today, while the 1994 Rwanda civil war ended long ago. Let's compare the three.

From the point of view of Generational Dynamics, every generational crisis war must end in what I call an "explosive climax," a genocidal event that's so horrible that the survivors on both the winning and losing sides vow to never let it happen again. In the Rwanda civil war, the explosive climax was the slaughter of some 800,000 Tutsis by the Hutus. Since then, Rwanda has gone through a Recovery Era in an attempt to prevent any recurrence, and it's been possible without any UN peacekeeping forces.

But in Darfur and CAR, there are ambitious United Nations / African Union peacekeeping forces. The UN is spending huge amounts of money trying to create peace -- get the same results as in Rwanda, but without the explosive climax. That's impossible. It's the explosive climax, the horrific event that ends the war, that brings about the desired peace.

There are millions of Darfurians in refugee camps, under the protection of the UN peacekeeping forces. The UN forces are preventing the explosive climax, but they can't do so forever. Those millions of people are sitting ducks. At some point, the peacekeeping forces will withdraw, and the Arab militias will go through those refugee camps like a hot knife through butter, raping, torturing and slaughtering anyone they can. That will be the explosive climax, and after that, peace can come to Darfur once again.

Everyone prepares for the worst, as Greece bailout talks collapse again

With a big 1.5 billion euro debt payment due on June 30, EU-Greece weekend talks to negotiate a new deal have, once again, collapsed. Increasingly, markets are expecting that Greece will default, and be forced to leave the euro currency. The Europeans and the Greeks are all thought to have prepared some plan in case the worst happens, and that seems increasingly likely. Dow Jones

(Comments: For reader comments, questions and discussion, see the 15-Jun-15 World View -- Darfur genocide overshadows women's empowerment summit in South Africa thread of the Generational Dynamics forum. Comments may be posted anonymously.) (15-Jun-2015) Permanent Link
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14-Jun-15 World View -- Jihadist Attack on Druze population could bring Israel into Syria war

Druze community split on Syria war after al-Nusra attack

This morning's key headlines from GenerationalDynamics.com

Druze community split on Syria war after al-Nusra attack


Druze clerics in a meeting in Beirut on Friday (AP)
Druze clerics in a meeting in Beirut on Friday (AP)

The Druze community, with about one million living in Syria and Lebanon, and 104,000 living in Israel, have stayed out of the Syria war, although they are split in supporting or opposing Syria's genocidal president Bashar al-Assad.

However, on Wednesday, militants from the al-Qaeda linked Jabhat al-Nusra (al-Nusra Front) attacked a Druze community in the village of Qalb Lawzah, in Idlib province in Syria, and killed at least 20 Druze men and women. This has evoked strong nationalism among the Druze in Lebanon.

One Lebanese Druze leader who supports al-Assad, Wiam Wahhab, made a televised speech, saying,

"We will not accept to sell Druze blood!

[The Druze in Syria] are ready to defeat the terrorists, but what they lack is arms. Lebanon’s Druze are ready to help, we are ready to form an army of 200,000 fighters to defend the Druze!"

However, the principal Lebanese Druze leader, Walid Jumblatt, who opposes al-Assad, said on Twitter:

"Any inciting rhetoric will not be beneficial, and you should remember that Bashar Assad’s policies pushed Syria into this chaos."

An al-Nusra leader on Saturday apologized for the murder of the 20 Druze civilians, but it's unclear whether the Druze public will accept the apology in view of the 20 murders. Daily Star (Beirut) and Times of Israel

History of the Druze religion

The Druze came into existence as a secret society, and only announced itself to the world in the early 1000s (11th century). There was a brief period of proselytizing that ended in 1050. Since then it has been impossible to convert to Druze from any other religion.

The Druze creed arose from a branch of Shia Islam, but it incorporates concepts from Christianity and Judaism, as well from Greek philosophy and Hindu and Buddhist influences.

Like any other society, they have had their generational crisis wars, during some of which they were victims of genocide, and in others they were perpetrators of genocide, making them no different from anyone else. A particularly bloody generational crisis war occurred in 1860 with the Maronite Christians, which is considered a victory by the Druze, resulting in the deaths of 10,000 Christians. It's only been in recent years that the two groups have attempted to reconcile. Jewish Virtual Library

Jihadist Attack on Druze population could bring Israel into Syria war

Israel has been very careful to avoid getting involved in the Syria war, but a recent attack jihadist attack on the Druze ethnic community in Syria may force Israel's hand. The Druze in Syria fear that they'll be left on their own to fight al-Nusra and the Islamic State (IS or ISIS or ISIL or Daesh), especially with the Syrian army possibly near total collapse. The Druze consider this to be an existential threat to the entire Druze community.

Thousands of Druze protested in Israel on Saturday, calling on Israel to aid the Druze in Syria. Typical chants were "Stop the massacres," and "We want the Druze among us." According to one Druze Israeli official, "We do not plan to sit idly by while our brothers are being slaughtered in Syria."

From Israel's point of view, the danger is that if jihadist groups start attacking the Druze in Syria, then hundreds of thousands of Druze civilians will pour across the border into Israel, creating a major humanitarian crisis, and forcing Israel to enter the war.

Activists are asking Israel to send arms to the Syrian Druze. If Israel withholds support, it could be held responsible for whatever happens to the Syrian Druze community, including a mass slaughter by jihadists.

On the other hand, Israel may make the choice of sending arms to the Syrian Druze, allowing them to defend themselves. This would mean abandoning the consistent policy of abstaining from direct involvement in that war. It would moreover entail setting up new machinery for establishing, training and arming a Druze army of 20,000 to 30,000 fighting men.

There are also reports that Iran is offering to arm the Druze, something that would give them a great deal of control over the Druze community in Syria and Lebanon.

This is becoming a major political issue in Israel, and there are no easy choices. YNet (Israel) and Debka (Israel) and Fox News

(Comments: For reader comments, questions and discussion, see the 14-Jun-15 World View -- Jihadist Attack on Druze population could bring Israel into Syria war thread of the Generational Dynamics forum. Comments may be posted anonymously.) (14-Jun-2015) Permanent Link
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13-Jun-15 World View -- Australia accused of paying people smugglers to take migrants to Indonesia

France's Dominique Strauss-Kahn acquitted of 'aggravated pimping'

This morning's key headlines from GenerationalDynamics.com

Australia accused of paying people smugglers to take migrants to Indonesia


The notorious Nauru detention center for migrants
The notorious Nauru detention center for migrants

Indonesian people smugglers who had been on a boat traveling to Australia with 65 people from Bangladesh, Sri Lanka and Myanmar say that Australian authorities prevented them landing on Australian shores, and paid them AUS$5,000 to take the migrants to Indonesia.

This has led to accusations directed at prime minister Tony Abbott that Australia is regularly paying people smugglers to take migrants to other countries. When asked a question about this on a radio show on Friday, he evaded the questioned and alluded to Australia's tough anti-migrant policies:

"What we do is we stop the boats by hook or by crook because that's what we've got to do and that's what we've successfully done and I just don't want to go into the details of how it's done because like a lot of things that law enforcement agencies have to do, it's necessary, it's difficult and at times I suppose it's dangerous work, but we do it and we've stopped the boats. ...

What the government has done is stop the boats. We have stopped the boats. And we've used a whole range of measures. We will do whatever we reasonably can, consistent with the principles of a decent and humane society, to insure that the boats stay stopped, and I am never, never going to apologize."

Indonesian officials are criticizing Abbott's evasion as unethical. Some Australian officials are pointing out that if the charges are true that the government is paying people smugglers, then it will encourage more people smuggling.

The number of migrants reaching Australia has been sharply reduced in recent years because of tough policies that prevent migrants from settling in Australia. Thousands have been sent to a notorious rat-infested detention center on the island of Nauru in Micronesia. In other cases, Australian naval vessels have pulled the migrant boats out into the sea, or transferred the migrants to Cambodia, under terms of a deal made between the two countries. Australian and Jakarta Post and Guardian (London)

Pakistan shuts down 'Save the Children' and threatens other NGOs

Pakistan's government has shut down the aid organization Save the Children, locked and seized their office building in Islamabad, and gave them 15 days to leave the country.

According to Interior Minister Chaudhry Nisar Ali Khan, Pakistan is clamping down on non-government organizations (NGOs) that provide aid:

"We will not allow anyone to work under the table. We will not allow any NGO to work in this country against Pakistan’s interests, culture and values."

He also accused some local NGOs, without naming any, of "taking foreign funding to work on a foreign agenda." He indicated that they were guilty of espionage.

Pakistan's campaign against NGOs is believed to have been triggered by the American administration bragging in 2011 that a vaccination program in Pakistan was used as a cover to locate and capture Osama bin Laden. Save the Children says they had nothing to do with that, but since 2011, every foreign aid program has come under suspicion.

According to the US State Dept., "We are concerned about Pakistan's crackdown on international charitable organizations and other NGOs. ... [Several NGOs] have reported difficulty doing business in Pakistan. This has had a significant negative impact on international partner efforts to support Government of Pakistan priorities." Dawn (Pakistan) and State Dept. and Daily Express (London)

France's Dominique Strauss-Kahn acquitted of 'aggravated pimping'

Dominique Strauss-Kahn (DSK) used to be the head of International Monetary Fund (IMF), a position now held by Christine Lagarde, and he once hoped to run for president of France in the Socialist Party, a role taken over by the current Socialist president François Hollande. But all that came to an end in 2011, when a hotel maid Nafissatou Diallo, accused him of having raped her in a NY city hotel. ( "2-Jul-11 News -- France's politics in turmoil from collapse of Strauss-Kahn rape case")

The rape case collapsed because Diallo was evidently a liar, but she made out pretty well anyway, reportedly collecting $1.4 million in a civil case, and now running her own restaurant in New York.

However, that case opened Pandora's box for DSK, who was next accused by a Paris prosecutor of "aggravated pimping," meaning that he procured prostitutes for parties in Party, Brussels and Washington.

During the trial, DSK said he attended all these parties but said, hilariously, that he didn't know that the girls were prostitutes. Here are some famous DSK quotes from the trial:

When asked by the judge about the presence of prostitutes at the sex orgies, the ex-IMF chief declared: "I am horrified at the practice of using prostitutes."

When quizzed later he said: “Prostitution is an assault on women’s dignity.”

The court also heard DSK comparing prostitutes at orgies to flying fish. "They do exist," he said. "But you don't often see them."

That trial finally concluded on Friday, with the judge agreeing that there was not enough evidence to convict him.

While we're on the subject of rape, it's become a major international issue recently that the Obama administration has been claiming that 25% of all college girls get raped. These figures are parroted by mainstream media like the NY Times and NBC News, whose reporters are too dumb to even bother to check them out. And I've even heard them repeated on the BBC and Al-Jazeera.

These figures on their face are totally ridiculous. No father who actually believed them would send his daughter to a college if he thought there was a 25% chance she would be raped.

Also, imagine the NBC News and NY Times newsrooms, filled with reporters and producers who went to college. If you believe the moronic figures, then those newsrooms must be filled with rapists and rape victims. The same would be true of the White House. If they really believe the figures, then they would have an obligation at least to find out who all the rapists are in their organizations, and get rid of them.

I spent ten years writing a book on gender issues for men, called Fraternizing with the Enemy - A book on gender issues for men and for women who care about men. I researched the whole range of gender issues - divorce, domestic violence, rape, teen motherhood, sexual harassment, child abuse, incest, with an appendix on quotes from feminists that's well worth reading.

In my book, I quoted Katie Roiphe from her 1993 book about her college experience:

"According to the widely quoted Ms. survey, one in four college women is the victim of rape or attempted rape. One in four, I remember standing outside the dining hall in college looking at a purple poster with this statistic written in bold letters. It didn't seem right. If sexual assault was really so pervasive, it seemed strange that the intricate gossip networks hadn't picked up more than one or two shadowy instances of rape. If I was really standing in the middle of an epidemic, a crisis, if 25 percent of my female friends were really being raped, wouldn't I know it?"

In other words, if rape were common in college, she would know a lot of rape victims among her female friends, but she doesn't know any. Once again, if the White House really believes the figures, then they ought to do something about all the rapists working in the White House.

If you actually do the research, as I did, checking many, many sources, then there's no question about the statistics: Only about 0.1% (one-tenth of one percent) of college girls get raped. Even if you make the dubious assumption that as many as 3 out of 4 rapes don't get reported, the total figure is still only 0.75%. It's nowhere near 25%. But 0.1% is politically inconvenient for the Obama administration, so they manufacture the number they want, knowing that today's mainstream media reporters are too stupid to check it out. The Local (France) and France 24 and Daily Mail (London) and Book: Fraternizing with the Enemy (PDF)

(Comments: For reader comments, questions and discussion, see the 13-Jun-15 World View -- Australia accused of paying people smugglers to take migrants to Indonesia thread of the Generational Dynamics forum. Comments may be posted anonymously.) (13-Jun-2015) Permanent Link
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12-Jun-15 World View -- IMF and ECB walk out of negotiations with Greece

Zimbabwe offers 5 US dollars for 175 quadrillion Zim dollars

This morning's key headlines from GenerationalDynamics.com

Zimbabwe offers 5 US dollars for 175 quadrillion Zim dollars


Boy carrying Zim dollars
Boy carrying Zim dollars

Zimbabwe citizens still having bank accounts denominated in Zim dollars will have them replaced with accounts in US dollars. Each depositor will receive $5 for any account up to 175 quadrillion dollars. The Zim dollar, which has been completely destroyed the country's genocidal president Robert Mugabe, is finally being buried forever.

It would be hard to choose a country leader anywhere in the world who's more vile than Syria's Bashar al-Assad, but Zimbabwe's 91 year old Robert Mugabe certainly qualifies. Mugabe's actions to transform Zimbabwe, the breadbasket of southern Africa, into a starving disease-ridden country are almost beyond belief. (See "Zimbabwe's 'Liberation Hero' president Robert Mugabe continues to destroy his country" from 2008.)

As recently as the 1999, Zimbabwe was a breadbasket of Africa, exporting up to 500,000 metric tons of surplus food. By 2003, Zimbabwe was so starved that it had to receive 500,000 metric tons in food aid from the U.N.'s World Food Program.

What happened during those three years was a Marxist socialist "land reform" program by Robert Mugabe that confiscated 4,500 white-owned commercial farms and redistributed the property to loyal supporters of his Zanu-PF party -- i.e., members of his own Shona ethnic group. Anyone from the Ndebele tribe, the Shona's centuries old enemy, who objected was killed, tortured or jailed.

Many of the new owners were inexperienced in running large farms, and food production fell dramatically, as only a few hundred of the confiscated farms continued to function normally. Harvests of food staples plummeted by as much as 90%, livestock herds dwindled and production of the main cash crop, tobacco, slumped badly.

The results were dramatic, and show how it's possible for one dictatorial leader to destroy a country single-handedly. A formerly well-fed country had rampant 80% poverty, and the inflation rate went from 700% to 1000% to 10000% to 150000% and continued rising 500 billion percent. In 2009, Zimbabwe switched to a dual-currency economy, accepting the US dollar as valid currency. At that point, the Zimbabwe dollar collapsed completely, and millions of citizens had their saving destroyed.

In addition to having completely destroyed Zimbabwe's economy, Mugabe is best known for his 1984 pacification campaign known as "Operation Gukurahundi" (The rain that washes away the chaff before the spring rain). During that campaign, accomplished with the help of Mugabe's 5th Brigade, trained by North Korea, tens of thousands of people, mostly from the Ndebele tribe, were tortured and slaughtered. All Africa and Zero Hedge

IMF and ECB walk out of negotiations with Greece

The International Monetary Fund (IMF) walked out of talks in Brussels with Greece's prime minister Alexis Tsipras because the two positions were not getting any closer. According to an IMF spokesman:

"There are major differences between us in most key areas. There has been no progress in narrowing these differences recently and thus we are well away from an agreement.

We remain engaged. The IMF doesn’t leave the table."

European Central Bank (ECB) officials left Brussels as well.

The lenders are demanding that Greece institute reforms to address various economic issues, including Greece's bloated public sector, curbing tax evasion and corruption, privatizing public businesses, and adjusting generous pension and minimum wage policies. On Wednesday there were reports that Europe was willing to consider "kicking the can down the road again" by requiring only one reform now, and leaving the others for next year, but nothing has come of that.

European Council President Donald Tusk said: "We need decisions, not negotiations now. There is no more space for gambling; there is no more time for gambling. The day is coming, I am afraid, that someone says the game is over. ... The Greek government has to be, I think, a little bit more realistic."

A Greek official appeared upbeat: "The Greek delegation, as agreed, is ready to intensify deliberations in order to conclude a deal soon, even in the coming days."

Tsipras would like the IMF to completely write off the debt that Greece owes. The IMF can't do that, because they've loaned a lot of money to a lot of other countries, and if Greece's debt were written off, then others would demand the same treatment.

Tsipras can't agree to pension reduction or the other reforms because his government would probably collapse. On Thursday, Greece's Communist party took over the finance ministry, saying Tsipras is the third Prime Minister to sell Greece down the river.

The "final deadline" for a deal is June 18, the date of the next Eurogroup meeting of eurozone finance ministers. However, there have been so many "final deadlines" till now, we can't be sure.

It's thought that the "final final deadline" is June 30, when Greece must make a 1.6 billion euro payment to the IMF.

The logic of the Game of Chicken is that neither car veers off until the very last second. So if there's going to be a deal, it will probably occur just a couple of minutes before midnight on June 30. Kathimerini and Reuters

The Greek Tragedy must move to the happy ending

Commenting on Greece's debt crisis, EU Economic Affairs Commissioner Pierre Moscovici said:

"I really like Greek tragedy but now we must move to the happy ending."

Apparently Moscovici knows little about ancient Greek theatre. If he did, then he would know that a comedy has a happy ending, and a Greek tragedy always has a tragic ending. Business Insider

(Comments: For reader comments, questions and discussion, see the 12-Jun-15 World View -- IMF and ECB walk out of negotiations with Greece thread of the Generational Dynamics forum. Comments may be posted anonymously.) (12-Jun-2015) Permanent Link
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11-Jun-15 World View -- Pakistan reacts as Indian forces cross border and strike militants in Myanmar

Reports of breakthrough in Greece's debt crisis

This morning's key headlines from GenerationalDynamics.com

Indian forces cross Myanmar border to strike at militants


Indian army forces
Indian army forces

For the first time, Indian special forces crossed the border into Myanmar (Burma) and conducted a cross-border operation to strike at the terrorist group National Socialist Council of Nagaland – Khaplang (NSCN-K). The Khaplang terrorists are based in Myanmar, but have conducted numerous terrorist attacks in northeast India. The retaliation was triggered by an ambush last week on Thursday (4-Jun) on Indian soil that killed 18 soldiers. The terrorists escaped police and security forces by running back across the border into Myanmar.

Early Tuesday morning, a team of 70 elite Indian special forces commandos crossed the border into Myanmar and struck at the Khaplang. The commandos were air-dropped from helicopters deep inside Myanmar around 3 am, equipped with assault rifles, rocket launchers, grenades and night vision goggles. They walked 5 km to two Khaplang camps and destroyed them, killing 38 militants.

NSCN-K was formed on April 30, 1988, under the leadership of S S Khaplang, as a secessionist movement of the Naga people in India and Myanmar to form a separate nation, the People's Republic of Nagaland. Mumbai Mirror and Indian Express and South Asia Terrorism Portal (SATP - India)

Cross-border raid implications for India with Pakistan and China

Indian officials are brimming with nationalistic pride today after the cross-border attack in Myanmar (Burma) that killed 38 militants who had ambushed Indian soldiers several days earlier. According to one official:

"This message is now very clear to all those who harbored intentions of terror on our country. Unprecedented though, but our Prime Minister has taken a very bold step and given a go ahead for hot pursuit into Myanmar."

Another official said:

"The military's action against insurgents with assistance from the Myanmarese government speaks volumes about India's resolve to fight terror. This is a lesson and a message to all the terror groups that India will not hesitate in going beyond its geographical borders to eliminate terrorists."

There is some doubt about the truthfulness of this statement, as it's not clear that the Myanmar government was aware of the strike until after it happened. In fact, the initial response from the Myanmar government on the military strike was to say that it took place entirely on Indian soil.

In fact, there have been some reports that Myanmar and officials from China's People's Liberation Army (PLA) have been supporting the NSCN-Khaplang terrorist attacks into India.

Editorial opinion in India seems highly positive. One editorial says that "Prime Minister Narendra Modi has demonstrated that he is willing to bite the bullet and take tough action when it comes to the killing of Indian soldiers."

But the raid has raised some very sensitive hackles in China and Pakistan.

In 2008, there was a horrific 3-day terror attack on Mumbai by Lashkar-e-Taibi (LeT), a Pakistani terrorist group that was formed in the 1990s by Pakistan's Inter-Services Intelligence (ISI) agency to fight India in the disputed regions of Kashmir and Jammu. After the attack, India threatened to send its army to cross the border and attack LeT on Pakistani soil, which might have led to a major war. This was prevented by hard intervention by Secretary of State Condoleezza Rice. Furthermore, as we reported in April, Pakistan has refused to prosecute the mastermind of the Mumbai attack, and he walks free today, infuriating the Indians.

Since then, there have been other terrorist attacks by Pakistan-based terror groups in India. The nationalistic gloating by Indian officials seems to suggest that India would no longer hesitate to cross the border into Pakistan in pursuit of a Pakistani terrorist.

But according to Pakistan's interior minister:

"Pakistan is not like Myanmar. ... Those having ill designs against Pakistan should listen carefully that our security forces are capable of matching response to any adventurism. ... Indian leaders should stop day dreaming."

He accused India of conducting terrorist attacks on Pakistan, and said that India's "nefarious designs" will not succeed in future as in the past. Dawn (Pakistan) and Times of India

Reports of breakthrough in Greece's debt crisis

There were reports through the day on Wednesday that Germany will be satisfied with just one of the reforms that Greece has previously committed to.

The Europeans are demanding that Greece institute reforms to address various economic issues, including Greece's bloated public sector, curbing tax evasion and corruption, privatizing public businesses, and adjusting generous pension and minimum wage policies.

According to the reports, only one of these reforms would be required, and the others would be postponed to the future. If true, this compromise would, in effect, "kick the can down the road" once more.

However, there was a late night meeting in Brussels between Germany's Chancellor Angela Merkel and Greece's Prime Minister Alexis Tsipras, and the only word following the meeting was that negotiations still had a long way to go.

Greece must make a debt repayment of 1.6 billion euros to the IMF on June 30. It's thought that Greece has no chance of making that payment unless a new bailout program for Greece is approved in the next week. Bloomberg and Reuters

(Comments: For reader comments, questions and discussion, see the 11-Jun-15 World View -- Pakistan reacts as Indian forces cross border and strike militants in Myanmar thread of the Generational Dynamics forum. Comments may be posted anonymously.) (11-Jun-2015) Permanent Link
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10-Jun-15 World View -- Obama planning additional troop deployment to Iraq in new escalation

US-supported rebels capture key Assad regime army base in Syria

This morning's key headlines from GenerationalDynamics.com

Burundi's Hutu government in violent crackdown on Tutsi protesters


Student camp outside the American embassy in Bujumbura (Reuters)
Student camp outside the American embassy in Bujumbura (Reuters)

Hundreds of students are camping outside the American embassy in Bujumbura, the capital city of Burundi, fearing violence by police and security forces. Elsewhere, the violent crackdown has created 100,000 refugees, many of whom have fled into Rwanda and Uganda.

Burundi is following a familiar pattern of a kind experienced by many countries in a generational Awakening era, one generation past the end of a bloody, genocidal civil war. The 1994 war between Hutus and Tutsis in Rwanda and Burundi, resulting it around a million deaths, left the survivors traumatized, vowing they'd never let it happen again.

But now, a generation later, young people have no personal memory of the 1994 slaughter, and all the old hatreds that gave rise to the war are being inflamed again. This is raising fears that the civil war will be revived in all its fury, something that can't happen in a generational Awakening era because the survivors won't permit it.

But just the fear of a renewed civil war is driving policies that are detrimental to Burundi. Burundi's Hutu president Pierre Nkurunziza took office in 2005, and has served for two terms, which is the maximum allowed under the country's constitution, written during the post-war Recovery era with the intention of preventing another civil war. Nkurunziza was appointed by the parliament in 2005, and was re-elected in 2010, and now wants to run for a third term in the 2015 election. He claims that since he was appointed as president in 2005, his first term doesn't count, and he can run for another term. He claims that his presidency will bring stability to Burundi. His Tutsi opponents say that his power grab will destabilize the country, and make a new civil war more likely.

Nkurunziza is following the violent crackdown on protesters that we've seen in other Awakening era countries, such as Iran, Syria and Thailand. Peaceful anti-government protesters are considered to be enemies of the state, destabilizing the country. President Nkurunziza, claiming that he knows best how to keep the country safe, massacres the peaceful protesters, just like Syria's president Bashar al-Assad, just like Iran's Supreme Leader Ayatollah Seyed Ali Khamenei, and just like Thailand's Thai-Chinese élite army junta.

Nkurunziza has postponed the election from June to July 15, and still insists that he will run for a third term, something that his opponents say will risk a new civil war. International Business Times and Reuters and All Africa

Obama planning additional troop deployment to Iraq in new escalation

Reports from unnamed officials say that the Obama administration has adopted a major shift in strategy in Iraq. The Obama administration is planning to establish a new military base in Anbar Province and send hundreds of additional American military trainers to help Iraqi forces retake the city of Ramadi and repel the Islamic State (IS or ISIS or ISIL or Daesh).

A day after President Barack Obama announced that the administration had no plan for defeating ISIS, anonymous Pentagon officials say that the Administration is planning a significant troop escalation in Iraq. According to the reports, 1,000 new troops will be added to the 3,080 troops already there.

Last year in June, President Obama announced that the U.S. would send 300 American advisors to train, advise and support the Iraqi securities forces fighting ISIS. Since then, this number has been increased, one step at time, from 300 to 800 to 1500 to 3100, and now presumably to over 4,000. He said that this was "not mission creep." He insisted that the "U.S. will not be putting boots on the ground." The goal is "to degrade and ultimately destroy the terrorist group known as ISIL." All of this was in addition to air force strikes against ISIS.

President Obama, whose foreign policy has been one disaster after another, appeared to have no coherent policy in Iraq at all after saying on Monday, "We don't yet have a complete strategy because it requires commitments on the part of the Iraqis," even though many months had past. Pentagon sources quickly stated that they had presented several options and recommendations to Obama months ago, and they were waiting for him to make up his mind. Analysts are saying that 1,000 more troops just for training purposes won't make any difference, so it remains to be seen whether this announcement is just cosmetic, or whether there's more to it.

For those of us who have been around for a while, sending 1,000 more troops to Iraq looks very much like the kind of escalation and "mission creep" that got us into other wars with no planning. Washington Post and NY Times and CNN

US-supported rebels capture key Assad regime army base in Syria

An umbrella group of opposition fighters, known as the "Southern Front," has captured one of Syria's largest army bases, 56 miles south of Damascus, after 24 hours of fighting the Syrian army. The Southern Front is backed by the US and Jordan, and several Arab countries provide money and weapons. The Southern Front has now cut off Syria's army from the border crossings to Jordan.

We've reported several times in the last few weeks that the army of Syria's president Bashar al-Assad is facing numerous setbacks and may be near total collapse, and that Russia may end support for al-Assad. These new setbacks make a collapse more likely.

In the regions north of Damascus, another rebel alliance led by the al-Qaeda linked Jabhat al-Nusra (al-Nusra Front), has captured much of the region from Aleppo to the coastal city of Latakia. This includes the heartland of al-Assad's Shia/Alawite ethnic group, and places that entire population in danger. Farther to the east, ISIS has taken control of large sections of the country, crossing over into Iraq.

There's apparent a "dog that didn't bark" in the picture. We've described reports that Iran is invoking a 2007 mutual defense treaty with Syria, and that Iran would deploy tens of thousands of Islamic Revolution Guards Corps (IRGC) to defend al-Assad, especially in the coastal region around Latakia. So far, there's no sign that these reports have come to past, and now there are reports that Iran has rejected al-Assad's request for up to 100,000 IRGC troops. Al Jazeera

(Comments: For reader comments, questions and discussion, see the 10-Jun-15 World View -- Obama planning additional troop deployment to Iraq in new escalation thread of the Generational Dynamics forum. Comments may be posted anonymously.) (10-Jun-2015) Permanent Link
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9-Jun-15 World View -- Iran demands a nuclear agreement 'snapback' provision of its own

South Korea fears that MERS virus will break out into general population

This morning's key headlines from GenerationalDynamics.com

South Korea fears that MERS virus will break out into general population


Anti-government protesters in Seoul on Sunday wear masks for protection from MERS (AP)
Anti-government protesters in Seoul on Sunday wear masks for protection from MERS (AP)

South Korea is implementing panic measures, to keep a rapidly spreading epidemic of Middle Eastern Respiratory Syndrome coronavirus (MERS-CoV) under control.

The are 95 known cases, with seven deaths.

So far, the only new infections have occurred in hospitals, where one infected person comes to the hospital seeking treatment, and ends up infecting other people, including patients, nurses and doctors.

It hasn't started spreading in the general public, and authorities are taking numerous steps to keep that from happening. 2,000 schools have been closed, and hundreds of public events have been canceled.

More significant are the quarantines. Some 2,500 people have been ordered to stay home under quarantine for 14 days, and their cell phones are being monitored to make sure that they do so. The authorities call the cell phones regularly to make sure that the patient hasn't left home without his cell phone.

Sometimes entire villages are quarantined. Men in protective clothing are guarding all roads in and out of Jangduk village, which is 172 miles south of Seoul, preventing any of the 105 residents from leaving. The only contact the villagers have with outsiders is twice-daily visits from health officials checking their temperatures.

MERS was first identified in Saudi Arabia in 2012. Globally, there have been almost 1200 cases since then, most in Saudi Arabia, and at least 444 related deaths. The original hosts for the MERS virus are thought to be bats, and the bats have transferred the virus to camels, which can carry the virus without showing symptoms. Studies show that it's been common in camels for at least 20 years before spreading to humans. Camel handlers and shepherds are the people most at risk for MERS in Saudi Arabia.

However, that figure represents only people who were diagnosed. One study of 10,000 people in Saudi Arabia found that many more had been exposed to MERS, but had not shown symptoms or been diagnosed.

MERS spread to Seoul several weeks ago when a Korean working in Saudi Arabia returned home several weeks ago, and went to a hospital because he was feeling ill. He infected several nurses and doctors, who spread it to nurses, doctors and patients.

North Korea is also in danger from MERS, as there are some 50,000 North Korean workers in Saudi Arabia. South Korea was able to respond quickly to a MERS pandemic, but it could be a real disaster in North Korea, which is ill-equipped to handle it. World Health Organization and Reuters and Deutsche Welle and Live Science

Iran demands a nuclear agreement 'snapback' provision of its own

In the nuclear negotiations with Iran, the West is insisting that the agreement contain a "snapback" provision, meaning the following: If the sanctions are removed, and then Iran violates the nuclear agreement, then the sanctions will "snap back" and be reapplied.

Iran has consistently refused to agree to the snapback provision, but is now changing its position: It will agree to the West's snapback provision, provided that it also has a snapback provision of its own.

Iran's snapback provision would permit Iran to resume full nuclear development if the West breaches its side of the deal.

Many people are skeptical of the whole snapback concept. They argue that once the agreement is in place and sanctions have been lifted, it would be politically impossible to reintroduce sanctions, even if Iran breached the agreement.

On the other hand, Iran's snapback option would seem to have little meaning. If the West breached its side of the agreement, which would presumably mean failing to lift the sanctions, then Iran could resume nuclear development with or without a snapback option. Reuters

(Comments: For reader comments, questions and discussion, see the 9-Jun-15 World View -- Iran demands a nuclear agreement 'snapback' provision of its own thread of the Generational Dynamics forum. Comments may be posted anonymously.) (9-Jun-2015) Permanent Link
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8-Jun-15 World View -- In major election setback, Turkey's Erdogan loses support as Kurds gain seats

Israeli residents near Gaza border expect war soon

This morning's key headlines from GenerationalDynamics.com

Israeli residents near Gaza border expect war soon


Hamas tunnel (Memri)
Hamas tunnel (Memri)

Israeli residents who live near the Gaza border can hear the sounds of tunnels being dug underground, and the digging goes on 24 hours a day. The residents blame Israel's Defense Forces (IDF). According to one resident:

"Very simply, the IDF didn’t do the job the last time.

I’ve also heard of many residents in the area complaining about hearing digging, so we weren’t surprised that a senior Hamas official said their people continue to prepare offensive tunnels. I hope that next time [the army] will properly deal with the tunnels in a timely fashion instead of waiting until 14 terrorists pop out from underground."

Many of these residents living on the border were forcibly expelled from the Gaza Strip in 2005, after the prime minister at the time, Ariel Sharon, forcibly withdrew all Israeli settlers from Gaza, and turned the Strip over to the Palestinian government.

"I keep saying this again and again. It’s been 10 years since we were expelled from [Gaza], and the leadership in this country - some of whom are alive, some of whom are dead - promised us we would be safe. Since [leaving Gaza], we’ve absorbed 6,000 mortar bombs and even Qassam rockets, and we didn’t complain. ...

They promised that there would be quiet in the South and the entire country. But since we left [Gaza], there have been three large-scale campaigns - Cast Lead, Pillar of Defense, and Protective Edge. In the last year, we have seen a trickle of missile fire and the digging of tunnels, and we may be on the verge of another military operation."

As I've been writing since 2003, Generational Dynamics predicts that there will be a new war between Arabs and Jews, refighting the bloody, genocidal 1948 war that followed the partitioning of Palestine and the creation of the state of Israel. Jerusalem Post

Israel launches fresh air strikes on Gaza

Israel's air force launched air strikes at a Hamas training facility in the northern Gaza Strip on Sunday, in response to a rocket launched from Gaza at Israel. The rocket landed in the middle of a farmer's sunflower field, and there were no casualties from either attack.

White House spokesman Josh Earnest, accompanying President Barack Obama at a G7 summit in Germany, supported the Israeli air strikes: "Clearly the US stands with the people of Israel as they defend their people and their nation against these kind of attacks."

The head of the IDF's Southern Command, Maj-Gen Sami Turgeman, says that Hamas is not responsible for the rocket fire from Gaza:

"These are isolated rockets fired by terrorists in Gaza. The rockets explode in open fields and the IDF retaliates to the incidents but will not launch an operation in the Strip because of them. The IDF responds in accordance with the attacks."

According to Turgeman, the IDF believes that Hamas wants the calm in Gaza. The Omar Brigades, a Gaza terror group, took responsibility for the rocket fire. Reuters and Jerusalem Post

In major election setback, Turkey's Erdogan loses support as Kurds gain seats

The electorate on Sunday surprised Turkey's president Recep Tayyip Erdogan by refusing to give his party the re-election margin that he needed to implement the constitutional changes he was proposing.

Erdogan's AKP (Justice and Development Party) government has won a parliamentary majority for the last 13 years, giving Erdogan a great deal of power, which opponents say he's used to become almost a dictator, suppressing free speech and jailing opposition.

During the campaign, Erdogan asked the voters to give him an even bigger parliamentary majority, so that he could modify the constitution to change from a parliamentary government (like Britain) to a presidential government (like the US), presumably giving himself even more power. So Sunday's election was probably really a referendum on Erdogan's increasingly autocratic grab for power.

The loss in support was significant. The AK Party got 49% of the vote in the 2011 election, but only 41% in Sunday's election. This means that Erdogan will have to try to form a ruling coalition with another party. However, some reports indicate that Erdogan feels he was cheated, and may call for a snap election soon, in the hope of regaining a majority.

It was significant that the AK Party got only 41% of the vote, but equally significant was that the Kurdish anti-government far-left Peoples’ Democratic Party's (HDP) got 12% of the vote, surpassing a 10% threshold that gives the party a significant representation in the parliament. HDP's support was very strong in eastern Turkey, in the region that Kurdish separatists desire as an independent Kurdistan.

Note: HDP = Kurdish Peoples' Democratic Party in Turkey, PKK = Kurdistan Workers' Party anti-government insurgents in Turkey. Peshmerga = Kurdish militias in Iraq. PYD = Kurdish militias in Syria.

The PKK is considered a terrorist group, and has fought an on-and-off civil war with the government since the 1980s, but has sought peace in recent years. So the rise of the HDP in Sunday's election will give the Kurds in Turkey a much larger political voice than they've had in the past. BBC and Daily Sabah (Turkey) and Hurriyet (Turkey)

(Comments: For reader comments, questions and discussion, see the 8-Jun-15 World View -- In major election setback, Turkey's Erdogan loses support as Kurds gain seats thread of the Generational Dynamics forum. Comments may be posted anonymously.) (8-Jun-2015) Permanent Link
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7-Jun-15 World View -- Saudi Arabia shoots down Scud missile from Houthis in Yemen

Europeans rescue 3,000 migrants on Saturday, fear hundreds of thousands more

This morning's key headlines from GenerationalDynamics.com

Saudi Arabia shoots down Scud missile from Houthis in Yemen


Young Yemenis in anti-Saudi demonstrations in Sanaa
Young Yemenis in anti-Saudi demonstrations in Sanaa

In a new, potentially major escalation of the war in Yemen, Iran-backed Shia Houthi militias in Yemen fired a Scud missile across the border with Saudi Arabia, targeting the King Khalid Air Base in the city of Khamis Mushait, about 100 km north of the Yemen border.

The Saudis launched two missiles from a Patriot missile battery, and shot the Scud missile down with no reported casualties.

However, the Houthis are calling it a symbolic victory, because it shows that the Saudi air strikes have not been effective, and it shows that the Houthis still have enough firepower to attack Saudi villages and bases. It's believed that the Houthis have a stockpile of some 300 Scud missiles, though some of those may have been destroyed by Saudi air strikes.

At the same time, fighting along the border between Yemen and Saudi Arabia has been increasing. The Saudis responded to the Scud missile attack by a new surge in airstrikes at Houthi targets in Yemen, along the Saudi border and in the capital city Sanaa.

As we've been describing for a long time, the Mideast is headed for a massive war of Shias versus Sunnis, Arabs versus Persians, and Jews versus Muslims. Ever since the "Arab awakening" in 2011, the Mideast has become more and more inflamed.

The United Nations has called for peace talks to begin next week. This is great news, because this will settle the Yemen war, just as previous peace talks have resolved the wars in Iraq, Syria and Ukraine. Reuters and AP and AFP

Who's causing the humanitarian crisis in Yemen?

Everyone agrees that there's a humanitarian disaster in progress in Yemen, with nearly 80% of the population in urgent need of food, water and medical aid. But the ideological war is whether the humanitarian crisis is the fault of the Houthis or the Saudis.

According to the liberal Guardian, the Saudis are at fault:

"[The humanitarian crisis] has been dramatically worsened by a naval blockade imposed by an Arab coalition with US and British backing.

Washington and London have quietly tried to persuade the Saudis, who are leading the coalition, to moderate its tactics, and in particular to ease the naval embargo, but to little effect. A small number of aid ships is being allowed to unload but the bulk of commercial shipping, on which the desperately poor country depends, are being blocked. ...

The desperate shortage of food, water and medical supplies raises urgent questions over US and UK support for the Arab coalition’s intervention in the Yemeni civil war since March. Washington provides logistical and intelligence support through a joint planning cell established with the Saudi military, who are leading the campaign. London has offered to help the Saudi military effort in “every practical way short of engaging in combat”.

On western urging, Riyadh had promised to move towards “intelligence-led interdiction”, stopping and searching individual ships on which there was good reason to believe arms were being smuggled, and away from a blanket policy of blocking the majority of vessels approaching Yemeni ports. But aid agencies and shipping sources say there is little sign of any such change. UN sources say that only 15% of the pre-crisis volume of imports is getting through, and that the country depends on imports for nine-tenths of its food. ...

At Al Hudaydah on Yemen’s west coast, the only major port still functioning, a trickle of humanitarian food supplies is arriving on a handful of aid ships allowed through the naval blockade each week, but many more ships are being turned away or made to wait many days to be searched for weapons."

According to the Arab News, the United Nations and the Houthis are at fault:

"One source confirmed that more than 200 licensed ships were allowed to deliver aid and that not all the ships were inspected as many are believed not to be linked to the rebels. The source added that many ships are using the Djibouti port, which the United Nations — not Saudi Arabia, Egypt or the US — supervises and grants licenses accordingly.

The inspection forces may have delayed the passage of the ships but they haven’t prevented them from passing and have not confiscated their cargo. ...

The Saudi-led coalition forces know that the rebels are intentionally obstructing aid in order to stir international public opinion at the expense of the Yemeni people, whom they’ve taken hostage. Hospital operations have been disrupted due to rebels obstructing the delivery of fuel. Millions of people in several cities and towns lack drinking water because they ran out of the diesel necessary for generators to pump water. Meanwhile, the military power of the Houthis and Saleh’s forces has not been obstructed as they are stealing fuel to operate their vehicles and are in control of food storage centers. They’ve also seized aid routes in the center of the country and are transferring this aid to areas in their control.

When I asked a source as to why international organizations do not blame the Houthis and Saleh’s forces for this humanitarian crisis, he said it’s because they do not want to cut ties with them and because they fear for their employees and activities in Yemen, considering that these rebels are gangs that do not hesitate to kill whoever criticizes or defies them."

It's clear that both of these accounts are completely biased, in opposite directions.

One expects the Arab News to be biased. After all, the Arab coalition is one party to the war, and their press is going to be biased in their favor.

But the Guardian is supposed to be a mainstream media source, based in London. So why is the Guardian just as biased as the Arab News? Why does the Guardian account read like it was from the Tehran Times?

More broadly, why are all the mainstream liberal news sources -- the Guardian, the NY Times, NBC News, etc., so completely biased that it's almost impossible to trust anything they write? We know that Generation-Xers have been extremely dishonest as politicians and as bankers, so I suppose we should expect it of journalists as well.

As for mainstream conservative news sources, there are fewer choices. Fox News covers mostly American political news, which I tend to avoid. And the London Telegraph is behind a limited paywall.

My job every day in my World View column is that when I write about a subject is to read media sources from all points of view, and try to figure out who's telling the truth. Usually I do pretty well, but it would be easier if I could depend on journalists who act like professional adults instead of screwed up children. The Guardian (London) and Arab News (Riyadh)

Europeans rescue 3,000 migrants on Saturday, fear hundreds of thousands more

Vessels from Germany, Ireland, Britain and Italy rescued over 3,400 migrants on Saturday. There were about 15 individual rescues, mostly 200-300 nautical miles south of Italy, in international waters near Libya.

According to one analyst, there's a big surge every weekend. The reason is that the weekend starts in Libya on Thursday evening, and then there are fewer people on the streets and beaches, making it much easier for the migrant smugglers to launch their boats on Friday and Saturday. There may be thousands of migrants rescued on the weekend, but during the week, there are usually just a few hundred every day.

Europeans are bracing for an even bigger surge of migrants as the summer continues. There are reportedly 450,000 to 500,000 migrants already in Libya, waiting to make the crossing to Europe. They've already each paid thousands of dollars to the smugglers, and are waiting their turns to make the crossing. The migrants are put onto overcrowded boats, and they're told to sink them as soon as they see another vessel, so that they'll have to be rescued. Guardian (London) and Al Jazeera

(Comments: For reader comments, questions and discussion, see the 7-Jun-15 World View -- Saudi Arabia shoots down Scud missile from Houthis in Yemen thread of the Generational Dynamics forum. Comments may be posted anonymously.) (7-Jun-2015) Permanent Link
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6-Jun-15 World View -- Speculation grows about China's purpose in giant government hacking breach

Tsipras gives bitter, defiant speech to Greece's parliament

This morning's key headlines from GenerationalDynamics.com

Tsipras gives bitter, defiant speech to Greece's parliament


Alexis Tsipras giving speech to parliament on Friday (Kathimerini)
Alexis Tsipras giving speech to parliament on Friday (Kathimerini)

As expected, Greece did not make its 300 million euro debt payment International Monetary Fund (IMF) on Friday, and instead will have to pay 1.6 billion euros to the IMF on June 30. June 30 will be the end of Greece's current bailout plan, and there will be no more bailout money available under any terms.

So it seems that after several years of "kicking the can down the road," and postponing making the hard decisions, the Greece bailout crisis will finally run out of road on June 30. And whatever the outcome, it's certain to be very unpleasant.

Prime Minister Alexis Tsipras was defiant and bitter in a speech he gave to Greece's parliament on Friday:

"Time is not only running out for us, it is running out for everyone. ...

The proposals submitted by lenders are unrealistic. The Greek government cannot consent to absurd proposals. ...

I would like to believe that this proposal was an unfortunate moment for Europe, or at least a bad negotiating trick, and will very soon be withdrawn by the same people who thought it up. ...

We don’t just need an agreement, we need a definitive solution, both for Greece and for Europe, that will finally end the talk of a Greek exit from the eurozone. ...

The fiscal strangulation of a country is a moral issue that conflicts with Europe’s founding principles – which raises well-founded questions on Europe’s future."

Tsipras called on opposition parties to support him in the ongoing negotiations. The far left factions in his own Syriza party have already indicated that they won't support any plan that calls for any austerity.

Tsipras's predecessor, center right New Democracy leader Antonis Samaras, responded by telling the prime minister that he had "some nerve" asking for support at this time. He accused Tsipras of mishandling the negotiations and tipping Greece back into recession. "You have totally destroyed the country and isolated us," he said. Kathimerini and Guardian (London)

Speculation grows about China's purpose in giant government hacking breach

Chinese hackers are suspected in a massive breach compromising the computers at the U.S. Office of Personnel Management (OPM) and Department of the Interior. The personal information of 4 million U.S. current and former federal employees were compromised in the breach. The OPM is the human resources department for the federal government, and so every government agency is potentially affected. The data goes back to 1985.

As usual, the Chinese feigned outrage at anyone who could suspect them of such a thing, and complained that any such accusation would be "irresponsible and unscientific."

The perpetrators are believed to be the same Chinese hackers behind the Anthem health insurance data breach in March, where 80 million current and former customers of Blue Cross Blue Shield plans had their personal information compromised, including birthdates, addresses, and social security numbers.

Assuming that the Chinese are the perpetrators, questions are being raised about what they're planning to do with all this data. The Chinese now have a massive data base of detailed personal information on tens or hundreds of millions of Americans. What are they going to do with this?

If the Chinese want to penetrate another company, they can use detailed information from the files to craft personalized phony messages to trick workers. These are called "spear phishing" messages. A worker receiving such a message might think it's from a family member and click on something in the message that infects their computer, or which gives the hacker access to the other data bases in the company network. With this technique, the Chinese can penetrate one company after another, using the information gathered from one breach to gain access to perpetrate the next breach.

It's not known how certain government officials are that the Chinese government is the perpetrator. It's possible that they know with 100% certainty based on NSA data. However, even if they're that certain, they couldn't say so because they would be accusing China of an act of war, and a response would be required. AP and CNN and Reuters and Dark Reading

(Comments: For reader comments, questions and discussion, see the 6-Jun-15 World View -- Speculation grows about China's purpose in giant government hacking breach thread of the Generational Dynamics forum. Comments may be posted anonymously.) (6-Jun-2015) Permanent Link
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5-Jun-15 World View -- With Syria's army nearing collapse, Iran plans massive troop deployment

Greece and Europeans fail once again to reach an agreement

This morning's key headlines from GenerationalDynamics.com

With Syria's army nearing collapse, Iran plans massive troop deployment


Idlib (Reuters)
Idlib (Reuters)

As we've been reporting since April, the army of Syria's president Bashar al-Assad has been increasingly showing signs of collapse, losing one major city after another either to the Islamic State (IS or ISIS or ISIL or Daesh) or to the al-Qaeda linked Jabhat al-Nusra (al-Nusra Front). The collapse has become so serious that even Russia is considering ending support for al-Assad, as we reported a few days ago.

Al-Assad has been mostly relying on fighters from Hezbollah, but even Hezbollah has been suffering substantial losses, between 700 and 2000 fighters, according to reports. Hezbollah claims that its purpose is to be the army of "resistance" against Israel, but the disastrous situation in Syria has forced Hezbollah to transfer hundreds of fighters from the border with Israel into the fight in Syria.

But now in a major escalation in the (proxy) war in Syria, Iran is planning to deploy tens of thousands of troops in Syria to prevent the fall of al-Assad. 15,000 to 20,000 troops are already being sent to the region around Idlib, and up to 50,000 are reportedly on the way.

Iran has a second objective in deploying troops to Syria. They want results by the end of the month (June), because that's the deadline for a nuclear agreement with the United States and the West. They believe that they'll get a better nuclear deal by scoring a win in Syria. It would also improve Tehran’s leverage on negotiations with other parties after the nuclear deal is completed.

Gen. Qassam Soleimani, the commander of Iran’s elite Quds force, whom ISIS humiliatingly defeated in the battle of Tikrit Iraq a couple of months ago, promised a "surprise":

"The world will be surprised by what we and the Syrian military leadership are preparing for the coming days."

Soleimani made the statement during a secret trip to Idlib, where he determined that Syria's army made numerous operational errors, resulting in a loss to al-Nusra. YNet and Daily Star (Beirut)

Iran and Syria may invoke 2006 mutual defense agreement

The purpose of a new agreement between Iran and Syria, which may involve invoking a 2006 mutual defense pact between the two countries, is to allow tens of thousands of Iran's soldiers to prevent ISIS and al-Nusra from cutting off the corridor between Damascus and Syria's coastal region.

According to a report by Saudi-based al-Arabiya:

"Iran must send 50,000 soldiers from the infantry force to Syria to manage the war there and prevent the fall of the Assad regime, which has begun to collapse recently.

Iran must preserve the vital corridor [connecting] Damascus to Latakia, Tartous and the Lebanese border.

[Any] delay by Iran in [implementing] this pre-emptive action will cause the fall of Damascus airport, which in turn [means] the severing of the essential communication and supply line Iran [uses] to assist the Syrian regime."

Ironically, al-Assad is agreeing to this deployment of Iranian soldiers because he has no choice. He has opposed the establishment of any Iranian bases in Syria, because he knows that once Iran has a military base in Syria, it won't be long before Iran is in charge of the whole country.

Long-time readers are aware that Generational Dynamics predicts a major war engulfing the entire Mideast. Since last year, we've been reporting that ISIS and other terror groups are not fighting Christians and Jews; they've been overwhelmingly fighting other Muslims, with the number of Christians and Jews killed by Muslims being a minuscule amount compared to the number of Muslims being killed by other Muslims.

With wars in Syria, Iraq, Yemen and Libya, the entire Mideast is increasingly in flames. A major military deployment by Iran in Syria would substantially inflame the Shia-Sunni fault line in the Mideast, and would cause the Saudis and other Gulf Arab nations to prepare for further military action. Now Lebanon and Debka and AFP (2006)

Greece and Europeans fail once again to reach an agreement

Although Greece was due to make a 300 million euro debt payment to the International Monetary Fund (IMF) on Friday, I wrote a few days ago that Greece will NOT go bankrupt on Friday. The reason is that analysts were predicting that Greece would take advantage of a loophole that allows Greece to postpone the payment to the end of the month. Greece exercised that loophole on Thursday, and Friday's payment will be bundled together with three others, and now Greece will have to pay 1.6 billion euros to the IMF at the end of the month. Greece's PM Alexis Tsipras, in his usual pretense of normality, said that there will be no problem making the payment, though almost no one believes him.

Tsipras was in Brussels on Thursday, meeting with IMF and European officials. The meeting ended in failure, though both sides said that it had been "constructive."

The Europeans are demanding that Greece institute reforms to address various economic issues, including Greece's bloated public sector, curbing tax evasion and corruption, privatizing public businesses, and adjusting generous pension and minimum wage policies.

In the past, Tsipras has refused to agree to any of these. But there's now evidence from leaked documents that the Tsipras is beginning to back down. He appears to have given ground on privatizing public businesses, and he seems willing to raise taxes and cut pensions, at least by a small amount. However, Tsipras is still insisting on implementing a huge minimum wage increase, undoing a cut in the minimum wage from 2012.

However, Tsipras does not have a free hand in agreeing to the creditors' terms. He's facing a backlash from the far left in his own party, and his government may collapse if he meets too many of the Europeans' demands. Greek Reporter and Kathimerini and Economist

(Comments: For reader comments, questions and discussion, see the 5-Jun-15 World View -- With Syria's army nearing collapse, Iran plans massive troop deployment thread of the Generational Dynamics forum. Comments may be posted anonymously.) (5-Jun-2015) Permanent Link
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4-Jun-15 World View -- FBI investigating awarding of 2018 and 2022 World Soccer Cups

Philippines president Aquino compares China to Nazis

This morning's key headlines from GenerationalDynamics.com

FBI investigating awarding of 2018 and 2022 World Soccer Cups


Sepp Blatter
Sepp Blatter

In a new announcement on Wednesday, the FBI said it is investigating the awarding of the 2018 and 2022 World Football (Soccer) Cups to Russia and Qatar, respectively. This follows the Justice Dept.'s indictments last week of nine world soccer officials.

If you aren't a follower of world football (soccer), then you may not be aware of the news story that's consumed international news outside the United States, with 24-hour almost continuous coverage every day, almost wiping out coverage of anything else, including Iraq, Yemen and Ukraine.

On May 27, the United States Department of Justice indicted nine officials from the Zurich, Switzerland, based Fédération Internationale de Football Association (FIFA - International Football Association) for racketeering, conspiracy and corruption.

According to the Obama administration's new Attorney General Loretta Lynch:

"The indictment alleges corruption that is rampant, systemic, and deep-rooted both abroad and here in the United States. It spans at least two generations of soccer officials who, as alleged, have abused their positions of trust to acquire millions of dollars in bribes and kickbacks. And it has profoundly harmed a multitude of victims, from the youth leagues and developing countries that should benefit from the revenue generated by the commercial rights these organizations hold, to the fans at home and throughout the world whose support for the game makes those rights valuable. Today’s action makes clear that this Department of Justice intends to end any such corrupt practices, to root out misconduct, and to bring wrongdoers to justice – and we look forward to continuing to work with other countries in this effort."

The indictment did not mention FIFA's controversial president Sepp Blatter, but the indictment came just two days before FIFA was to hold an election for the next FIFA president. Blatter had already been president for 17 years, and was re-elected despite all the indictments. However, when word leaked that he was also being investigated by the US administration, he announced his resignation.

So why the heck is the U.S. Justice Department doing this? Why not the European Union or the Swiss?

Well, FBI director James Comey has an answer to that question:

"If you touch our shores with your corrupt enterprise, whether that is through meetings or through using our world class financial system, you will be held accountable for that corruption."

Oh really? Comey is going to hold people responsible for corrupting our "world class financial system"??? Long-time readers can easily guess what I'm going to say next.

First we had original financial crisis, where thousands of bankers corrupted our world class financial system by knowingly created tens of trillions of dollars in faulty subprime mortgage backed synthetic securities, and knowingly defrauded thousands of investors with them. This triggered the financial crisis and caused millions of people to lose their homes and go bankrupt. But these bankers gave millions of dollars in contributions to the Obama administration, and so the Obama administration has adamantly refused to prosecute even a single one of these criminals.

Because the Obama administration made it clear that no banker criminals would be prosecuted, the same bankers stayed at the same jobs and found a new form of fraud -- the Libor scandal. Bankers corrupted our world class financial system by colluding with one another to fix interest rates. According to one banker, "It's just amazing how Libor fixing can make you that much money." Those actions cost clients hundreds of millions of dollars.

However, bankers have given millions of dollars in contributions to the Obama administration, so even though the bankers doing this criminal activity were easily identified, the Obama administration refused to prosecute them. In fact, Timothy F. Geithner, Obama's Treasury Secretary, knew about Libor fraud as early as 2008, but refused to do anything about it.

So bankers knew that they could continue committing fraud with impunity and make billions of dollars, as long as they gave a percentage of that money to the Obama administration.

That brings us to Forex (foreign exchange) fraud, where bankers colluded with one another to defraud their customers making currency conversions from one currency to another. Libor fraud cost clients hundreds of millions of dollars, while Forex fraud cost trillions of dollars.

The interesting thing about the Forex investigation is that the bankers continued committing fraud even after it became public that Forex fraud was being investigated. Why did they do that? Why not? They wanted to make as much money as they could, knowing that they would never be prosecuted. They had a free ticket to commit fraud and keep the money. As one banker was quoted as saying, "If you ain't cheating, you ain't trying."

Two weeks ago, the Justice Dept. fined four banks a total of $6 billion for committing Forex fraud. Just to give you an idea of how much that is, one of the banks, JP Morgan, made $4 billion in the first quarter of this year in just one unit, the commodities unit. So the $6 billion was a tiny fraction of the money that the banks made fraudulently. And NOT ONE SINGLE PERSON was charged for Forex fraud, even though the Justice Dept. knows exactly who the criminals are.

So now the Justice Dept. puts on this big dog and pony show over bringing criminal charges against some foreign officials in the world soccer organization, because they may have corrupted our world class financial system.

As I've written many times, this kind of criminality in the administration was unthinkable before the 2000s and the rise of Generation-X. Not only do a sizeable minority of Gen-Xers feel that it's OK to defraud anyone they want, it seems that a majority of Gen-Xers refused to prosecute crimes.

As I'm typing this, there's a TV report that street crime and street homicide is at an all-time high in Baltimore, Chicago, and other cities. At the same time, financial "experts" on Wall Street lie about stock valuations frequently, as I've documented many times, and no one cares.

And you can be sure that the same bankers who created the phony synthetic subprime backed securities, and who perpetrated the Libor and Forex frauds, are still working at the banks, looking for other ways to defraud people.

The Obama administration is directly responsible for millions of Americans losing their homes or going bankrupt through its failure to prosecute crime. But fear not. The next time you watch an international soccer game, assuming you can afford a TV, you can feel confident that the Justice Department is protecting you. U.S. Justice Dept. and Fox Sports and Reuters and Guardian (London)

FIFA investigation brings the Russia and Qatar awards into question

Here are some political notes related to the FIFA investigation:

Guardian (London) and Slate

Palestine drops demand to ban Israel from FIFA

Before the US Justice Dept. made the surprise announcements of the indictments against FIFA officials, the big news was that the Palestinian Football Association was going to introduce a motion to expel Israel from FIFA, accusing it of unjustly restricting Palestinian soccer players’ freedom of movement and claiming that Israel’s West Bank settlement teams violate FIFA rules.

However, because of the indictments, the Palestinians were forced to drop their plan.

The Palestinians are expected to try similar actions at the Olympics and other international arenas. Jewish Telegraphic Agency and Washington Post

Philippines president Aquino compares China to Nazis

Speaking at a business meeting in Tokyo, Philippines President Benigno Aquino III suggested that the world cannot continue to appease China as it annexes other countries' territories in the South China Sea:

"If there was a vacuum, if the United States, which is the superpower, says 'We are not interested,' perhaps there is no brake to ambitions of other countries.

I'm an amateur student of history and I'm reminded of ... how Germany was testing the waters and what the response was by various other European powers.

They tested the waters and they were ready to back down if for instance in that aspect, France said (to back down).

But unfortunately, up to the annexation of the Sudetenland, Czechoslovakia, the annexation of the entire country of Czechoslovakia, nobody said stop.

If somebody said stop to (Adolf) Hitler at that point in time, or to Germany at that time, would we have avoided World War II?

So, I say again, America's rebalancing sends a definite signal that we are all supposed to be living under norms that we agreed upon."

China's Foreign Ministry pretended to be shocked at the "outrageous and unreasonable" comments by Aquino:

"I once more seriously warn certain people in the Philippines to cast aside their illusions and repent, stop provocations and instigations, and return to the correct path of using bilateral channels to talk and resolve this dispute."

Reuters and AFP/Rappler

(Comments: For reader comments, questions and discussion, see the 4-Jun-15 World View -- FBI investigating awarding of 2018 and 2022 World Soccer Cups thread of the Generational Dynamics forum. Comments may be posted anonymously.) (4-Jun-2015) Permanent Link
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3-Jun-15 World View -- Greece will NOT go bankrupt on Friday

Greece's Alexis Tsipras faces a government mutiny from the far left

This morning's key headlines from GenerationalDynamics.com

Greece's game of Chicken no closer to resolution


Prime Minister Alexis Tsipras (center) speaks with Minister of Culture Aristides Baltas (L) in Athens (Kathimerini)
Prime Minister Alexis Tsipras (center) speaks with Minister of Culture Aristides Baltas (L) in Athens (Kathimerini)

"Greece could face bankruptcy on Friday."

That's what we've been hearing almost every week for months, but now we're being told that even though Greece has a 300 million euro payment due to the International Monetary Fund (IMF) on Friday, there is no danger of a bankruptcy.

The reason is that the IMF has agreed to postpone the payment. Greece owes four payments to the IMF this month (June), totaling 1.6 billion euros. And the IMF has agreed to wait until the end of the month for Greece to pay the entire amount. And so, Dear Reader, you'll be relieved to know that Greece will not go bankrupt this week on Friday.

Nonetheless, the clock is clearly running out. Postponing this Friday's payment simply has the effect of postponing the final deadline, again. It looks like the end of the month is a hard deadline, but we've heard that before.

As many people have noted, it looks like both sides are playing a game of Chicken. This would be particularly appealing to Greece's colorful finance minister Yanis Varoufakis, who is an expert on game theory. In the 1950s game of Chicken, two cars race towards each other at top speed. The first one to veer off is the "chicken." If neither car veers, then there's a collision, and both drivers are dead. (They didn't have seat belts in those days.)

So as the clock runs out, both sides are maintaining their demands, hoping that the other side will give in. According to the logic of the game of Chicken, there's no hope of a compromise until the very last moment, which means that the game will continue at least until the end of June.

The institutions -- IMF, European Central Bank (ECB) and European Commission (EC), formerly known as the "Troika," a word that's now forbidden -- are demanding that Greece continue the austerity programs that were in place until January, when Alexis Tsipras's far left Syriza party won the elections on a platform of no more austerity. The institutions are demanding that Greece institute reforms to address various economic issues, including Greece's bloated public sector, curbing tax evasion and corruption, privatizing public businesses, and adjusting generous pension and minimum wage policies.

In January, Tsipras agreed to some minor reforms, but even those have not been implemented.

On Sunday, Tsipras wrote an editorial that blamed the failure to reach a compromise on " the obsession of some institutional representatives who insist on unreasonable solutions."

This was not received well. It resulted in an emergency meeting in Berlin on Monday evening. Attending were the leaders of Germany, France, the ECB, the EC and the IMF. Greece was not invited.

The result was a new final proposal from the Troika. Tsipras has defiantly countered by announcing that he has his own new 47-page proposal. The contents of the two proposals have not been revealed, but analysts seem to agree that they're likely to be very far apart when they're revealed on Wednesday. So the game of Chicken will continue.

There's an assumption behind the game of Chicken that does not apply to the situation in Greece. In the 1950s game of Chicken, if one or both cars veer off, the nothing has been lost, except that someone may be humiliated.

But the game of Chicken has already cost a lot. Greece had a budget surplus last year, and Tsipras has blown that away on new social programs. Greece's government has confiscated the cash reserves of all the public institutions, including municipalities, provinces, universities and hospitals. That money also has been blown away.

So even if a compromise of some kind is reached this month, the game of Chicken is going to result in a major wreck. Kathimerini and RTE (Ireland) and Value Walk

Greece's Alexis Tsipras faces a government mutiny from the far left

Greece's prime minister Alexis Tsipras is facing open rebellion in his far left Syriza party, over the austerity demands of the Europeans. The far-far-left politicians are calling themselves the "Left Platform" faction of Syriza. They are demanding that Tsipras stop humiliating himself and Greece, and that Greece leave the eurozone and return to the drachma currency.

According to Syriza member Stathis Kouvelakis,

"It has become now clear that the 'institutions' are not striving for what some are calling an 'honorable compromise'. ...

What the ruling circles of the EU, the ECB and the IMF are ruthlessly and consistently aiming for in the last for months, is to strangle the economy, to milk even the last euro from the country’s reserves and to push an 'unprotected' government to full submission and exemplary humiliation."

After that, the Left Platform is demanding all sorts of new spending programs, nationalizing the banks, substantial taxation of top earners, and full implementation of labor union rights.

Polls have shown that most Greeks want to find a compromise that lets Greece stay in the eurozone, but among Syriza supporters, 58% want to return to the drachma. Telegraph (London) and Guardian (London) and Red Flag

(Comments: For reader comments, questions and discussion, see the 3-Jun-15 World View -- Greece will NOT go bankrupt on Friday thread of the Generational Dynamics forum. Comments may be posted anonymously.) (3-Jun-2015) Permanent Link
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2-Jun-15 World View -- Hamas and ISIS turn on each other in the Gaza Strip

Clashes following the ISIS invasion of the Yarmouk refugee camp

This morning's key headlines from GenerationalDynamics.com

Hamas and ISIS-linked group clash in the Gaza Strip


ISIS terrorist (Reuters)
ISIS terrorist (Reuters)

A Gaza Strip group claiming to be linked to the Islamic State (IS or ISIS or ISIL or Daesh) has given Hamas, the governing authority of the Gaza Strip, a 48-hour deadline to stop cracking down on the members of the group.

The group calls itself the "Islamic State supporters in Bayt al-Maqdis (Jerusalem)" (ISIS in Gaza), and is linked to Ansar Bayt al-Maqdis (Supporters of Jerusalem), a group in Egypt's Sinai that has committed numerous terrorist bombings that we've reported on several times.

The ISIS in Gaza group has been conducting terror attacks against Hamas targets for the last couple of months, and Hamas has been cracking down on the group by arresting dozens of its members.

On Monday, the ISIS in Gaza group sent a statement to the media giving Hamas 48 hours to end the crackdown. The statement did not say what the group would do if the crackdown continued.

The statement included a claim taking responsibility for a rocket fired at Israel from Gaza last week. That claim could not be verified, but the rocket firing did occur on Tuesday, and early on Wednesday the Israeli Air Force attacked four targets in the Gaza Strip in response.

However, following the rocket firing, Hamas security forces arrested a number of militants from the al-Quds Brigade, the armed wing of Islamic Jihad. At the same time, Egyptian officials on Wednesday demanded that "Israel hold its aggression," and practice restraint toward the Gaza strip. Jerusalem Post (27-May) and AP and Times of Israel

ISIS and Hamas turn on each other after Yarmouk invasion

ISIS in Gaza has apparently been operating since last Gaza's summer war with Israel, but its existence has been denied or played down by Hamas. On November 3 of last year, the group pledged allegiance to ISIS. In response to questions about whether the group would be targeting Hamas, a spokesman said:

"Hamas should not have any concerns regarding the announcement of [ISIS in] Sinai. Despite their differences, ISIS does not target Hamas, since the group is confronting the Egyptian army. [ISIS in Sinai] would protect Gaza from any possible attacks by Egyptian President Abdel Fattah al-Sisi."

That attitude began to change dramatically in April, when ISIS invaded the Palestinian refugee camp at Yarmouk in Syria in April. ( "10-Apr-15 World View -- Syria's Yarmouk refugee camp descends into the 'deepest circle of Hell'")

The invasion caused the latest flip-flop in Hamas's relationship with Bashar al-Assad in Syria. Hamas and al-Assad used to be close allies, and Hamas's headquarters were actually located in Damascus, Syria's capital city. But then in 2011 al-Assad started massacring and butchering innocent Sunni Arab women and children in Syria, and this forced Hamas to turn against al-Assad, and move its headquarters to Doha Qatar.

But the invasion of the Yarmouk camp has thoroughly roiled the situation again. ISIS is inflicting its usual gruesome massacres on the Palestinians in Yarmouk, and the only defender of Yarmouk is al-Assad. In particular, ISIS beheaded several Palestinians, including a senior Hamas official in the camp.

So now Hamas is tentatively allying itself again with al-Assad, at least for the purposes of defending the Yarmouk camp. In addition, Hamas promised to exact revenge.

So that all happened in April. At the beginning of May, Hamas retaliated against ISIS by demolishing a mosque used by the ISIS in Gaza group and arrested dozens of its members, including several ISIS preachers in Gaza.

In response, ISIS called Hamas "worse than the Jewish and American occupiers." (As an aside, recall that I recently quoted an Egyptian sheik who said that Shia Muslims are worse than Jews and Crusaders.)

The clashes between ISIS in Gaza and Hamas are continuing to escalate, and ISIS is continuing to trigger further conflicts throughout the Mideast. Gulf News/Financial Times and International Business Times (16-July-2014) and Israel National News (7-May) and Al Monitor (20-Nov-2014)

(Comments: For reader comments, questions and discussion, see the 2-Jun-15 World View -- Hamas and ISIS turn on each other in the Gaza Strip thread of the Generational Dynamics forum. Comments may be posted anonymously.) (2-Jun-2015) Permanent Link
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1-Jun-15 World View -- Report: Russia may end support for Syria's Bashar al-Assad

Greece faces new financial crisis with no solution in sight

This morning's key headlines from GenerationalDynamics.com

Report: Russia may end support for Syria's Bashar al-Assad


Bashar al-Assad and Vladimir Putin (Reuters)
Bashar al-Assad and Vladimir Putin (Reuters)

According to a report in Asharq Al-Awsat, there are signs of a dramatic U-turn in Russia's policy toward the regime of Bashar al-Assad in Syria, including consideration of a future without al-Assad, according to unnamed Russian officials. This admission would be the first of its kind from Russian officials.

Since the Syrian conflict began in 2011, Russia's support has been essential to the survival of al-Assad. Al-Assad, a member of the Alawite/Shia religious group, began using heavy weapons on peaceful Sunni Muslim demonstrators. He's flattened entire Sunni villages with Russia's heavy weapons, he's killed children by sending missiles into exam rooms and bedrooms, he's killed dozens with sarin gas, and he continues to kill countless more with barrel bombs loaded with explosives, metals, and chlorine gas dropped from helicopters.

Al-Assad's genocidal sectarian attack on Sunnis caused the formation of Iraqi rebel groups, such as the Free Syrian Army (FSA). But it also triggered a worldwide tsunami of young men from around the world traveling to Syria to fight against al-Assad, joining the al-Qaeda linked Jabhat al-Nusra (al-Nusra Front), and causing the creation of the Islamic State (IS or ISIS or ISIL or Daesh).

Al-Assad predicted a quick victory in 2012, and that might have happened if his only enemy had been the FSA. But he began to suffer defeats at the hands of al-Nusra and ISIS, and his regime could only continue with the help of a massive supply of heavy weapons from Russia, fighters from Iran's Islamic Revolution Guards Corps (IRGC), and fighters from the Lebanon-based Iran-back terror group Hezbollah.

But even with all that help from three different countries, al-Assad's army has suffered one setback after another. In just the last couple of weeks, the army lost the big Palmyra air base to ISIS, including its large stocks of ammo and military equipment, and Syrian military and air units have begun pulling out of the big air base at Deir ez-Zour. Because of falling morale, enormous casualty rates, and significant increases in draft-dodging, desertions and defections, the army of al-Assad is showing signs of collapse.

The stunning ISIS victories in Iraq are certainly being watched carefully by those remaining in Syria's army. In particular, every time Iraqi soldiers drop their weapons and flee from oncoming ISIS fighters, Syrian soldiers may be thinking of doing the same. Desertion by a few divisions or brigades, following the example of the Iraqis, could be all it takes for al-Assad's army to collapse completely. Asharq Al-Awsat (Riyadh) and Jerusalem Post and Debka

Russia searches for a plan for a post-Assad Syria

The Asharq Al-Awsat report suggests that Russia is thinking about a post-Assad Syria, but few believe that Russia will end its support of al-Assad as long as he has a chance to survive.

The main problem is that the collapse of al-Assad's regime would probably mean a complete victory for ISIS, which would have control of Damascus, as well as large portions of Syria and Iraq.

There have been thousands of young jihadists around the world who came to Syria to fight the al-Assad regime. Once ISIS had defeated al-Assad, many of those jihadists would wish to return to their home countries. This will subject almost every nation in the world to potential terror attacks. For Russia, it would mean that the armies of Chechen soldiers fighting in Syria would return to Chechnya and join the Chechen separatist movement. Russia's president Vladimir Putin would get what deserved for having supported al-Assad, but unfortunately, every other country would suffer as well.

The problem is that no one has a serious post-Assad plan. Iran and Hezbollah have increased deployments in Syria, but not enough to replace the lost soldiers in al-Assad's shrinking army. As a result, Iran and Hezbollah have begun paid recruitment efforts among Shias in Pakistan and Hazaras in Afghanistan. Jerusalem Post and The National (UAE) and Debka and Foreign Policy

Greece faces new financial crisis with no solution in sight

It seems that Greece is always just a few days away from total bankruptcy, but then always manages to come up with the funds to get through the next deadline. Greece is due to repay 300 million euros to the International Monetary Fund (IMF) by Friday of this week, and it's not known where it will get the funds, nor how it will the funds to pay three more installments in June, with all four totaling 1.6 billion euros.

The Europeans and the IMF are demanding that Greece reduce pension payouts and its bloated public sector, something that prime minister Alexis Tsipras and his far-left Syriza party have refused to do. According to a news article written by Tsipras on Sunday:

"If we have not reached an agreement with our partners, it’s not because of our intransigence or incomprehensible positions from the Greek side. It is rather because of the obsession of some institutional representatives who insist on unreasonable solutions and are being indifferent to the democratic result of recent Greek elections.

Currently, 44.5 percent of pensioners receive a pension under the fixed threshold of relative poverty while approximately 23.1 percent of pensioners ... live in danger of poverty and social exclusion. These numbers ... cannot be tolerated – not simply in Greece but in any civilized country."

On Sunday, Tsipras held a "constructive" phone call with German Chancellor Angela Merkel and France's president François Hollande, but there was no sign of a deal. Irish Times and Kathimerini

(Comments: For reader comments, questions and discussion, see the 1-Jun-15 World View -- Report: Russia may end support for Syria's Bashar al-Assad thread of the Generational Dynamics forum. Comments may be posted anonymously.) (1-Jun-2015) Permanent Link
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31-May-15 World View -- EU rescues 4300 migrants in one day as country quotas are enacted

US-China tensions in South China Sea take another step upward

This morning's key headlines from GenerationalDynamics.com

US-China tensions in South China Sea take another step upward


Sun Jianguo from the Chinese People's Liberation Army Navy chats with US Secretary of Defense Ash Carter in Singapore on Saturday (AFP)
Sun Jianguo from the Chinese People's Liberation Army Navy chats with US Secretary of Defense Ash Carter in Singapore on Saturday (AFP)

Secretary of State Ashton Carter gave a speech on Saturday morning in Singapore at a regional security conference. Once again, he implied that the US will militarily challenge China's plans in the South China sea:

"So let me make clear the position of the United States:

First, we want a peaceful resolution of all disputes. To that end, there should be an immediate and lasting halt to land reclamation by all claimants. We also oppose any further militarization of disputed features. We all know there is no military solution to the South China Sea disputes. Right now, at this critical juncture, is the time for renewed diplomacy, focused on a finding a lasting solution that protects the rights and the interests of all. As it is central to the regional security architecture, ASEAN must be a part of this effort: the United States encourages ASEAN and China to conclude a Code of Conduct this year. And America will support the right of claimants to pursue international legal arbitration and other peaceful means to resolve these disputes, just as we will oppose coercive tactics.

Second, the United States will continue to protect freedom of navigation and overflight – principles that have ensured security and prosperity in this region for decades. There should be no mistake: the United States will fly, sail, and operate wherever international law allows, as U.S. forces do all over the world. America, alongside its allies and partners in the regional architecture, will not be deterred from exercising these rights – the rights of all nations. After all, turning an underwater rock into an airfield simply does not afford the rights of sovereignty or permit restrictions on international air or maritime transit.

Finally, with its actions in the South China Sea, China is out of step with both the international rules and norms that underscore the Asia-Pacific’s security architecture, and the regional consensus that favors diplomacy and opposes coercion. These actions are spurring nations to respond together in new ways."

Here is a summary of the main points that will infuriate the Chinese:

There have been unconfirmed reports that the Chinese have installed mobile artillery weapons on one of China's man-made islands. A Vietnam official said, "If it has actually happened it is a very bad sign for what is already a very complicated situation in the South China Sea."

In response to Carter's speech, People’s Liberation Army (PLA) Senior Colonel Zhao Xiaozhuo said:

"Over the past decades, the region has been peaceful and stable, just because of China's great restraint. So I think China's activities are ... legitimate, reasonable and justified."

I've been puzzling over what this statement means. Zhao appears to be saying that the South China Sea has been China's sovereign territory for the past decades, but China has been kind enough to let other nations use it, and the only reason that there hasn't been a war so far is "because of China's great restraint." Is he saying that this restraint is coming to an end?

In response my article last week, "26-May-15 World View -- China says war with US in South China Sea is inevitable", one web site reader commented: "In 2008, well connected people I know in China said Xi Jinping 'would not mind going to war with America.' To-date actions have played out as explained to me." I've read hundreds of articles about China's president Xi Jinping over the last couple of years, and everything I've read is consistent with this comment.

When Xi took office in 2013, he gave a number of speeches about "China's Dream," in which he called for China to shed its past as a secondary player, and become the world's top military and economic power. He visited Chinese military bases and told the troops to be ready for war at any time. He vowed that China will take every step necessary to gain control of the East China Sea and South China Sea regions, including areas that have been owned by other countries for centuries.

China has had a major policy change in the last few months. They used to deny that the land reclamation had any military purpose, but now they're openly acknowledging that the islands are for military purposes.

China is in a massive state of denial, believing that they will win a war quickly, because the US will quickly back down. One possible first step is likely to be to shoot down an unmanned drone, or even a manned surveillance plane, saying that it's an unauthorized entry into China's sovereign territory. They believe that Obama is so weak that he won't retaliate, and they're completely wrong about that.

It's hard for me to see how the status quo is going to continue much longer. In the worst case scenario, which is the one I expect and the one that Generational Dynamics predicts, the war will go on for several years and engulf the entire world. Dept. of Defense and Xinhua and Defense News and Reuters

EU rescues 4300 migrants in one day as country quotas are enacted

European Union vessels rescued 4300 migrants from waters off the coast of Libya on Friday and Saturday, packed into 9 boats and 13 large rubber dinghies. Seventeen dead bodies were found, people who had died from exhaustion, thirst or exposure.

More than 40,000 migrants and asylum seekers have reached Italy so far this year. An estimated 1,800, including women and children, lost their lives during the journey. Last year, Italy rescued some 170,000 migrants at sea.

The huge surge in arrivals follow a pattern. There were several days with no rescues, because stormy weather prevented boats from leaving Libya. But calm seas on Friday brought a flood of smuggler launches.

The EU government in Brussels enacted a controversial quota system this week. EU countries will accept around 60,000 refugees, and each country will be required to take in a number of refugees, based on a calculation that looked at each country's size, GDP and unemployment rate. France has a quota of 7,000. Germany has a quota of 8,700. Sweden has a quota of 1,300. A financial incentive of 6,000 euros for each migrant has been offered to member states.

Britain has a constitutional right to opt out of the quota system, and has already it will do so. Ireland and Denmark are also expected not to take part. Irish Independent and Al Jazeera and The Local (France)

(Comments: For reader comments, questions and discussion, see the 31-May-15 World View -- EU rescues 4300 migrants in one day as country quotas are enacted thread of the Generational Dynamics forum. Comments may be posted anonymously.) (31-May-2015) Permanent Link
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30-May-15 World View -- ISIS suicide bombers strike Shia mosques in Saudi Arabia and Baghdad

ISIS continues to gain supporters throughout the Mideast

This morning's key headlines from GenerationalDynamics.com

ISIS suicide bombers strike Shia mosques in Saudi Arabia and Baghdad


Two Shia Saudi boys stand at the graves of 21 people killed in the May 22 attack on a Shia mosque (EPA)
Two Shia Saudi boys stand at the graves of 21 people killed in the May 22 attack on a Shia mosque (EPA)

The Islamic State (IS or ISIS or ISIL or Daesh) is claiming responsibility for a suicide bombing during Friday prayers in the Shia Al Anoud mosque in Dammam, in eastern Saudi Arabia. A male was disguised in women's clothing to evade detection by heavy security surrounding the mosque. He was stopped by security just as he entered the mosque and detonated the device. Three people were killed.

This follows by one week the bombing of another Shia mosque in eastern Saudi Arabia. ISIS claimed responsibility, and said it would not rest until all Shias were driven from the Arabian Peninsula.

Saudi officials condemned the terrorist bombing, and said it was an attempt to destabilize the security and unity of the Kingdom and local social cohesion:

"Terrorists seek to destabilize the Arab and Islamic nations’ security. Terrorism will never succeed in dividing the Saudi nation or destabilize national security."

However, it appears that ISIS is doing exactly that, throughout the Mideast and Asia.

Also on Friday, ISIS claimed responsibility car bombings outside two heavily guarded hotels in central Baghdad, killing ten people. The bombings are considered reprisals against the Shia Baghdad government for sending Shia militias to attempt to recapture Ramadi from ISIS. ISIS seized Ramadi, the capital of Anbar Province, two weeks ago when the Iraqi army fled.

And it was just three weeks ago when when terrorists in Karachi attacked a bus full of Shias, killing 45, and left behind leaflets accusing Shias of "barbaric atrocities," and warning of the "Advent of the Islamic State!" Arab News and AFP and Reuters

ISIS continues to gain supporters throughout the Mideast

A recent poll conducted by Al Jazeera Arabic asked the question, "Do you support the organizing victories of the Islamic State in Iraq and Syria (ISIS)?" An overwhelming 81% of those responding voted "Yes".

Al Jazeera Arabic has an overwhelmingly Sunni Muslim audience, mostly in Saudi Arabia and Egypt, and the respondents were self-selected. But the size of the positive response shows that there's a sufficiently large population of ISIS supporters in the Mideast to feed its growth.

Furthermore, stories continue of young male jihadists from Asia, Africa, Europe and Russia traveling to Syria to join ISIS, and young females traveling there as well to marry them. They're attracted by the fact that ISIS appears to be winning in Iraq and Syria, and even defeating large enemies, including Iran, Hezbollah and the United States. In addition, reports indicate that ISIS is using its vast oil wealth to pay its fighters well.

For decades, activist rhetoric around the Mideast has been targeted against Israel. But we're increasingly seeing that the conflict with Israel is becoming less important than the conflict with Iran and with Shias in general.

According to Egyptian cleric, Khaled Al-Kholif, the fight against Shias is more important than the war against "the Jews and Crusaders":

"Our problem with the Jews and Christians in this world is ongoing. You get rid of the Christians, and along come the Jews, and so on.

Our war with [the Shias] is a war of religion and of existence. This is not a war over Arab identity, over some regional issue, over petroleum, or over border crossings. It is much more serious than that. It is a war over religion and its basic principles. It is a war between us and them over religious creed. ...

Is it justified to be worried about modern Shiite ideology? The answer is: Yes. It is justified a thousand times over. Anyone who does not know and feel this should remember history. We don't want another [Shiite conqueror] like the Fatimid Al-Muizz li-Din Allah."

Al-Kholif is invoking the name of the Fatimid caliph Al-Muizz li-Din Allah. Al-Muizz is considered to be the founder of Cairo, but to Egyptians he was the Shia conqueror of Cairo in 969, putting Egypt under Shia Fatimid control for a century. The fact that this battle is being mentioned today shows how deeply and bitterly the Egyptian people still remember that event of over a millennium ago. Al-Kholif continued:

If those [Shiites] gain power and become firmly established, the Jews and the Crusaders will become the decision-makers in our own countries. We will become foreigners in our own countries. The nation must confront these [Shiites] by all possible means. ...

Our war with the Jews is a simple one, but our war with these [Shiites] is very serious, and we must commence it."

Why would a victory of Shias mean that Jews and Crusaders would become the decision makers? The explanation is that Al-Muizz got along very well with Jews and Christians, because most of the citizens were Sunni Muslims who hated Shias. As a result, Christian and Jewish intellectuals were often appointed as officials and ministers, and they became the decision makers in the land of the Sunni Muslims in Egypt.

So Al-Kholif's argument is really quite remarkable. Fighting Jews and Christians is just a war over "over petroleum, or over border crossings," and losing is not very consequential. But losing a war to Shias is far more serious, because the Jews and Christians will become the decision-makers, as happened in the time of Al-Muizz, and "We will become foreigners in our own countries." Amazing!

You know, when one is trying to understand other cultures, one is always astounded by little nuggets of information like this, where a battle that took place over a millennium ago is being used to justify a war today. People who are surprised by this should remember how much American policy today is still being influenced by the events of 1776.

It also helps to remember that when we talk about something happening in the Mideast, and blame it on something that Bush did or didn't do, or on something that Obama said or didn't say -- it's far more likely that anything that happened in America is far less important than the events of centuries ago in the Mideast. Breitbart News and Memri and Jewish Virtual Library

(Comments: For reader comments, questions and discussion, see the 30-May-15 World View -- ISIS suicide bombers strike Shia mosques in Saudi Arabia and Baghdad thread of the Generational Dynamics forum. Comments may be posted anonymously.) (30-May-2015) Permanent Link
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29-May-15 World View -- As Russia's economy worsens, withdrawal from Ukraine may be necessary

US-China military tensions get rapidly inflamed over South China Sea

This morning's key headlines from GenerationalDynamics.com

Russia using mobile crematoriums to continue pretense about Ukraine


A group of Russian soldiers captured by Ukrainian authorities in August, 2014 (Reuters)
A group of Russian soldiers captured by Ukrainian authorities in August, 2014 (Reuters)

It's an irony. On the one hand, Russia's Vladimir Putin is supporting the anti-government militias in East Ukraine with Russian weapons and thousands of Russian troops in order to stoke nationalism in Russia and burnish his popularity with the Russian people. But on the other hand, he can't admit that there are Russian troops in Ukraine because Russia's economy is so bad.

It's becoming increasingly difficult for Russian leaders to hide the fact that Russian soldiers are dying in eastern Ukraine in large numbers, but a number of sources are indicating that a way has been found.

Russia is using mobile crematoriums -- crematoriums on wheels -- to burn the bodies of Russian soldiers who die in east Ukraine.

According to House Armed Services Committee Chairman Mac Thornberry:

"The Russians are trying to hide their casualties by taking mobile crematoriums with them. They are trying to hide not only from the world but from the Russian people their involvement."

The mounting evidence of dead Russian soldiers is causing a domestic backlash for Putin. But burning the bodies of Russian soldiers killed in battle, instead of treating them as dead heroes, is causing a backlash in the army, and making it harder than ever to justify the military action in Ukraine. Bloomberg and Business Insider

Russia's economic crisis may force withdrawal from Ukraine

The Russian government's original 2015 budget was based on the assumption that the price of oil would be $100 per barrel, that Russia's GDP would grow by 2%, and that inflation would not exceed 5%. None of those assumptions has proven true. Oil has fallen to around $50 per barrel, and Russia's GDP has contracted 4% instead of growing. The inflation rate has exceed 15%.

Even worse, Russia's military spending is far higher than expected. It was budgeted at an already very high level of 4.5% of GDP, but during the first three months of this year it exceeded 9% of GDP -- twice more than planned. Most European countries are not spending more than 2% of GDP on defense; the US spends 3.5%, and only nine countries in the entire world are now spending more than 4%.

Russia's high rate of military spending is forcing it to dip into its reserve fund. If that level of funding continues, Russia's reserve fund will be exhausted before the end of the year.

The strategic aims of Russia's war against Ukraine are extremely unclear, and it's increasingly difficult to justify the Russian military intervention. Even the annexation of Crimea has turning into an economic calamity.

Russia is soon going to have to make some difficult decisions, and only bad options are available. Window on Eurasia and Jamestown

US-China military tensions get rapidly inflamed over South China Sea

Secretary of Defense Ashton Carter said on Wednesday:

"There should be no mistake about this: The United States will fly, sail and operate wherever international law allows, as we do all around the world. ...

We want a peaceful resolution of all disputes, and an immediate and lasting halt to land reclamation by any claimant. We also oppose any further militarization of disputed features."

However, China is openly doing all of those things, and is building a series of military bases in the South China Sea in international waters and in waters that have historically belonged to Vietnam and the Philippines.

As we reported earlier this week, China says war with US in South China Sea is inevitable. Since then, China has issued an extremely aggressive Military Strategy document indicating the intention "to seize the strategic initiative in military struggle, proactively plan for military struggle in all directions and domains, and grasp the opportunities to accelerate military building, reform and development."

Chinese media responded to Ashton Carter's remarks with:

"The dangerous provocation of the US, driven by their illusion of the worst-case scenario, is unwise and reckless. It is pressing Beijing to act in compliance with Washington's desire. However, China won't dance to the rhythm of the US."

All of these are signs that nationalism is increasing significantly on both sides, and that a major military confrontation is building. And in this generational Crisis era, such a military confrontation will lead to full-scale war. I've been writing for ten years that China is planning preemptive war on the United States, and it's hard to escape the feeling that the time is getting close. Washington Times and Global Times (Beijing) and Full Text: China's Military Strategy

(Comments: For reader comments, questions and discussion, see the 29-May-15 World View -- As Russia's economy worsens, withdrawal from Ukraine may be necessary thread of the Generational Dynamics forum. Comments may be posted anonymously.) (29-May-2015) Permanent Link
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28-May-15 World View -- ISIS stokes sectarian Sunni-Shia clashes across the Mideast and Asia

Sunni Arabs are being forced to choose between ISIS and Shias

This morning's key headlines from GenerationalDynamics.com

ISIS stokes sectarian Sunni-Shia clashes across the Mideast and Asia


A Pakistani security official displays cartridges from the scene of an attack on a bus, killing 45 Ismaili Shias two weeks ago(AP)
A Pakistani security official displays cartridges from the scene of an attack on a bus, killing 45 Ismaili Shias two weeks ago(AP)

I am not among those who worry that the Islamic State (IS or ISIS or ISIL or Daesh) is going to take control of the entire Arabian Peninsula, but one thing that's clear is that ISIS is becoming the focal point of the increasingly hostile fault line between Sunnis and Shias.

Pakistan has long been a hotbed of Sunni-Shia clashes, as certain branches of Tehrik-e-Taliban (TTP - Pakistan Taliban), such as Jundullah and Lashkar-e Jhangvi (LeJ), specifically target Shias. But this is being taken to a new level, as we reported two weeks ago, when terrorists in Karachi attacked a bus full of Ismaili Shias, killing 45, and left behind leaflets accusing Shias of "barbaric atrocities," and warning of the "Advent of the Islamic State!" That's not to say that previous terrorist attacks on Shias were not equally horrific, but the overlay of referring to the advent of ISIS is inflaming sectarian tensions throughout the region.

Similarly, we reported last week of the bombing of a Shia mosque in Saudi Arabia. ISIS claimed responsibility, and said it would not rest until all Shias were driven from the Arabian Peninsula. VOA and Reuters

Iraq's government changes name of military operation to recapture Ramadi

After ISIS's stunning seizure of the city of Ramadi a few days ago, with the Iraqi army fleeing from the approaching ISIS militias, the Iraq government has launched a military operation to recapture Ramadi, using Iran-trained Shia militias known as Hashid Shaabi (popular mobilization units). This is raising sectarian fears among the Sunni tribes around Ramadi, who are afraid that the Shia militias will commit similar atrocities on Sunnis that they did after the earlier recapture of the city of Tikrit.

In fact, Iraq's government seemed to be headed in that direction, when they called the attack "Operation Labaik ya Hussein," which roughly translates as "We are at your service, Hussein." The name refers to Hussein ibn Ali (or Husayn ibn Ali) who is considered to be a revered Shia saint. He was killed in 680 at the Battle of Karbala, which was the seminal battle that resulted in the Sunni-Shia split.

The choice of that name was severely criticized by Sunni leaders, and was described as "unhelpful" by the Pentagon. Because of the pressure, the Shia militias have renamed the planned attack "Operation Labaik ya Iraq," meaning, "We are at your service, Iraq."

This kerfuffle over the name of the operation shows how sensitive the Sunni-Shia split is, and how many officials are concerned about a sectarian backlash. Rudaw (Iraq) and Reuters

Sunni Arabs are being forced to choose between ISIS and Shias

With sectarian conflict growing in the Mideast, many Sunni Muslims are in a position where they are going to be forced to choose between ISIS and Shias. This is true to some extent in Syria, Iraq and Lebanon, as neighborhoods and groups become polarized along sectarian lines. For these Sunnis, the choice may be facing atrocities by ISIS versus atrocities by Shias.

According to an article translation by Memri, an Egyptian cleric Sheik Dr. Ahmad Al-Naqib was asked this question. He uses the word "Rafidites," which is a pejorative term for Shias:

"I was asked: What is your opinion about ISIS and its conduct? Should one pledge allegiance to ISIS? Does refraining from this constitute a sin? This question is part of the catastrophe that has afflicted the lands of Islam. ...

We must not say that this creation [ISIS], with its rulings and its conduct, is in keeping with the rightly-guided Islamic state that we must obey, especially since much consideration is required to determine whether this "Islamic State" qualifies as a state. They experience ups and downs. Again and again, they conquer land, which is then taken from them. In addition, as far as their upbringing is concerned, most of them are non-Arabs. This is a very dangerous issue. ...

There is no doubt, however, that they are much better than the criminal Rafidites [Shias], who kill the Sunnis because of their Sunni identity, and who kill, rape, and burn the Muslims wherever they may be. They are better than the [Shias], and their victories over the Rafidites are good for Islam, but God knows best. ...

Despite their transgressions, injustice, wrongdoing, and aggression, they are better than the Rafidites. They are better than the criminal Rafidites, who kill Sunnis just because they are Sunnis."

There have been numerous sectarian wars between Sunnis and Shias over the centuries, and there have been numerous atrocities committed on both sides. But in recent times, Al-Naqib was undoubtedly referring to Syria's president Bashar al-Assad.

Like many Arab Sunnis are appalled that Syria's president Bashar al-Assad has been conducting virtual genocide against his own people. Syria's Shia/Alawite president Bashar al-Assad has flattened entire Sunni villages with Russia's heavy weapons, he's killed children by sending missiles into exam rooms and bedrooms, he's killed dozens with sarin gas, and he's killed countless more with barrel bombs loaded with explosives, metals, and chlorine gas. In addition, he's used electrocution, eye-gouging, strangulation, starvation, and beating on tens of thousands of prisoners on a massive "industrial strength" scale, and does with complete impunity, and in fact with troops and weapons from Russia, Iran and Hezbollah.

So, from the point of view of Americans, Al-Naqib's remarks about ISIS and Shias seem revolting, but from the point of view of Sunni Arabs, ISIS is the lesser of the two evils.

In the political news the last few days, it seems that both the Democratic President Barack Obama and the Republican presidential candidate Rand Paul have come to full agreement that ISIS was created by the Republicans. This conclusion is absurd on its face, since ISIS was formed in Syria, not Iraq. The bizarre conclusion is part of the conceit of Americans that everything is caused by Americans, and other people have no histories of their own.

Once again, al-Qaeda in Iraq (AQI) was created by Jordanian terrorist Abu Musab al-Zarqawi. As I wrote in 2007 in "Iraqi Sunnis are turning against al-Qaeda in Iraq", al-Zarqawi was unable to find Iraqis who were willing to be suicide bombers, or shed blood in any way, so he had to bring in Jordanian and Saudi terrorists from abroad. Al-Zarqawi was killed by an American drone strike in 2006, and AQI was completely driven out of Iraq in 2007 by Iraqi Sunnis in the "Anbar Awakening," with the help of President George Bush's "surge."

As I've written many times, ISIS came into existence because of al-Assad's actions. By 2012, it was becoming obvious that Sunni jihadists from countries around the world were heading for Syria to fight against al-Assad. These jihadists became the fighters that formed the backbone of the militias that became ISIS, and other salafist militias. There were no jihadists heading for Syria during the Bush administration, and there were no jihadists heading for Syria during Obama's first term, so neither Bush or Obama can be held responsible for creating ISIS. However, it is possible to blame Obama for the growth of ISIS, for not killing al-Assad in 2011-12 when he had the chance, and for not leaving any troops behind in Iraq after the December 2011 withdrawal.

Whatever happened in the past, Al-Naqib's remarks represent widely held opinions in the Arab Sunni world, and they indicate that the Muslim world is headed for a massive Sunni-Shia sectarian war. Memri

(Comments: For reader comments, questions and discussion, see the 28-May-15 World View -- ISIS stokes sectarian Sunni-Shia clashes across the Mideast and Asia thread of the Generational Dynamics forum. Comments may be posted anonymously.) (28-May-2015) Permanent Link
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27-May-15 World View -- Major terror attack in Kabul underscores dire Afghan travel warning

Hackers obtain IRS tax filings for 104,000 taxpayers

This morning's key headlines from GenerationalDynamics.com

State Dept. issues alarming Afghanistan travel warning


Afghan security forces patrol in Kunduz, Afghanistan, on April 30 (Reuters)
Afghan security forces patrol in Kunduz, Afghanistan, on April 30 (Reuters)

The State Dept. on Friday issued a dire travel warning for Afghanistan that indicates that the security situation is unstable across the entire country. This warning goes much farther than any previous administration statements about Afghanistan:

"The U.S. government remains highly concerned about possible attacks on U.S. citizens (whether visiting or residing in Afghanistan), U.S. facilities, businesses, and perceived U.S. and foreign interests. Attacks may target official government convoys and compounds, including Afghan and U.S. government facilities, foreign embassies and military installations, as well as restaurants, hotels, airports, non-governmental organization (NGO) offices, international organizations, religious institutions, educational centers, foreign guest houses, and other commercial entities.

Extremists associated with various Taliban networks and members of other armed opposition groups are active in every province of the country. Despite numerous security operations and checkpoints by Afghan and coalition forces in and around the capital, Kabul is at high risk for militant attacks, including vehicle-borne improvised explosive devices (VBIED), direct and indirect fire, and suicide bombings. The same risks also exist in other major cities in Afghanistan, including Herat, Mazar-e-Sharif, and Kandahar. A strong possibility for hostile acts exists throughout the country at all times, either targeted or random, against both U.S. and other foreign nationals. An ongoing risk of kidnapping exists throughout Afghanistan."

The dire warning indicates that provinces across the country are unstable, and that even heavily protected areas in the capital city Kabul are unsafe.

This point was underscored late Tuesday evening and Wednesday morning, when heavily armed militants stormed an upscale, heavily protected neighborhood in Kabul, resulting in a fierce gun battle and at least 20 explosions. At this writing, the attack is still ongoing.

The new travel advisory represents a major change in position by the administration, essentially admitting that the withdrawal plan from Afghanistan is not working. It comes at the same time that Secretary of Defense Ashton Carter admitted that the Iraq plan is not working, because "the Iraqi forces just showed no will to fight." Both announcements were made over the Memorial Day weekend. U.S. State Department and AP

Afghan militia strategy revives hostility and conflicts of 1990s crisis civil war

Afghanistan's increasing instability as American troops withdraw is causing the government in Kabul to change strategies. It's increasingly clear that the Afghan army is not able to prevent attacks by insurgents.

As a result, Kabul is reviving the conflicts of the extremely bloody Afghanistan generational crisis civil war, fought between 1991 and 1996. That war was fought mainly between the Pashtuns in southern Afghanistan versus the Northern Alliance of Tajiks, Hazaras and Uzbeks in northern Afghanistan.

Today's Taliban terrorists are radicalized Pashtuns. And so, in northern Afghanistan, the Kabul government is calling on militias from the old Northern Alliance to come forward and fight their old Pashtun foes. The effort is expected to mobilize thousands of Afghans from the Northern Alliance to fight against the Pashtun Taliban.

Some analysts are concerned that this will trigger a new major civil war. But Afghanistan is in a generational Awakening era, so a new crisis civil war is impossible. The 1990s civil war was extremely bloody and genocidal, and there are several generations of survivors of that war who are still alive and will prevent anything like it from happening again.

However, that doesn't mean that reviving the Northern Alliance will bring peace. It will bring the usual post-civil war template of periods of conflict alternating with periods of each. Each period of conflict will be worse than the previous one, and each will end with some peace agreement that will bring peace for a few years. That's what almost always happen in any country after a civil war. The alternating periods of conflict and peace continue for decades, until finally all the survivors of the preceding crisis civil war are gone, and then a new bloody genocidal crisis civil war breaks out again. Hindustan Times and International Business Times

Hackers obtain IRS tax filings for 104,000 taxpayers

The Internal Revenue Service (IRS) announced that hackers obtained the tax returns of approximately 104,000 taxpayers. The hackers apparently used names and social security numbers that had been obtained from previous hacks. They used that information in the IRS "Get Transcript" application to get entire transcripts of previous tax return filings.

Once the hackers obtain a taxpayer's tax filings, they can use it to apply for fraudulent incomes, in addition to using the information from the tax filing to defraud the taxpayer.

The IRS believes that the hacking began some time in February, though they didn't notice it until mid-May.

The IRS has been repeatedly warned by experts that its data security systems are inadequate. Accounting Today and AP

(Comments: For reader comments, questions and discussion, see the 27-May-15 World View -- Major terror attack in Kabul underscores dire Afghan travel warning thread of the Generational Dynamics forum. Comments may be posted anonymously.) (27-May-2015) Permanent Link
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26-May-15 World View -- China says war with US in South China Sea is inevitable

China's military using jamming against US drones in South China Sea

This morning's key headlines from GenerationalDynamics.com

Vietnam protests China's fishing ban in the Gulf of Tonkin


Anti-Chinese environment activists in Manila protest in front of the Chinese embassy, shooting Chinese flags with water guns (Reuters)
Anti-Chinese environment activists in Manila protest in front of the Chinese embassy, shooting Chinese flags with water guns (Reuters)

Vietnam is protesting China's unilateral ban on fishing in Vietnamese waters that include the Gulf of Tonkin, nominally "to promote the sustainable development of the fishing industry." The ban will last until August 1.

Vietnamese officials are advising their shipping industry to ignore the ban.

China is claiming that the ban is required for ecological reasons, but ecological activists in Manila are demanding that China stop its ecological destruction caused by ongoing activities to build man-made islands in the South China Sea. Thanh Nien News (Hanoi) and Reuters

China says war with US in South China Sea is inevitable

According to commentary in China's Global Times newspaper:

"If the United States' bottom line is that China has to halt its activities, then a U.S.-China war is inevitable in the South China Sea.

The intensity of the conflict will be higher than what people usually think of as 'friction.'"

There are actually two separate (though related) issues here, and it's unclear whether this threat of war applies to one or both issues.

As we reported last week, the level of military tension between the US and China escalated substantially when China repeatedly demanded that an American P-8A Poseidon surveillance plane leave the area immediately. The plane was surveilling China's man-made islands in the Spratly Islands in the South China Sea.

So the first issue is that China is demanding an end to American surveillance activities over the Spratly Islands.

The second issue is that the US State Dept. is demanding an end to China's island-building. According to U.S. Deputy Secretary of State Antony Blinken, speaking in Jakarta last week on Wednesday:

"As China seeks to make sovereign land out of sandcastles and redraw maritime boundaries, it is eroding regional trust and undermining investor confidence.

Its behavior threatens to set a new precedent, whereby larger countries are free to intimidate smaller ones, and that provokes tensions, instability and can even lead to conflict."

China's Foreign Ministry responded:

"Comments of this sort are not good for the solving of tensions and are not beneficial for the mutual trust between countries as well as maintaining the peace and the stability of the South China Sea region."

China has been annexing regions in the South China Sea that have historically belonged to other countries, and continues a massive military to enforce its seizures. China has claimed the entire South China Sea, including regions historically belonging to Vietnam, Brunei, Malaysia, Indonesia, Taiwan and the Philippines. China's claims are rejected by almost everyone outside of China, and China refuses to submit them to the United Nations court deciding such matters, apparently knowing that they would lose.

In recent months, China has repeated escalated the military aggression by using land reclamation projects to construct man-made islands for military bases and airports in regions surrounding the Spratly Islands that have previously belonged to Vietnam and the Philippines.

The US says that it will continue surveillance missions over international waters. However, the Chinese claim that the entire South China Sea is their sovereign territory, so there are no international waters.

On Thursday of last week, Assistant Secretary of State Daniel Russel said that U.S. naval forces and military aircraft would "continue to fully exercise" the right to operate in international waters and airspace:

"Nobody in their right mind is going to try to stop the U.S. Navy from operating - that would not be a good bet.

But it’s not enough that a U.S. military plane can overfly international waters, even if there is challenge or hailing query ... We believe that every country and all civilian actors should have unfettered access to international waters and international airspace."

Well, whether the Chinese military leaders are in their right minds is certainly open to question, but there's little doubt that the Chinese are, at some point, going to take some military action to stop the surveillance flights. Global Times and International Business Times and Al-Jazeera and Reuters

China's military using jamming against US drones in South China Sea

If China is to take the next step in military action against the United States in the South China Sea, one possible direct target would Global Hawk surveillance drones as they conduct surveillance over the Spratly Islands.

The Washington Free Beacon is reporting that China has tried to electronically jam US drone flights over the South China Sea, in order to prevent ground stations from communicating with the drones. There may be an additional objective of trying to capture a drone by getting it to crash in shallow waters.

Putting on my software engineering hat, I would hope that isn't possible. When the Global Hawk takes off from Guam, the software should be programmed to respond to jamming by continuing on a pre-programmed path to continue surveillance and return to Guam.

When Iran captured an American drone by taking electronic control while it was traveling over Afghanistan, I could never understand how that was possible, unless the programmers who wrote the software for the drone had been so sloppy that they didn't anticipate that possibility. At any rate, let's hope that there have been "lessons learned," and that that have been applied to the Global Hawk drones flying over the South China Sea.

However, electronic warfare is not the only possibility. China's military could shoot down a drone, or could attempt to snatch one in flight using a manned aircraft.

If/when China wants to take the next step with a military action against the United States in the South China Sea, the drones may present an attractive military target. Washington Free Beacon

China's media describes 'bottom line' for war with US

Because of some confusion surrounding this story, I wanted to get more information about China's analysis of the situation. I went to the original Global Times article in Chinese, and got a machine translation, which is pretty garbled. The following is my attempt to extract key sentences from the machine translation of the original article in Chinese:

"When US reconnaissance aircraft flew over the Spratly (Nansha) Islands last week, she was repeatedly warned by China's navy, raising fears in the strategic community and the public of a possible outbreak of Sino-US military conflict in the South China Sea. How likely is such a military conflict, and how intense will it be?

First of all, provocations from the Philippines and Vietnam, with the support of US troops, make the possibility of Sino-US military conflict larger than in the past.

China cannot make infinitely many concessions [, and so will make no more concessions beyond its bottom line]. Then we will see how the United States sets their own bottom line, and whether the two sides can understand and respect each other's bottom line.

For China, the most important bottom line is to make the construction of the reefs continue until they are completed.

If the United States' bottom line is that China has to shut down its construction of the reefs, then a U.S.-China war is inevitable in the South China Sea. The intensity of the conflict will be higher than what people usually think of as 'friction.'

In addition China has a bottom line, that the United States must respect China's territorial sovereignty and maritime rights and interests in the South China Sea.

If the US continues to 'harass' China with American forces in the South China Sea, but shows restraint, then China will also show restraint.

But if the US military says that China is arrogant, and continues its provocative acts of public humiliation, then a conflict will be difficult to avoid. The Chinese army will fight for dignity.

China's determination to complete the reefs is very clear and firm. But the strategic goal of the United States is relatively vague. Whether there is peace or war in the South China Sea depends on the United States.

A US military aircraft or warship may use an 'accident' to provoke a war. This is like the year before the outbreak of the Vietnam War, when the US concocted a 'Gulf of Tonkin incident.'

US troops in the South China Sea seem arrogant, but they do not have underlying political and social support. This is clearly up and down the US military, so the Chinese saying, 'paper tiger' in fact refers to this situation."

The Global Times is the most nationalistic of government publications, and it doesn't always reflect official policy, but it does reflect what many in China's government are thinking.

As I've been saying for years, China has been rapidly building its military for years with a variety of weapons and missile systems that have no other purpose than to preemptively strike American aircraft carriers, American military bases, and American cities. Generational Dynamics predicts that China is preparing to launch a pre-emptive full-scale nuclear missile attack on the United States. There may not be a war tomorrow, but every week or two it becomes apparent that the trend toward war is unmistakable. Global Times (Chinese) (Translation)

(Comments: For reader comments, questions and discussion, see the 26-May-15 World View -- China says war with US in South China Sea is inevitable thread of the Generational Dynamics forum. Comments may be posted anonymously.) (26-May-2015) Permanent Link
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25-May-15 World View -- Scathing Iraq remarks by Ash Carter suggest imminent policy change

Some reports suggest intentional loss of Ramadi by Iraq's government

This morning's key headlines from GenerationalDynamics.com

US administration's strategy in Iraq continues to fail


Iraqis fleeing Ramadi on Sunday (AP)
Iraqis fleeing Ramadi on Sunday (AP)

Last year, the Islamic State (IS or ISIS or ISIL or Daesh) stunned the world by seizing Mosul in Iraq. The Iraqi soldiers who were supposed to defend Mosul simply dropped their weapons and fled as the ISIS militias approached.

President Barack Obama had withdrawn all troops from Iraq in December 2011, and had assured the world that Iraq could take care of itself, without needing American troops. However, as ISIS scored major victories in Iraq, Obama was forced to change his position. On June 19, he said:

"We're prepared to send a small number of additional American advisors, up to 300, to assess how we can best train, advise and support Iraqis security force forces going forward I think we always have to guard against mission creep, so let me repeat what I've said in the past -- American combat troops are not going to be fighting in Iraq again."

Since then, President Obama has been forced to announce several increases in troop deployments, though always special forces and not "ground troops."

There have also been American airstrikes in Iraq and Syria, but many analysts say that they're almost completely ineffective. Some reports indicate that the pilots often return to base without having launched any airstrikes because of a lack of suitable targets.

One of the reasons that suitable airstrike targets cannot be identified is that Obama has not permitted US soldiers to be on the ground acting as "forward air controllers," who identify the targets on the ground then communicate their locations to the aircraft.

In the last two weeks, ISIS has scored several additional stunning victories.

On Sunday, ISIS took full control of a border crossing between Iraq and Syria. Earlier, ISIS captured the historic city of Palmyra in Syria, and the city of Ramadi in Iraq. This gives ISIS full control of the two main roads between Syria and Iraq's province of Anbar. The National (UAE) and Economist

Obama administration's rhetoric changes dramatically on Sunday

Initially, President Obama referred to the stunning seizure of Ramadi as a temporary "tactical setback," but on Sunday, the tone of the rhetoric from the Obama administration changed sharply. Secretary of Defense Ashton Carter, appearing on CNN, gave a scathing criticism of Iraq's army after its defeat in Ramadi:

"What apparently happened was that the Iraqi forces just showed no will to fight. They were not outnumbered but in fact they vastly outnumbered the opposing force, and yet they failed to fight. They withdrew from the site. And that says to me, and I think to most of us, that we have an issue with the will of the Iraqis to fight ISIL and defend themselves.

Now, we can give them training, we can give them equipment; we obviously can't give them the will to fight. But if we give them training, we give them equipment and give them support and give them some time, I hope they will develop the will to fight, because only if they fight can ISIL remain defeated."

Carter also agreed that airstrikes have not been very effective:

"Air strikes are effective but neither they nor really anything we do can substitute for the Iraqi forces' will to fight.

They're the ones who have that to beat ISIL and keep then keep them beaten. We can participate in the defeat of ISIL but we can't make Iraq run as a decent place for people to live. We can't sustain the victory. Only the Iraqis can do that, and in particular, in this case, the Sunni tribes to the west.

If there comes a time when we need to change the kinds of support we're giving to the Iraqi forces, we'll make that recommendation. But what happened at Ramadi was a failure of the Iraqi forces to fight. And so our efforts now are devoted to providing their ground forces with the equipment, the training, and to try to encourage their will to fight so that our campaign enabling them can be successful both in defeating ISIL and keeping ISIL defeated in a sustained way."

During Sunday's interview, Carter said that there are still no plans to use forward air controllers.

On the Sunday talk shows, both Democrats and Republicans criticized Obama's strategy in Iraq, with several calling the situation "a stalemate." One Democrat urged Obama to supply the Kurdish Peshmerga and Sunni tribesmen in Iraq, who she said are "literally begging, for arms, heavy weapons and ammunition" to defeat ISIS and protect their land and families.

One Republican, Illinois Rep. Adam Kinzinger, called for much more aggressive military action:

"You are not losing and you are not winning because we are not really engaged in this fight.

At some point, we're going to have to understand that the goal is the destruction of ISIS. ... We have to understand that every day that goes by where we don't push this cancer back ... the cost of liberating Iraq or the cost of defeating this cancer is only going to increase."

The scathing, undiplomatic criticism of Iraq's army by the Secretary of Defense, combined with criticisms of Obama from all sides, suggests that there is going to be a significant change of policy in the next few days. However, he will certainly try anything rather than ground troops, as that would be the ultimate humiliation after having suffered a long string of foreign policy humiliations, one after the other. CNN and The National (UAE) and Fox News

Some reports suggest intentional loss of Ramadi by Iraq's government

There are some reports that indicate that ISIS's seizure of Ramadi was accomplished with the help of Iraq's government in Baghdad, or at least with its intentional neglect.

According to a top Kurdish commander who fought the ISIS militias in Ramadi, he had received intelligence five days before the attack on Ramadi that 400 armed ISIS vehicles had entered Iraq from Syria, and at least 200 were headed for Ramadi. The commander asked his superiors in Baghdad to arrange for airstrikes to take out the vehicles, which would presumably have been easy targets. But no air strikes occurred.

Instead, ISIS sent 50 suicide bombers into the Iraq army defense lines. The suicide bombers had arrived from Syria. After that, seizing Ramadi was an easy victory for ISIS.

According to one Iraqi analyst, Baghdad's support of the Ramadi defenses was so bad, it must have been intentional. He suggests that any support for the Iraq army and the Sunni tribes in Ramadi would require giving weapons to Sunnis, which Baghdad did not want to do. Instead, Baghdad wanted the entire operation against ISIS to be conducted by Shia militias under the command of Iran's Al Qods Brigades commander Qassam Soleimani.

Arguing against this analysis is the fact that Soleimani was handily defeated by ISIS at the battle of Tikrit, and was forced to flee back to Tehran. Bringing him back to lead the fight in Ramadi would have to be considered a big risk. Rudaw (Iraq) and Middle East Briefing

(Comments: For reader comments, questions and discussion, see the 25-May-15 World View -- Scathing Iraq remarks by Ash Carter suggest imminent policy change thread of the Generational Dynamics forum. Comments may be posted anonymously.) (25-May-2015) Permanent Link
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24-May-15 World View -- Burma (Myanmar) approves birth control law targeting Rohingya Muslims

Lessons learned from Ireland's vote on gay marriage

This morning's key headlines from GenerationalDynamics.com

Burma (Myanmar) approves birth control law targeting Rohingya Muslims


Ethnic Rohingya women and children gather to receive a meal in Indonesia on Saturday (AP)
Ethnic Rohingya women and children gather to receive a meal in Indonesia on Saturday (AP)

President Thein Sein of Myanmar (Burma) has signed into law the Population Control Health Care Bill, to require mothers to have their children at least three years apart. Nominally, the purpose of the bill is to "protect women's health," but opponents say that it's designed to target Rohingya Muslims.

The law doesn't provide punishment for parents who do not comply, but it gives local authorities the power to take whatever steps are necessary to implement the law. Human rights activists say that this gives a blank check local police to take harsh measures with Rohingya families.

Rohingya Muslim migrants have lived peacefully in Myanmar (Burma) for generations, but are now being slaughtered and driven from their homes by Buddhists led by Buddhist monk Ashin Wirathu. Some 140,000 have been herded into dirty apartheid-like camps. Thousands of Rohingya have fled Burma. An estimated 2000 Rohingya migrants are have been trapped for over 40 days in crowded boats off the coast in the Bay of Bengal. Thousands more are in boats further south in the Andaman Sea, where they have been trying to reach shore in Thailand, Indonesia or Malaysia. However, officials in those three countries have been pushing the boats back out to sea when they approach shore, although an agreement last week may permit up to 7,000 to be sheltered temporarily.

The new Population Control law was enacted in response to the demands of hard-line Buddhists who have repeatedly warned that Muslims, with their high birthrates, could take over the country of 50 million even though they currently represent less than 10 percent of the population.

However, human rights activists warn that this attitude is racist and anti-Muslim, and that the new law will "exacerbate ethnic and religious divisions and undermine the country's efforts to promote tolerance and diversity." AP and AFP

Burma's government vacillates between repression (stability) and reforms (human rights)

Burma's last two generational crisis wars (1886-91 and 1948-58) were extremely bloody and violent civil wars between ethnic groups. (See "Burma: Growing demonstrations by the '88 Generation' raise fears of new slaughter" from 2007, for a generational history of Burma.)

Any country that goes through a crisis civil war faces the problem, in the decades that follow, of preventing old hatreds to lead to a renewal of that civil war. For that reason, it's fairly common for the military to take control of the government after the civil war ends, and to use military and police power to try to control riots and demonstrations, fearing that they will destabilize the country and lead to a new civil war.

So in 2008, as the 20th anniversary of the 1988 massacre approached, there were massive new demonstrations in Rangoon (Yangon), led by monks and nuns, as well as many ordinary citizens. Burma's military junta ordered thousands of troops into the streets of Rangoon. Hundreds of activists and citizens were shot dead or burned alive in government crematoriums. Thousands of Buddhist monks, who led the protests to begin with, were rounded up and detained. Some were found floating face down in rivers. This repression was done in order to promote "stability."

The result was an enormous international backlash, along with economic sanctions. This caused the pendulum to move away from repression (stability) back towards reforms, including free elections and freedom of expression. The purpose of these reforms is to promote "human rights."

However, the end of repression unleashed a lot of hatred that had been bottled up since the 1950s generational crisis civil war. New protests began appearing in the northern provinces of Kachin and Shan, and earlier this year we reported on fighting between Burma's army and ethnic Chinese in Burma's Kokang Special Region.

Now Burma's government is again moving away from reforms (human rights) and back in the direction of repression (stability) with the new Population Control law. The parliament is consider additional bills relating to monogamy, religious conversion and interfaith marriage. These laws are also being demanded by hardline Buddhists with an anti-Muslim agenda.

From the point of view of Generational Dynamics, this vacillation between repression and reforms never succeeds in bringing peace. As the generations of survivors of the last crisis civil war die off, and the country enters a new generational Crisis era, there is a huge, new bloody civil war. Deutsche Welle and Economist

Lessons learned from Ireland's vote on gay marriage

Ireland's referendum on gay marriage has passed overwhelmingly, despite being bitterly opposed by the Catholic Church. It seems that Irish Catholics can overwhelmingly call themselves Catholics, go to Church every Sunday and still completely ignore the teachings of the Pope. This has been true in the case of contraceptives for years.

The lesson to be learned is that you can't depend on churches, synagogues, mosques or politicians to tell you how people think and behave. Millions of Muslims may pray in mosques where they're taught jihadism, but that doesn't mean that they're all jihadists. Other methods must be used to determine what the populations and different generations of people in a country think, and how they will behave when they're forced to make difficult choices. Irish Times and Religion News Service

(Comments: For reader comments, questions and discussion, see the 24-May-15 World View -- Burma (Myanmar) approves birth control law targeting Rohingya Muslims thread of the Generational Dynamics forum. Comments may be posted anonymously.) (24-May-2015) Permanent Link
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