Generational Dynamics
	Forecasting America's Destiny ... and the World's
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Web Log - October, 2006

Somalia and Ethiopia close to full-scale war, according to leaked UN report

Thousands of refugees are fleeing Ethiopia into Kenya to escape war

Horn of Africa

There are two sides within Somalia itself:

• The internationally recognized Transitional Federal Government (TFG), formed in 2000 as a confederation of the warlords who rule the various ethnic groups that have existed for centuries and had fought each other frequently;
• The Islamic Courts Union (ICU), a radical Islamist group that captured Somalia's capital, Mogadishu, on June 6, and has been increasing in power and control ever since.

The ICU has been gaining ground on the TFG for several months, despite TFG pleas for international assistance, especially from the United States.

And now, arch-enemies Ethiopia and Eritrea are getting into the act. According to a leaked confidential UN report on Somalia, Somalia, with support from Eritrea, is close to all-out war with Ethiopia, a US ally.

The confidential report says that Ethiopia, Uganda and Yemen are supporting the TFG, while Iran, Libya, Saudi Arabia and Gulf states are supporting the ICU.

There are already some 300,000 Somalian refugees in camps in Kenya, and the new threats are adding thousands more. There have been polio outbreaks in Somalia in the last few years, and there's a great fear that polio will spread through the densely packed refugee camp in Kenya.

Africa, with Ivory Coast and Darfur highlighted

Somalia has taken on increasing international strategic value since 9/11, since it's believed that al-Qaeda has been using the country for training camps for terrorists. In fact, al-Qaeda training in Somalia was linked to last year's London subway bombings. Previously, al-Qaeda links are considered likely for the the 1998 bombings of US embassies in Kenya and Tanzania and the 2002 attacks on Israeli tourists in Kenya.

From the point of view of Generational Dynamics, Islamist control of Somalia, if it continues to take hold, would have major strategic significance in the coming "clash of civilizations" world war. Somalia is strategically located a short boat ride from the Arabian peninsula, and could be used as a base of operations against Israel or oil facilities in Saudi Arabia.

Within Africa itself, the entire northern tier of African countries -- those just below the Sahara Desert -- from Côte d'Ivoire to Sudan to Somalia -- are either in a crisis war or approaching one. The countries of southern Africa are on a different generational timeline, launched by the huge Mfecane war of the early 1800s, had their most recent crisis wars in the 1960s. But the northern African countries are on the World War II generational timeline, and have fault lines either between Muslims and Christians or between Arabs and indigenous Africans, or between different ethnic groups, and all are headed for full-scale war within the next decade. (28-Oct-06) Permanent Link
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Alan Greenspan blames the housing bubble on the fall of the Berlin Wall

Meanwhile, the stock market keeps skyrocketing and appears unstoppable to many investors.

I've been wanting for a long time to write a comprehensive exposition of a "Generational Dynamics theory of macroeconomics," and I finally posted it today as "System Dynamics and the Failure of Macroeconomics Theory." I hope any web site readers with an interest in macroeconomics theory will read it and let me know what you think.

The economy is so crazy these days that it's hard to see where any theory has anything to do with it. Just when the market has gone so high up into bubble territory that I think that investors can't possibly be such fools as to buy, they push it up higher. The Dow advanced a huge 114 points on Monday, and 11 more today. On Monday, the long-term trend value of the DJIA was 5074, and the market closed at 12117, which is 238% of the trend value. The figure 238% indicates how high the bubble is. In 1929, the market peaked at 254% of trend value, so maybe that means that the Dow has another 1000 points or so to go before the bubble bursts. Even so, this stock market panic is well overdue, even though it's impossible to predict the exact date of a stock market panic.

On Friday, I heard a TV financial pundit say that the market is doing so well that small investors are coming back in. Maybe that's where all the new investor money is coming from. Isn't that wonderful? Ordinary people who lost big after the Nasdaq crash in 2000 are now betting their pensions and 401k's again, now that the market is near the top of a new bubble.

Greenspan and the Berlin Wall

And now, if things aren't crazy enough, Alan Greenspan is giving a brand new reason for the real estate bubble:

"I don't think that the [real estate] boom came from a 1 per cent Fed funds rate or from the Fed's easing. It came from the collapse of the Berlin Wall," said Alan Greenspan to a private Canadian audience on Friday.

Ten months after leaving the Fed, he appears to want to rewrite his legacy.

Here's a summary of the reasoning that Greenspan used:

• The collapse of Communism in eastern Europe and the shift towards more market-based economies in China and other parts of the developing world brought "billions of cheap laborers onto the scene."
• Thanks to this flood of cheap labor, manufacturing and other labor costs became much cheaper, and prices of good came down -- in other words, this caused disinflation, rather than the inflation that we usually hear about caused by increasing labor costs.
• Because of disinflation, long-term interest rates also came down.
• Lower long-term interest rates caused a decline in mortgage rates.
• Lower mortgage rates mean that a real estate property is more valuable, since a buyer can afford to pay more for the property and still have the same monthly payment to the bank.
• This caused the market value of real estate to grow quickly, creating a bubble.

This represents a substantial evolution in Greenspan's thinking.

Greenspan has solved his 'conundrum'

If you've been following Greenspan for a while, then you may recall the word "conundrum." In a speech early in 2005, Greenspan said that long-term interest rates and bond yields were exceptionally low in countries around the world, and that this "remains a conundrum." Here's what he said:

"There is little doubt that, with the breakup of the Soviet Union and the integration of China and India into the global trading market, more of the world's productive capacity is being tapped to satisfy global demands for goods and services. Concurrently, greater integration of financial markets has meant that a larger share of the world's pool of savings is being deployed in cross-border financing of investment. The favorable inflation performance across a broad range of countries resulting from enlarged global goods, services and financial capacity has doubtless contributed to expectations of lower inflation in the years ahead and lower inflation risk premiums. But none of this is new and hence it is difficult to attribute the long-term interest rate declines of the last nine months to glacially increasing globalization. For the moment, the broadly unanticipated behavior of world bond markets remains a conundrum. Bond price movements may be a short-term aberration, but it will be some time before we are able to better judge the forces underlying recent experience."

Notice this sentence in particular: "But none of this is new and hence it is difficult to attribute the long-term interest rate declines of the last nine months to glacially increasing globalization."

Well, guess what, folks? Greenspan has changed his mind. He's resolved his conundrum. He's now decided that the long-term interest rate declines that caused the housing bubble were in fact caused by the cheap labor resulting from globalization.

The problem is that this makes no sense at all, for the reason given by Greenspan in this same sentence: "But none of this is new ...."

Cheap labor has been around for decades, even from China, as well as many other countries. There was no significant difference between 1983, 1993 or 2003 with regard to cheap labor, but it didn't cause a real estate bubble in those other times.

(This is the kind of argument that we use all the time in generational theory. Terrorist events and acts of war happen all the time; what changes is the generational era, and that affects the reactions of the population to the events. Cheap labor has been around all the time, but what's different now is America, not the cheap labor.)

There's really little doubt what caused the real estate bubble. It was caused by the Fed's near-zero interest rate policy, which poured money into the economy, and to the fact that other central banks around the world followed the Fed's lead in that regard, leading to a huge money liquidity around the world. It's particularly worthwhile to note that the Chinese currency was pegged to the dollar until recently, and so the Fed's near-zero interest rate effectively became the near-zero interest rate of the People's Bank of China.

Diffusing the bubble

Greenspan made some more news at this meeting.

Greenspan was asked why he didn't raise interest rates to dampen down the stock market bubble of the late 1990s. His answers contain some completely new information.

He said, "we tried that in 1994/1995 and failed," and added that the tightening cycle from 1994 to 1995 was "highly disruptive" but failed to rein in stock prices.

A little history: The year 1994 was a pivotal year for the Fed because the Fed decided to raise interest rates to keep inflation under control at that time. However, something went wrong, and there were some spectacular bankruptcies, the most visible of which was the bankruptcy of Orange County, California. Many people blamed Greenspan for these bankruptcies, and Greenspan is now blaming the 1994 experience for failing to stop the 1990s bubble.

"We didn't diffuse the bubble, we made it worse," he said. "The stock market was flat during the tightening period and when the tightening ended in 1995 the stock market took off. We learned that the Fed could not incrementally diffuse a bubble."

S&P stock prices, 2000 dollars, with long-term exponential growth trend line

There's a small surprise here -- that Greenspan appears to be saying that the bubble started in 1994 rather than 1996. It was at the end of 1996 that Greenspan gave his "irrational exuberance" wherein he stated publicly that the bubble was on. Furthermore, if you look at the adjoining graph, you can see that it was in 1995 that stock prices, which had been leveling off, took a sharp upward turn, indicating a bubble. It probably doesn't matter much whether the bubble began in 1994, but was held down by the 1994 tightening, or whether it actually began in 1995, but it's something worth more research.

At any rate, Greenspan is now saying that he was shocked by the 1994 experience, and realized that the stock market bubble could not easily be stopped.

He now says he realized that "unless we tightened aggressively enough to hurt the economy and profitability the market bubble wouldn't diffuse. Rates would have had to go up 10 to 12 percentage points to break the back of the stock market, which would destroy the economy."

He now gives this as his reason for not stopping the bubble, but he gave a quite different reason in his Wall Street Journal interview in November, 2004.

At that time, he didn't think that the bubble was important because it was caused by increased productivity from hi-tech investments. He even got two of his interns to gin up a report supporting that view. But as anyone knows who was in the computer industry, as I was, productivity was way DOWN from information technology (IT) investments. IT was a monetary black hole. IT investments didn't become productive until after the Nasdaq crash in the early 2000s.

However, his new reasoning is consistent with a view that he's often expressed: The Fed decided not to deal with the bubble, but to deal with its aftermath instead. That's why interest rates were lowered to near-zero levels after 2000.

And that's what caused the various bubbles -- the new stock bubble, the bonds bubble, the real estate bubble, the commodity bubble. Greenspan is going to have a tough hill to climb if he wants to now convince people that these bubbles were all due to the fall of the Berlin Wall, especially when he's never mentioned that before.

The agony of Alan Greenspan

As I wrote last year in "Ben S. Bernanke: The man without agony," Greenspan became increasingly agonized over the years about his 1996 decision.

In January, 2004, Greenspan was quite positive and hopeful when he bragged in a speech:

"There appears to be enough evidence, at least tentatively, to conclude that our strategy of addressing the bubble's consequences, rather than the bubble itself, has been successful. Despite the stock market plunge, terrorist attacks, corporate scandals and wars in Afghanistan and Iraq, we experienced an exceptionally mild recession, even milder than that of a decade earlier." -- Alan Greenspan to the American Economic Association's annual meeting.

During the next two years, Greenspan's remarks reflected an increasing level of concern, then alarm -- and agony that he was going to be blamed.

By August, 2005, he warned about the stock market and housing bubbles:

"To some extent, those higher [stock and housing] values may be reflecting the increased flexibility and resilience of our economy. But what [investors] perceive as newly abundant liquidity can readily disappear. Any onset of increased investor caution elevates risk premiums and, as a consequence, lowers asset values and promotes the liquidation of the debt that supported higher asset prices. This is the reason that history has not dealt kindly with the aftermath of protracted periods of low risk premiums."

When Greenspan says that "history has not dealt kindly," he's referring to the 1930s Depression. This was one of Greenspan's final speeches as Fed Chairman, and it was his most explicit warning that we're headed for a new Great Depression.

In his new remarks, he now seems to be returning to his January, 2004, position, that everything is OK. At his Friday meeting, he even said that the worst of the real estate bubble correction may be over, something that will be surprising news to home sellers, as the housing bubble bursts, and home prices continue to fall. (25-Oct-06) Permanent Link
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Pundits are predicting major policy changes after the Democratic election win

But no one is saying what they might be.

Expected election results as of Sunday, Oct 22, 2006

Last week's results (Oct 15, 2006)

To take one example, I listened to the This Week With George Stephanopoulos pundit panel on Sunday morning. It went on for about 15 minutes, saying the same things over and over:

• The Democratic win will be huge
• The Democrats will force policy changes
• The Democrats will investigate every nook and cranny of the Bush administration.
• The Democrats will pass laws restricting spending on the Iraq war, in order to force the Administration to end the war.

This panel, like almost all the other pundits I heard, are predicting that everything will proceed exactly as it did in the 1970s, when the Democratic-led Congress did all of the above things.

In other words, they're predicting an exact replay of the end of the Vietnam war.

There's one very big thing missing, however: There is no widespread call for immediate withdrawal from Iraq, as there was for the Vietnam war.

During CNN's Sunday news show (with Wolf Blitzer) I made some quick notes about what various politicians said on the question of what we should do next.

• Republican Senator Arlen Specter said this (paraphrasing): "We have to start setting timetables. Tell the Iraqis they'll have to take a larger role in their own security, make progress on sectarian violence. Consider looking at the option of splitting Iraq into 3 parts -- Shiite, Sunni and Kurd -- so that these warring factions will stop killing each other."

  Now that's a really hard-hitting statement. I really get goose bumps just reading it.

• Democratic Senator Jack Reed: "Begin redeployment of American forces, first within Iraq and then outside Iraq, coupled with putting pressure on the Iraqi government, along with continued efforts by us for reconstruction. The strategy of the administration has not worked."

  Wow! It's a good thing we have someone like Senator Reed to provide this nitty-gritty advice to the Bush administration, since the people in the Bush administration are clearly too stupid to have ever thought of anything so clever.

• Republican Senator Olympia Snow: "The patience of the Congress and the American people is finite and our presence there is neither unlimited nor unconditional. The congress and the administration must be open to considering alternative plans for the future role of the U.S. in Iraq."

  Honestly, these people are full of great ideas that no one ever thought of before!

• Republican Sen. Kay Bailey Hutchison on splitting Iraq into three parts: "Yes, it would be hard to do, but it would be worth trying ... People say, 'Well, that would balkanize the country.' Well, things are pretty stable in the Balkans right now. It's looking better than Iraq."

  Now get this, folks. Senator Hutchison thinks we ought to go in and tell the Iraqis how to split up their country. Iranian President Mahmoud Ahmadinejad would be so supportive!

  And she's comparing it to the Balkans. When Yugoslavia was split up in the early 1990s, there was a genocidal "ethnic cleansing" war in Bosnia that lasted several years. So maybe "things are pretty stable" in the Balkans right now, but that's a decade after the bloodbath ended. Another gifted genius politician.

• Carter administration security advisor Zbigniew Brzezinski launched an extremely vitriolic statement about the stupidity of the Bush administration, and the total disaster he's causing. I used to respect this guy, but he's become increasingly gross and disgusting.

  It's worth remembering that Brzezinski was strongly opposed to the war in Iraq in 1991, after Saddam had invaded and taken over Kuwait, at a time when we knew for a fact that Saddam had used chemical weapons in the Iran/Iraq war, and was developing nuclear technology. If Brzezinski had had his way, then Kuwait would be part of Iraq, and Saddam would have had 15 years to further develop chemical and nuclear weapons.

  Interestingly, Brzezinski criticized Hillary Clinton and other Democratic leaders for never specifying any alternative action in Iraq.

Only one person said anything on Sunday that was actually interesting.

When Wolf Blitzer said, "If the public thinks the government is broken with a Republican president and a Republican house and a Republican senate, wait till there's a Democratic house of representatives, maybe even Senate, then this notion of a broken government could even escalate.

Ed Henry, CNN's White House correspondent, said this:

"We interviewed Dan Rostenkowski, former Ways and Means chairman, [who] talked about the days when Ronald Reagan was President and then Democrats ran the hill, and you would assume that they got absolutely nothing done. They fought like cats and dogs, but they still legislated, still governed. They had a major compromise in tax reform, for example, in 1986. You never would have thought that someone as conservative as Ronald Reagan and as liberal as Rostenkowski and Tip O'Neill could work together. but the fact is they did. And so, I think you can turn that notion on its head a bit, and say that sometimes divided government, when the Democrats have one part of government and the Republicans have the other, sometimes both sides have a stake in getting things done."

This is something that I've talked about before: That the federal government is paralyzed, not only in America, but in countries around the world. Even Alan Greenspan said the budget was out of control, and that Congress was doing nothing.

In the early 1980s, it was quite a joke that Republican President Ronald Reagan and Democratic Speaker of the House Tip O'Neill would say nasty things about each other at press conferences, but that the two Irishmen would get together in the evening, have beers and tell jokes to one another.

In fact, the Republicans and Democrats did get things done in the 1980s. As Ed Henry said, the Democrats and Republicans got together and passed a tax reform law. They cooperated with each other to change the Social Security system to make it a sounder system. After that, they cooperated again to specify new rules to control the budget deficit. Even as late as 1996, Democratic President Bill Clinton cooperated with the Republican congress to eliminate the welfare entitlement.

This was all accomplished by people in the G.I. generation that fought in World War II, and by others who survived WW II. These people defeated the Nazis and beat the Depression, and they set up structures like the United Nations, World Bank, and World Health Organization to manage the world. Those organizations worked as long as they were being run by the Heroes of World War II.

Today they're being run by Boomers and Xers (people in the Baby Boomer generation, born after the war, and Generation X, born in the 60s and 70s) who have no idea how to run these organizations, or how to get things done.

Boomers are arrogant and narcissistic, and don't know how to do anything but argue with people. Xers are angry and alienated, and also don't know how to do anything but argue with Boomers. So the result is the near-total gridlock paralysis we see, and the extremely vitriolic, hate-filled political atmosphere. And the same kind of thing is happening in all the countries that fought in WW II.

Nancy Pelosi on 60 Minutes, Sunday, Oct 22, 2006

If the Democrats take over the House, then Nancy Pelosi will replace Dennis Hastert as Speaker. Can you imagine Nancy Pelosi getting together with George Bush and telling jokes to one another? I can't imagine that scene. I CAN imagine scenes where the Secret Service would have to protect Bush from being stabbed in the balls with a fork.

Nanci Pelosi has promised to "restore civility" to Washington if she becomes Speaker of the House, but on 60 Minutes on Sunday evening, Leslie Stahl said this to Pelosi in an interview: "You have called your Republican colleagues - these are quotes - immoral, corrupt, you say they're running a criminal enterprise -- I mean, you're one of the reasons we have to restore civility in the first place."

Pelosi replied, "Well actually when I called them those names, I was being gentle. There are much worse things I could have said about them."

So much for improved civility.

The same kind of thing also happened in America during our previous generational crisis periods. The Republicans were vitriolic against Franklin Roosevelt in WW II, and the Democrats were vitriolic against Abraham Lincoln in the Civil War.

But even though the level of vitriol and hatred in Washington will only get worse, and possibly much worse, and even though the gridlock and paralysis will only continue, or get worse (if that's possible), it's probably still better if the Democrats win control of both houses of Congress.

The reason is that the "clash of civilizations" world war is inevitable, and it will be better for the country if both parties are forced to cooperate with one another, as we're forced to make decisions that will affect the survival of America. (23-Oct-06) Permanent Link
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Iranian president Mahmoud Ahmadinejad threatens Europe and Israel

He also says he has a "connection with God"

France, Germany and Britain appear to be close to completing a UN Security Council resolution on sanctions for Iran for its refusal to halt nuclear development.

President Mahmoud Ahmadinejad of Iran(Source: Mardomyar.ir )

In response, Iranian president Mahmoud Ahmadinejad warned Europe to stop its support of Israel.

"You should believe that this regime (Israel) cannot last and has no more benefit to you. What benefit have you got in supporting this regime, except the hatred of the nations?" said Ahmadinejad. "We have advised the Europeans that the Americans are far away, but you are the neighbours of the nations in this region. We inform you that the nations are like an ocean that is welling up, and if a storm begins, the dimensions will not stay limited to Palestine, and you may get hurt."

In a speech by Ahmadinejad given on October 14, he said that the U.N. will not be able to prevent Iran from further nuclear development.

"I have a connection with God, since God said that the infidels will have no way to harm the believers," said Ahmadinejad. "We have [only] one step remaining before we attain the summit of nuclear technology." He added that after that, the West "will not dare to attack us." (20-Oct-06) Permanent Link
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Australian Govt. warns citizens to avoid Sri Lanka

The war between Tamil Tiger rebels and Sri Lanka government continues to escalate, and has spread into formerly "safe" regions containing tourist attractions.

Areas of conflict in Sri Lanka (Source: The Economist)

On Wednesday, Tamil Tigers posing as fisherman blew up two boats in a suicide attack on a naval base Wednesday in the historic resort town of Galle, killing at least one sailor.

The most spectacular terrorist attack occurred on Monday. A military convoy of buses carrying sailors on leave had stopped briefly by the side of the road in a supposed safe town of Habarana. A suicide bomber rammed an explosives-packed truck into the buses, with at least 150 casualties.

In retaliation, government jets bombed a rebel camp on Monday, evidently killing two young girls.

Australia's Dept. of Foreign Affairs and Trade has issued a travel advisory, saying, "We strongly advise you not to travel to Sri Lanka at this time because of the deteriorating security situation and the high risk of further terrorist attacks."

The U.S. State Department says, "there should be an immediate cessation of violence. It is more important to talk now than ever as Sri Lanka is in danger of going to all-out war."

Indian subcontinent, with the island of Sri Lanka off the southern tip of India.

As I keep struggling to figure out exactly what's going on in the Iraq situation, the Sri Lanka situation provides a contemporary example to use as a contrast (in addition to the Darfur war and the recent war in Lebanon).

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There are many differences. Sri Lanka is in a generational crisis era, and so is quite susceptible to a crisis civil war, and that appears to be happening.

As I described a couple of months ago, Sri Lanka has had intermittent violence, including a brief non-crisis civil war in the 1980s, between two ethnic groups: The Sinhalese, who run the government, and Tamils (Liberation Tigers of Tamil Eelam or LTTE), who are demanding a separate state of their own in the north. A peace agreement was signed in 2002, but that's completely fallen apart now.

The level of violence, including the massacring of civilians, has been increasing steadily this year. There's no ambiguity in Sri Lanka, as there is in Iraq, about whether the massacring is being done by outsiders. Both the Sinhalese government forces and the Tamil rebels are clearly Sri Lankans, and the increasing massacring of civilians points to a building crisis civil war.

Of course, there's a "peace process" going on. Norwegian mediators are 'confident' that peace can be restored, but this I have to see. And U.S. State Dept. envoy Richard Boucher is also visiting Sri Lanka.

As these various conflicts continue -- in Sri Lanka, Iraq and Darfur -- we'll continue to try to compare and contrast them, as we did with the war in Lebanon, to make sense out of what's really going on in each of them. (20-Oct-06) Permanent Link
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President Bush's reference to Vietnam War "Tet Offensive" has journalists in a tizzy

Airhead journalists have completely missed the point, and the real danger.

President Bush

Journalists were excited all day saying that President Bush "admitted" that the current rise in violence in Iraq may be similar the Tet Offensive in the Vietnam War.

The Independent, for example, said in what was supposed to be a news story, "The allusion to the Tet Offensive was a real departure for Mr Bush, who hitherto refused to accept any similarities between Iraq and the war in Vietnam, which lasted eight years and claimed more than 55,000 American lives."

I feel pretty confident that the story author, Rupert Cornwell, has no idea what the Tet Offensive was. This reflects the general level of ignorance exhibited by journalists, something I've commented on frequently, especially with respect to economics and global finance, and the willingness of most reporters today to say the stupidest things they can to support their political beliefs.

Here's what President Bush actually said in the ABC News interview, when asked whether he agreed with the opinion that the situation in Iraq may be equivalent to the Tet offensive in Vietnam almost 40 years ago. "He could be right. There's certainly a stepped-up level of violence, and we're heading into an election." When asked what his "gut" tells him he said, "George, my gut tells me that they have all along been trying to inflict enough damage that we'd leave. And the leaders of al Qaeda have made that very clear. Look, here's how I view it. First of all, al Qaeda is still very active in Iraq. They are dangerous. They are lethal. They are trying to not only kill American troops, but they're trying to foment sectarian violence. They believe that if they can create enough chaos, the American people will grow sick and tired of the Iraqi effort and will cause government to withdraw." Bush added that there wouldn't be a withdrawal before the end of his Presidency.

In other words, Bush was criticizing those who are calling for a withdrawal from Iraq, not because America was losing, but because al-Qaeda is "trying to inflict enough damage that we'd leave." He was indirectly criticizing the press for supporting al-Qaeda. In other words, he wasn't saying "We're losing in Iraq like we did in Vietnam"; he was saying, "We're not losing in Iraq, and we're not going to just leave like we did in Vietnam."

From the point of view of Generational Dynamics, both pro-Bush and anti-Bush pundits are completely misreading the situation, and the significance of the Tet Offensive. So let's review.

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The Tet Offensive occurred in January 1968, while Lyndon Johnson was President. The Vietnam War really was a civil war (unlike the current war in Iraq), fought along historical fault lines separating indigenous peoples in South and North Vietnam, respectively.

South Vietnam had historically aligned with the West, thanks to a century of French occupation and control. North Vietnam was aligned with Communist China. Thanks to the Truman Doctrine, when President John Kennedy took office in 1960, he decided that Communism had to be stopped at the South Vietnamese border. He began increasing American involvement during his term. After he was assassinated, President Johnson continued increasing American forces.

America at that time was in a generational Awakening era, and the anti-war movement was fierce, especially among college students. Anti-war riots and demonstrations occurred on campuses around the country on almost a weekly basis, and in the summer of 1967, thousands of anti-war students converged in San Francisco to celebrate the Summer of Love.

In this climate, President Johnson's administration was constantly on the political defensive, but promises of "light at the end of the tunnel" seemed to keep most voters in line.

Then the North Vietnamese made an explosive military move during the January 1968 Tet holiday. (Tet is the Vietnamese new year.) They attacked American and South Vietnamese forces in coordinated attacks in dozens of cities simultaneously. They caught the US forces by surprise.

Nonetheless, the US forces repelled the attacks. The Tet Offensive was a total military disaster for the North Vietnamese.

But it was total political victory for the North Vietnamese. The media called it a military victory for the North Vietnamese, which it wasn't. CBS newsman Walter Cronkite said that the U.S. was "mired in a stalemate" and called for a negotiated end to the conflict.

Cronkite's report was especially a political disaster for President Johnson. 1968 was an election year, and his poll results started falling dramatically. In March 1968, a distraught President Johnson announced that he would not run for re-election.

This is the moment that today's journalists wish to re-create. That's why they want to call the Iraq war a civil war (so it would be like Vietnam). That's why they use words like "quagmire" and "stalemate," hoping to turn the American public against the war. That's why journalists are so overwhelmingly opposed to Bush, hoping to repeat their 1968 victory.

But things are very different today. As I've been saying for years, there's no anti-war movement in America today. There are no riots and demonstrations on college campuses. No Democrats, except those farthest on the left, are calling for a withdrawal or for negotiation with al-Qaeda. In fact, nobody is offering any realistic proposal for ending the war in Iraq.

OK, so political events can't be predicted because they're chaotic events (in the sense of Chaos Theory), but it's very unlikely that the current rising violence in Iraq will have anything remotely like the same effect that the Tet Offensive. We're in a generational crisis era now, not an awakening era, so the rules are completely changed. This means that the dreams and fantasies of the journalists who are hoping to bring about this result are going to have their dreams crushed.

So let's leave politics aside, and do a Generational Dynamics analysis of the war itself. What does the current increase in violence mean to the war?

To explain this, we're going to compare the Iraq war to two other wars: the Vietnam war, of course, and also the recent war between Israel and Lebanon.

Let's start with the Lebanon war.

Recall that when I wrote about the winners and losers of the Lebanese war, I contrasted the war styles of the two parties.

Israel fought in a typical crisis era "hot" war style, furiously bombing infrastructure, calling up new reserves every day, confronting Hizbollah terrorists on their own soil, and feeling very anxious about the U.N. peace deal after the war.

If Hizbollah had fought in a "hot" style, they would have crossed the border into Israel and killed Israelis in their own homes.

Instead, Hizbollah fought the war in a "cool," methodical non-crisis war style. They launched missiles from their home soil, retreating to their homes or to bunkers as needed. They methodically goaded Israeli into supplanting their air-only war with a ground war, requiring thousands of Israeli soldiers to fight on Lebanese soil. The goaded the Israelis into destroying Lebanese infrastructure, and killing Lebanese civilians, including women and children.

The reasons for these differences in style are that Israel is in a generational crisis era, while Lebanon (along with Hizbollah) is in a generational awakening era. This difference between "hot" and "cool" styles is typical of countries in these two different eras.

Now let's turn to the Vietnam war and the Tet Offensive. The Tet Offensive was, to say the least, a "hot" style. It was an enormously risky attack, and, in fact, it was a military disaster. In fact, the Vietnamese were in a generational crisis era at their time, their last crisis war having been fought against the French in the 1890s.

Militarily, North Vietnam should have lost the war after the Tet Offensive, but they won because America, in an awakening era, defeated itself politically.

OK, now let's return to the Iraq war. The increase in violence by a "Tet Offensive" style of fighting, if that's really true, is obviously extremely aggressively -- definitely a "hot" war style.

But Iraq is in a generational awakening era. So how could it be a "hot" war style?

I won't explain again what I've explained many, many times, why a civil war between Sunnis and Shiites in Iraq is impossible. A civil war must be an extremely energetic, genocidal effort, such as is going on in Darfur at the present time, and that's impossible in an awakening era. There's a lot of violence going on in Iraq, but not the genocidal violence going on in Darfar.

This is how I can be so sure that the source of any really genocidal violence is from outside Iraq. The most murderous and violent of the belligerents, the suicide bombers, are known to be 95-100% foreigners, from Saudi Arabia or Jordan mostly. If there were a civil war going on, why would they need outsiders to conduct suicide bombings?

Some percentage of the Sunnis and Shiites are Iraqi people, but from the point of view of Generational Dynamics, it's not possible that these people could be generating this kind of violence.

If, as the gleeful journalists claim, the current surge in violence is like the Tet Offensive, then it means that the regional war is beginning to take hold.

This is what I wrote in August 2003, as the terrorist bombings began:

"The really dangerous scenario is that large numbers of Palestinian and "mujahadeen" terrorists will be motivated by identity group relationships to move into Iraq as a theatre of war against the Americans. That isn't happening now, but it's one of several possible scenarios that may unfold in the Mideast region during the next few months and years."

If the violence is increasing as it did with the Tet Offensive, then from the point of view of Generational Dynamics, this is what it must mean. Iraq is increasingly becoming a theatre of war.

The analysis of what's going on in Iraq has been really difficult, and I've been struggling with it and trying to refine it as time has gone on. What makes it difficult is that there are so many things going on at the same thing, and the news reports treat them all equally. If there were a news report of a Sunni village and a Shiite village massacring each other, that would be a genocidal style of war, but we never hear anything like that. What we hear about are bombings that may kill people, but are not the close combat genocidal violence that occurs in crisis wars. The militia battles that occur in Iraq do not appear to be massacres that would indicate a crisis war; instead, they appear to be brief actions in support of political objects, and that would indicate a non-crisis war battle.

The real war will be in the countries that are in or entering generation crisis eras -- Israel, Palestine, Egypt, Saudi Arabia, Pakistan, and others. Iraqis will not want any part of the war, having just survived the genocidal Iran/Iraq war of the 1980s, but Iraq will increasingly be a theatre of war, as the "clash of civilizations" world war approaches.

I started out this essay by criticizing journalist Rupert Cornwell for saying stupid things. Let me finish up by commenting on some of the other pundits' statements I've heard and read today:

• If it hadn't been for Walter Cronkite, we would have won the Vietnam War.

  No. America was in an awakening era, and we would have lost the war politically, even without Walter Cronkite.

• If George Bush hadn't been President, we wouldn't be at war with Iraq.

  No. If Al Gore had been President after 9/11, the ground war would have begun in his administration as well, and we'd be in exactly the same place today. Remember that Iraq war actually began in 1991, not 2003, and escalated in 1999 in the Clinton Administration. President Gore would have continued that policy.

• If it weren't for Iraq, Bush's approval rating would be very high.

  No. During generational crisis eras, the political fighting is always extremely bitter. It was during America's two previous crisis periods, and the vitriolic attacks on George Bush are no worse than those directed at President Franklin Roosevelt or President Abraham Lincoln.

• The economy is strong, so the Republicans should do well in the mid-term elections.

  No. It's a bubble economy, and the bubble could burst at any time with a panic. Right now it appears that the Democrats will have a major victory, but if I have any misgivings about that expectation, it's because it's so widely believed by the airhead press, and those airheads are wrong more often than they're right.

• Gas prices are back down.

  Sure. Oil used to sell for $30 a barrel a few years ago. A few weeks ago it was selling at $76 per barrel. Now it's back down to $60 a barrel, but that's still twice as much as it sold for previously.

  Still, the commodities bubble still appears to be deflating, and if there's a worldwide financial crisis, then the price of oil and gas should come way down, since no one will have any money to pay for it.

• Al-Qaeda is on the run.

  No. Al-Qaeda is getting stronger, and according to a report in the Guardian, the UK is al-Qaeda's number one target. The UK is a much easier target than the US because tens of thousands of British citizens visit Pakistan each year, and that provides al-Qaeda with plenty of opportunity to build up cells like the one that perpetrated the July 7 London subway bombings last year.

  Al-Qaeda will continue to get stronger until the "clash of civilizations" world war begins, and then it's anyone's guess how things will go.

(20-Oct-06) Permanent Link
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Questions and answers from readers

Iraq civil war, feeding Africa, Israel's survival, and answering user comments.

It's been a couple of years since my last question and answer column, so I thought that it might be time.

Iraq civil war?

Q:

How can you keep saying that there's no civil war in Iraq, when dozens of people are being killed every day in sectarian violence?

A:

There's something horrible going on in Iraq, and I admit that I don't completely understand it. But there's one thing I'm sure of: It's absolutely NOT a civil war. Those of you who were around in the late 1960s will remember that many people thought that the U.S. was in or close to civil war at that time. There were large riots and demonstrations in the ghettos and on college campuses and the Black Panthers and Weather Underground were calling for violence and insurrection and were setting off bombs around the country. That violence wasn't as bad as we're now seeing in Iraq, but those groups didn't have millions of dollars of funding from al-Qaeda or Iran or organized crime to spend on weapons and hire recruits either. The fact is that there's no fixed definition of the term "civil war," and you can call anything you want a "civil war." But from the point of view of Generational Dynamics, a "crisis civil war" means something specific: A burst of genocidal energy that causes groups in an entire population to try to exterminate each other through massive bloodshed. This is what's happening today in Darfur, it happened in the 1990s in Bosnia and Rwanda, in the 1980s in Lebanon, and in the 1970s in the Cambodian killing fields. Nothing even close to those situations is what's happening today in Iraq. It's important to make these distinctions, because we're seeing real civil wars building in other regions today, regions that are in a "generational crisis" period. Regions in this category that I've mentioned on this web site Palestine/Israel, Sri Lanka, Côte d'Ivoire (Ivory Coast) and the entire nation of China. As the "clash of civilizations" world war approaches, there will be more. Most of the debate over the term "civil war" is purely political jabber. If you have such a need to call Iraq a "civil war" then by all means do what you have to do. But from the point of view of Generational Dynamics, it isn't a civil war, and isn't even close.

H5N1 bird flu in Ohio

Q:

There was a news report last week of H5N1 bird flu found in birds in Ohio. Should we be concerned?

A:

The report was for "low pathenogenic avian influenza (LPAI) H5N1 virus, which is different from the "highly pathogenic" H5N1 that spread like wildfire last winter in birds across Asia, into Europe, the Mideast and Africa. As far as we know, it still hasn't reached North American shores, but there's a good chance it will in the fall. So far there's no sign of a human pandemic. In the last few months, the virus has mutated in Indonesia enough to permit human to human transmission through skin contact, but the mutations that would permit easy transmission through the air, thus causing a pandemic, have not yet occurred. In the meantime, it's not too early to start planning. You should stock up on enough dried or canned food, medicines, water, batteries and other supplies so that you and your family can survive for a month or two without leaving home. By the way, Harvard researchers are studying stay-at-home quarantine plans as one of the methods for buying time in a bird flu pandemic.

Feeding Africa

Q:

I think it was great to make people aware of the physical hugeness of Africa; however it's not correct that there isn't enough money in the world to cure hunger in Africa. It's the population size that represents the actual cost of feeding. Africa is 13.8% of the world population, under one billion people, and not all of them need to be fed. Food aid costs at most $1 per person per day, or at most $365 billion per year to feed everyone in Africa, and so it wouldn't take very many of the G-8's pennies at all to feed every single African.

A:

Africa is larger than Europe, America, Alaska, China, and New Zealand (not shown) combined. (Source: Boston Univ) The size of Africa absolutely does matter. It may cost only $1.00 per day to deliver food aid to Johannesburg, but distribution costs are many times greater the bare cost of the food. The larger the region, the higher the distribution costs and the costs to transport food from country to country to city to city to town to tribe, through the savanna and the rain forest, would be extremely expensive, but it's actually much worse than that. In America we have government agencies like FEMA to distribute food aid in emergencies, but nothing like that exists almost anywhere in Africa. So we'd have to use local governments and organizations to distribute the food. And every person in every one of those organizations would SELL the food rather than giving it away. (In America, this would be called "corruption.") The elite and and bourgeoisie would make tons of money from the food aid, and none of the food would reach the poor peasants and workers. Actually, it would be even more disastrous than that. The food aid wouldn't reach the peasants, but the influx of food would depress food prices, bankrupting farmers and turning them into paupers. So disaster would pile upon disaster. Incidentally, this problem isn't unique to Africa. Around the world there are "megacities," each containing tens of millions of people with no access to farmland. Families in poverty in those cities often survive by foraging in large garbage dumps for scraps of food left over by people who can afford to buy food. As population continues to grow faster than the food supply, this problem of megacities will multiply. These problems have occurred in cycles throughout human history, and have gotten many times worse in the last two centuries because medical discoveries have lowered the infant mortality rate from 40-50% to 1-2%. After the "clash of civilizations" world war, the world population will be thinned enough so that everyone will be properly fed for a few decades.

Israel in ten years

Q:	Comment - You asked whether Israel will exist in ten years. I absolutely think Israel will exist in ten years, but I'm not so sure about the Pals. They are destroying themselves.
A:	Well, Israel might exist in ten years, but it depends on what comes out of the war. There are millions of Arabs and Persians who want Israel gone, so even if you're right about the Palestinians, that wouldn't be the end of it. On the other hand, when there's a grand peace conference after it's all over, they may decide to put Israel back together again in some way. So, who knows?

User comments on articles

Q:

Why don't you allow user comments on each of your articles, as other blogs do? Are you afraid?

A:

All my web site software was developed by me in Perl. I've started writing software that would allow these user comments, but I want to do it right, and that means allowing users some options, distinguishing between users who need to be moderated and those who don't, protection from hackers, and so forth. I've started writing the code, and I may even get it done some day, but it's not done now. In the meantime, you have other options. You can send me an e-mail message (or use the comment boxes). It sometimes takes me a few days to get back, but so far I've kept up with all the e-mail messages. If you want to get into a public argument with me, I take on all comers in the "Objections to Generational Dynamics" thread of the First Turning forum. If your interest is the Singularity and super-intelligent computers, then go to the the "Singularity" thread. However, that thread's been fairly inactive for a few months.

(17-Oct-06) Permanent Link
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Extremely bitter midterm elections appear to head for overwhelming Democratic victory

It now appears likely that Democrats will control the House and may control the Senate, after the November 7, 2006, elections.

Expected election results as of Sunday, Oct 15, 2006

It won't much difference in terms of policy, since America has almost no policy alternatives today. And it won't make much difference in terms of rhetoric, since both Democrats and Republicans are saying any stupid thing that comes into their minds.

What is of interest in extreme bitterness and acrimony accompanying the campaign. As I've said several times before on this web site, when a country enters a "generational crisis" period, the great mass of people become increasingly confrontational and less willing to compromise. During America's last generational crisis period, in the 1930s, the acrimony directed against President Franklin Roosevelt was enormous. He was accused of one thing after another, including treason. Just google the phrase "fdr scandal" to see what happened. Republicans were extremely critical of Roosevelt's handling of WW II. In America's previous generational crisis period, Democrats were very acrimonious about President Lincoln's pursuit of the war, and as late as 1864, the Democratic platform called for peace negotiations with the South, to end the war as quickly as possible.

So what's happening today is nothing new. William Strauss and Neil Howe, the founders of generational theory, found that the same kind of acrimony in all the Anglo-American crisis periods they analyzed, as described in their 1997 book, The Fourth Turning.

Let's briefly address some of the political arguments we're hearing today:

• Who's to blame for the North Koreans having a nuclear weapon -- the Republicans or the Democrats?

  Can you imagine a stupider question? But that's all the politicians have been talking about. Kim Jong-il is determined to get nuclear weapons and to make money by selling the weapons to other countries. This has been North Korea's policy since at least the early 1990s. President Clinton tried to stop them using an "appeasement" strategy -- which was perfectly OK and appropriate for America's generational unraveling era in the 1990s -- and the North Koreans simply cheated on it. President Bush has been using a more confrontational approach -- which is perfectly OK and appropriate for America's current generational crisis era, and Kim simply continued what he was doing.

  Politically, Kim follows the same policy as Iran and al-Qaeda: Just blame everything on America, and our morons in the media seem to just eat that up.

  We saw this on Saturday, after the United Nations Security Council unanimously voted to sanction North Korea.

  North Korean ambassador Pak Gil Yon reading a very bitter response to Security Council sanctions. (Source: CNN)

  In response to the unanimous vote, the North Korean ambassador read a very bitter and angry statement directed entirely at the United States. He said that the Security Council was "gangster-like," manipulated by the U.S. He said, "If it weren't for the United States, we wouldn't be developing nuclear weapons," and added, "If the U.S. increases pressure on [North Korea] persistently, then [North Korea] will continue to take countermeasures, considering it a declaration of war."

  But it really makes no difference what we do: Kim is going to develop nuclear weapons, sell them and use them, and nothing but war will stop them.

• "Will Iraq become peaceful if America pulls its troops out?"

  This week we had a British group from the Lancet publication claim, based on a polling sample of 1800 people that 655,000 Iraqis have died as a result of the war. Publication of this study was, according to an interview with one of the authors that I saw on TV, sped up to get it out before the American elections.

  I certainly can't judge whether this poll-based result is correct, or the official numbers of 30-50,000 are correct, but I will say that I believe almost nothing that any politically-oriented group says today.

  However, what I can't understand is why the anti-American politicians and press are so gleeful about this number. If the high number is true, it means that the tide of violence throughout the Mideast is much higher than anyone suspected, and that the Mideast war is already well in progress. If government estimates in Iraq are off by 1000%, then so are estimates in Afghanistan, the Gaza strip, and other Mideast nations.

  This UK poll came in the same week that British military chief Gen. Richard Dannatt said that British troops should "get ourselves out sometime soon because our presence exacerbates the security problems."

  It's really hard for me to understand how so many people can view the Afghanistan war as a "good" war, and the Iraq war as a "bad" war, and then claim that Islamist terrorist groups use the Iraq war, but not the Afghan war, as a recruiting tool. It's a dizzying argument, put forth by people who have given up all their professional credibility and self-respect to polemical political arguments.

  The violence in the Mideast has been growing steadily for three decades. The American war with Iraq began in 1991, and substantially escalated in 1999 with the bombing of no-fly zones during the Clinton administration. The war escalated to a ground war in 2003, but it didn't start in 2003. Violence in Palestine, Afghanistan and the Arabian peninsula has also been increasing steadily for decades.

  From the point of view of Generational Dynamics, the entire Mideast is headed for a major regional war, with components of Arabs versus Jews and Sunnis versus Shiites. It doesn't really matter what we do to try to stop it; we can't stop it any more than we could stop a tsunami.

  As I've said several times in the past, my expectation is that we will NOT withdraw from Iraq until the general "clash of civilizations" world war begins in earnest, and then we'll withdraw the troops to fight in other theatres.

This is an extremely dangerous time for our country, and we need to be preparing for what's coming, instead of bickering over nonsense.

From a policy point of view, it really doesn't make much difference which party is in control of Congress, but in one sense I'm relieved that the Democrats will be taking over. At that point they may have to take some responsibility for getting things done, rather than just acrimonious criticisms of people who are trying to get things done. Perhaps I'm just fooling myself in the hope that the level of acrimony will come down, but for the time being I'd prefer to hold onto that hope, even though it may mean that I too am in a "state of denial." (15-Oct-06) Permanent Link
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August trade deficit reaches fresh historic high -- that's GOOD NEWS, say economists

The deficit, up 2.7% from July's historic high, exceeds even the highest of economists' estimates, according to a Bloomberg survey of 66 economists.

Both exports and imports increased in August, but this is the same old story that I've described before as each new record high deficit was reached: Exports are growing exponentially, and imports are growing exponentially, but the growth rate for exports is higher than for imports, so the trade deficit continues to grow exponentially.

These concepts obviously are beyond the understanding of most economists, since they keep getting their forecasts drastically wrong.

Just what kinds of airheads these economists are can be seen from the Bloomberg summary:

"The deficit rose 2.7 percent from a $68 billion gap in July, the Commerce Department said in Washington, and exceeded the highest estimate in a Bloomberg News survey of economists. U.S. companies imported more computers, consumer goods and oil even as they shipped a record amount abroad.

The report was read as good news by economists, who said the gain in imports showed that consumer spending is holding up even as the economy slows. A weaker dollar and expansion in Europe and Asia are helping boost exports; at the same time a reduction in the deficit will be gradual because the economy is still growing faster than many of its counterparts.

"Strength in imports is typically associated with strong domestic demand," said Jim O'Sullivan, a senior economist at UBS Securities in Stamford, Connecticut. "Both imports and exports are growing solidly lately, which very broadly is a sign of growth."

Consumer spending, which accounts for two-thirds of the economy, "increased more quickly in a number of districts," the Federal Reserve said today in its survey known as the beige book for the color of its cover. Four of the Fed's 12 districts reported that "economic growth firmed" in the last month.

The August deficit compares with the $66.7 billion median estimate in a Bloomberg News survey of 66 economists. The dollar weakened in the minutes after the report was released before retracing much of its drop. Stocks advanced."

I read these reports all the time, and listen to reports on CNBC, CNN, and other stations, and I have to say that this is just about the stupidest I've ever seen. It's unbelievable that we've come to the point where a financial service like Bloomberg could publish an article as truly moronic and idiotic as this, quoting dozens of economists who make decisions about all our finances.

According to standard macroeconomic theory that's been around for decades, consumer spending should have come down years ago, and economists have been predicting it would. Why? Because loss of assets in the Nasdaq crash of the early 2000s gave consumers less money to spend. Then a rise in unemployment and loss of income gave consumers less to spend. On top of that, gasoline prices have risen from a $1.00-$1.25 range to a $2.00-$3.00 range, giving consumers less money to spend. With less money to spend, consumers should spend less. And they should import less from China and other countries.

That's all standard macroeconomic theory. And it's been proven totally wrong. Consumers have been spending more and more, by going into increasing levels of debt. Nothing in macroeconomic theory prior to this decade has come anywhere near predicting this result.

Of course, if consumer spending had gone down, the corporate earnings would have gone down, and the stock market would have fallen.

So the "state of denial" in which these moronic economists, macroeconomists, journalists, politicians and high-priced analysts has reached even more dizzying heights: The record high and exponentially growing trade deficit is wonderful news because it means that consumers are importing more stuff, even though it means that consumers are going ever deeper into historically high debt to buy this stuff.

And of course, analysts and newscasters on TV are visibly drooling over the possibility of the Dow reaching 12000, thus pushing the stock market bubble even higher -- on the same day that the trade deficit reaches a historic high. Why? Because an exponentially growing trade deficit is a GOOD thing. (12-Oct-06) Permanent Link
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How to raise your son to be a terrorist

A Hamas website provides some helpful tips.

The Middle East Media Research Institute regularly translates documents from Islamic websites into English so that Westerners can read them.

MEMRI provides a translation of an article on a web site for the military wing of Hamas. The article contains a series of images showing how to imbue children with terrorist aspirations.

The first image is a montage showing an infant in the center, with a picture of Osama bin Laden on the right, and the image of Yahya Ayyash, the legendary Hamas explosives engineer, on the left. The infant is wearing a green Kata'ib Al-Qassam (Al-Qassam Brigades) ribbon on his forehead.

The caption on the picture of the three horsemen is "The horses' backs were our cradles, and on them we followed our ancestors [in Jihad]."

Have your son watch computer screens displaying scenes of Jihad.

When it's bedtime, have him cuddle up with a picture of Osama bin Laden.

(10-Oct-06) Permanent Link
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The "Appeasement Conundrum": What was the alternative to appeasing Hitler?

President Bush calls for an "immediate response" to North Korea's nuclear weapon test, but what kind of response is available?

Neville Chamberlain, returning from a 1938 meeting with Hitler, promising "Peace in our time," holding up a signed agreement

One of the most reviled men of the twentieth century, besides dictators like Adolf Hitler himself, is British Prime Minister Neville Chamberlain who, in 1938, "appeased" Adolf Hitler.

When I was in school in the 1950s, and then later in college and in bitter politics of the 1970s, I heard Neville Chamberlain's name over and over. He had appeased Hitler. Hitler had fooled him. He had permitted Hitler to annex Austria in the Anschluss, then the Rhineland and Sudetenland. He should have listened to Winston Churchill, an MP (Member of Parliament) who kept warning his colleagues about Germany's rapid militarization. This is what we were told many times.

It's worthwhile taking a look at what happened.

Chamberlain met with Hitler in Munich. He returned to Croydon Airport on Sept. 30, 1938, waving the piece of paper with the agreement that he and Hitler had signed. (See picture.)

When he arrived at 10 Downing Street, he read the written agreement and made this statement:

"My good friends, for the second time in our history, a British Prime Minister has returned from Germany bringing peace with honour.

I believe it is peace for our time.

Go home and get a nice quiet sleep."

The written agreement said the following:

We, the German Führer and Chancellor, and the British Prime Minister, have had a further meeting today and are agreed in recognizing that the question of Anglo-German relations is of the first importance for our two countries and for Europe.

We regard the agreement signed last night and the Anglo-German Naval Agreement as symbolic of the desire of our two peoples never to go to war with one another again. We are resolved that the method of consultation shall be the method adopted to deal with any other questions that may concern our two countries, and we are determined to continue our efforts to remove possible sources of difference, and thus to contribute to assure the peace of Europe."

This agreement was met with worldwide praise, because a peaceful solution had been found by means of diplomacy and negotiation.

What the world didn't know was that Hitler was actively planning for war; on the same day that Hitler met with Chamberlain, he also met with Mussolini to plan the invasion of Britain.

But what else could Chamberlain have done? Suppose one of his aides in Munich accidentally overheard Hitler telling plans to someone. What could Chamberlain have done differently?

If he'd repeated what his aide heard, he'd have been told he was mistaken. If he'd suggesting invading Germany to kill Hitler or force "regime change," he'd have received worldwide condemnation. Chamberlain could have done nothing other than what he did.

Smiling North Korean news anchor announces successful nuclear weapons test in a gleeful, happy voice. (Source: CNN)

Today we're faced with another crazy dictator, Kim Jong-il of North Korea, with a huge army, an huge array of conventional weapons, and now nuclear weapons.

President Bush is certainly not trying to appease Kim, at least not today. In President Bush's statement on Monday morning, he was confrontational:

"This was confirmed this morning in conversations I had with leaders of China, and South Korea, Russia, and Japan. We reaffirmed our commitment to a nuclear-free Korean Peninsula, and all of us agreed that the proclaimed actions taken by North Korea are unacceptable and deserve an immediate response by the United Nations Security Council.

The North Korean regime remains one of the world's leading proliferator of missile technology, including transfers to Iran and Syria. The transfer of nuclear weapons or material by North Korea to states or non-state entities would be considered a grave threat to the United States, and we would hold North Korea fully accountable of the consequences of such action."

This statement is interesting because it comes in two parts. The first mentions an "immediate response by the United Nations Security Council," without mentioning what that response might be. This appears to be an empty threat, but we'll see.

The second paragraph is much more confrontational. It threatens a response from the United States (as opposed to the United Nations) if nuclear material is transferred to other countries (like Iran).

What would that response be? I listened to many commentators on Monday, and nobody mentioned anything stronger than vague economic sanctions. When military action was mentioned, it was described as impossible for various reasons.

Let's try to generalize this, and look at some responses that might be used in various situations.

• Appeasement. This really isn't a bad option at some times. Very often you can offer a country incentives to step back from something. In fact, appeasement worked with North Korea in the 1990s. Why? Because they were in a generational unraveling period at a time that, like us, problems are contained and compromises are possible. But once a country enters a generational crisis period, where North Korea is today, then appeasement is treated simply as a sign of weakness.

  Appeasement doesn't always work even in non-crisis periods, and here I'm specifically returning to the many attempts to appease Iranian President Mahmoud Ahmadinejad with respect to Iran's nuclear development problem. Iran is in a generational awakening era, like America in the 1960s, and there have actually been times in the last year when I thought that Iran might back off. But nuclear development has become a core national goal for Iran, so backing off is not possible.

• Sanctions. Probably the United Nations Security Council will discuss imposing some kind of economic sanctions against North Korea and Iran. But this is unlikely to work for the same reasons that appeasement doesn't work.

  Sanctions do sometimes work. For example, one commentator on Monday referred to the breakup of the apartheid government in South Africa after economic sanctions were imposed as a model for dealing with North Korea. However, the collapse of South Africa's apartheid government was the climax of their generational awakening era, and something like it would have happened with or without sanctions.

  Sanctions did not work after Japan had invaded Manchuria and China in the 1930s. That was a generational crisis era for them, and sanctions only infuriated them. In 1933, they walked out of the League of Nations. Both Iran and North Korea are aware of this, and several times both countries have threatened to walk out the U.N. if sanctions are imposed. That's one possible scenario that we may see.

• Military confrontation. This means war. If the target country is in a generational awakening or unraveling era, a quick war might work well. If the target country is in a generational crisis era, as most of the world is today, since it's 61 years past the end of World War II, any war can quickly spiral into a full-fledged crisis war.

So those are the options that are available to the U.N. Security Council and the United States today.

Unfortunately, it's pretty clear that none of them is going to work. There's nothing that either North Korea or Iran is willing to trade for the development of nuclear weapons. We can offer incentives, we can threaten sanctions, we can have six-party talks, we can have bilateral talks, we can describe Kim as a "nice guy," or we can describe Kim as an evil dictator. Same with Ahmadinejad. It doesn't matter. They're determined to have nuclear weapons, and nothing will stop them.

There's another option that we haven't mentioned yet: Preparation. In this option you accept the inevitability of a coming war, and you prepare for it.

Today I tell people: Treasure the time you have left, and use it to prepare yourself, your family, your community and your nation.

Think of what's coming from China, Iran and North Korea as a tsunami. We can't stop the tsunami with appeasement, sanctions or a military strike. We can't stop the tsunami at all. But if we know that it's coming we can prepare for it.

The country certainly wasn't prepared for World War II. When the Japanese bombed Pearl Harbor on November 7, 1941, they destroyed the entire Pacific Fleet -- the greatest military disaster in American history. This mistake might have caused us to lose the entire war (How do you say "What's for lunch?" in Japanese?) if we weren't several times bigger and more powerful than Japan.

We can't afford that today. We're facing war with China, North Korea and Iran, and anything like the Pearl Harbor loss would possibly be irrecoverably disastrous.

As I see the actions of the Administration -- President Bush, Vice President Dick Cheney, Secretary of State Condoleezza Rice, and Secretary of Defense Donald Rumsfeld -- I see people who appear to me to be preparing the country for this war, as much as can be done.

I don't want to make this a partisan statement; I have no doubt that an administration led by President Al Gore or President Hillary Clinton would similarly lead / have led the nation to prepare for war in the same way. It's something that any administration understands better today than in 1941.

But I do want to respond to a web site reader's question that arrived last week: "You often support Rumsfeld because he is a Silent. Why? I have not read anyone who supports Rumsfeld in about five years. I am not asking this question out of political conviction, just curiosity. Perhaps you could write more on this subject."

The air is filled with political nonsense, and 99.9% of the political stuff we hear today is disgusting crap. I'm not just talking about the sex scandal; I'm talking about all the ridiculous nonsense we hear about the Iraq war.

Few people understand the huge value that the Iraq war has been for us. We've developed an extensive array of high-tech weaponry that we've been able to test out in Iraq and Afghanistan, and the "lessons learned" in actual battle have been invaluable. China, by contrast, have developed similar kinds of high-tech weaponry, but they have absolutely no live battle experience. This alone gives us a big edge over China.

I've said a few times that about the only person in Washington that I trust to know what's actually going on in the world and is preparing the nation for it is Secretary of Defense Donald Rumsfeld, who was born in 1932, and is in the Silent Generation. He grew up when Hitler was militarizing in Europe, and undoubtedly has a personal memory from his childhood when Neville Chamberlain made his "peace in our time" statement. Rumsfeld's personal memory of these events from his childhood give him an insight into today's world that someone younger would not have. That's why I've said many times that I dread the day when Rumsfeld is replaced by someone from the Boomer generation or Generation-X, since no one in those generations in either party will have a clue what to do.

And once again, this isn't a political statement. It's quite reasonable to believe that a President Al Gore would have appointed a similarly qualified person from the Silent Generation. President Gore might even have appointed Rumsfeld himself, since Rumsfeld appears to me to be almost completely non-political and non-ideological. He's extremely wealthy, and is doing the current very stressful and important job out of service to his country, understanding the enormous danger that we'll soon be facing.

Rumsfeld has struck exactly the right note, it seems to me, in response to China's rapid and accelerating militarization. At a conference in Singapore last year, he said:

"[A DOD report] concludes that China’s defense expenditures are much higher than Chinese officials have published. It is estimated that China’s is the third largest military budget in the world, and clearly the largest in Asia.

China appears to be expanding its missile forces, allowing them to reach targets in many areas of the world, not just the Pacific region, while also expanding its missile capabilities within this region. China also is improving its ability to project power, and developing advanced systems of military technology.

Since no nation threatens China, one must wonder: Why this growing investment? Why these continuing large and expanding arms purchases? Why these continuing robust deployments?

China criticized Rumsfeld for this statement as being a "war-monger." This shows what a screwed up world we live in, when China can spend exponentially increasing amounts of money on massive weapons systems, and it's Rumsfeld rather than China who's the "war-monger."

Rumsfeld has not made similar statements again, but has been quietly refocusing our armed forces for the coming war with China. This is what needs to be done to prepare our country for what's coming.

Rumsfeld knows that appeasement won't work with China, and sanctions won't work with China, just as it didn't work with Hitler. War is the tsunami that's coming, and it can't be stopped. We can only prepare for it. That's why Rumsfeld's job is incredibly important, since it affects the entire survival of our nation, and indeed affects the world. The garbage we hear about the Iraq war is so ridiculous and fatuous that, as a nation, we should be ashamed of ourselves for generating so much of it. (10-Oct-06) Permanent Link
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North Korea announces a nuclear weapon test.

Has Pyongyang passed the point of no return?

North Korea's state news agency announced that it has carried out its first ever test of a nuclear weapon.

In recent days, pretty much every country in the region, including China, has joined America in telling North Korea that such a test is not acceptable.

Warnings to North Korea have been particularly stark in the last few days.

US Assistant Secretary of State Christopher Hill has gone so far as to say that North Korea "can have a future, or it can have these weapons. It cannot have both".

Significantly, even China has expressed severe displeasure at North Korea's plans, and North Korean diplomatic sources claim that these statements have angered North Korean generals, who wanted to teach Beijing a lesson, according to an analysis by Russian newspaper Kommersant.

Analysts on Sunday evening were discussing the following issues:

• That Japan will re-arm and develop its own nuclear weapons.
• That South Korea will re-arm and develop its own nuclear weapons.
• That North Korea will sell nuclear weapons technology to other countries.
• That Iran will be further emboldened to develop its own nuclear weapons. North Korea has already sold long-range missile technology to Iran.

Most of the analysts are talking in terms of "the U.S. has a problem," but I consider the conflict with China to be much more significant than the conflict with the United States.

China, in my opinion, is trying to align with Iran, Pakistan and North Korea to gain hegemony over Asia and the Pacific. A disobedient North Korea is going to suffer some kind of sanction from China.

Indeed, positions in Washington, Tokyo, Europe and the United Nations have hardened so much in recent days and weeks that it's hard to see how it's possible to avoid severe international sactions against North Korea, without the U.N. and the West looking like a complete bunch of boobs.

At this point, there's no talk of any military response against North Korea.

Conflict risk level for next 6-12 months as of: 9-Feb-2006
W. Europe	1	Arab Israeli	3
Russia Caucasus	2	Kashmir	2
China	2	North Korea	2
Financial	3	Bird flu	3
Key: 1=Low risk 2=Med 3=High 4=Active

With regard to my little risk conflict graphic, the problem as the one I described for the Caucasus last week. The North Korea situation is shown at "yellow - medium risk," level 2. The current situation raises it to a 2.5. We'll have to watch and see whether the situation settles down, or whether it escalates to risk level to "red - high risk," level 3.

The situation between Russia and Georgia, incidentally, has not escalated further over the weekend, so things may be settling down there. (9-Oct-06) Permanent Link
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Learning-disabled journalists and politicians continue to predict Iraq civil war

Occasionally journalists take a break from their heavy-breathing over Congressional pages, and when they do, they go back to predicting a civil war in Iraq.

Panelist Fareed Zakaria on Sunday's This Week With George Stephanopoulos (Source: ABC)

Fareed Zakaria, Newsweek International editor appearing on ABC, said that the Iraqi government has failed and the American mission has failed.

"If you look at the last 3-4 months, it's absolutely clear that a civil war dynamic has set in," said Zakaria on Sunday. "This is happening. ... The trend is moving in the wrong direction on every issue that relates to a building civil war."

If I'm not mistaken, Zakaria has been saying almost exactly the same thing for several years. If he predicts a civil war week after week, and a civil war never materializes, you'd think that he'd learn.

Zakaria is a "Generation-Xer," born in Mumbai (Bombay), India, in 1964. Most Indians I've known have been extremely intelligent, and I recall from my days as a mathematician studying at MIT that Srinivasa Aaiyangar Ramanujan is considered by many to be the greatest and most brilliant number theorist in the history of mathematics. But that brilliance hasn't rubbed off on Zakaria.

Obviously he must be learning-impaired. When a two-year-old baby fails to balance one ball on top of another a few times, sooner or later he realizes it isn't going to happen. But this guy keeps trying to balance the ball week after week, repeating his civil war theory, and just can't seem to learn, a fairly frequent problem among Boomers and Generation Xers that I've known.

The learning impairment includes an inability to connect closely related events. If he'd read his own magazine this week, he would have found an interview with Jimmy Carter saying, "I would say that in the last 30 years or so one of my main commitments in life has been to bring peace to Israel. But I am frustrated when terrorist activities cause a serious setback as they have among the Palestinians, and by Hizbullah and the reluctance of Israel to withdraw from occupied territories."

Or, if he'd read the competing Time Magazine, he would have found an article saying, "dreams of peace are fading fast" in Gaza. It says,

While the international community has committed itself to enforcing the two-month-old cease-fire between Israel and Hizballah in Lebanon, the siege of Gaza and its 1.4 million inhabitants goes on, battering the territory's infrastructure, paralyzing its economy and leaving what's left of the Palestinian government in chaos. ...

Here's how a civil war could start. Islamic preachers under Hamas' influence begin denouncing Abbas in mosques as a stooge of the U.S. and Israel, undercutting his credibility. Hamas would then use its majority in the legislative body to try to oust Abbas as President.

If that were to fail, Hamas' fighters would take to the streets in Gaza and the West Bank territories. Such an internecine conflict would devastate the Palestinians, since many families have fathers who support Abbas and sons who belong to Hamas. And the consequences for Israel could be just as dire."

Mideast, showing Israel/Palestine, Muslim countries, and Orthodox Christian countries

Now for some reason, Fareed Zakaria, editor at Newsweek International, is so learning-impaired that he can't make the connection between what's happening in Iraq and what's happening in Gaza. You'd think that a Newsweek international editor would be able to do that, but apparently not, even though funding from al-Qaeda and Iran are major factors in the violence in both places. I mean, all it takes is connecting two dots. When my son was two years old, he was able to connect a lot more than two dots, but apparently this guy can't.

Well, I'm being nasty, huh? I shouldn't pick on Fareed Zakaria. I'm sure he's a nice guy, and very intelligent, and that he's no more learning-impaired than the rest of the Washington journalists and politicians. And what I mean is that all of them are more stupid than the average two-year-old: they can't learn from their mistakes, and they can't connect two dots right in front of them.

What's going on in the Mideast is exactly what I predicted in 2003.

Based on Generational Dynamics, and the fact that Iraq is in a "generational awakening" era while the Palestine/Israel region is in a "generational crisis" era, I made the following predictions:

• On May 1, 2003, when the "Mideast Roadmap to Peace" was announced, I predicted: The Roadmap would fail, and the disappearance of Ariel Sharon and Yasser Arafat would signal a major generational change that would lead the region into massive regional war, probably within a couple of years after Arafat's death.
• Then, on August 19, 2003, after the terrorist attacks had begun and the terrorists blew up the United Nations building in Baghdad, I predicted: There would not be massive uprisings against the Americans or a civil war. If the terrorist attacks continue and get worse, it won't be because of civil war; it will be because of funding by Palestinian groups or other external groups, and that large numbers of Palestinian and "mujahadeen" terrorists are moving into Iraq, making it a theatre of war for the larger regional war involving the Palestinian Arabs and the al Qaeda against Americans in Iraq.

Basically, a civil war in Iraq is impossible, one generation past the genocidal Iran/Iraq war of the 1980s. The worst that could happen is a brief struggle that would fizzle out quickly. Iraq is centrally located in the Mideast, as the map above shows, and any regional war will include Iraq as a theatre of war, but not as a civil war.

But the Palestinians, in a generational crisis era, are quite susceptible to a civil war, and the threat of a civil war is quite real in Gaza, as is the threat of a major war between Arabs and Jews. This war will affect the entire region, and has already created a rising tide of violence throughout the region, including Iraq.

I've repeated these predictions many times, and I've made numerous other predictions along the way, involving things like Iran, the Lebanon war, and Darfur, and all of these predictions have come true or are heavily trending in that direction. And no Generational Dynamics predictions have turned out false.

That's why I keep saying: If you want to know what's going on in the world, this is the only web site on the entire internet that tells you. Generational Dynamics is not ideological or religious in any way; predictions are based on generational patterns that have recurred over and over throughout all times and places in history. There have been other "predictive" or "early warning" web sites in the last few years, but they've all closed down because they keep getting things wrong. This web site has not gotten things wrong. It doesn't make any money (sigh!), but it does serve a public service by telling the few thousand people who regularly read it what's actually happening in the world, so that they can prepare for it.

And so, returning to the main subject, we have journalists and politicians talk about Iraq as if it were on an island somewhere, unaffected by events around it.

The problem is that these people are mostly Boomers (members of the Baby Boomer generation, born after WW II), and they have no skills except the ability to argue. They can't solve problems; all they can do is criticize other people who try to solve problems.

They all think that the Iraq war is like the Vietnam war, but as I've explained many times, America is in a very different place now than it was in the 1960s, and the Iraq war is the opposite of the Vietnam war in many ways.

You don't see college students protesting against the Iraq war, because they care less about the war than about the fact that their parents can't stop screaming at each other. The only people who protest the war are grandmothers carrying around 'Stop the War' signs. The signs are leftovers from the 1960s, when these same grandmothers were college girls, burning their bras. They're reliving their childhoods, but today's college students aren't reliving it with them.

Journalists and politicians don't understand this at all. They all think that they understand the lessons of Vietnam better than anyone else, and they keep getting shocked and surprised whenever things don't work out the same way.

The worst recent example I've seen of this is Bob Woodward, with his new book "State of Denial." This guy actually believes -- get this -- that dozens, perhaps hundreds of people in the administration are all lying to each other about Iraq, and that he, Bob Woodward, sees the truth that they don't. They're all in a "state of denial," but Bob Woodward isn't, because he's smarter than everyone.

He particularly accuses them of re-fighting the Vietnam war. This is a particularly ironic accusation, since Woodward is guiltiest of everyone of reliving the Vietnam War. Woodward was one of the journalists who played the biggest part in bringing down Richard Nixon during the Vietnam War era, and like the anti-war grannies who are trying to relive their exciting, erotic, childhood bra-burning days, Woodward is trying to relive the most exciting and erotic time of his childhood, hoping to bring down another President as he did the last one.

His book title, "State of Denial" is so ironic because it's the title of the entire current era. In Gaza or Darfur or China, people are completely oblivious to what's going on in the world, denying what's going on.

And not just in geopolitics. Let's talk about the stock market. The Dow index hit a new high this week, and the champagne corks were a-popping.

This same week, as in every week, I listened to analysts on CNBC, CNN, Fox News, etc., and read financial news on the internet. And they all out and out lie about price/earnings (P/E) ratios, also called "valuations" of stocks. I won't go into the details, since I've gone through it many times before. But basically they all use today's stock prices and divide by inflated future earnings earnings estimates, rather than dividing by last year's earnings, which is the correct computation. They must know this, because it's their job to know it. But either they're stupid or they're in a "state of denial."

So, when you hear a financial analyst on television use the word "valuation," referring to the stock market, you'll know that he's simply lying. Or stupid. It doesn't really matter which.

The state of denial of financial analysts and journalists is based on the fact that they can't face up to how the stock market is 200%+ overpriced, P/E ratios (valuations) have been astronomical for 12 years, and that a major stock market correction to Dow 4500 or so is way overdue. By lying about current valuations, they deny the reality of what's going on.

The thing that I really can't get over is new Fed Chairman Ben Bernanke. As I explained in "Ben S. Bernanke: The man without agony," former Fed chairman Alan Greenspan was very concerned about a major financial crisis, but Bernanke doesn't even believe in bubbles.

When speaking about America's astronomical and exponential growing debt to other countries in March, 2005, Bernanke blamed debt on "global savings glut" in other countries.

Now I know that people in (my) Boomer generation are arrogant and narcissistic, but to actually stand up before the world and blame America's wild credit spree on other nations requires brass balls of a hardness that any other Boomer (or Xer) could only imagine. This is what a "state of denial" brings people to.

Several people have remarked recently that I should be happy or gratified now that all the predictions I've been making are now coming true, and that the validity of Generational Dynamics is getting more and more firmly established.

That may be true in some intellectual way, such as when you solve a math puzzle or a chess problem, but I have a very strong and increasing sense of foreboding about what's going to happen -- and by this I mean to me personally as well as the consequences to the world of the various predictions.

This isn't my only experience of this type. I've been a systems computer (IT) consultant since 1978, and I've worked on dozens of projects for dozens of clients. (Incidentally, I'm currently available, if anyone needs something.) On five occasions since that time, I've realized that a development project was in trouble when no one else did, or at least when no one else was admitting it. (Computer projects typically are months or years late, so you'd think people would learn.) On those five occasions I reported this fact to my management, along with available evidence. On four of those five occasions I was fired within a month. On all five occasions, my predictions turned out to be 100% correct.

The Trojan Horse in the Brad Pitt movie Troy

So this "gift" or "superpower" or "curse" or whatever you want to call it has never brought me happiness or pleasure, only grief. The Cassandra of Greek mythology had the ability to predict the future, including Troy's destruction (via the Trojan Horse), but nobody believed her predictions. Her family locked her up, believing she was mad. When her predictions came true, she was reviled, beaten and raped.

The "state of denial" of Woodward, Zakaria, Bernanke, and so many other people today reminds me of the Jacques Brel song "La Valse à Mille Temps" or "Carousel" in the English version. Part of it goes:

    We're on a ferris wheel
    A crazy ferris wheel
    A wheel within a wheel
    That suddenly reveals
    The stars begin to reel
    And down again around
    And up again around
    And up again around
    So high above the ground
    We feel we gotta yell
    We're on a carousel
    A crazy carousel.

(Here's a link to an MP3 version of the song. Grab it quick, because the copyright gods may make me remove the link. To assuage the anger of the copyright gods, let me say that if you download the MP3, please consider purchasing the entire album. Brel's music (even in translation) is brilliant and deeply incisive in a way that no one else has ever matched.)

Having worked on this web site for four years, and written hundreds of articles, I feel that I'm in the center of Brel's Carousel, and that it's spinning all around me, with people like Woodward, Zakaria and Bernanke doing one crazy thing after another to make it spin faster, in "a state of denial," for fear that if the Carousel stops or slows down then everything crashes. That should explain the sense of foreboding. (8-Oct-06) Permanent Link
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Russian President Putin continues to turn the screws on Georgia

Russia closes the border, forbids money transfers, and evacuates Russians from Tbilisi.

Russia's harsh sanctions didn't just begin last week, with the arrest of Russian officers in the Russian embassy in the Georgia's capital, Tbilisi, on charges of espionage.

Earlier this year, Russia banned imports of Georgian wine, the country's most lucrative export.

But when the officers were arrested, the steely Putin really started turning the screws. The border between Russia and Georgia is effectively closed, with all transportation links cut. The Russian postal service will no longer permit the million plus Georgian guest workers in Russia to send money back to the families in Georgia.

In the latest twist, Russia has ordered a crackdown on Georgian-owned businesses, closing restaurants, casinos and hotels in Russia that are owned by Georgians.

"We have been witnessing unbelievable militarisation of Georgia," said the official spokesman of Russian President Vladimir Putin. "We have some facts that money being sent to Georgia is being used for that purpose. ... Our interior ministry has pointed out that these restaurants and casinos were under the control of illegal groups of Georgian origin."

Russia is evacuating citizens from Georgia. Georgian children attending Russian schools in Georgia will no longer be permitted to do so. Some news reports indicate that Russia's energy giant Gazprom may be planning to double gas prices to Georgia next year.

Troubled areas in Caucasus region - including Dagestan, North Ossetia and Chechnya in Russia, and breakaway regions of Abkhazia and South Ossetia in Georgia

Russia is holding naval exercises in the Black Sea, near Georgian ports. Disputed breakaway republics of Abkhazia and South Ossetia have sided with Russia against Georgia, and are blocking Georgia's cargo shipments.

The principal European organization charged with providing mediation in such situations is the Organization of Security and Cooperation in Europe (OSCE). The OSCE, with cooperation from Washington, has been involved in this dispute from the beginning. It was OSCE representatives who convinced Georgian officials to return the arrested Embassy officers back to Russia last weekend.

Conflict risk level for next 6-12 months as of: 9-Feb-2006
W. Europe	1	Arab Israeli	3
Russia Caucasus	2	Kashmir	2
China	2	North Korea	2
Financial	3	Bird flu	3
Key: 1=Low risk 2=Med 3=High 4=Active

The OSCE had hoped that the return of the officers would end the crisis, but Russia has continued to escalate the crisis, and there's international concern that the situation may spiral out of control into war.

My little risk conflict graphic shows the Caucasus region at "yellow - medium risk," level 2. With the current situation escalating, I would have to call this a "2.5" today. We'll watch this situation over the next few days to see whether it continues to escalate or settles down. If it escalates, we'll change the risk level to "red - high risk," level 3.

In other news, the violence between Palestinian factions in Gaza continues to escalate. The situation has been deteriorating almost continuously since the death of Yasser Arafat, and the possibility of Palestinian civil war seems more likely every day. (6-Oct-06) Permanent Link
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Care International says that aid money to Africa is being wasted

Although the amount of aid has tripled, it hasn't improved things, according to Care International U.K.'s chief executive, Geoffrey Dennis.

The Care International report, says that over 120 million people in black Africa are "permanently living on the edge of emergency ... because we keep them there."

Even though aid has tripled, we keep them there because "this money is often made available too late, is too short-term and is targeted at the wrong things. The result is that the needs of people living on the edge are largely ignored until they have fallen into starvation. The same money must be spent differently to end the cycle of emergency."

One particular complaint is that 39% of the aid given to Africa is food aid. "[F]ood aid responses continue to be popular, partly because food aid is used by several international governments to offload their own domestic food surpluses, but also because the results are immediate and visible. Despite this, food aid often leaves people no better off then before the emergency."

Instead, priority should be given "to recovery and prevention programmes like seed distribution and improved veterinary services so that families can pull themselves back from the edge and be in a stronger position to fight off the next emergency themselves."

I know I shouldn't be such a curmudgeon, but these things are so crazy unrealistic at a time when the entire world is crazy unrealistic.

Last year in June, the leaders of the G-8 countries, the "richest" countries of the world, vowed to cure poverty in Africa during the next decade. But the sheer size of Africa makes that mathematically impossible, as I explained at length at the time, and the politicians know it. But they all patted themselves on the back for making promises that they knew could not be fulfilled.

Africa is larger than Europe, America, Alaska, China, and New Zealand (not shown) combined. (Source: Boston Univ)

Most people seem to think that it should be easy to cure poverty and hunger in Africa because Africa is about the size of Texas, so how hard could it be?

Actually, Africa is a tiny bit larger than Texas. Africa is as big as the entire United States. PLUS Alaska. PLUS Europe. PLUS China. And there's still enough space left over to throw in New Zealand.

I'm in favor of doing what we can to feed the people of Africa, but call me a curmudgeon if you want, but if all the so-called "rich nations" of the world gave every penny they had to Africa, it still wouldn't be enough. Africa is too big.

Meanwhile, we're not preparing enough for a bird flu pandemic.

Most Americans are oblivious to the rising tide of terrorism throughout the Mideast and Europe, and over the weekend the level of violence between Palestinian gangs in Gaza is leading even Palestinians to believe that a civil war may be near.

Americans are oblivious to the rising tide of militarism in China, and to the fact that they're actively preparing for war with the US.

And yesterday, idiot investors pushed the stock market up to Dow 11727, the highest in history, at a time when the real estate bubble is bursting, household debt servicing is at a historic high and will be going higher, and China's economy is softening. There seems to be no limit to the "state of denial" of today's investors.

In the meantime, the top international news story is a sex scandal in Congress.

So fine, let's bicker about whether we should be sending food aid or seed aid to Africa. It'll fill the time until we have something real to worry about. (4-Oct-06) Permanent Link
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Russia's harsh sanctions on Georgia raise tensions in Caucasus

Russia is preventing millions of Georgians working in Russia from sending money back to their families.

The immediate crisis began last week when Georgia arrested four officers from the Russian Embassy in Tbilisi and charged with them spying.

Georgia released the officers over the weekend, but not before infuriating the Russians.

On Tuesday, the Russian Ministry for Transport stopped all railway, marine, air and car communication with Georgia for an indefinite period.

In addition, Russia has ended all postal communication between the two countries, claiming a security risk from "dangerous content had been detected in the parcels sent to Russia from Georgia." (I'm having difficulty understanding what this is supposed to mean, since such dangerous content would presumably be a security risk to Georgia, not to Russia.)

However, the principal effect of the sanctions will be to strand thousands of Georgian guest workers in Russia, unable to send their earnings home to families. If these remittances were entirely cut off, it would have a huge economic impact on Georgia. Remittances sent home by some 1.2 million Georgians working in Russia currently amount to around $2 billion annually, around 20% of Georgia's GDP.

Russian Foreign Minister Sergey Lavrov said at a Tuesday press conference that “One can not on the one hand feed from Russia and on the other hand humiliate Russia. The Georgian authorities should understand this."

He added: "But we can not tolerate the fact that illegal money flows, which feeds the regime that is militarizing itself for its own goals and that has nothing in common with the needs of the Georgian people."

One extremist member of the Russian Duma says that war against Georgia is the only solution. Vladimir Zhirinovsky, chairman of the ultra-nationalist Liberal-Democratic Party of Russia (LDPR), said, "We should follow the example set by the U.S. and clamp down on Georgia, just as the Americans did with Iraq, depose the local Saddam Hussein, throw all the allies of Saakashvili into FSB prison cells, and then call a free democratic election in Georgia." He said that otherwise, "the U.S. will make Georgia a NATO-member and send Turkish troops into the country. If we are to win we must be ahead of the Americans."

Troubled areas in Caucasus region - including Dagestan, North Ossetia and Chechnya in Russia, and breakaway regions of Abkhazia and South Ossetia in Georgia

Historically, the Caucasus mountain region, which controls many valuable land routes connecting the Caspian Sea to the Black Sea, has been the battlefield for many crisis wars between the Orthodox and Muslim civilizations, and between different ethnic groups of the same or different religions for many centuries. A war between Russian and Islamist forces has been going on in Chechnya since 1994. The Caucasus and the Palestine regions are probably the two most volatile regions of the world.

Georgia itself has been the object of rivalry between Russia, Turkey and Iran (Persia) for many centuries. Russia took control in 1921, but Georgia gained independence in 1992 following the collapse of the Soviet Union. Former Soviet Foreign Minister Eduard Shevardnadze became Georgia's leader, but was overthrown by the "Rose Revolution" in 2003, resulting in the Presidency of Mikheil Saakashvili, someone who has not been to Russia's liking. Many Georgians accuse Russia of imperialism, while Russia criticises Georgia of nationalism and pursuing an anti-Russian foreign policy.

The current crisis comes during a long period of increasing tensions between Georgia and Russia over the two of Georgia's breakaway regions: Abkhazia and South Ossetia. Both regions have ethnic Russian populations that are claiming to be part of Russia rather than Georgia.

Tensions heightened in July when Georgia sent troops into Abkhazia to regain control from secessionist forces. A glance at the map above shows how strategically important Abkhazia is to commerce, situated on the Black Sea. In response, Russia has been conducting naval maneuvers in the Black Sea, near major Georgian sea ports.

Conflict risk level for next 6-12 months as of: 9-Feb-2006
W. Europe	1	Arab Israeli	3
Russia Caucasus	2	Kashmir	2
China	2	North Korea	2
Financial	3	Bird flu	3
Key: 1=Low risk 2=Med 3=High 4=Active

From the point of view of Generational Dynamics, the Caucasus is the most dangerous region of the world, along with Palestine, since the last crisis wars in some areas ended over 70 years ago.

The arrest of the four officers last week caught Russia by surprise, and drew the sharp sanctions that have been imposed. Georgia backed off quickly by returning the officers, but Russia decided to escalate the crisis again anyway.

Most people don't care much when you're talking about spies and such, since it doesn't affect their lives. But when do something that affects a million people and prevents them from sending money to their families, then large masses of people really take notice, and look for someone to blame.

My little conflict risk graphic shows the Caucasus at a yellow "medium risk" level, since nothing has happened recently that appeared likely to lead to a major war within six months. However, that could change quickly if the current confrontation continues to escalate. (4-Oct-06) Permanent Link
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India claims Pakistan government agency perpetrated the Mumbai railroad bombings

India has promised to show potentially explosive evidence to Pakistan.

On July 11, seven bombs exploded in railway stations across the city of Mumbai (Bombay), India. Over 200 people have died, with over 700 injuries.

The suspected perpetrator was a Kashmir separatist group Lashkar-e-Taiba, based in Pakistan. This insinuation angered the Pakistanis, who suggested that India should look to its own internal terrorist groups.

Indian subcontinent, showing the disputed regions of Kashmir and Jammu.

Now India's investigators say that they've solved the case and identified the perpetrators, and claim that they have solid proof that Pakistan's Inter-Services Intelligence (ISI) agency had masterminded the terrorist act.

India and Pakistan are both nuclear powers, and they almost went to war in 2002, but they drew back, thanks to a détente that Pakistan's President Pervez Musharraf and India's Prime Minister Manmohan Singh have engineered over the last few years.

After the Mumbai bombings, Singh refused to meet again with Musharraf. However, he defrosted a little at the international meeting in Cuba a couple of weeks ago, and they shook hands.

Conflict risk level for next 6-12 months as of: 9-Feb-2006
W. Europe	1	Arab Israeli	3
Russia Caucasus	2	Kashmir	2
China	2	North Korea	2
Financial	3	Bird flu	3
Key: 1=Low risk 2=Med 3=High 4=Active

India has promised to turn the evidence over to Pakistan so that they can see for themselves. If it turns out that the ISI did indeed mastermind the massive bombings in Mumbai, it will put enormous pressure on Musharraf to punish the perpetrators.

Musharraf is already under enormous pressure in Washington and London for allegedly not doing enough to stop terrorism, and not doing enough to catch Osama bin Laden.

On the other hand, Musharraf is heavily criticized in Pakistan for cooperating too much with the west. There have been numerous attempts on Musharraf's life.

Pakistan's President Pervez Musharraf is a major lynchpin holding the Indian subcontinent back from war. If this ISI scandal ends up seriously undermining Musharraf, or causes him to get killed or to give up his office, then the entire region will immediately become much more hostile to the West, and the separatist struggle over Kashmir will immediately become much worse. (1-Oct-06) Permanent Link
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