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Crypto-currency crackdown
by
John J. Xenakis
This morning's key headlines from GenerationalDynamics.com
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Last week, it was clear that China Evergrande Group real estate construction and retail investment firm was a gargantuan Ponzi scheme that was headed for default soon, unless the Chinese Communist government executed an extremely risky bailout. (See "16-Sep-21 World View -- China's Evergrande financial crisis threatens China's financial stability")
By Friday, 24-Sept, Evergrande was scheduled to pay $83.5 million in interest payments on dollar-denominated bonds held by overseas investors (i.e., non-Chinese). Evergrande missed those payments, but Evergrade will not be in technical default until a 30-day grace period has passed.
Evergrande owes another $47.5 million to offshore investors next week, and $669 million by the end of the year. By the end of next year, Evergrande has to pay back $7.4 billion, as a number of bonds mature. All in all, Evergrande has $305 billion in liabilities.
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Beijing cannot save Evergrande, but the Chinese Communist regulators have announced that they will henceforth be closely supervising decisions by Evergrande. They will override international financial norms and agreements to achieve the political ends of preventing a "systemic" financial crisis or social unrest.
Under direction from regulators, Evergrande has reportedly made arrangements with local (Chinese) bondholders to delay interest payments.
Offshore (non-Chinese) bond holders will not be made whole. Current estimates are that if you hold an Evergrande bond, then you'll receive only 25% of its value, though that number could fall as time goes on. However, most offshore bond holders are actually large international banks, like the Swiss bank UBS, which holds $275.7 million in Evergrande's bonds.
There is little appetite in Beijing to pay back Western bondholders, but this is offset by worries that Chinese companies will not have access to dollar funding in the future. So some accomodation will be made for Western bondholders.
As for local (Chinese) banks, Beijing has injected billions of additional yuan into the banking system to prevent "contagion" -- bank failure resulting from Evergrande failure, in the cases where bank loans won't be repaid.
Beijing is telling Evergrande to pay off Chinese retail investors first. The objective is to avoid social unrest.
Beijing is also telling Evergrande to finish up its unfinished homes under construction, for the same reason. Evergrande is estimated to have a staggering 1.5 million unfinished properties, for which down payments have been collected, but many of which have stopped construction, for lack of funding. Private property developers are being told to prepare to take over projects left unfinished by Evergrande.
Evergrande's Ponzi scheme involved using the down payments for new homes to pay off old debts. Many of these down payments were also used for risky ventures in electric vehicle manufacturing, bottled water, football clubs, and amusement parks. So now, many of these homes are incomplete in ghost cities.
Evergrande is offering a fire sale of unfinished or unoccupied properties, in order to generate cash. Estimates are that you can get something for 40% of its market value. However, China's real estate is in a bubble, and there is a fear that this action will cause property values generally to fall sharply, causing bankruptcies in other areas of the economy.
Chinese banks, including Bank of China and China CITIC Bank Corp, are now closely monitoring their own clients and scrutinizing all loans, to make sure that no other construction firm is about to fail because of its own Ponzi scheme. Credit is being eliminated or tightened for fourth-tier and third-tier cities across China. Smaller Chinese banks are themselves being scrutinized for viability.
Whenever any investors or debtors are bailed out for any reason in any country, there is always a "moral hazard" problem. This is the problem that risky or reckless behavior should not be rewarded with a bailout, since that will encourage others to pursue to risky and reckless behavior.
According to reports, Chinese regulators do not want to get involved in any sort of bailout of Evergrande or any of its subsidiaries until the very last moment, and then only if absolutely necessary.
Most analysts seem to believe that the Chinese Communists will be able to contain the damage from an Evergrande default, with no systemic damage to China's economy and no sustained social unrest or rebellions, although investors outside of China may lose all or almost all of these investments.
Last week's article described a related matter -- a crackdown on China's Macau, the gambling capital of Asia. I'm told that the purpose of the crackdown was end Macau's use of money laundering, particularly the practice by wealth mainlanders of using sending money abroad through Macau.
This week on Friday, the Chinese Communists announced a crackdown on crypto-currencies like Bitcoin. Not only will use of cryto-currencies be made illegal, but any transactions involving the cryto-currencies will be illegal.
Once again, this is apparently a way to prevent money laundering, particularly when used to send money abroad.
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(25-Sep-2021)
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Furious reactions from China and France
by
John J. Xenakis
This morning's key headlines from GenerationalDynamics.com
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The US, the UK and Australia have reached a new agreement called the "AUKUS pact." The US will provide nuclear-power technology to Australia, and Australia will build a fleet of nuclear-powered submarines using the technology, with help from the US and UK. The submarines will be nuclear-powered, but they will not be capable of launching nuclear weapons. The intention is for eight nuclear-powered submarines to be built in Adelaide.
The Aukus announcement did not mention China specifically. However, it referred repeatedly to regional security concerns which they said had "grown significantly."
Commenting on the agreement, UK Defence Secretary Ben Wallace said China was "embarking on one of the biggest military spends in history. It is growing its navy [and] air force at a huge rate. Obviously it is engaged in some disputed areas. Our partners in those regions want to be able to stand their own ground."
The agreement will also provide for industrial cooperation among the United States, Australia, and the United Kingdom on other key technologies, including artificial intelligence, cyber, and long-range precision strike capabilities.
According to China's Foreign Ministry:
"The nuclear submarine cooperation between the US, the UK and Australia has seriously undermined regional peace and stability, intensified the arms race and undermined international non-proliferation efforts. The export of highly sensitive nuclear submarine technology to Australia by the US and the UK proves once again that they are using nuclear exports as a tool for geopolitical game and adopting double standards. This is extremely irresponsible."
It's always really funny when the Chinese Communist sleazebags accuse someone of undermining peace and stability, or of being irresponsible. The Chinese Communists are emulating the Nazis by illegally annexing the South China Sea, by threatening Taiwan, and by committing genocide, rape, torture, and other atrocities against millions of Uighurs.
What the Chinese sleazebags want is to take control of the entire Indo-Pacific region, without any opposition. The Aukus agreement is a clear challenge to China's illegal military threats.
The Ankus agreement scraps an existing $90 billion deal that Australia had with the French shipbuilding firm Naval Group. That agreement would have had France provide non-nuclear submarine technology for Australia's submarine fleet.
In an interview, France's furious Foreign Minister Jean-Yves Le Drian said:
"It's just not done between allies. It's a stab in the back. This unilateral, brutal, unpredictable decision is very similar to what Mr Trump used to do. ... We had established a relationship of trust with Australia and this trust has been betrayed. This is not the end of the story."
France's Defense Ministry added:
"[Australia's decision] is contrary to the letter and spirit of the cooperation that prevailed between France and Australia, based on a relationship of political trust as well as on the development of a very high-level defence industrial and technological base in Australia. [Also,] the American choice to exclude a European ally and partner from a structuring partnership with Australia, at a time when we are facing unprecedented challenges in the Indo-Pacific region, whether in terms of our values or in terms of respect for multilateralism based on the rule of law, shows a lack of coherence that France can only note with regret."
As far as I can tell, France was going to sell Australia old, out-of-date diesel-power technology for the new submarine fleet, while the Aukus agreement sells new nuclear-power technology. I assume that's the reason that Australia canceled the agreement with France and went with the Aukus agreement.
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(17-Sep-2021)
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Will there be a government bailout?
by
John J. Xenakis
This morning's key headlines from GenerationalDynamics.com
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China Evergrande Group is an enormous real estate construction firm that has built millions of homes and other structures in China, and which has expanded into other areas, such electric vehicles, a theme park, a soccer club, a food company, and other areas. However, Evergrande is now close to default because of its massive debt, and its inability to meet its obligations.
China's Evergrande financial crisis has been bubbling for several months, but reaching a turning point on Monday when the company issued a statement denying that it was close to bankruptcy, but saying that it was going to hire financial advisers to explore "all feasible solutions" to its crisis. However, they would not guarantee that the company will meet its financial obligations. That announcement provoked protests at Evergrande offices across the country.
Evergrande appears to me to be a giant Ponzi scheme, where new debt is incurred to cover old, out of control debts.
So Evergrande as a construction firm has completed nearly 900 commercial, residential, and infrastructure projects. But it has 1.5 million unfinished properties, for which down payments have been collected, but many of which have stopped construction, for lack of funding. For years, Evergrande has apparently used down payments for new homes and projects to fund completion of previously committed projects, leaving no money for the new projects.
Millions of ordinary homebuyers who made down payments on new home construction are now facing losing their down payments, and getting no homes. According to press reports, Evergrande now has about 900 unfinished projects, and there are about 1.2 million people waiting to move in.
In order to fund its Ponzi scheme, Evergrande for years has been offering investment opportunities in "wealth management products" (WMPs), which are offered by many Chinese banks and financial institutions, and which are are unique components of China's shadow banking system. A retail investor can invest in a WMP, which supposedly guarantees a high rate of return, but which is not directly backed by any solid asset, such as real estate. Evergrande pays the WMP through profits from its real estate business and by issuing its own bonds. But if the real estate business is not making profits, and if its bonds are losing value in the financial markets, then Evergrande will default on the WMPs.
Every Ponzi scheme depends on an accelerating stream of cash to fund further sales to meet previous debt obligations. As soon as there's a slowdown in the incoming stream of cash for any reason, like a recession or new regulations, then the Ponzi scheme crashes. That seems to be where Evergrande is now. This means that homebuyers, lenders, bondholders and retail investors are all subject to some or all of their investments. According to some reports, bondholders will lose 75% of their investments.
As things stand now, Evergrande is going to collapse, possibly into bankruptcy but at least into massive restructuring. With millions of people losing some or all of their investments, this could lead to China's dreaded "social unrest." Evergrande's headquarters are located in Shenzhen, which is on the mainland adjacent to Hong Kong, in southern China which has historically been the crucible of China's previous massive rebellions, including Mao's Communist Rebellion (1934-49) and the huge Taiping Rebellion (1854-64). The Chinese Communists are well aware of this history.
The Beijing government may decide that Evergrande is "too big to fail," and bail the company out. But Evergrande has publicly acknowledged $300 billion in debt, and so a bailout would test even the Communist government's resources.
But it's more complicated than even that. For years, there have been news stories about ghost cities where entire towns had been built with homes and stores, all of which remained empty and unoccupied. Many individuals purchased these homes, not to live in, but as an investment, hoping to cash in when they finally became occupied and increased in value. Instead, they're now worth much less than their original prices, and they're sitting empty, with no hope of occupancy.
Another problem is that if Evergrande defaults, then the entire real estate market could collapse, as millions of new properties could possibly come on the market at the same time.
So a bailout might cost China's government considerably more than the $300 billion in debt.
So bailing out the Evergrande Ponzi debt might be too expensive even for China. Even worse, it may result in contagion. Investors in other large financial firms with huge exposures might demand similar bailouts.
It was just last month that Beijing executed a much smaller bailout. China's Huarong Asset Management announced a $16 billion net loss for 2020. After months of saying nothing, the Chinese Communist government finally gave in and agreed to a bailout, for fear that a Huarong bankruptcy could destablize China's financial system.
The way that the bailout would work is that Huarong will issue new shares to five state-owned companies -- Citic Group, China Insurance Investment, China Life Asset Management, China Cinda Asset Management and Sino-Ocean Capital Holding. By purchasing these shares, the five state-owned companies would provide a huge cash infusion to Huarong.
So if that worked for Huarong, would it also work for Evergrande? Well, Huarong lost a mere $16 billion, while Evergrande is at least $300 billion in debt, and possibly much more. So it may not even be possible.
There are several typical behaviors that generations and populations exhibit during a generational Crisis era, like the one we've been in since the beginning of the century. At this time, all the people who survived the previous generational crisis war (World War II) have all died or retired, and the new generations in power (Gen-X, Millennials) have no memory of the lessons learned. They forget the nationalism and xenophobiat that caused the World War II, and they forget the profligacy that resulted in the previous major financial crisis (1929). They say that history doesn't repeat itself but it rhymes, and we're seeing that now.
I've written much about China's increasing xenophobia and nationalism directed at Japan and Taiwan, and I won't repeat it here, but I want to focus on profligacy.
The United States is already $28 trillion in debt, and is contemplating new legislation that will add $5 trillion more to the debt. That's absolutely ridiculous, and will result in the worst financial crisis in the history of the world.
China is also incurring historically high levels of debt, with no end in sight. At some point there will be a major financial crisis in China, with tens or even hundreds of million people losing their life savings as the crisis spreads from company to company.
That will give rise to the Beijing's nightmare scenario, massive social unrest, possibly turning into rebellion.
Macau is similar to Hong Kong in that it is a special administrative region in southern China. However, Macau is the gambling capital of Asia, competing against Las Vegas for customers.
On Tuesday, China's regulators announced changes to the gaming law that would give the government much greater control over the casinos, and possibly a larger share of the earnings.
You may think that this is an internal Chinese matter, but it's not. Almost all the casinos are operated by American companies -- Sands China, Wynn Macau, Galaxy Entertainment, SJM Holdings, Melco Entertainment and MGM China. And Macau stocks lost a third of their value, around $14 billion, because investors feared that China would impose tighter regulations.
This illustrates how tightly interlocked the Chinese and American companies are, and a global financial crisis in one country will cause a chain reaction financial crisis in the other.
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Dynamics forum. Comments may be posted anonymously.)
(16-Sep-2021)
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Did Joe Biden intentionally sabotage the Afghanistan evacuation?
by
John J. Xenakis
This morning's key headlines from GenerationalDynamics.com
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The Taliban have announced that they're in total control of Afghanistan, now that they've won the last battle, the clash in Panjshir Valley. It's not clear that this is true. The Taliban have cut off electricity and communications to the Panjshir Valley, so it's impossible to read what's going on. I'll discuss the Panjshir Valley below.
Separately, there's already a potential hostage crisis in progress, with the Taliban preventing Americans from leaving Mazar-i-Sharif airport. US Secretary of State Antony Blinken is negotiating with the Taliban to obtain safe passage. But as of this writing, the situation is unclear.
The situation in Afghanistan is extremely complex. It's very hard to provide a politically balanced exposition, since the evacuation was clearly a disaster. Even many Democrats agree. I'm going to quote from different, sometimes conflicting media sources, in order to sort the issues out.
The view held by president Joe Biden, the Democrats, the administration and by the left-wing mainstream media (CNN, MSNBC, CBS news, etc.) is that the Afghanistan problem has now ended, and that it's time to move on.
Biden says that the evacuation ws an "extraordinary success." He says that he was handed an existing agreement that the Taliban had made with former president Donald Trump, and that he had to implement it as best as he could. He admits that only 90% of the Americans and Afghan allies had been evacuated, leaving 10% behind, but he says that any large historical evacuation has always been chaotic and had always left people behind.
The Biden administration has been downplaying the problem. They insist that only 100 or 200 Americans are left behind, and many of those have families in Afghanistan and didn't want to leave.
In fact, the mainstream media are cooperating with the desire of the administration to turn the page. MSNBC and CNN sometimes aggressively covered the Afghan evacuation prior to 30-Aug, but since then, coverage on those channels has fallen off a cliff, and typically the Afghan war is never even mentioned.
The Biden administration now wants to turn the page back to the $1.3 trillion infrastructure bill that has passed in the Senate, but is being held up in the house, and the $3.5 trillion "human infrastructure" bill, which is an ill-defined collection of spending on Democrat cronies, including labor unions, teachers unions, debt-ridden Democrat states, and social services organizations.
The decision to "end the war" is overwhelmingly popular, but many people believe that the evacuation was botched and America was defeated, betrayed and forced to surrender. In particular, Bagram airbase should not have been closed as the first act of the evacuation. The result was that billions of dollars in advanced American weapons have been left behind, as have hundreds, thousands, or tens of thousands (depending on the report) of Americans and Afghan allies have been left behind. Republicans say that people should have been evacuated first, then weapons, and then Bagram could be closed.
Republicans refer to a newly leaked transcript of a phone call between Joe Biden and Afghanistan President Ashraf Ghani on July 23, when Biden said, "And there is a need, whether it is true or not, there is a need to project a different picture." Soon after, Ghani fled the country.
Many Republicans -- and many Democrats, especially veterans -- say that Biden not only botched the evacuation but has betrayed America and the veterans who fought in that war for 20 years, by letting the Taliban take over as if we were back in 2001.
The Republicans point out that Biden's approval rating has crashed from 60% a few months ago to 43% now.
A particularly bitter complaint is the number of Americans and Afghan allies that have been left behind, and mostly ignored, and by the repeated Administration lies about the number of these. As recently as August 19 Biden said in an interview, "If there are American citizens left, we're gonna stay till we get them all out." He said the same was true of Afghan allies. It's believed that Biden never had any intention of fulfilling this promise, since he wants to make a grand "Mission Accomplished!" speech on 11-Sep-2021.
A separate issue for conservatives is that Afghan refugees are coming into the country without being properly vetted. This subject will be debated in the coming weeks.
The BBC receives a great deal of funding from NPR, so it normally just repeats the same Democrat talking points as CNN and MSNBC.
However, this situation is different, because the British and Europeans also feel completely betrayed. In fact, the mission in Afghanistan was actually a NATO mission, and Biden made a unilateral decision without even consulting NATO or any European leaders. So neither NATO nor the individual countries had time to evacuate their own troops or their citizens.
The result was that countries like Britain, France, Italy and Germany each left behind a thousand or more citizens. The future of Nato itself is in doubt.
Once Kabul fell to the Taliban, and Biden blamed it on the Afghan government, criticism from Europe was sharp.
Tom Tugendhat, Tory chair of foreign affairs committee said:
"To see their commander-in-chief [the US president, Joe Biden] call into question the courage of men I fought with – to claim that they ran – is shameful. Those who have not fought for the colours they fly should be careful about criticising those who have.I leave the house with one image. In the year that I was privileged to be the adviser to the governor of Helmand, we opened girls’ schools. The joy it gave parents to see their little girls going to school was extraordinary ...
The second image is one that the forever war that has just reignited could lead to. It is the image of a man whose name I never knew, carrying a child who had died hours earlier into our firebase and begging for help. There was nothing we could do. It was over. That is what defeat looks like; it is when you no longer have the choice of how to help. This does not need to be defeat, but at the moment it damn well feels like it."
Labor MP Dan Jarvis said the following:
"Many of us who served in Afghanistan have a deep bond of affection for the Afghan people, and I had the honour of serving alongside them in Helmand. We trained together, fought together and, in some cases, died together. They were our brothers in arms. I shudder to think where those men are now. Many will be dead, and I know others now consider themselves to be dead men walking. Where were we in their hour of need? We were nowhere. That is shameful, and it will have a very long-lasting impact on Britain’s reputation right around the world."
Norbert Röttgen, chairman of the German parliament’s foreign relations committee and a senior member of Chancellor Angela Merkel’s Christian Democrats, said:
"I say this with a heavy heart and with horror over what is happening, but the early withdrawal was a serious and far-reaching miscalculation by the current administration. This does fundamental damage to the political and moral credibility of the West."
A number of European politicians are discussing the creation of a European Rapid Reaction Force.
The UK and the EU have said that when the Taliban announce their new government, there will be "operational engagement" with the new government, but they will not recognize it until it's "stable."
They are particularly concerned that girls and women "will be erased from life." The BBC already reports stories of rape, forced marriages.
As a Muslim country, Qatar is much more sympathetic to the Taliban than the West is.
Al-Jazeera has a very different view of the Afghanistan problem: refugees.
Al-Jazeera is headquartered in Doha, Qatar's capital city, and is funded by Qatar's monarchy.
Qatar has friendly relations with the Taliban, and Qatar also has friendly relations with the United States and the West. Qatar hosts a major American naval base. So I understand that al-Jazeera Arabic has been cheering for the Taliban. Of course, I watch al-Jazeera English, which is much more guarded.
Qatar is playing a pivotal role in Afghanistan's relationship with the United States. The thousands of Americans and Afghans that were evacuated from Afghanistan were first transited through Doha, before going on to other destinations. Qatar's government cooperated by providing hotel rooms and the essentials of food and medical treatment. The housing planned for the 2022 FIFA World Cup (soccer) contests next year is being used.
Since 30-Aug, the Qataris have taken on another important role. With the Americans gone, Kabul's airport was no longer operational for commercial use. The Qataris and the Turks are sending technicians to Kabul to make the airport operational. I understand that there's a dispute about who will operate the airport, once it's operational.
Al-Jazeera has been reporting heavily on the refugee issue.
The issue that may be very explosive in 2022 is a potential flood of hundreds of thousands of Afghan refugees. The size of this flood will depend on the depth of the growing humanitarian disaster and the growing violence by the Taliban against people in the Tajik, Hazara and Uzbek ethnic groups that formed the backbone of the Northern Alliance that fought against the Taliban in the 1990s civil war.
Europeans still have sharp memories of the millions of refugees that flooded into Europe in 2015 and 2016. Those were mostly Syrian refugees, but a large percentage were Afghans. Now many Afghan refugees are once again crossing borders, hoping to find a better life in the European Union.
The flood of refugees was only slowed in 2016 when the EU reached an agreement to pay Turkey a great deal of money to host millions of refugees.
The EU is looking for ways to prevent a new refugee crisis. Greece is strengthening its border wall with Turkey. EU negotiators are desperately trying to reach agreements to pay other countries to host a potential flood of Afghan refugees. Turkey has already said it wants no more refugees. Central Asian countries -- Tajikistan, Uzbekistan -- are closing their borders and, so far, are rebuffing EU offers to pay for housing of refugees.
According to the United Nations, Afghanistan is facing a looming humanitarian disaster. Even before the evacuation, Afghanistan's economy was in severe trouble, with a severe drought going on, but now the economy and the currency are collapsing. In addition, the entire health system is near collapse. According to a United Nations spokesman, "One in three Afghans do not know where their next meal will come from. Nearly half of all children under the age of 5 are predicted to be acutely malnourished in the next 12 months."
The United Nations has warned that up to half a million Afghans could flee the country by the end of the year and has called on neighbouring countries to keep their borders open. The current crisis comes on top of the 2.2 million Afghan refugees already in neighboring countries and 3.5 million people forced to flee their homes within Afghanistan's borders.
The UN says that more than 600,000 Afghans were displaced this year, 80% of which are women and children. But with the growing humanitarian crisis, it's possible that millions more will become refugees in the next year.
Other countries are helping out. Uganda, Mexico, Colombia and Rwanda are temporarily hosting Afghan refugees.
Belarus, arguably the worst country in Europe, is weaponizing refugees. They're inviting refugees into the country, and then transporting them across the border into Poland.
Pakistan's government has denied years of accusations that it was funding the Afghan Taliban. However, the accusations have really been directed at Pakistan's extremely powerful intelligence agency, the Inter-Services Intelligence (ISI) agency, which is known to fund terrorist organizations in Afghanistan and India, and to have protected Osama bin Laden when he was hiding out in Pakistan.
Pakistan was formerly part of the British empire, and so the people in the government, the agencies, and the élite almost always speak English. Among rural citizens, Punjabi and Sinhi are most widely spoken. In Afghanistan, most people speak Dari (Afghan variant of Persian), while the majority Pashtun ethnic group speak Pashto. So there is no particular advantage to other ethnic groups besides the Pashtuns to flee to Pakistan.
Nonetheless, Pakistan is the first country of choice for many displaced Pakistanis, especially Pashtuns. However, Pakistan has closed its borders with Afghanistan because it already hosts three million Afghan refugees and refuses to take more because of its own ravaged economy.
In 2020, Pakistan and Iran saw the highest numbers of Afghanistan's refugees and asylum seekers. Almost 1.5 million fled to Pakistan in 2020, while Iran hosted 780,000, according to UNHCR figures.
Furthermore, Pakistan has its own Pakistan Taliban (Tehrik-e-Taliban or TTP), different than the Afghan Taliban, that has conducted numerous violent terrorist attacks in Pakistan. The TTP has been opposed to the Afghan government for the last 20 years, but with the return of the Taliban government, the TTP is pledging allegiance to the Afghan Taliban.
According to analyst Walid Phares, the combined Afghan Taliban and TTP would like would like to take over all of Pakistan. Among other things, this would give them control of nuclear weapons.
Pakistan's government has expressed concerns that some TTP terrorists were let out of jail by the Taliban.
The Taliban leadership promised that once the American forces were withdrawn, the Taliban would stop fighting and would govern peacefully. Nobody seriously believes any Taliban promises, but this one was broken instantly. As soon as the last American left, Taliban forces moved hundreds of fighters to subdue the Panjshir Valley.
Panjshir Valley has an almost mythical quality. When the Soviet Union invaded in the 1980s, and when the Taliban attacked during the 1990s, the Panjshir Valley was not conquered. The people of Panjshir Valley are Tajiks. The valley itself is surrounded by high mountains, and there is only one road used as an entrance and one road used as an exit. The Soviets attacked from the air, but were defeated when their helicopters were shot down with missiles. In the 1990s, the Taliban were defeated by blockading the entrance and exit roads. The Panjshir Valley was supported by the Americans against the Soviets, and by Central Asians against the Pashtuns.
In the 1990s, Panjshir Valley was the stronghold of the Northern Alliance, fighting the Taliban. Today, it's the stronghold of the National Resistance Front of Afghanistan (NRF), once again fighting against the Taliban.
There have been heavy clashes during the last week between the Taliban and the National Resistance Front of Afghanistan (NRF) in Panjshir Valley, with both sides claiming to have the upper hand.
This time, the Taliban have several advantages that they didn't have during the 1990s. First, they have a huge multi-billion stash of advanced weaponry that the Americans left behind, and those weapons are being used to attack the NRF. Second, the NRF does not have any foreign support, as it did in the past.
The Taliban have already cut off electricity and all communications to the valley. If the the clashes continue, they can impose a full siege, depriving the value of food and fuel, crippling their ability to fight.
Joe Biden said at once point that America had no further interest in Afghanistan because al-Qaeda was gone. This claim was considered by almost everyone to be outrageous. It's hard to guess whether that was a lie, or because he had no idea, but no one ever seriously believed that al-Qaeda was gone.
Biden's remark was particularly shocking in retrospect, after ISIS-K caused a massive explosion at Kabul airport, killing 13 American forces and hundreds of Afghans.
Al-Qaeda is deeply embedded in the Taliban and the Haqqani network, which has historical ties to Pakistan’s powerful Inter-Services Intelligence (ISI) spy agency, though Pakistan denies that.
The fear now is that Afghanistan next year will become a cauldron of international terrorism. The international jihadists networks are thrilled and excited that the Taliban have humiliated and defeated the Great Satan, the United States. There have already been reports of jihadists from Syria and northern Africa going to Afghanistan to join up with other jihadists and to receive training. This had led a number of people to conclude that it will be necessary for American forces to re-enter Afghanistan, possibly next year.
When Saigon was evacuated in 1975, it was claimed that the Vietnam War "was over," something that continues to be believed today, even though nothing can be further from the truth, as I described in my book "Vietnam, Buddhism, and the Vietnam War," published earlier this year.
Once Saigon fell to the Communists, the war was completely over for most Americans. But that wasn't true for the Vietnamese people. They knew what was going to happen because they'd seen it all before, especially in 1954 when the evacuation of French forces led to massacres of Catholics and other "pro-French" civilians in North Vietnam, forcing almost a million of them to flee to South Vietnam. Now that the North Vietnamese Communists were going to take over Saigon, they knew that they would probably have to flee again.
The new Communist government in Saigon acted in a very brutal way, using policies that they had learned from Communist China. There were harsh "re-education programs," as there are still in Communist China today. The peasants had their land taken from them and collectivized into state farms, as in China's disastrous Great Leap Forward, with similar results.
North Vietnam sent administrators to Saigon to establish a new regime. Officials in the defeated government were killed, and hundreds of thousands of people were sent to concentration camps, ostensibly to re-educate them to live in a socialist society. A system of registering the population was instituted to ensure that those whose families had supported the Second Republic were penalized by denial of employment, education, and food rations.
There was a massive exodus of refugees, and they became known as the "Vietnamese Boat People." Experts estimate that up to 1.5 million refugees escaped but a high estimate of 10 percent died from drowning, piracy, dehydration, or otherwise never made landfall.
The point of remembering that history of "the end of the Vietnam War" is that the Vietnam War was not over in 1975, and the Afghanistan war is not over today.
Afghanistan's last generational crisis war was an extremely bloody, horrific civil war, in 1991-96. The war was a civil war, fought between the Pashtuns in southern Afghanistan versus the Northern Alliance of Tajiks, Hazaras and Uzbeks in northern Afghanistan.
As I've written many times before, the ethnic groups in Afghanistan are COMPLETELY NON-UNITED and loathe each other. Pashtuns still have scores to settle with the Tajiks, Hazaras and Uzbeks that formed the Northern Alliance, especially the Shias. These opposing groups have fresh memories of the atrocities, torture, rape, beatings, dismemberments, mutilations, and so forth that the other side performed on their friends, wives and other family members, and they have no desire to be friends or to work together. They'd rather kill each other.
The media-savvy Taliban spokesmen are promising a kinder, gentler "Taliban 2.0" that will govern wisely and will respect women and girls, allowing them to go to school and work. That this is nonsense is made clear by the Vietnam example.
It's even worse, because the North Vietnamese were relatively disciplined, but the Taliban are a collection of tribes headed by warlords who may or may not obey the directions of the central leadership in Kabul. Any one of these tribal warlords might decide to revert to the harsh, violent practics of "Taliban 1.0," including brutality and abuse of girls and women.
Furthermore, there are Americans and American allies scattered in provinces across Afghanistan. Any one of the Americans can be used to provoke a hostage crisis, even worse than the Iran Hostage Crisis of 1979 that lasted over a year.
 |
Up until a few months ago, I would never have believed that any President of the United States would intentionally sabotage a major foreign policy effort like the Afghanistan evacuation.
My mind was opened to the possibility by my work on my recent book, "Vietnam, Buddhism, and the Vietnam War," published earlier this year. I concluded, after months of research involving dozens of sources, that John F. Kennedy intentionally sabotaged the Vietnam war effort. Two major decisions -- first, neutralization of Laos and ceding it to Hanoi, and second, ousting South Vietnam's strong anti-Communist leader Ngo Dinh Diem, resulting in Diem's assassination. After these two disastrous mistakes, the war was lost, as I described in great detail in my book.
JFK was a Democrat, and obviously deeply embedded in the Democrat Party culture that was humiliated and infuriated by losing the Civil War and having the end of slavery imposed on them. That culture had spawned the KKK and the Jim Crow laws, and had as its slogan, "The South will rise again!" The Democrats were further humiliated by proposed Civil Rights legislation that was bitterly opposed by the Democrats, and did not pass until JFK himself was assassinated.
Although President Truman was strongly anti-Communist and created the Truman Doctrine, Communism became a highly politicized issue in 1954 because of the Army-McCarthy hearings, which were shut down soon after a Senate Democrat said to Republican Joseph McCarthy "Have you no sense of decency, sir?" After that, McCarthyism was used synonymously by Democrats as being anti-Communist.
So JFK became president, and the Vietnam war was forced on him, probably against his will, because it was another anti-Communist fight. As I describe in my book, the Vietnam War was pushed on JFK by the worldwide march of Communism at the time -- the Iron Curtain in Eastern Europe, the victory of North Korea, and the victory of North Vietnam. Then, in 1960, there was Fidel Castro's Communist revolution in Cuba.
So two other factors may have contributed to JFK's desire to sabotage the Vietnam War effort. One was the disastrous Bay of Pigs invasion in April 1961, which was a losing attempt to defeat Communism in Cuba. And the other was the Civil Rights Act that Democrats bitterly opposed, and in fact did not pass until after JFK himself was assassinated.
So I've concluded that JFK sabotaged the Vietnam war, and did so intentionally.
As a child, Joe Biden was in the same Democrat party culture that had supported ending America with the Civil War. His mentor was Senator Robert Byrd, who had been a Grand Wizard in the KKK.
Now, Joe Biden is in office, and he has adopted one policy after another to sabotage the United States. These include: open the border, flood the country with illegal immigrants from 170 countries, flood the country with Chinese fentanyl and meth, open the prisons, let violent criminals out of jail, defund the police, destroy black families, encourage the murder of thousands of young black men by other black men in Democrat-run cities, close Keystone pipeline then beg Saudi Arabia for more oil, destroy America's energy independence, teach racial hatred in school (critical race theory), censor political opposition, paying people not to work, etc.
When a policy has unintended consequences, and the unintended consequences go on for a long time, with no attempt to stop them, then it's reasonable to conclude that the consequences are intentional. Many of the above policies have gone on for a long time with no attempt to repair them. In some cases, further policies have worsened the "unintended conquences," making it all but certain that they were "intended consequences."
At this point, there's no doubt that the Biden administration repeatedly lied and made one decision after another that "botched" the evacuation effort. Based on JFK's actions, and based on Biden's actions in other areas, I now believe that the circumstantial evidence points to intentional sabotage, imitating JFK's sabotage of the Vietnam war effort.
U.S. General Mark Milley is predicting a new civil war because the Taliban won't "be able to consolidate power and establish governance." Milley and the other generals have had no idea what's been going on in Afghanistan for the last 20 years, and this comment indicates that they still don't.
Milley's observation about the Taliban is correct, but it will not lead to a civil war, since Afghanistan is in a generational Awakening era. As I described in my previous article on Afghanistan, we're going to see the Generational Dynamics Democide Pattern played out. (See "23-Aug-21 World View -- The Afghanistan catastrophe" for an explanation.)
This means that there won't be a new civil war, but there will be continual clashes and brutal treatment by the Taliban of its old Northern Alliance enemy. The Taliban will use violence, beatings, rape, and extrajudicial torture and jailing as needed or desired.
Furthermore, because of the undisciplined, tribal nature of the Taliban, these events, sometimes using American hostages as pawns, are expected to increase.
The Panjshir Valley clashes are only the beginning. These clashes will spread and grow, and it's quite possible that Americans left behind will be used as pawns by either side.
Milley's observations about the Taliban confirm what a number of other politicians, both Democrat and Republican, have been suggesting -- that it will be necessary for the US to go back into Afghanistan, as it becomes a crucible of international terrorism.
The Democrats are hoping that the whole Afghanistan catastrophe will pass quickly from public memory, and they can go back to one destructive policy after another. If the opposite happens -- that the situation continues to worsen -- then Biden's presidency will be untenable. The next two in line - Kamala Harris and Nancy Pelosi -- are just as incompetent as Biden.
Any other president would at least have fired several people after this debacle. If Biden continues to make decisions destructive to America, then it will be necessary to find a way, within the Constitution, to find a way to replace Biden with someone competent to govern.
John Xenakis is author of: "World View: Vietnam, Buddhism, and the
Vietnam War: How Vietnam became an economic powerhouse after the
Vietnam War" (Generational Theory Book Series, Book 4), March 2021
Paperback: 325 pages, over 200 source references, $13.99 Complete Table of Contents
https://www.amazon.com/dp/1732738645/
John Xenakis is author of: "World View: War Between China and Japan:
Why America Must Be Prepared" (Generational Theory Book Series, Book
2), June 2019, Paperback: 331 pages, with over 200 source references,
$13.99
Complete Table of Contents
https://www.amazon.com/World-View-Between-Prepared-Generational/dp/1732738637/
John Xenakis is author of: "World View: Iran's Struggle for Supremacy
-- Tehran's Obsession to Redraw the Map of the Middle East"
(Generational Theory Book Series, Book 1), September 2018 Paperback:
153 pages, over 100 source references, $7.00 Complete Table of Contents
https://www.amazon.com/World-View-Supremacy-Obsession-Generational/dp/1732738610/
John Xenakis is author of: "Generational Dynamics Anniversary Edition - Forecasting
America's Destiny",
(Generational Theory Book Series, Book 3), January 2020,
Paperback: 359 pages, $14.99,
Complete Table of Contents
https://www.amazon.com/Generational-Dynamics-Anniversary-Forecasting-Americas/dp/1732738629/
Sources:
Related Articles:
(Comments: For reader comments, questions and discussion,
see the Generational Dynamics World View News thread of the Generational
Dynamics forum. Comments may be posted anonymously.)
(7-Sep-2021)
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