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Generational Dynamics Web Log for 10-Jan-2011
10-Jan-11 News -- Defense Secretary Gates announces an arms race with China

Web Log - January, 2011

10-Jan-11 News -- Defense Secretary Gates announces an arms race with China

Japan and South Korea unite against China and North Korea

Defense Secretary Gates announces an arms race with China

US Defense Secretary Robert M. Gates announced on Friday that the Pentagon is investing in a range of new weapons in response to China's military buildup, according to the NY Times. China has been rapidly building up its military since the 1990s, but this is the first time that the Pentagon has responded to China's buildup with more than words.

"The American weapons that Mr. Gates was referring to included investments in a new long-range nuclear-capable bomber aircraft, which the Pentagon had stopped developing in 2009, as well as a new generation of electronic jammers for the Navy that are designed to thwart a missile from finding and hitting a target. At a Pentagon briefing on Thursday, Mr. Gates said that the jammers would improve the Navy’s ability to “fight and survive” in waters where it is challenged.
Mr. Gates was also referring to continued investment in the Joint Strike Fighter, the Pentagon’s newest radar-evading fighter jet."

From the point of view of Generational Dynamics, China is arming and planning for a major war with the United States.

However, hope springs eternal. Secretary Gates arrived in Beijing on Sunday for discussions with China's president and defense minister. According to VOA, Gates says that he wants to persuade China to engage in regular military talks with the United States to prevent misunderstandings that could lead to conflict.

In ten days, China's president Hu Jintao will arrive in Washington for discussions with President Obama.

Japan and South Korea unite against China and North Korea

Japan and South Korea have had very bitter relations since the end of World War II, because Japan had colonized Korea during the first half of the 20th century, and because the Japanese army used Korean women as "comfort women" during WW II.

But now Japan and South Korea are faced with new realities. These include China's military buildup, North Korea's nuclear weapons buildup, and China's close relationship with North Korea.

As a result, Japan and South Korea are being forced to choose sides, and they're choosing each other, according to Bloomberg. Japan and South Korea are boosting military and economic ties in ways that would have been politically impossible just a few years ago.

Governments around the world struggle with increasing food prices

Riots continued in Algeria for a fifth day on Sunday over high food prices and unemployment. Since they began on Tuesday, three young people have been killed, and more than 1,000 have been arrested, according to the Interior Minister quoted by Magharebia.

Fourteen people were killed on Sunday in clashes with security forces in Tunisia, near the border with Algeria, according to VOA.

In both countries, policemen were killed as a result of the clashes.

This comes as the U.N. Food and Agriculture Organization (FAO) announces that its food price index has reached its highest level since it was begun in 1991. Prices have risen 32% in just the last half of 2010.

High prices sparked worldwide food prices in 2008. Everyone hoped that food prices would come down, and they did for a while in 2009, and again early in 2010, but they really surged in the last half of 2010. They're now up to new highs, higher than in 2008, and governments around the world are looking for ways to head off problems.

World food situation (FAO)

World food situation (FAO)

In Bangladesh, the Prime Minister announced a rationing system on Sunday, according to the Daily Star. Rice will be distributed to "the destitute and ultra-poor" at subsidized prices through ration cards.

India, which still has in effect from the 2008 crisis an export ban on rice, is also considering a plan to distribute food grains at subsidized prices to the BPL (people Below Poverty Line), according to Business Standard (India).

India's consumers have been particularly hit by a doubling of the price of onions in the last month, according to Sify (India). However, the General Secretary of the Vegetable Traders Association is quoted as saying that the rise in onion prices is only temporary, as a fresh crop is ready to be harvested.

From the point of view of Generational Dynamics, what we're seeing is what I call the "Malthus effect," a continuing increase in the price of food as the population grows faster than the supply of food. (See "Food: Green revolution v Malthus effect.")

Food prices were steady or declining until 2002. Since 2002, food prices have been surging much faster than inflation.

The survivors of World War II (GI and Silent generations) were well aware of the horrors of famine and starvation that occurred during the war, and they developed the Green Revolution to make sure that everyone in the world would be fed.

The Green Revolution led to huge increases in food production in the 1960s and 1970s, but for some reason, many people believe that the Green Revolution is some magic potion that will last forever. In many ways it was a one shot deal -- improve crop yields by using a lot more water, fertilizer and insecticides. Since then, water has gotten scarcer, and fertilizer and insecticides have been overused. New, modern equipment that was made available in the 1970s is now worn out and rusting.

It's really not surprising that the surge in food prices occurred in the same time frame as the tech, real estate and credit bubbles that have developed into the current global financial crisis. The same generational greed and nihilism that led to the global financial crisis has also led to the collapse of the Green Revolution.

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After a relaxing holiday season, the euro zone financial crisis is coming to the fore again. Germany, France and other euro zone countries are pressuring Portugal to seek a bailout from the EU and IMF to prevent Portugals financial problems from spreading to other countries. This is the same kind of game that was played with Ireland last year, and if it plays out in a similar way, then Portugal will stall on asking for aid in order to gain leverage in having to pay lower interest rates on the bailout money. Reuters

Tensions are also rising again in Thailand. On Sunday, some 30,000 red-shirt anti-government protesters filled the streets of downtown Bangkok in a peaceful demonstration. Red Shirt organizers say that they plan to hold regular demonstrations twice a month. CNN

165 Israeli academics are refusing to participate in academic functions at the Ariel University Center of Samaria, because it's across the "Green Line" in the West Bank, in territory claimed by the Palestinians. Jerusalem Post

(Comments: For reader comments, questions and discussion, see the 10-Jan-11 News -- Defense Secretary Gates announces an arms race with China thread of the Generational Dynamics forum. Comments may be posted anonymously.) (10-Jan-2011) Permanent Link
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Generational Dynamics Web Log for 10-Jan-2011 10-Jan-11 News -- Defense Secretary Gates announces an arms race with China

Defense Secretary Gates announces an arms race with China

Japan and South Korea unite against China and North Korea

Governments around the world struggle with increasing food prices

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Generational Dynamics Web Log for 10-Jan-2011
10-Jan-11 News -- Defense Secretary Gates announces an arms race with China