*** 16-Apr-13 World View -- Forced selling hits gold, commodities and stocks

This morning's key headlines from GenerationalDynamics.com

• Terrorist attack at finish line of Boston Marathon
• Forced selling hits gold, commodities and stocks
• Deflation and hyperinflation
• Bad economic data plagues China and United States

****
**** Terrorist attack at finish line of Boston Marathon
****


Second Boston Marathon explosion, seen from the finish line (CNN)

At 2:50 pm on Monday, terrorist explosions in Boston, about two miles
from where I live, killed three people and injured dozens more.

This is the first terrorist explosion on American soil since 9/11.
The American public is already extremely anxious about a number of
things, and this attack has the potential to harden opinions. The
attacker might be an American on the left or right, or it might be a
Muslim, or it might be a foreigner (Latino, Chinese, Canadian, or
whatever) or it might be a disgruntled worker of some kind. Each
possibility will drive a different path in public opinion, and may
unite or further divide the American people. CNN

****
**** Forced selling hits gold, commodities and stocks
****

The price of gold as a commodity fell 9.3% to $1,362 per ounce on
Monday, after falling 5% on Friday. Analysts are afraid that the
price of gold is in free fall. According to one analyst, Phoenix
Futures President Kevin Grady:

<QUOTE>"I think the last $20 has been margin selling. The
market is falling like a knife. People are saying, 'Get me out
now.' You're also seeing people selling energy profits to pay for
metals losses. You're seeing a tremendous amount of gold
liquidation today."<END QUOTE>

It was just a couple of years ago that the price of gold
was at $2,000 per ounce, and I had listen to "experts" endlessly
talk about how it was going to continue going up, up, up,
to $5,000 or even $10,000 per ounce.

Actually, as I've been saying for years, the long-term trend price of
gold is around $400-500 per ounce, and gold has been in a bubble since
the early 2000s. When the bubble bursts, the price of gold will
overshoot the trend, and may fall to the $200-300 per ounce level.
Whether that's what's happening now will not be known for a few days
or weeks, but it will happen at some point. And people who insist on
buying or holding gold are going to lose a lot of money.

The analyst quote above is worth study because it contains a number
of important elements. Notice the reference to margin selling,
and to the fact that energy investments are being sold to make
up for losses in gold.

In a sense, the phrase "panic selling" isn't really accurate, because
it implies a kind of insanity. But the insanity isn't in selling --
it's in buying. It was insanity for people to buy gold when the price
was near $2,000. It was insanity for people to buy homes six years
ago, when home prices had tripled or quadrupled. It's insanity for
people to be buying stocks today, when the S&P 500 Price/Earnings
ratio (stock valuations) has been far above average for over 15 years.

When the bubble bursts, the selling occurs, but because of necessity,
not because of insanity. So it should be called "forced selling,"
rather than "panic selling." It's well to remember how the crash of
1929 occurred.


Bayer's pre-WW I bottle containing 5 grams of heroin

In 1929, it wasn't because people suddenly lost their minds, snorted
heroin, and decided to sell everything on a whim. Typically, people
had purchased stocks on margin -- had arranged with their brokers to
buy stocks for only 10% of the purchase price, in essence borrowing
the other 90% of the funds from the broker, who holds the stock as
collateral. When the price of the stock begins to fall, then the
brokers start calling their clients with "margin calls," which means
you'll lose your stocks unless to put up more money. In order to meet
margin calls, many investors have to sell other stocks, pushing those
prices down. The result of this forced selling is a cascade effect,
as margin calls force prices down, which results in more margin calls.

So, according to Grady, that's what happened on Monday with gold.
People had purchased gold on margin, and when the price began to fall,
they were forced to sell their gold, stocks and other commodities to
meet margin calls. If this continues, then there will be a new
cascade, and the crash will occur now instead of later. Or perhaps
the Fed and other central banks can find a way to intervene and stop
the fall, as it's been doing for years.

****
**** Deflation and hyperinflation
****

And that segues to the massive quantitative easing that's been going
on. The Federal Reserve has been "printing" an enormous $86 billion
per month and pushing it into the banking system through quantitative
easing. The European Central Bank (ECB) has been pouring out billions
through various bailout programs. But that's nothing compared to what
the Bank of Japan is doing. The BOJ is also "printing" $81 billion
per month in quantitative easing. But since Japan's economy is 1/3
the size of the U.S. economy, that would be like the U.S. "printing"
$250 billion per month, or $3 trillion per year.

With trillions of dollars in new money pouring into the banking
system, you'd think that we'd have hyperinflation, but we don't. I've
been saying since 2003 that we're in a deflationary spiral, and that
hyperinflation is impossible. The "experts" have been predicting
"hyperinflation next quarter" continuously. They've been consistently
wrong, and I've been consistently right.

This morning on CNBC, market reporter Rick Santelli was talking about
the fall in gold prices, and he was asked about deflation. This
really set him off, and he started screaming at the top of his lungs:


Rick Santelli discussing deflation on Monday morning (CNBC)

<QUOTE>"You know what? I'll tell you what. The more I hear
about deflation, the more I just wanna pull my eyelashes out.
Deflation is gonna cause central bankers to go, ohhhhh we gotta do
more to fight deflation. I think it's deleveraging of assets that
have gotten bubblicious, through cheap money, and the things
central banks look at that were deflation, and they come back and
do more of it just shows the LUNACY of what central banks have
done to "save our lives." Even gold goes up when you have
inflated dollars, and it goes down when you have to pay for
it."<END QUOTE>

Well, Santelli may not like talk of deflation, but that's what we've
got. But he's right that the massive outpouring of central bank money
has created bubbles in commodities and stocks through debt, and now
that debt is being deleveraged through forced selling, forcing prices
down.

What's the motivation for all this talk about hyperinflation? My
observation is that it's all wishful thinking. People on the left
want to see hyperinflation because they want to see the $17 trillion
government debt get inflated away. People on Wall Street want to see
hyperinflation because they want to convince people to buy stocks.
People on the right want to see hyperinflation because they want to
sell gold. Deflation is a disaster for all of them, so they'd
rather just go into a state of denial.

But from the point of view of Generational Dynamics, inflation does
not occur in generational Crisis eras (except for brand new
currencies). The famous German Weimar hyperinflation occurred during
a generational Unraveling era. Enormous inflation occurred in America
from 1977 to 1980, but that was during a generational Awakening era.
During the Great Depression and WW II, one country after another
suffered deflation, not inflation. You would think that there would
be at least one major case of hyperinflation during that period, if
only by accident, but apparently there was none. Hyperinflation does
not occur during generational Crisis eras. We're in a deflationary
spiral, and we're going to stay there.

So we have trillions of dollars in money pouring out of the central
banks. Where is it going, and why isn't it causing hyperinflation?

Back in 2003, I received a call from an officer at my bank. She
offered to loan me $25,000 because I was such a good long-time
customer of the bank. No collateral, low interest rate. Her
motivation, of course, is that she gets a commission.

Well, today those things don't happen any more, at least not to me and
you, Dear Reader. Those of us in the 99% don't see a dollar of those
trillions of dollars. Instead, that money is loaned to the people in
the 1%, the people who don't need it, but borrow it anyway, at near
zero interest rates, to invest in gold or commodities or stocks. That
doesn't cause inflation.

Well, now it looks like that poop is hitting the fan. All those
people in the 1% are in debt up to their eyeballs, and suddenly
they're getting margin calls. They're forced to sell, which pushes
down prices. That causes deflation. Let's see if Ben Bernanke can
get us out of this one. CNBC

****
**** Bad economic data plagues China and United States
****

There was a lot of bad economic news on Monday, contributing
to the fall in gold, commodity and stock prices:

• China's economy grew more slowly than expected in
  the first quarter.
  
• In the U.S., the Federal Reserve's Empire State manufacturing
  index, a key gauge of economic health in New York State, fell to 3.1
  in April from 9.2 the previous month, falling far short of market
  expectations for a decline to 7.0.
  
• On Friday, a survey of consumer sentiment fell to a 9 month
  low.
  
• Retail sales in the U.S. fell in March, defying expectations
  of a rise.

Investing.com



KEYS: Generational Dynamics, Boston Marathon,
gold, forced selling, Kevin Grady, China,
Federal Reserve, Bank of Japan, CNBC, Rick Santelli

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Theory that a deflationary spiral will result in a depression.

Originally Posted by TimWalker

Theory that a deflationary spiral will result in a depression.

You're absolutely right. It sure will.

How much more bubble blowing before people finally figure out that prices won't keep going up, up, up, up, up, up......

*** 17-Apr-13 World View -- Germany's economic experts consider a wealth tax to fund bailouts

This morning's key headlines from GenerationalDynamics.com

• Greece to lay off old people, hire 'young, capable' replacements
• How margin accounts work today versus 1929
• China's local government debt is 'out of control'
• Germany's economic experts consider a wealth tax to fund bailouts

****
**** Greece to lay off old people, hire 'young, capable' replacements
****


Antonis Samaras - Greek Prime Minister

Greece's prime minister Antonis Samaras has confirmed that the latest
deal with the "troika" of organizations bailing out Greece -- the
European Commission (EC), the European Central Bank (ECB) and the
International Monetary Fund (IMF) -- calls for 15,000 layoffs of civil
service employees. There will be 4,000 layoffs in 2013, and 11,000
more layoffs in 2014, violating the provision in Greece's 1911
constitution that civil servants have lifelong job security.

Ordinarily this news story wouldn't be that big a deal -- just
describing one more Greek commitment that probably won't be met. But
here are the two paragraphs in the news story that made my eyes bulge:

<QUOTE>"The premier also confirmed that a total of 15,000
civil servants would be dismissed before the end of 2014, with
4,000 to go this year, but he stressed that each departure would
be replaced by a new recruit. 'The same number of new people will
be recruited in their place,' he said.

Poul Thomsen, the head of the International Monetary Fund’s
mission to Greece, struck a similar note at a conference in Athens
organized by The Economist, saying that public sector staff 'will
not be eliminated but replaced by young, capable people.' He did
not confirm explicitly that the one-hiring-to-one-firing ratio
would apply."<END QUOTE>

Huh? Are we really being that explicit about tossing out the older
generation to make way for the "younger, more capable" generations? I
guess we are. Kathimerini

****
**** How margin accounts work today versus 1929
****

In yesterday's column, "16-Apr-13 World View -- Forced selling hits gold, commodities and stocks"
, I described how the 1929 crash was not caused by
an emotional panic, but was caused by forced selling -- a cycle of
margin calls, forcing investors to sell, pushing down prices, causing
more margin calls.

There's a commercial from Interactive Brokers that seems to
run a zillion times a day. The announcer says the following:

<QUOTE>"Central banks are flooding the world with cheap
money.

Interactive Brokers will lend USD 1 million at 1.3% for every USD
200,000 in a portfolio margin account.

See our high dividend scanner for the many hundreds of stocks that
yield over 5%.

Trading on margin is only for sophisticated investors with high
risk tolerance. Dividend yields can change and stocks may lose
value. You may lose more than your initial
investment."<END QUOTE>

YouTube - Interactive Brokers commercial



And so, if you're in the 99%, then you can't borrow any money at all,
certainly not for anything so mundane as paying salaries or buying
equipment to build a business. That's why all these trillions of
dollars pouring out of the Fed and other central banks don't cause
hyperinflation.

But if you're in the 1%, then you can borrow millions of dollars from
Interactive Brokers at 1.3% and use the money to buy stocks (and,
presumably, gold) at only 20% margin. The stocks are supposed to
yield over 5%. Sounds like a good deal.

From 1926 to 1929, the amount of margin credit grew from $2.5 billion
to almost $10 billion. After the 1929 crash, the amount of
margin debt fell, along with the stock market. Even as late
as 1959, margin debt was only $3.4 billion.

Margin debt in 1990 was about $30 billion. It started taking off
rapidly in the 1990s, at the same time as the tech bubble. Today,
margin debt is $366 billion. It was $289 billion just one year ago.
The reason that it grew so rapidly in the last year is because the Fed
is "printing" $86 billion per month in new money liquidity, and a lot
of that money is being loaned to investors by companies like
Interactive Brokers, creating huge margin debt accounts.

John Kenneth Galbraith, in his 1954 book The Great Crash -
1929, defines margin as follows:

<QUOTE>"Margins -- the cash which the speculator must supply
in addition to the securities to protect the loan and which he
must augment if the value of the collateral securities should fall
and so lower the protection they provide -- are effortlessly
calculated and watched. The interest rate moves quickly and
easily to keep the supply of funds adjusted to the demand. Wall
Street, however has never been able to express its pride in these
arrangements. They are admirable and even wonderful only in
relation to the purpose they serve. The purpose is to accommodate
the speculator and facilitate speculation. But the purposes
cannot be admitted. If Wall Street confessed this purpose, many
thousands of moral men and women would have no choice but to
condemn it for nurturing an evil thing and call for reform.
Margin trading must be defended not on the grounds that it
efficiently and ingeniously assists the speculator, but that it
encourages the extra trading which changes a thin and anemic
market into a thick and healthy one. At best this is a dull
by-product and a dubious one. Wall Street, in these matters, is
like a lovely and accomplished woman who must wear black cotton
stockings, heavy woolen underwear, and parade her knowledge as a
cook because, unhappily, her supreme accomplishment is as a
harlot."<END QUOTE>

This shows the problem that the Fed faces. The Fed has created a true
Ponzi scheme, where more and more money has to pour into the system to
keep stock prices up. If the Fed lets up on the $86 billion per
month, then customers of Interactive Brokers and similar firms who are
counting on new stock market highs are going to be stuck. Once stocks
start falling, and the margin calls start, then there's nothing to
prevent a major panic and financial crisis. And that's exactly what
Generational Dynamics predicts is going to happen.

New York Stock Exchange Market Data Factbook

****
**** China's local government debt is 'out of control'
****

Zhang Ke, a senior Chinese auditor, and head of leading Chinese
accounting firm ShineWing, is refusing to sign off on further bond
sales by local governments in China because local government debt is
"out of control," and could spark a bigger financial crisis than the
US housing market crash, according to Zhang

<QUOTE>"We audited some local government bond issues and
found them very dangerous, so we pulled out. Most don't have
strong debt servicing abilities. Things could become very
serious."<END QUOTE>

It is rare for a figure as established in the Chinese financial
industry to make such stark comments. FT Blog

****
**** Germany's economic experts consider a wealth tax to fund bailouts
****

Germany's council of economic experts, known as the "Five
Wise Men," is considering a plan to raise bailout money by
large increases in real estate taxes on property. The Europeans
have been looking for ways to fund bailout programs, and in
Cyprus it was done by confiscating 60% of bank accounts above
100,000 euros. But many consider that unsatisfactory, because
rich people can easily transfer their money out of a country
when it appears that the country is headed for a bailout.
However, rich people cannot transfer real estate out of a
country, and so taxing real estate seems the best way to
make the rich pay.

The idea of a wealth tax has gained support after publication last
week of the European Central Bank (ECB) report that found that Germany
had the lowest median net household wealth in the eurozone, while
countries like Cyprus and Spain had much higher values. ( "11-Apr-13 World View -- Is Germany the poorest country in Europe?"
) The non-intuitive
result is attributed to the fact that Germany has much lower
home ownership than other countries, and home ownership is
the biggest contributor to household wealth. Telegraph (London)


KEYS: Generational Dynamics, Greece, Antonis Samaras, troika,
Interactive Brokers, margin debt, John Kenneth Galbraith,
China, Zhang Ke, ShineWing, Germany, European Central Bank

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*** 18-Apr-13 World View -- U.S. sends more troops to Jordan after threat from Syria

This morning's key headlines from GenerationalDynamics.com

• Split Venezuela election leads to seven protester deaths
• IMF: Loose U.S. monetary policy risks global financial stability
• China issues white paper describing its armed forces
• U.S. sends more troops to Jordan after threat from Syria

****
**** Split Venezuela election leads to seven protester deaths
****


Maduro supporters shout slogans during a Tuesday protest in Caracas (Reuters)

Following the razor-thin victory by Nicolas Maduro in Sunday's
presidential election in Venezuela, a series of opposition-led
protests have resulted in seven deaths. When the late Hugo Chavez ran
in last year's presidential election, he beat opposition leader
Henrique Capriles by 20%. Maduro had hoped to beat Capriles by a
similar margin in this year's runoff election, following the death of
Chavez, but instead he won by only 1.5%. Capriles has requested a
full recount of Sunday's votes. Maduro at first agreed, and later
refused, further infuriating the opposition. Maduro is now banning any
further protests, and is calling the protesters "Nazis," who are
following a script written by the United States, which he says is
planning a coup against him. Maduro does not have anything like
Chavez's charisma, and the fear is that the close election will be the
trigger for continued violence between the two ideological camps.
Venezuelanalysis
and Al-Jazeera

****
**** IMF: Loose U.S. monetary policy risks global financial stability
****

According to the International Monetary Fund (IMF) Global Financial
Stability Report, issued on Wednesday, loose monetary policy in the
U.S. has encouraged weaker standards for corporate underwriting while
company debt continues to grow, posing a risk to financial stability.
In other words, corporations are taking the same risks that they took
in mid-2000s decade, in the lead up to the financial crisis.
Concerning Europe, the report says that the debt levels at banks in
Portugal, Ireland, Italy, Greece, Spain and Cyprus (PIIGS + Cyprus)
are unsustainable. Reuters and International Monetary Fund

****
**** China issues white paper describing its armed forces
****

China has issued a new white paper, "The Diversified Employment of
China's Armed Forces," describing the duties of the People's
Liberation Army (PLA), including the army, navy and air force, as well
as the "Second Artillery Force (PLASAF)," responsible for carrying out
nuclear counterattacks and precision strikes with conventional
missiles. According to the paper, the PLA has evolved from purely
defensive capabilities to offensive capabilities as well, although the
paper insists, "We will not attack unless we are attacked; but we will
surely counterattack if attacked." The paper says that China has
signed border cooperation agreements with seven neighboring countries,
including Vietnam, but doesn't mention the PLA policy of using its
vast military power to take control of the entire South China Sea,
including regions that have historically belonged to Vietnam and other
countries. The white paper also doesn't mention that China has
already effectively declared cyber war with the United States.
Council on Foreign Relations and Xinhua

****
**** U.S. sends more troops to Jordan after threat from Syria
****

The U.S. has informally had special forces in Jordan for the last
year, assisting the Jordanian forces. On Wednesday, the
U.S. announced that it would create a more official military presence
in Jordan -- the first formalized ongoing presence of an American
military unit in Jordan for many years -- deploying 200 troops to the
country. The troops will be "ready for military action" if president
Barack Obama were to order it. The announcement comes as Syria's
president Bashar al-Assad warned the government of Jordan that it was
risking war within its own borders by hosting training camps for
Syrian rebels, with U.S. help. He said he hoped that Jordanian
officials realized "that the fire does not stop at our borders and
everyone knows that Jordan is exposed to it as is Syria." CNN and LA Times


KEYS: Generational Dynamics, Venezuela, Nicolas Maduro,
Hugo Chavez, Henrique Capriles, Portugal, Ireland,
Italy, Greece, Spain, Cyprus,
International monetary Fund, IMF,
China, People's Liberation Army, PLA,
Jordan, Syria, Bashar al-Assad

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*** 19-Apr-13 World View -- Japan and Mongolia cooperate to counter China's influence

This morning's key headlines from GenerationalDynamics.com

• Japan and Mongolia cooperate to counter China's influence
• Racial hatred suspected in shooting of Bangladeshis in Greece
• Greece looks 'like 1930s Germany' as neo-Nazis gain support

****
**** Japan and Mongolia cooperate to counter China's influence
****


Norov Altankhuyag and Shinzo Abe in Mongolia (Kyodo)

The purpose of the recent visit by Japan's prime minister Shinzo Abe
to Mongolia is to counter China's increasing influence in Mongolia and
other parts of Asia. Mongolia has large deposits of coal, copper,
gold and uranium, and is also believed to be rich in rare metals and
rare earths. But Japan is racing with Chinese firms that are stepping
up efforts to acquire firms controlling Mongolian mines, giving China
effective control over these mines. Abe's meetings with Mongolia's
prime minister Norov Altankhuyag in Ulaanbaatar, the capital of
Mongolia, had these purposes:

• Improve business environment for Japanese companies
  in Mongolia.
  
• Approve Japanese loans to Mongolia to build infrastructure.
  
• Provide Japanese imports of Mongolia's giant coal deposits,
  to supply fuel to replace Japan's now off-line nuclear power
  stations.
  
• Secure Mongolian support for the dispute between Japan
  and China over the Senkaku / Diaoyu islands.

According to Mongolia's president Tsakhia Elbegdorj, "It has been said
many times that with Mongolia's wealthy resources and Japan's hi-tech,
we can develop complementary cooperation, and now is the time [for
this] to be realized." However, speculation is that Mongolia and
Japan are developing a trilateral framework, along with the United
States, to counter China's influence.

Altankhuyag also promised to assist in easing tensions between North
and South Korea, as Mongolia has a normal relationship with North
Korea. Jamestown and Japan Times

****
**** Racial hatred suspected in shooting of Bangladeshis in Greece
****

About 30 migrant workers, mostly from Bangladesh, were wounded in a
shooting on a strawberry farm in Nea Manolada, a village east of
Athens, in Greece. According to a spokesman for the migrants, more
than 150 Bangladeshis were working on the farm and had not been paid
in six months. The workers began a strike three days ago. The owner
called them in, promising payment, and then he and some foremen opened
fire on the workers. The incident has outraged many Greeks fearing
racial hatred and violence, and even the neo-Nazi Golden Dawn party
condemned the barbaric shooting. Police are searching for three
foremen to be charged with attempted manslaughter. Kathimerini (Athens) and BDnews24 (Bangladesh)

****
**** Greece looks 'like 1930s Germany' as neo-Nazis gain support
****

The neo-Nazi party Chrysi Avgi, or Golden Dawn, has been gaining
supporters in Greece as the financial crisis has deepened. Polls show
that the party holds 10-12% of voter support, up from almost zero in
2009. At a recent rally of over 1,000 neo-Nazis, party leader Nikos
Michaloliakos, 55, bellowed: "No one can stop us -- not the bombs, not
all your filth. We will triumph!" His listeners raised their right
arms and yelled "Zito!," a phrase meant to sound like "Heil!" In
parts of Athens where migrants live, small bands of extremists calling
themselves "stormtroopers" roam the streets and beat foreigners and
leftists with clubs, baseball bats and knives. Michaloliakos himself
is a Holocaust denier, and says that Adolf Hitler is "A historic
figure, who is not judged objectively. Spiegel


KEYS: Generational Dynamics, Japan, Mongolia,
Norov Altankhuyag, Shinzo Abe, Tsakhia Elbegdorj,
Greece, Nea Manolada, Bangladesh, Golden Dawn, Chrysi Avgi,
Nikos Michaloliakos

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*** 20-Apr-13 World View -- Generational analysis of Boston Marathon bombings

This morning's key headlines from GenerationalDynamics.com

• Background profiles of Dzhokhar and Tamerlan Tsarnaev
• The radicalization of the Tsarnaev brothers
• Generational history of Kyrgyzstan
• The Beslan massacre and ABC news

****
**** Background profiles of Dzhokhar and Tamerlan Tsarnaev
****


Tamerlan Tsarnaev, left (dead), and Dzhokhar Tsarnaev, right (captured) (AP)

The satirist Ambrose Bierce said a century ago, "War is God's way of
teaching Americans geography." Bierce might have said the same of
terrorism, because now Americans may finally have occasion to learn
something about Chechnya (in the North Caucasus) and Kyrgyzstan (in
Central Asia). Long-time readers of Generational Dynamics will
already be familiar with these regions, as I've written about them
many times, but for most Americans, they'll be completely unfamiliar.

Dzhokhar and Tamerlan Tsarnaev were ethnic Chechens (from Chechnya),
but they were born in Kyrgyzstan. What were ethnic Chechens doing
in Kyrgyzstan?

The two regions -- the North Caucasus (Dagestan, Chechnya, etc.) and
central Asia (Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan) -- are
linked by history. The two regions are historically connected because
Josef Stalin in 1944 deported North Caucasus ethnic groups to Central
Asia, believing that they were collaborating with the Nazis. When
Nikita Khrushchev allowed the deported people to return in the 1960s,
many remained behind. Thus, familial relationships between the two
regions remain to this day, and there has been cross-pollination of
Islamist terrorist fighters in both regions.

According to interviews with the Tsarnaev brothers' relatives,
including their father in Dagestan and their uncle in Baltimore, the
family knew nothing about the brothers' plans, and were both shocked
and saddened by the revelation that they were the perpetrators.
Baltimore Sun and Russia Today

****
**** The radicalization of the Tsarnaev brothers
****

If we look back at the London subway bombers of 7/7/2005, it turned
out that the suicide bombers were committing "altruistic suicide,"
because they believed that their parents' community would support and
honor their actions. The Boston bombers were not suicide bombers, but
I wouldn't be surprised if the they were acting for what they
considered to be altruistic reasons, expecting to be honored by their
parents.

The London subway bombers were radicalized by internet contact with
al-Qaeda imams in the Pakistan tribal areas. As I recall, there were
some visits to Pakistan by one or two of the London bombers.

It appears that the Boston bombers were radicalized through social
networks. Tamerlan apparently spent around six months of last year
out of the U.S., during which time he visited his father in Dagestan,
and visited relatives in Chechnya. It's possible that Tamerlan
arranged for some training during that six month period, with or
without the knowledge of his father. NBC News and Jamestown

****
**** Generational history of Kyrgyzstan
****

Kyrgyzstan's last generational crisis war was the brutally repressed
1916 rebellion against the Russians, after which Kyrgyzstan became
part of the Soviet empire. World War II was an generational Awakening
era war for Kyrgyzstan. So, from the point of view of Generational
Dynamics, Kyrgyzstan today is in a "fifth turning," a distinctly
different era that occurs if the entire generational Crisis era
(fourth turning) passes with no crisis war. (See "Basics of Generational Dynamics")

Within Kyrgyzstan, there are many pending conflicts that may have
contributed to the radicalization of the Tsarnaev brothers.

• There are ancient ethnic hatreds between the Kyrgyz and the
  Uzbeks. These ethnic hatreds are particularly pronounced in the
  Fergana valley, which is at the intersection of Kyrgyzstan,
  Uzbekistan, and Tajikistan. In June 2010, there was a massive
  genocidal slaughter of Kyrgyz by Uzbeks on the Kyrgyzstan side of the
  border. (See "15-Jun-10 News -- Uzbekistan closes border to refugees from Kyrgyzstan"
  ). This
  massacre has radicalized the entire Fergana valley region.
  
• One consequence of the 2010 massacre in Kyrgyzstan is that
  discrimination against Uzbeks has increased dramatically, especially
  in and near the Fergana valley. Uzbeks can't get jobs, and Uzbeks are
  increasingly religiously oppressed, leading to a backlash of
  radicalization among the Uzbeks.
  
• At the same time, tensions between Russians and Kyrgyz
  are leading to violence in northern Kyrgyzstan. Russians (12.5
  percent of the republic’s population) are the second most numerous
  (after Uzbeks) ethnic minority in Kyrgyzstan.
  
• Kyrgyzstan has been cooperating with the U.S. with logistics for
  the Afghan war, as have the Russians. This cooperation is becoming
  increasingly significant as the U.S. has to find a way to remove ten
  years of military equipment from land-locked Afghanistan. America's
  drone strikes in Pakistan has unified Islamist militants throughout
  central and southern Asia. (See "Islamist Uzbeks lead terrorists in Pakistan and Afghanistan"
  )

So what we're trying to do here is identify possible reasons why the
Tsarnaev brothers, growing up in Kyrgyzstan, were radicalized against
the U.S., and why they eventually decided that bombing the Boston
Marathon would be an altruistic act that would make their parents
proud of them. We've identified several possibilities:

• Opposition to the American drone strikes.
  
• Opposition to the Kyrgyz government's cooperation with the
  Americans.
  
• Opposition to the Russian government's cooperation with
  the Americans.
  
• All of the above.

These appear to be the most likely motivations for the Boston Marathon
bombers.

It's important to emphasize the obvious: None of this is supposed to
imply logical or rational reasoning on the part of Tsarnaev brothers.
But it's not crazy either. It's no different than the recent massacre of Muslims by Buddhists in Burma,
or by slaughter of Sufis and Shias by Sunni radicals in Pakistan,
or by the genocide of Jews by
ordinary Germans in the 1930s, or by the massive fraud by financial
engineers in the early 2000s that caused the financial crisis. (See
"The Legacy of World War I and the Holocaust"
) As I've described at length many times, these
things occur when inter-generational hatreds metastasize into hatred
along fault lines defined by religion, ethnicity, geography, language,
or skin color. As time goes on, we'll probably learn a lot more about
the specific motivations of the Tsarnaev brothers.

Whatever the motives of the Tsarnaev brothers, it's still necessary
for the investigation to determine exactly what methodology was used
to radicalize them. Did they figure out how to build a bomb on their
own, following directions from the internet, or through online
contacts? Or were they part of a larger cell that's still out there,
building more bombs? These questions will presumably be answered in
the coming days. Guardian (London)

****
**** The Beslan massacre and ABC news
****

This analysis of the Boston Marathon bombings gives me an
opportunity to review the extremely shameful news coverage
by ABC News in 2005.

One change that the Boston Marathon bombings may have brought
to America is a new appreciation for the horrific terrorist
attacks that the Russians have suffered at the hands of
Islamic terrorists from the North Caucasus.

In September, 2004, Russia was the target of several major terrorist
attacks -- the bombing of two airplanes in flight, a subway bombing in
Moscow, and the massacre of 340 people, including 156 children, at a
school in Beslan, North Ossetia. (See "Russian President Putin asks revenge for Beslan"
)

All of these terrorist attacks occurred in a ten-day period,
and were comparable in size and horror to America's 9/11 attacks,
but the Russians received no sympathy from Americans. To the
contrary, some American leaders blamed the terrorist attacks
on the Russia government, saying that it had been mistreating
the Chechens.

As if to prove the point, in July 2005, ABC News broadcast a
lengthy interview Shamil Basayev, the mastermind of the Beslan
massacre and other terrorist acts. Basayev was permitted
to go on and on, justifying his bloody massacres politically.
It's as if ABC News had broadcast a lengthy interview with
Osama bin Laden, allowing him to go on and on criticizing the
U.S. and saying that we deserved the 9/11 attacks.

This was completely irresponsible "journalism" on the part of ABC
News, and the Russians were quite angry. (See "Russia infuriated over ABC 'Nightline' interview of Shamil Basayev"
.)

Returning now to the paraphrase of Ambrose Bierce's quote, "Terrorism
is God's way of teaching geography to Americans," perhaps now
Americans will learn where the North Caucasus is, and ABC News will
learn to be less contemptuous of terrorism originating there.
The Atlantic Wire


KEYS: Generational Dynamics, Dzhokhar Tsarnaev, Tamerlan Tsarnaev,
Chechnya, Kyrgyzstan, Ambrose Bierce, Dagestan, Uzbekistan,
altruistic suicide, Afghanistan, Russia, Pakistan,
Burma, Beslan massacre, Vladimir Putin, Shamil Basayev

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This 4T may be noted for intrusions by Muslim jihadist/terrorists, and perhaps also by violent ("transnational") gangs.

Originally Posted by TimWalker

How much more bubble blowing before people finally figure out that prices won't keep going up, up, up, up, up, up......

Beats the hell out of me. Stocks, houses, PM's, now stocks again. USA = ADHD nation.

Originally Posted by Ragnarök_62

Originally Posted by TimWalker

How much more bubble blowing before people finally figure out that prices won't keep going up, up, up, up, up, up......

Beats the hell out of me. Stocks, houses, PM's, now stocks again. USA = ADHD nation.

It stops when we stop covering their bets ... and not a minute sooner. Most of the price push that triggers the speculation comes from a very thin layer at the top. At the moment, it's real estate ... again. I do agree that we seem to have ADHD.

Eh, I am betting on a hiccup overseas unwinding this bubble. I've got my eye on Japan, China, or the EU. With everybody trying to prime the pump at the same time, something has got to give.

*** 21-Apr-13 World View -- American bloggers confuse 'Chechnya' with 'Czech Republic'

This morning's key headlines from GenerationalDynamics.com

• American bloggers confuse 'Chechnya' with 'Czech Republic'
• Krugman in 2002: The Fed should create a housing bubble
• Hepatitis C: The hidden epidemic for the Boomer generation

****
**** American bloggers confuse 'Chechnya' with 'Czech Republic'
****


Czech Ambassador Petr Gandalovic

In yesterday's report, "20-Apr-13 World View -- Generational analysis of Boston Marathon bombings"
, I paraphrased the famous remark by Ambrose
Bierce as "Terrorism is God's way of teaching geography to Americans."
Well, apparently the problem is worse than I though, and the education
process has begun. Since the announcement that the two Boston
Marathon bombers had origins in Chechnya, dozens of bloggers have been
posting messages to Twitter and Facebook, accusing the Czechs of
terrorism and even calling for US retaliation against the Czech
Republic. Ambassador Petr Gandalovic has posted the following message
on the web site for the Czech embassy in Washington:

<QUOTE>"As many I was deeply shocked by the tragedy that
occurred in Boston earlier this month. It was a stark reminder of
the fact that any of us could be a victim of senseless violence
anywhere at any moment.

As more information on the origin of the alleged perpetrators is
coming to light, I am concerned to note in the social media a most
unfortunate misunderstanding in this respect. The Czech Republic
and Chechnya are two very different entities - the Czech Republic
is a Central European country; Chechnya is a part of the Russian
Federation.

As the President of the Czech Republic Milos Zeman noted in his
message to President Obama, the Czech Republic is an active and
reliable partner of the United States in the fight against
terrorism. We are determined to stand side by side with our allies
in this respect, there is no doubt about that."<END QUOTE>

This isn't the first time that American bloggers needed education
about geography. After the 2008 Russian invasion of the South
Caucasus nation of Georgia, bloggers posted messages about Russia
invading the U.S. state of Georgia. Ria Novosti and
Czech Republic Embassy

****
**** Krugman in 2002: The Fed should create a housing bubble
****

In 2002, famous left-wing economics pundit Paul Krugman wrote a column
in which he advocated that the Fed and the Bush administration take
steps to create a housing bubble. His reasoning was that consumers
would be able to refinance their houses and use the money to purchase
things in shopping malls, which would improve the economy. So
apparently Nobel-prize winning economist Paul Krugman specifically
advocated policies that created the huge financial crisis that's still
ongoing.

Today he's advocating the same kinds of policies -- create and spend
trillions more dollars, and go into debt with no limits. Having been
an intellectual force in creating one disaster, he's doing everything
he can to convince the Fed and the Obama administration to create an
even worse disaster.

Krugman is not someone that anyone would accuse of knowing anything
about economics. But no matter. He had one important qualification
-- his deep hatred of President Bush -- and that qualification was
enough for the intellectuals in the Nobel Prize committee to award him
the Nobel prize. Huffington Post

****
**** Hepatitis C: The hidden epidemic for the Boomer generation
****

Among the ways that the deadly Hepatitis C virus spreads are using dirty drug
needles, or by sharing the straws used to snort cocaine. The virus
may do nothing for years after infection, and then attack the liver,
causing life-threatening liver disease or liver cancer. The Hepatitis
C virus is an inner-city and drug-user epidemic: Infection among IV
drug users is estimated at 60 percent and in the prison population at
about 50 percent. However, a startling new CDC study shows that there
is a Hepatitis C epidemic in the making among the Boomer generation.
During the 1960s, and especially during the 1967 "Summer of Love,"
many teen Boomers experimented with sex and drugs. Even one
experiment with drugs can be enough to be infected with the virus, and
now many of these Boomers are developing liver disease, requiring a
liver transplant. According to one researcher:

<QUOTE>"This is an iceberg problem. We see only a small part
of the problem now -- the tip, those ill or needing liver
transplants -- and that's very frightening. But probably 10 times
that number have an underlying, smoldering disease and are
asymptomatic. And most of these people are walking around without
a clue they're infected."<END QUOTE>

Boomers are now considered to be a "high risk group" for Hepatitis C,
and are encouraged to be screened for the virus. Health Day



KEYS: Generational Dynamics, Chechnya, Czech Republic,
Petr Gandalovic, Georgia, Milos Zeman,
Paul Krugman, CDC, Hepatitis C, Summer of Love

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Originally Posted by JordanGoodspeed

Eh, I am betting on a hiccup overseas unwinding this bubble. I've got my eye on Japan, China, or the EU. With everybody trying to prime the pump at the same time, something has got to give.

The US is through priming the pump. Japan has yet to return to the pre-1990s boom. The EU has the problem that other countries have had -- living beyond means, at least in some obvious countries. That said -- China has a real estate bubble devoid of any foundation other than fear of its collapse. Despite the Marxist icons in China, China may have financial markets with even weaker regulation than those of California in the Double-Zero Decade.

Really, did QE3 end while I wasn't looking? Just because none of that gold is being showered on us doesn't mean that Uncle Ben isn't spinning it as fast as he can. Japan's new central banker has committed to expanding the money supply till they get to 2% inflation, while Abe unveils a massive spending package. And China's shadow banking sector is as large as you say. Either Chartalism is going to turn out to have been the answer all along, or something is going to give way.

What if somebody tried to start a new bubble, but nobody showed up?

Judging from the stock market, I don't think we're there yet.

We'll see it within the next 10 years. Gen X doesn't have the purchasing power to keep this up.

*** 22-Apr-13 World View -- Hunger strike at Guantanamo grows among prisoners

This morning's key headlines from GenerationalDynamics.com

• North Korea positions two more missile launchers on east coast
• Hunger strike at Guantanamo grows among prisoners
• The assumptions for the Cyprus bailout are 'patently ridiculous'
• Heavier fighting flares on the Syria / Lebanon border

****
**** North Korea positions two more missile launchers on east coast
****


North Korean child dictator Kim Jong-un and wife Ri Sol-ju

North Korea continues to build up an arsenal of missile launchers long
the east coast, apparently ready to launch missiles. In early April,
the North Koreans moved two mid-range missiles and seven mobile
missile launchers to the east coast. The speculation was that they
would conduct missile tests on April 15, the 101st anniversary of the
birth of North Korea's founder Kim Il-sung. However, it now turns out
that launchers for two shorter-range Scud missiles were moved to the
east coast in the last few days, and appears to be prepared to launch
several missiles as a show of force. This would trigger a new
international crisis, even if the missiles landed in water. And it
would trigger military retaliation if any American, South Korean or
Japanese assets were put at risk. America has threatened to shoot
down any North Korean missile, and the North Koreans have responded by
threatening war if that happens. Yonhap (Seoul)

****
**** Hunger strike at Guantanamo grows among prisoners
****

The number of prisoners at Guantanamo prison taking part in a hunger
strike has grown by 32 in just the last few days. 84 prisoners, over
half of the 166, are now participating. Of those, 16 are now being
force-fed, though no lives are in danger according to the Pentagon.
The strike began on February 6, when the inmates claim that prison
officials searched their Korans for contraband, and has been growing
into a general hunger strike since then. AFP and Independent (London)

****
**** The assumptions for the Cyprus bailout are 'patently ridiculous'
****

Comments by several economists indicate that the assumptions
underlying the recent European bailout of Cyprus are unrealistic,
which should not be a surprise to any regular readers.

According to Megan Greene, chief economist at Maverick Intelligence:

<QUOTE>"The underlying growth assumptions for the Cypriot
bailout this year are hugely overly optimistic. Senior members of
the ministry of finance in Cyprus admitted to me that they'd be
quite pleased if the Cypriot economy only contracted by around 9%
this year. With GDP falling more sharply than expected, Cyprus
will fall behind on its fiscal targets, and as it implements ever
more austerity measures to play catch up, will go deeper into
depression. This bailout program ensures Cyprus will either need a
second bailout or a debt restructuring in a year or two, with the
latter more likely."<END QUOTE>

Note that the assumption that Cyprus's economy would contract by 9%
is "hugely overly optimistic." That's very unpleasant reading.

According to Stephanie Hare, senior analyst for Western Europe at
Oxford Analytica, the assumptions for Ireland, Portugal and other
troubled European economies are also optimistic:

<QUOTE>"The viability of the latest Cypriot rescue is highly
questionable: forecasts of a deep recession this year (nearly
9.0%) and in 2014 (nearly 4.0%) may prove optimistic, while the
projection that Cyprus will return to growth thereafter is
patently ridiculous. Other euro-area bailout recipients remain
enmired in debt, high unemployment and recession -- one reason why
EU leaders agreed last week to grant Ireland and Portugal an extra
7 years to pay back their bailout loans. Efforts by the EU/ECB/IMF
'troika' to be positive are requiring ever-increasing contortion,
including the tolerance of fiscal slippage, extended loan
maturities, and debt write-offs. Risks remain high (Portugal could
still require further assistance and Slovenia remains vulnerable)
while the lack of growth throughout the region augers poorly for
its long-term prospects."<END QUOTE>

These analyses continue to be consistent with the Generational
Dynamics prediction that the world is headed for a major panic and
financial crisis. Kathimerini

****
**** Heavier fighting flares on the Syria / Lebanon border
****

Areas held by al-Qaeda linked Sunni Islamist rebels on both sides of
the Syria/Lebanon border were attacked on Sunday by combined forces of
Syria's president Bashar al-Assad, combined with Shia militias of
Iran-backed Hizbollah. Saturday's attack was the first by Syrian
forces deep inside Lebanon. The al-Qaeda linked al-Nusra Front in
Syria threatened to "move the battle into Lebanon" if the Hizbollah
backed offensive continues. Reuters


KEYS: Generational Dynamics, North Korea, Kim Jong-un, Ri Sol-ju,
Kim Il-sung, South Korea, Japan,
Guantanamo, hunger strike,
Cyprus, Megan Greene, Stephanie Hare,
Syria, Lebanon, al-Nusra Front, Hizbollah, Iran

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After the gimmicks collapse, we will have to rebuild the economy the hard way.

*** 23-Apr-13 World View -- Boston bombers raise new problem for Russia's Vladimir Putin

This morning's key headlines from GenerationalDynamics.com

• Russia's Vladimir Putin warns of 'alarming signals' of economic slowdown
• Boston bombers raise new problems for Russian officials
• Canada thwarts al-Qaeda inspired plan to attack passenger train
• Lebanon Salafists call for jihad against Hizbollah in Syria

****
**** Russia's Vladimir Putin warns of 'alarming signals' of economic slowdown
****


Vladimir Putin on Monday (RT)

Russia's president Vladimir Putin warned his economic ministers
on Monday of "alarming signals" of a slowing Russian economy,
and demanded:

<QUOTE>"I'm waiting for concrete proposals about measures
that will help us ensure stable economic growth and safeguard
ourselves against negative swings in the world economy, reduce the
risks for key industries and stimulate business
activity."<END QUOTE>

However, like politicians in Europe and America, Putin added that
there's nothing to worry about:

<QUOTE>"I do not want to dramatize the situation
unnecessarily. The Russian economy has a sufficient safety
net. Many analysts believe growth in the second-quarter is
expected to recover."<END QUOTE>

I guess that even in Russia, prosperity is just around the corner.
Russia Today and Bloomberg

****
**** Boston bombers raise new problems for Russian officials
****

The news that the Boston terrorist bombers are ethnically from
Chechnya who have lived in the U.S. for many years may be shocking to
Americans, but in Russia it's not so surprising, as they've been
dealing with exactly the same situations for years. In fact,
Americans who used to be sympathetic to the Chechens and blamed the
Russians for the unrest are now doing an about-face and viewing
Chechnya as a "cauldron of Islamic militancy." However, that reality
has created an ironic problem for Russian officials, because the
Boston terrorist connection to Chechnya is going to create bad
publicity for the 2014 Winter Olympic Games to be held in Sochi in the
North Caucasus, and also raises new questions about the stability of
Russia's government. Russia Today and Jamestown

****
**** Canada thwarts al-Qaeda inspired plan to attack passenger train
****

The Royal Canadian Mounted Police (RCMP) on Monday announced the
arrest of two men planning a terrorist attack on a passenger train.
The plan received "direction and guidance" from an element of al-Qaeda
based in Iran, but there was no evidence that the plan was
"state-sponsored" by Iran. Although details of the planned attack
were not released by the RCMP, speculation is that they were planning
to blow up a bridge as a train from New York to Toronto passed over
it. The two men are from Tunisia and the United Arab Emirates,
respectively. The planned attack is unrelated to the Boston bombings.

The startling element of this case is that it was inspired by al-Qaeda
elements in Iran. Now, Sunni Muslim al-Qaeda and Shia Muslim Iran are
bitter enemies. Al-Qaeda linked terrorists have conducted terrorist
attacks on Iran, most spectacularly the 2009 attack by Jundallah that
killed 42 people, including 20 top commanders in the Revolutionary
Guards. (See "Furious Iran blames Pakistan, US and Britain for Sunday's terrorist attacks."
)

Nonetheless, Iran and al-Qaeda have cooperated, especially in
Afghanistan, against their common enemy, the United States. After
9/11/2001 and the start of the Afghan war, Iran transported several
hundred al-Qaeda linked individuals to Iran, where al-Qaeda
established its "management council," under the direction of Osama bin
Laden. Iran has kept the group under strict house arrest, but allowed
them to plot activities against the United States and others of Iran's
enemies. Canadian TV News and Foreign Affairs (Jan 2012)

****
**** Lebanon Salafists call for jihad against Hizbollah in Syria
****

The Iran-support Lebanese terrorist group Hizbollah is now openly
fully engaged in fighting in the al-Qusair region of Homs province in
Syria, alongside the army of Syria's president Bashar al-Assad. The
actions of Iran-backed Hizbollah are being called a "declaration of
war" by the rebel Syrian National Coalition, and Lebanese Salafists
are calling for a jihad to defend Sunnis in Syria from Shia Hizbollah.
According to Sheikh Ahmad Assir:

<QUOTE>"We in Lebanon are today [caught] between the Zionist
hammer and the anvil of Iran's party arms [Hezbollah], which have
been directed internally. Therefore, every Muslim in Lebanon or
abroad is duty-bound to respond to the [jihad] appeal and support
the oppressed in Syria, particularly in Al-Qusair."<END QUOTE>

However, a Hizbollah official defended its actions, calling it a
"moral duty":

<QUOTE>"What Hizbollah is doing toward this issue is a
national and moral duty in protecting the Lebanese in border
villages. Are we required to leave our people in border villages
exposed to killings, kidnapping, slaughter and
displacement?"<END QUOTE>

The danger is that the war will spread into Lebanon and into other
countries. Daily Star (Beirut)


KEYS: Generational Dynamics, Russia, Vladimir Putin,
Boston, Chechnya, North Caucasus, Sochi, Olympics,
Canada, al-Qaeda, Iran, Tunisia, United Arab Emirates,
Jundallah, Revolutionary Guards, Afghanistan,
Lebanon, Hizbollah, Syria, al-Qusair, Homs,
Syrian National Coalition, Sheikh Amad Assir

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*** 24-Apr-13 World View -- Japan's Shinzo Abe threatens 'force' against China's ships

This morning's key headlines from GenerationalDynamics.com

• France's embassy in Tripoli, Libya, attacked by car bomb
• Israel accuses Syria of using chemical weapons, then retracts
• Twitter hoax causes a new Wall Street 'Flash Crash'
• Japan's Shinzo Abe threatens 'force' against China's ships

****
**** France's embassy in Tripoli, Libya, attacked by car bomb
****


France's embassy in Tripoli on Tuesday after car bomb explosion (AFP)

Two guards were wounded when a car bomb exploded early Tuesday morning
in front of France's embassy in Tripoli, Libya. The explosion created
a deep crater in the street, and destroyed two cars parked nearby,
damaging nearby buildings. There were so few casualties because the
blast occurred at 7:10 am local time, before most embassy personnel
had arrived for work. There has been very little dependable security
in Libya since the 2011 Nato war in Libya. The region of greatest
insecurity has been around Benghazi, which has been hit by multiple
bombings and assassinations. Four Americans, including ambassador
Chris Stevens, were killed when heavily armed men overran the Benghazi
mission on September 11th, setting fire to much of the compound and
then attacking a nearby annex. The Benghazi attack remains highly
controversial in Washington, since there's evidence that the
Administration repeatedly lied and covered up the facts surrounding
the attack. The Local/AFP (France) and CBS News

****
**** Israel accuses Syria of using chemical weapons, then retracts
****

Brig. Gen. Itai Brun, the head of research and analysis in Israeli
military intelligence, told a security conference on Tuesday that the
regime of Syria's president Bashar al-Assad has used chemical weapons,
including the lethal nerve agent sarin, multiple times:

<QUOTE>"To the best of our professional understanding, the
regime used lethal chemical weapons against the militants in a
series of incidents over the past months, including the relatively
famous incident of March 19. Shrunken pupils, foaming at the
mouth and other signs indicate, in our view, that lethal chemical
weapons were used."<END QUOTE>

However, US Secretary of State John Kerry said that he had spoken to
Israel's prime minister Benjamin Netanyahu, who refused to confirm
Brun's accusations.

The United States and the west are extremely reluctant to confirm the
use of chemical weapons in Syria, since President Barack Obama has
said that their use would cross a "red line," and require military
intervention in Syria. AP and McClatchy

****
**** Twitter hoax causes a new Wall Street 'Flash Crash'
****


Graph of Tuesday's 'flash crash' (WSJ)

The Dow Jones Industrial Average briefly crashed 150 points on Tuesday
at 1:08 pm, when someone hacked into the Associated Press Twitter
account and posted a phony story saying that explosions at the White
House had injured President Barack Obama. AP immediately retracted
the story, and things were back to "normal" by 1:15 pm. The rapid
crash was caused by computer algorithms that scan all news stories and
react within nanoseconds when certain keywords are recognized. Credit
for the AP hack was claimed by a shadowy group called the "Syrian
Electronic Army." CNBC
and NBC News

****
**** Japan's Shinzo Abe threatens 'force' against China's ships
****

Japan's prime minister Shinzo Abe made the most threatening statement
so far in the dispute with China over the Senkaku / Diaoyu islands:

<QUOTE>"We would take decisive action against any attempt to
enter territorial waters and to land. We would never allow [a
landing].

It would be natural for us to expel by force (the Chinese) if they
were to make a landing."<END QUOTE>

China sent a fleet of eight warships to the waters around the
islands, and forced boats carrying 80 Japanese nationalists to
turn back.

Threats between Japan and China are back in the news again, after
being eclipsed by other crises, including the Boston terror attack and
the North Korean war threats. But tensions have remained very high.
China refused to allow Japan to contribute humanitarian aid to victims
of the recent earthquake in Sichuan province. And the Chinese are
infuriated that 168 Japanese lawmakers on Tuesday visited the Yasukuni
Shrine, which commemorates World War II war dead, including some who
have been declared war criminals for atrocities committed against
China. Japan Times and China Daily


KEYS: Generational Dynamics, France, Libya, Tripoli, Benghazi, Chris Stevens,
Israel, Syria, sarin, chemical weapons, Bashar al-Assad,
John Kerry, Benjamin Netanyahu, Itai Brun,
Associated Press, Twitter, Flash Crash, Syrian Electronic Army,
Japan, Shinzo Abe, China, North Korea

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*** 25-Apr-13 World View -- Ethnic violence kills 21 in China's Xinjiang province

This morning's key headlines from GenerationalDynamics.com

• Ethnic violence kills 21 in China's Xinjiang province
• Will Thursday be the day for a North Korean missile test?
• Syria's opposition scorns Obama over chemical weapons commitment

****
**** Ethnic violence kills 21 in China's Xinjiang province
****


Uighur folk dance in Xinjiang province in 2006 (Xinhua)

Major ethnic violence has returned to China's northwestern Xinjiang
province for the first time since 2009. On Tuesday, 21 people were
killed in confrontations between police and Uighur residents of
Kashgar, the country's westernmost city. Violence exploded in July
2009 when over 1,000 people were injured in a Uighur riot that
targeted Han Chinese. That riot was triggered by the Han Chinese
killing of two Uighurs working in a toy factory in Guangdong province.
(See "China's Xinjiang province is scene of violent anti-government protests"
)

The Muslim Uighurs, of Uzbek origin, have historically occupied the
Xinjiang region. However, the Chinese Communist Party (CCP) government
has been relocating Han Chinese into the Xinjiang region in order to
dilute the Uighur population. However, the Han Chinese have
marginalized the Uighurs, inflaming the situation. Few details are
known about the new violence, since China keeps very tight control
over all reporters who attempt cover the situation. LA Times and Xinhua

****
**** Will Thursday be the day for a North Korean missile test?
****

Well, here we go again. The North Koreans have continued to move more
missile launchers to their east coast, apparently in preparation for a
missile test that the west will say is "unacceptable," though do
nothing else. The last best guess for when this missile test would be
was Monday, April 15, the birthday of North Korea's founder Kim
Il-sung. Well, nothing happened on April 15. So the new best guess
is now, Thursday, April 25, the anniversary of a well-remembered
battle with the Japanese. So, the new child dictator Kim Jong-un
continues to keep the world guessing what he plans to do next, and
apparently all we can do is wait to see when he makes his move.
Global Post

****
**** Syria's opposition scorns Obama over chemical weapons commitment
****

Syria's opposition forces are expressing scorn at President Barack
Obama for appearing to back down from earlier statements that the use
of chemical weapons in Syria would be a "red line" or a "game changer"
that would trigger military intervention in Syria. There have been
reports from Israel, Britain and France of the use of chemical weapons
in Syria, but the obvious reluctance of the U.S. administration to
involve itself militarily in Syria is forcing the administration to
hedge and duck questions about whether it means anything it says. The
same is true about North Korea threats. The problem is that the
U.S. is losing credibility. Guardian (London) and Global Post


KEYS: Generational Dynamics, China, Xinjiang, Uighur, Han,
North Korea, Kim Il-sung, Kim Jong-un, Japan,
Syria, chemical weapons

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*** 26-Apr-13 World View -- U.S. says Syria has used chemical weapons twice

This morning's key headlines from GenerationalDynamics.com

• S. Korea sets deadline for N. Korea on Kaesong Industrial Complex
• U.S. says Syria has used chemical weapons twice
• China's Uighur violence may be related to East Turkestan Islamic Movement
• U.N. Security Council approves 12,600 person force for Mali

****
**** S. Korea sets deadline for N. Korea on Kaesong Industrial Complex
****


Kaesong industrial complex

The Kaesong industrial park is in North Korea, just across the border
from South Korea. It was created in 2004 as a point of cooperation
between the two Koreas. Until a month ago, it provided jobs for more
than 5e,000 North Koreans, and over 1,000 South Koreans, many of whom
cross the border each day to work there. The employers are South
Korean manufacturing firms, mostly textiles. Each North Korean earns
around $70 per month, though a larger amount is paid to the North
Korean government, making Kaesong a major source of income.

Operations in Kaesong halted on April 9, when the North Koreans pulled
out all 53,000 of its workers, as part of its circus-like daily
threats of war. But now the South Koreans are saying that it's time
to end the circus show, and demanding that the North "discuss ways of
normalizing operations at Kaesong" by Friday. If the offer is
rejected, then the South will take "serious measures," possibly
shutting Kaesong down for good. Yonhap (Seoul)

****
**** U.S. says Syria has used chemical weapons twice
****

The White House and top U.S. administration officials said on Thursday
that U.S. intelligence has concluded "with some degree of varying
confidence" that the Syrian government has twice used chemical weapons
against the opposition. Republican Senator John McCain is insisting
that President Barack Obama should now honor his commitment that
use of chemical weapons would be a "game changer" and would
cross a "red line" that would trigger military intervention in
Syria. However, U.S. officials are now saying that more definitive
proof was needed before there could be military action. One issue
is that if the U.S. launched a military intervention based on
intelligence estimates, then the announcement would be met with
widespread scorn. AP

****
**** China's Uighur violence may be related to East Turkestan Islamic Movement
****

The ethnic violence between Uighurs and Han Chinese in China's
Xinjiang province in northwestern China that we reported
yesterday is being described by
Chinese authorities as the acts of a small group of thugs. However,
it seems far more likely that there two major underlying causes:

• In recent decades, Xinjiang province has seen a big influx
  of Han Chinese, brought into the region to exploit the natural
  resources and to dilute the Uighur population. (China uses the
  same policy with the Tibetans in Tibet province.) China's
  government is extremely oppressive towards the Uighurs, but they
  don't speak out because of fear.
  
• Although no one has been formally accused in Tuesday's attack, the
  al-Qaeda linked East Turkestan Islamic Movement has been accused in
  the past of fomenting a separatist movement among Uighur communities
  in central Asia.

Chinese media are claiming that the United States holds a "double
standard" when it comes to terrorism in the United States and in
China. According to one Chinese professor:

<QUOTE>"However, the West has been holding double standards
in the definition of terrorism. If the East Turkestan separatists
carry out evil deeds in Xinjiang, some Western opinions whitewash
them as seeking 'national self-determination'"<END QUOTE>

The Chinese point out that the U.S. was quick to blame separatists
from Chechnya for the Boston marathon bombings, but sympathizes with
Uighur separatists who commit terrorism in Xinjiang. VOA and BBC

****
**** U.N. Security Council approves 12,600 person force for Mali
****

The United Nations Security Council on Thursday voted unanimously to
approve a peacekeeping force for Mali, consisting of 11,200 troops and
1,440 police. Though the French-led intervention initially succeeded
in driving the al-Qaeda linked militias from the towns and cities
once under their control, a series of several attacks, including
suicide bombings, in Mali's northern cities raise the question of
whether the Islamist forces have really been defeated. CS Monitor


KEYS: Generational Dynamics, North Korea, South Korea,
Kaesong Industrial Complex, Syria, chemical weapons,
John McCain, China, Uighurs, Xinjiang, Han Chinese,
East Turkestan Islamic Movement, Chechnya,
United Nations, Security Council, Mali, al-Qaeda

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*** 27-Apr-13 World View -- Obama's meeting with Jordan's Abdullah meeting may signal new troop deployment

This morning's key headlines from GenerationalDynamics.com

• Demonstrators in Jordan protest American troop presence
• Jordan's King Abdullah and Obama meet to discuss Syria
• Sunni Jihadists pour into Syria

****
**** Demonstrators in Jordan protest American troop presence
****


Anti-American protesters in Amman, Jordan on Friday (Al-Monitor)

Last week, we reported
that the
U.S. announced the formal deployment of 200 troops to Jordan. The
troops will be "ready for military action" if President Barack Obama
were to order it. On Friday, Jordanians rallied against the
deployment of the 200 U.S. forces in Jordan. Demonstrators also
burned a mock American flag. At the end of the demonstration, they
gather in a circle and danced, chanting about Ali Baba and the forty
thieves. Al-Monitor

****
**** Jordan's King Abdullah and Obama meet to discuss Syria
****

The question of the use of chemical weapons by the regime of Syria's
president Bashar al-Assad continued to draw worldwide attention on
Friday. President Barack Obama met with Jordan's King Abdullah II in
the White House and said that "a line has been crossed" in Syria, and
said, "To use weapons of mass destruction on civilian populations
crosses another line in terms of international norms and
laws. ... That's going to be a game changer." However, he declined
to intervene militarily until a "vigorous investigation" had been
completed, to find more "direct evidence."

However, Debka, which sometimes gets things wrong, is quoting its
military intelligence sources as saying that the purpose of Obama's
meeting with Abdullah is to firm up an agreement for the U.S. to
deploy a 20,000 troop "surge" into Jordan. The 200 troops announced
last week are to lay the groundwork for the main body to take up
quarters in the King Hussein Air Base Mafraq, near the borders of Iraq
and Syria. The purpose of the "surge" is to protect Jordan's royal
family both from jihadists from Syria and from and "Arab Spring" type
revolt -- a step that the Obama administration did not take with
Tunisia, Libya, Egypt and Yemen. The "surge" will be heavily
coordinated with Israeli forces, and buffer zones will be set up on
Syria's borders to prevent attacks on both Jordan and Israel. This
"surge" comes at a time when thousands of fighters from Iran-backed
Shia militias from Iraq and Hizbollah are aiding the al-Assad regime
forces, and are threatening to defeat the opposition rebels. The Hill and Debka

****
**** Sunni Jihadists pour into Syria
****

With thousands of fighters from Iran-backed Shia militias arriving in
Syria to support al-Assad's regime, it's not surprising that thousands
of Sunni jihadists are also arriving in Syria to fight the Shia
militias. In particular, disaffected Muslims from Germany and
elsewhere in Europe have been heading for Syria to receive training in
weapons and terrorist techniques. German analysts are concerned that
these fighters are gaining experience in Syria, and making contacts,
and will return to Germany and conduct terrorist attacks there.
Spiegel


KEYS: Generational Dynamics, Jordan, King Abdullah II, Syria,
Bashar al-Assad

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