*** 22-Jun-15 World View -- China's bubble stock market plunges 13% in one week

This morning's key headlines from GenerationalDynamics.com

• China's bubble stock market plunges 13% in one week
• Wall Street stock market bubble continues its surge
• Tick-tock tick-tock, Greece's clock is running down

****
**** China's bubble stock market plunges 13% in one week
****


Shanghai stock market composite index for five years until June 19 (Bloomberg)

The Shanghai stock market has been fairly steady for years, but last
year it suddenly started surging into bubble territory, increasing by
250% in the last year.

Then, after reaching a peak of 5166 on Friday, June 12, it suddenly
started plunging all of the last week, falling 13% to 4478 by Friday,
June 19, including a 6.4% fall on Friday alone. This is the worst run
in China's stock market since the 2008/09 financial crisis.

Chinese analysts are giving four reasons for the plunge:

• A flurry of brand new listings of large new companies are
  drawing investors away from other stocks.
  
• A new regulation bans margin trading outside the brokerage
  system.
  
• Companies need to pay off their bank loans at mid-year, and sell
  stocks to get cash.
  
• The biggest threat to the market is the rapid rise, indicating a
  bubble that may be bursting.

However, Western analysts point to the explosive
greater-than-exponential growth in "retail investor" stock trading
accounts, especially in the last few months, for people who are
investing their life savings over the internet. Many Chinese have
been using the stock market bubble to make a living. According to one
report, retail investors are prone to herding patterns of behavior
when markets become stressed, which could lead to "periods of mass
fund exodus."

ZeroHedge has done an analysis and discovered that Chinese officials
are so worried about this situation that they've stopped releasing
data about the number of new stock trading accounts. They've been
providing this data for 8 years, but suddenly stopped on May 29. At
that time, the number of retail stock trading accounts spiked to 4.3
million, but there's been no released data since then. Global Times (Beijing) and CNBC
and ZeroHedge

****
**** Wall Street stock market bubble continues its surge
****


S&P 500 Price/Earnings ratio at astronomically high 21.73 on June 19 (WSJ)

Wall Street stocks have surged further into bubble territory as well
during the last year, just like Shanghai stocks, though they have not
yet taken any serious plunge like the Shanghai stock exchange.

It's been a month since I reported

that the S&P 500 Price/Earnings ratio (stock valuation index) was at
an astronomically high 21.47 on May 15, indicating a huge stock market
bubble. Since then it's shot up further to the ever more astronomical
level of 21.73, according to the Wall Street Journal on Friday, June 19.

21.73 is far above the historical average of 14. Furthermore, it was
18 just a year ago, and has been increasing rapidly since then,
indicating that the Wall Street stock market bubble is accelerating,
just as the Shanghai stock market bubble has been accelerating during
the last year. Generational Dynamics predicts that a panic will
occur, and that the P/E ratio will fall to the 5-6 range or lower,
which is where it was as recently as 1982, resulting in a Dow Jones
Industrial Average of 3000 or lower.

****
**** Tick-tock tick-tock, Greece's clock is running down
****

Thousands of protesters gathered in Syntagma (Constitution) Square in
Athens on Sunday to demand that Greece's government not give in to the
demands of the lending institutions. Those demands are to increase
taxes and reduce pension benefits by increasing the retirement age.

The protests were organized by left-wing parties and trade unions.
According to polls, the Greek people want Greece to remain in the
euro, but also want more benefits such as an increase in the minimum
wage. In other words, the Greek protestors are demanding to return to
the old days, when they could spend all they want with no care or
worry.

That's the crux of the problem. A lot of people are recommending that
the lending institutions just give in to the Greek government, and
forgive their current debt. Unfortunately, everyone knows what would
happen next. Greece would increase the minimum wage, increase pension
benefits, hire more public employees, and soon end up owing just as
much as before. That situation is politically untenable for the rest
of Europe.

I've been saying for years that there's no solution to the
Greek fiscal crisis. And by that I'm not saying that that the
Greeks and the lending institutions haven't yet been clever enough
to think up a solution. I'm saying that no solution exists.
When no solution exists, then the Law of Unintended Consequences
kicks in, and we may now be close to that time.

So on Monday there's going to be another Eurogroup meeting in
Brussels. Usually, the Eurogroup meetings are attended by each
eurozone country's finance minister. But Monday's meeting will be
extraordinary in that eurozone heads of governments will be in
attendance.

According to reports, Greece's government will be presented with two
options: to either accept the reforms proposed by Greece’s lending
institutions, potentially with some Greek amendments, or to prepare
his country for a default.

Others have mentioned a third option: Kick the can down the road
by providing a loan for just enough money to get through to
the end of the year. In January there was a compromise that
kicked the can down the road to June, so a new compromise would
do the same until December, and then we would start all over again.

In 8 days, Greece has to pay 1.5 billion euros to the International
Monetary Fund (IMF), or go into default. Tick-tock, tick-tock.
Kathimerini and Irish Times and CNN


KEYS: Generational Dynamics, China, Shanghai,
Greece, Athens, International Monetary Fund, IMF

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*** 23-Jun-15 World View -- Afghan Taliban score major victories as US and Nato withdraw forces

This morning's key headlines from GenerationalDynamics.com

• Report: Greece's debt crisis being kicked down the road
• Afghan Taliban strikes Afghan parliament in Kabul
• Afghan Taliban close to seizing the city of Kunduz

****
**** Report: Greece's debt crisis being kicked down the road
****


The wily Greek finance minister Yanis Varoufakis watches as Greek PM Alexis Tsipras grins broadly at something amusing said by European Commission president Donald Tusk (Kathimerini)

There are reports that Greek officials have finally made some
concessions, especially raising taxes on businesses and wealthy
individuals, and that the lending institutions are starting from
those, and are close to making a deal that will allow Greece to make
its 1.5 billion euro debt payment to the International Monetary Fund
on June 30.

If a "deal" is made, all it will do is kick the can down the road for
a few weeks. The deal is for the last 7.2 billion euro tranche of the
second bailout loan. That money will permit Greece to meet its IMF
payment, as well as several other payments due in July and August, but
no more.

What Greece needs is a third bailout loan. So assuming that this
"deal" is concluded later this week, then negotiations on the new
bailout loan will have to begin soon, and the drama will start all
over again.

On Bloomberg TV on Monday, there was an interview with Anna-Michel
Asimakopoulou, who is the finance minister for Greece's opposition New
Democracy party, which was the government party before Alexis
Tsipras's victory in January's election. Asimakopoulou expressed a
great deal of bitterness about what Tsipras has done (my
transcription):

<QUOTE>"Mr. Tsipras in 5 months has managed to bring the real
economy to a standstill, turn us into a recessionary cycle, undo
every decent thing that has been done, and now we're facing the
following choice: A deal, which is going to cost the Greek people
5 billion euros in measures, on the one hand, and the absolutely
worst case scenario, which is no deal, which means we're facing
uncharted waters, bankruptcy, and a possible Grexit [Greek exit
from the eurozone]. ...

This is a critical thing for Greece's future. It's not a little
bitty decision - it's a huge decision. He is not allowed to
jeopardize our future in the eurozone - he doesn't have the
mandate to do that. And yes, now people are taking money out of
the banks, now the public sector has stopped making any payments
towards anybody except for wages and salaries and we're not really
sure that's gonna last. ...

Our main concern with this deal, assuming it happens and we hope
it does, it's taxes, taxes and more taxes. There's nothing that
will favor growth. We think growth is gonna come from the private
sector, from businesses. We're all for privatizations. We don't
want a bloated public sector. Mr. Tsipras has hired 5,000 people
in the public sector in the last three months. That has a price
tag, and the price tag is being paid by the Greek
people."<END QUOTE>

Even if a deal is made, then it has to be sold to the Greek people,
who have been promised no more austerity, and to the German people,
who don't want to pay any more to bail out Greece.

As I've said repeatedly, no solution exists to Greece's debt crisis.
I think everyone believes that the can will run out of road at some
point, but we don't know when. Kathimerini and BBC

****
**** Afghan Taliban strikes Afghan parliament in Kabul
****

It's the start of the Afghan Taliban's summer offensive, and they've
scored two major victories in the last three days: A major terrorist
attack on the Afghan Parliament in Kabul on Monday, and the imminent
takeover of a major Afghan city in northern Afghanistan, for the first
time since 2001.

On Monday there was a terrorist attack captured on live TV in Kabul,
the capital city of Afghanistan. A suicide bomber blew himself up
outside the Afghan Parliament complex, bringing down a part of the
roof, and then six other terrorists rushed in, armed with assault
rifles and rocket propelled grenades, but they were not successful in
breaching the compound's gates. All seven terrorists were killed, as
was a woman civilian. 30 civilians were wounded.

The Parliament building is the most heavily guarded area in Kabul.
Every time there's a successful terrorist attack in central Kabul,
there's the usual commentary demanding an investigation about how
terrorists were able to get so close to the center of power. But the
situation seems to be worsening.

However, such attacks have been occurring with increased regularity,
as the Nato and American forces have been withdrawn. The attack fits
a pattern of high-profile assaults on heavily fortified buildings in
the capital. Last month, car bombs targeted the Justice Ministry, and
attackers stormed two guesthouses used by foreigners. Reuters and AFP and Hindustan Times

****
**** Afghan Taliban close to seizing the city of Kunduz
****

Taliban forces have captured two villages near the city of Kunduz in
the last two days, and are close to seizing Kunduz itself, forcing
tens of thousands of refugees to flee their homes. With a population
of 300,000, this will be the first time since 2001, when American
forces defeated the Taliban after 9/11, that the Taliban have been in
control of a large city. Whoever controls Kunduz, a vast, rich
agricultural region that was a former Taliban bastion, controls the
roads to northeastern Afghanistan as well as smuggling and trade
routes into neighboring Tajikistan and the rest of Central Asia.

The government in Kabul has dispatched reinforcements, including
Afghan Special Forces and their U.S. advisers and trainers, to try to
repel the insurgents and rescue about 75 soldiers and policemen
trapped inside their district base. But the Afghan forces are spread
very thin, fighting on several fronts. Washington Post and Stars and Stripes


KEYS: Generational Dynamics, Greece, Alexis Tsipras, Yanis Varoufakis,
Anna-Michel Asimakopoulou, New Democracy,
Afghanistan, Taliban, Kabul, Kunduz

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*** 24-Jun-15 World View -- US aligns with Kurds and Shias in Syria and Iraq, angering Turks and Saudis

This morning's key headlines from GenerationalDynamics.com

• Syrian Kurd militias deal a heavy blow to ISIS
• Turkey's support splits between Kurds and ISIS
• US support for Kurds further alienates Saudi Arabia
• Understanding men's moustaches in Turkey

****
**** Syrian Kurd militias deal a heavy blow to ISIS
****


Raqqa province in Syria. Kurdish forces have defeated ISIS in Tal Abyad, Ain Issa and Liwa 93 military base, and taken control of all three. (Reuters)

The Kurdish YPG militias in Syria, combine with forces from the
US-backed Free Syrian Army (FSA), have succeeded in a string of
dramatic and significant victories over the Islamic State (IS or ISIS
or ISIL or Daesh) in their stronghold in Raqqa province.

On Monday, YPG/FSA forces took full control of the town of Ain Issa,
as well as the Liwa-93 military base, following last week's seizure of
the border town of Tel Abyad.

These are significant victories for a couple of reasons. First, it
leaves the Kurdish forces poised to strike at the city of Raqqa
itself, the self-declared capital of ISIS in Syria.

And second, it cuts off two important supply routes for ISIS, the
north-south route from Raqqa to Turkey, and the east-west high running
through Ain Issa, which links the city of Aleppo with the
north-eastern province of Hasaka, which leads into Iraq, which makes
these victories a significant blow to ISIS.

It's also significant that these victories were done in close
coordination with the US and the US-led coalition, with the offensive
backed heavily with dozens of coalition airstrikes.

The close cooperation between the US and the Syrian Kurds began last
year in the battle over the Syrian town of Kobani, on the border with
Turkey, with a victory by the Kurds. ( "27-Jan-15 World View -- Kurdish militias drive ISIS out of the Syrian town of Kobani"
) After that, the Kurdish forces began
moving east toward Tal Abyad, while other Kurdish forces in eastern
Syria began moving west. The two forces met near Tal Abyad last week,
cutting off the main north-south road between Raqqa and Turkey. ISIS
had been using that route to funnel foreign fighters and equipment
into Syria and sell their black market oil.

Now the victories in Raqqa province are said to be a model for future
cooperation between the US and the Kurds when fighting ISIS.
According to Pentagon spokesman Col. Steve Warren:

<QUOTE>"This fight ... has been an example of ISIL fighters
breaking under the pressure delivered by coalition air power and
capable and willing ground forces."<END QUOTE>

Hundreds of Syrian refugees in Turkey returned to their homes
in Tal Abyad on Tuesday. They had fled to Turkey to escape
the fighting between YPG and ISIS.

Both Syria's army and Iraq's army have shown little will to fight
against ISIS, nor has Hezbollah. The strongest fighting on the ground
against ISIS has been with the local groups, the Kurds and the Shia
militias known as Hashid Shaabi (popular mobilization units). The US
is cooperating with these groups, thus providing indirect support to
the PKK and Iran, which are listed as terrorist groups and sponsors by
the US State Dept.

Note: PYD = Kurdish Democratic Union Party in Syria. YPG = Kurdish
People’s Protection Unit in Syria, armed wing of the PYD. YPJ =
Women’s Protection Units in Syria. HDP = Kurdish Peoples' Democratic
Party in Turkey, PKK = Kurdistan Workers' Party anti-government
insurgents in Turkey. In Syria, YPG is the armed wing of the PYD,
which is allied with the PKK in Turkey, which is considered a
terrorist organization by the US. Peshmerga = Kurdish militias in
Iraq. Be prepared for a quiz. Australian Broadcasting and USA Today and Today's Zaman (Istanbul)

****
**** Turkey's support splits between Kurds and ISIS
****

Turkey's president Recep Tayyip Erdogan has always made it clear that
his top priority is to get rid of Syria's president Bashar al-Assad.
Furthermore, the Kurdistan Workers' Party (PKK) is a separatist group
fighting for an independent Kurdistan, taking pieces from Syria,
Turkey and Iraq. The PKK considered a terrorist organization by both
the US and Turkey, and there has been years of terrorist PKK violence
in Turkey.

So Erdogan is not happy with the turn of events that have allowed
the Kurds in eastern and western Syria to link up at Tal Abyad
on the border with Turkey, with substantial support from US
airstrikes.

Erdogan's opposition in Turkey is now saying that pro-Erdogan
media is siding with ISIS against the Kurds. According to
reports, officials in Erdogan's Justice and Development
Party (AKP) have been praising ISIS and demonizing the Kurds.

A report in the pro-opposition Daily Zaman quotes the Sabah daily
headline: "PYD is more dangerous than Daesh." Sabah also claimed that
the PYD were not allowing Turkmens and Arabs from Tal Abyad to return
to their towns and hinted that the real target of the Kurdish
militants is actually Turkey.

Turkey's deputy prime minister Bülent Arinç says, "We see that there
are signs pointing towards a kind of ethnic cleansing," by both the
PYD and ISIS.

A Turkish state broadcaster said:

<QUOTE>"Daesh attacks and kills those it captures. The
PYD/PKK seize certain regions and force people living there to
migrate. It doesn't matter who comes -- the [al-Assad] regime,
Daesh or the PYD -- they are all persecuting
civilians."<END QUOTE>

Today's Zaman (Istanbul)

****
**** US support for Kurds further alienates Saudi Arabia
****

Saudi media makes it clear that the Saudis are also pretty unhappy
with US support for the Kurds and for Iran, while leaving Syria's
president Bashar al-Assad untouched. There's nothing new about
this, as the Obama administration has been relentless offensive
to the Saudis, and has alienated them considerably. However,
the support for the Kurds is one more step in the same direction.

According to a report in the Arab News:

<QUOTE>"As you will remember, the coalition partners that
remained silent during the four years of turmoil in Iraq and Syria
immediately swung into action when Kobani was targeted last year
and provided military assistance to the PYD/YPG forces in the
region. ...

At the same time we issued this warning: The PYD, a terror
organization, and its armed wing the YPG, are more dangerous than
all the armed groups in Syria. The US must become aware of the
growing communist threat.

Despite these warnings, very little has changed in the attitude of
the US and its allies. The YPG now know the passcode that would
open all doors for them. It used Daesh card in every area it
advanced through, ensured that coalition planes would bomb the
region and thus secured control of that territory. When events
were portrayed in that manner in the international media, all
developments were depicted as a victory; not a word was said about
the civilians dying in the coalition attacks or local residents
under threat by the YPG.

The same thing has now happened in the region of Tal
Abyad. ... The code word “Daesh” was employed again and coalition
planes horrifyingly dropped bombs on the local residents of Tal
Abyad. The interesting thing is that the area had already been
under Daesh control for a year. The only thing new in the area was
the violence inflicted on the inhabitants by the coalition bombs
and the YPG.

Certainly we in no way approve of the violence employed by Daesh
in Syria and Iraq. But the point we wish to make here is that the
YPG is playing the Daesh card to legitimize its own evil and to
deceive the US in particular. The terrible thing is that the US
secret state apparatus that has wanted to see a Great Kurdistan
for the last 100 years is keen to believe in this scenario and
believes that its objective is being attained."<END QUOTE>

In another Arab News editorial:

<QUOTE>"Today, one can summarize Washington’s approach toward
Iraq, Syria, and Lebanon as follows:

* In Iraq, it is supporting the ruling elite jointly brought to
power by the 2003 US invasion and Iran’s expansionist policies.

* In Syria, the virtual disregard of human suffering and
meaningless “red-lines” after four years and three months of the
country’s popular uprising.

* In Lebanon, the tacit acceptance of Hezbollah’s hegemony after
neutralizing the former battlefront with Israel through UN
Security Council Resolution 1701.

In all three cases Washington’s policies have been underpinned by
Obama’s all-out push for an “agreement” with Iran, and his
exploitation of Daesh extremism as the perfect justification for
such an agreement, eventually developing into a full-fledged
alliance."<END QUOTE>

This is a good time to review where things stand. As I've been
writing for years, we're headed for a Clash of Civilizations world war
in which some of the "allies" will be the West, India, Russia and
Iran, and some of the "axis" will be China, Pakistan, Turkey, Saudi
Arabia and other Sunni Arab countries. In the Mideast, the US will be
siding with the Shias against the Sunnis.

The events of the last year allow us to refine this, in that it's
becoming increasingly clear that the Kurds will be aligned with the
Shias and the West against the Sunnis.

I've written about this many times, at length. In brief, the
explanation is as follows: China is allied with Pakistan, which is
allied with Saudi Arabia. The US is allied with India, which is a
close ally of Russia, which is a close ally of Iran. Also, India's
Hindus and Iran's Shia's have been allies all the way back to the
Battle of Karbala in 680. ( "China 'betrays' Iran, as internal problems in both countries mount"
from 2008.)

It's actually been pretty obvious for years that Iran would become our
ally, because there large numbers of pro-American and pro-Western
student demonstrations in the early 2000s. Although the old geezers
who survived the 1979 Great Islamic Revolution refer to America as the
Great Satan, the young people are overwhelming pro-Western, and are
taking over as the Revolution survivors grow old and die off.
Arab News and
Arab News

****
**** Understanding men's moustaches in Turkey
****


Turkish Moustache Styles (Hurriyet)

According to a helpful analysis of moustache styles in Turkey,
there are three main styles illustrated above:

• Strongly nationalist Turks wear the "idealist" style
  on the left.
  
• Mainstream Islamists wear the "almond" style in the center.
  
• Hard-line Islamists (pro-Ottoman) tend to wear a beard.

Moustaches in both of the latter styles are generally trimmed short,
in line with the advice of the Prophet Muhammad. Hurriyet (Ankara)


KEYS: Generational Dynamics, Syria, Tal Abyad, Ain Issa, Liwa 93, Raqqa,
Kurdish People’s Protection Unit, YPG, Free Syrian Army, FSA,
Islamic State / of Iraq and Syria/Sham/the Levant, IS, ISIS, ISIL, Daesh,
Aleppo, Kobani, Hezbollah, Hashid Shaabi, popular mobilization units,
Turkey, Recep Tayyip Erdogan, Kurdistan Workers' Party, PKK,
Bashar al-Assad, Iraq, Lebanon, China, Pakistan, India, Russia

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Originally Posted by John J. Xenakis

*** 17-Jun-15 World View -- China tests hypersonic missile designed to defeat American missile defenses

This morning's key headlines from GenerationalDynamics.com

• China says it's finished building artificial islands in South China Sea
• China tests hypersonic missile designed to defeat American missile defenses
• Greece's bitter PM Tsipras hurls ultimatums and insults at IMF

****
**** China says it's finished building artificial islands in South China Sea
****


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

For the past year, China has been creating new, artificial islands in
the South China Sea in regions which have historically belonged to
other countries, particularly Vietnam and the Philippines. China has
been using aggressive military tactics to deprive Vietnamese and
Philippine fishermen of their historical fishing grounds, and made
demands that the U.S. end its surveillance activities in international
waters in the South China Sea. Tensions escalated substantially last
month when China repeatedly demanded that an American P-8A Poseidon
surveillance plane leave the area. ( "26-May-15 World View -- China says war with US in South China Sea is inevitable"
)

John, looks like the China war may indeed happen...

Originally Posted by The End of the American Dream Blog

Submitted by Michael Snyder via The End of The American Dream blog,
If the United States and China are supposed to be such “great friends”, why are both sides acting as if war is in our future? Thanks to events in the South China Sea and the blatant theft of the personal information of millions of U.S. government workers, tensions between the United States and China are the highest that they have been in decades.
Most Americans typically assume that a real, actual shooting war between the U.S. and China could never possibly happen, but as you will see below the Chinese are actually spending a lot of time and money preparing for precisely such a conflict. In fact, the Chinese are working feverishly to develop new offensive weapons systems that would only be used in such a war. Of course it is extremely unlikely that a military conflict between our two nations will happen in our immediate future, but without a doubt we are moving in that direction. And this is how wars typically happen – things build up over a period of time before they finally reach a breaking point.
Just think about what took place between the United States and Japan in the lead up to our war with them. There were years of diplomatic troubles before Japan finally made the decision to launch a “surprise” attack on Pearl Harbor. Right now, I believe that we are moving into a similar period of diplomatic trouble with China. Initially, this will likely affect our trade relationship with the Chinese, but ultimately it could be much more than that. The following are 10 signs that the United States and China are moving toward war…
#1 China’s moves in the South China Sea have greatly angered Obama administration officials. Some of the islands that China has grabbed are also claimed by Malaysia, Vietnam, Taiwan, Brunei and the Philippines. The United States is bound by treaty to defend the Philippines in any conflict with China, and Brunei, Malaysia and Vietnam are all slated to be parties to the new super secret global trade treaty that Obama is currently negotiating. The following comes from Business Insider…

China’s reclamation of more than 2,000 acres of land on disputed islands and atolls in the South China Sea since last year has raised international alarm over its territorial ambitions. Washington took the unusual step last month of publicizing a U.S. military surveillance flight that showed the massive scale of China’s island-building.

China says the islands are its sovereign territory, but Washington argues that the continuation of building work and militarization of the islands could enflame complex territorial disputes with China’s neighbors, with whom the U.S. is seeking to forge closer ties while preserving freedom of navigation in sea lanes crucial for world trade.

#2 In China, there is talk that a war may be necessary to defend China’s interests in the South China Sea. In fact, a newspaper that is a mouthpiece for the Communist Party actually stated that war with the United States “is inevitable” if the U.S. continues to insist that the Chinese must halt activities on those islands…

Coinciding with the publication of the white paper, an editorial in The Global Times – a tabloid newspaper mouthpiece for the ruling Communist Party – issued a warning to the US to halt its protests over the South China Sea.

Last week, China’s foreign ministry revealed it had lodged a complaint with the US over an American spy plane that flew over parts of the disputed archipelago.

The article read: “We do not want a military conflict with the United States, but if it were to come, we have to accept it.”

It added that China should “carefully prepare” for the possibility of war with Washington and that “if the United States’ bottom line is that China is to halt activities, then a US-China war is inevitable in the South China Sea”.

#3 The theft of the information of up to 14 million federal workers is being described as “an act of war“. At this point, the Obama administration appears convinced that this horrible act was committed by the Chinese government…

Cybersecurity is another source of acrimony that’s up for discussion, given fresh urgency by the massive security breach that led to the theft of personal information of as many as 14 million current and former U.S. federal employees. The Obama administration believes that China’s government, not criminal hackers, was responsible for the breach that included detailed background information on military and intelligence personnel.

China has denied involvement in the break-in and says it is also a victim of cyberattacks.

So was China behind this theft?
Perhaps we will never know for sure, but without a doubt this incident has raised tensions between the two nations.
And as tensions continue to increase, it is likely that the cyber espionage being committed by both sides will only get worse. Ian Bremmer, the founder of Eurasia Group, recently told Business Insider that he believes that a “virtual war” between our countries has already begun…

“We should be very clear: China is at virtual war with the United States, and the threat is far higher than that of terrorism, which gets the lion’s share of attention — and, in the post-9/11 world, funding.”

#4 China recently conducted a series of massive military exercises that simulated an attack against Taiwan. Since the U.S. is committed to protecting Taiwan, a real conflict of this nature would almost certainly involve the United States. The following comes from an article that was posted on janes.com…

In a new analysis by Richard Fisher and James Hardy, IHS Jane’s reports that “A series of Chinese military exercises between late May and early June showcased the ability of the People’s Liberation Army (PLA) to project land, air, and naval power into the area around Taiwan.”

The exercises demonstrated the People’s Liberation Army’s plan to use civilian ships during emergencies to help boost its forces.

“To compensate for the relatively small size of its formal naval amphibious transport fleet the PLA has co-funded construction of a large number of ferries used by civilian companies. They will be made available to the PLA during emergencies and are a frequent element in civil-military transport exercises,” Fisher and Hardy write.

#5 According to Paul Joseph Watson, thousands of Chinese merchant ships are being retrofitted for military purposes. The only possible conflict in which the Chinese military would need “thousands of merchant ships” would be a war with the United States…

China is set to retrofit thousands of merchant ships for military purposes so they can be used in the event of a war, another disturbing indication of growing tensions between Beijing and Washington.

Shipping industry publication TradeWinds reveals that China is preparing a new fleet of “war-ready ships” to serve as “a reserve military logistics wing” in the event of a naval conflict.

The new policy will apply to “containerships, ro-ros, multipurpose ships, bulkers and other ships,” with shipbuilders receiving a government subsidy to pay for the cost of making the vessels “militarily useful.”

#6 The Chinese have developed a “carrier killer” missile which was specifically designed to destroy U.S. aircraft carriers. There are some that have suggested that these new missiles may have made U.S. aircraft carriers obsolete…

Nevertheless, some have suggested that the DF-21D has rendered the supercarrier obsolete. While it depends on how we use the term “obsolete,” it’s probably too early to make that claim. China has expended vast time and resources determining how to kill US carriers, which suggests that the Chinese military takes carrier capabilities seriously. Moreover, the number of countries with both the interest and technical capability to develop the system of systems necessary to operate an ASBM is probably limited to two for the foreseeable future, with only Russia joining China.

#7 The Chinese now have the capability of equipping their nuclear missiles with MIRV warheads. According to Bill Gertz, this has significantly equalized the balance of power between the U.S. and China…

China carried out a long-range missile flight test on Saturday using multiple, independently targetable reentry vehicles, or MIRVs, according to U.S. defense officials.

The flight test Saturday of a new DF-41 missile, China’s longest-range intercontinental ballistic missile, marks the first test of multiple warhead capabilities for China, officials told the Washington Free Beacon.

China has been known to be developing multiple-warhead technology, which it obtained from the United States illegally in the 1990s.

However, the Dec. 13 DF-41 flight test, using an unknown number of inert maneuvering warheads, is being viewed by U.S. intelligence agencies as a significant advance for China’s strategic nuclear forces and part of a build-up that is likely to affect the strategic balance of forces.

#8 Of much greater concern than the MIRV warheads are the new hypersonic glide vehicles that China has developed. These ultra-high-speed missiles are capable of carrying nuclear warheads and represent a huge threat to the United States…

China recently conducted the second flight test of a new, ultra-high-speed missile that is part of what analysts say is Beijing’s global system of attack weapons capable of striking the United States with nuclear warheads.

The latest test of the new hypersonic glide vehicle (HGV) known as Wu-14 took place Aug. 7 at a missile facility in western China, said U.S. government officials familiar with details of the test reported in internal channels.

#9 The Chinese Navy is building a series of extremely quiet ballistic missile submarines. These subs could potentially creep up to our coastlines and rain nuclear missiles down on us within just a few minutes. The following comes from an article by Bill Gertz…

The Chinese Navy has deployed three ballistic missile submarines at sea capable of striking the United States with nuclear missiles, the commander of the U.S. Northern Command said Tuesday.

Adm. William Gortney, the commander, said the submarines are a “concern” and will be able to strike the United States when fully deployed with missiles and warheads.

The missile submarines are deployed in the South China Sea at a base on Hainan Island, according to a defense official.

#10 The Chinese have developed submarine-based nuclear missiles that could potentially reach all 50 states from the waters of Hawaii…

China could soon target the United States with sea-based nuclear weapons as it is reinforcing its submarines with long-range nuclear ballistic missiles, a US congressional report has found.
China’s military is set to acquire a reliable, hard-to-destroy sea-based nuclear deterrent, with a dozen JL-2 missiles that are being mounted on its JIN class submarines, according to a report submitted to Congress by the US-China Economic and Security Review Commission.
The missiles have a strike range of around 7,350 km, meaning they can reach all 50 US states if they are launched from waters west or east of Hawaii.

#11 At a time when the U.S. military is actually shrinking, Chinese military spending is increasing each year by double digits…

China’s government in March announced a 12.2 percent increase in military spending to $132 billion. That followed last year’s 10.7 percent increase to $114 billion, giving China the second-highest defense budget for any nation behind the U.S., which spent $600.4 billion on its military last year.

#12 The Chinese military is not the only one preparing for a war between our two nations. It turns out that the U.S. military has been conducting military exercises that are specifically geared toward simulating a conflict with China. The following comes from the BBC…

Watching the US Navy close up like this, it is hard not to be slightly awed. No other navy in the world has quite the same toys, or shows them off with the same easy charm.

But as I stand on the deck filming my report on how “the US is practising for war with China”, I can see my host from the Navy public affairs office wincing.

You get used to hearing the PR rhetoric: the US Navy “is not practising for war with any specific country”. But the US Navy has not assembled two whole carrier battle groups and 200 aircraft off the coast of Guam for a jolly, either. This is about practising what the Pentagon now calls “Air Sea Battle”.

It is a concept first put forward in 2009, and it is specifically designed to counter the rising threat from China.

Like I said, a war between the United States and China is not going to happen in our immediate future.
But it would be a grave mistake to assume that it could never happen.
Over in China, their military operates under the assumption that a war between the two superpowers will definitely take place at some point, and the Chinese are working feverishly to figure out ways that they can come out on top in such a conflict.
Yes, the Chinese have become exceedingly wealthy selling us goods. In the process, we have lost thousands of businesses, millions of jobs and we now owe the Chinese more than a trillion dollars. The Chinese never intended to have a balanced and fair trading relationship with us, because it has always been their plan to emerge as the sole, dominant superpower on the entire planet.
Once our debt-fueled economy collapses, the Chinese won’t have too much use for us anymore. Instead, we will just be a barrier in the way of their goal of total global domination.
If you don’t think that the Chinese view us in this manner, just read some of the white papers produced by the Chinese government and the Chinese military. They do not consider us to be a “friend” at all. Rather, they consider us to be an enemy that must ultimately be vanquished.
Sadly, most Americans seem to assume that the global community is just one big, happy family these days.
In the end, we will likely pay a very great price for being so naive.

[quote]

China now says that it's completed its artificial islands project.
However, that doesn't mean that China is becoming less aggressive
militarily; to the contrary, it means that China is moving on to
the next phase, building military structures on the artificial
islands.

According to Chinese media:

<QUOTE>"The islands and reefs after completion will not serve
as China's military outposts in the Nansha Islands. Apart from
satisfying the need of necessary military defense, they will be
mainly for civilian use."<END QUOTE>

These two sentences contradict each other. The first sentence says
"no military outposts," but the second sentence mentions "satisfying
the need of military defense," which means that the islands will be
used as military outposts. This is no surprise to anyone, as China
prepares for war with its neighbors and with the United States.
VOA and Global Times (Beijing)

****
**** China tests hypersonic missile designed to defeat American missile defenses
****

China has confirmed the fourth test, on June 7, of the new Wu-14
hypersonic glide strike missile designed to defeat American missile
defenses.

During a war, the hypersonic missile is carried up by an ordinary
ballistic missile, but is then released while still in the atmosphere.
It can then glide almost horizontally to its target at almost 8,000
miles per hour. It can easily change direction in flight, to evade
missile defense. The systems provide enhanced precision, speed,
range, maneuverability and multiple-targeting, and are capable of
carrying a nuclear warhead. In actual practice, several will be
launched at once, making a missile defense almost impossible.

According to Chinese analysts, the missile test was timed to send a
threatening message to the American military to stop doing
surveillance in the South China Sea. Washington Free Beacon

Looks like we need to have a redo. Russia's not the problem, China is. So.
1. Harden all internet facing computers against cyber attacks.
2. Find a way to counter hypersonic missiles.
3. Realize aircraft carriers may be obsolete.
5. We may need a few of these as an asymetric solution to the size of the Red Army vs. US troop levels. From the wiki
"The PLA is the world's largest military force, with a strength of approximately 2,285,000 personnel, 0.18% of the country's population."Obviously with an armed services that large asymetry is a much needed thing.

So... Congrat John,

Rags - How I've come to love the cobalt bomb.

*** 25-Jun-15 World View -- Hungary and Austria in disagreement over migrants

This morning's key headlines from GenerationalDynamics.com

• Hungary and Austria in disagreement over migrants
• Britain and France face migrant crisis in port of Calais
• Palestinians to submit war crimes charges against Israel to ICC

****
**** Hungary and Austria in disagreement over migrants
****


A group of Afghans rest after crossing illegally from Serbia into Hungary near the village of Asotthalom, Hungary (Reuters)

With migrants from Africa and Syria flooding into Europe,
disagreements are arising among the European Union countries
on dealing with them.

In the case of Hungary, prime minister Viktor Orbán, is personally
disliked by other EU leaders, has said that the country is being
overwhelmed by migrants, with more than 60,000 having crossed in
Hungary from outside the EU since the start of 2015, which
is more than any other EU country. Most of the migrants have
crossed into Hungary from Serbia, which is not an EU country.

In the last week, Orbán has announced three measures to control the
number of migrants in Hungary:

• The government is setting aside $23.5 million to build a
  temporary security fence along Hungary's entire border with Serbia.
  The fence will be 4 meters high and 175 km long. Although EU
  officials in Brussels have condemned this plan, it's apparently not
  illegal under EU rules.
  
• Hungary will stop processing asylum seekers registered in Hungary,
  which is a violation of EU regulations. Asylum seekers may travel
  freely within the EU but must rely on the country they first entered
  to process their paperwork. After strong condemnation from other EU
  leaders, Orbán backed down a bit, saying that the processing of asylum
  seekers was being merely suspended, because of a large backlog, but
  not stopped entirely.
  
• Hungary announced that it would no longer take in asylum seekers
  sent by other EU states. This has infuriated other EU countries,
  particularly Austria, which threatened in retaliation to re-introduce
  border controls on its border with Hungary. This means that there
  would be passport checks on the Austrian-Hungarian border, which ended
  with the Schengen agreement nearly 10 years ago.

VOA and International Business Times (London) and SpyGhana

****
**** Britain and France face migrant crisis in port of Calais
****

That's not the only current conflict between EU countries over
the migrant crisis. France and Britain have been pointing
the fingers of blame at each other over a major crisis in
the French port of Calais, which is the location of the
entrance to the Channel Tunnel that connects France to Britain.

There's been a flood of migrants into Calais, wanting to reach
Britain to take advantage of the generous benefits.
Migrants have been burning tires and using other methods to
slow the trucks trying to travel to Britain, and then jumping
into the trucks while they're stopped, hoping that they won't
be detected until they reach Britain.

One 20-year-old migrant was quoted as saying:

<QUOTE>"My future would be better if I get to England. I need
to get to England. I came here via Turkey and Greece and now I'm
living in the jungle in Calais. The situation here is very bad.

But life in Syria was worse. Our homes were destroyed and our
government used chemical weapons against us. I need a better life
in England and I will do whatever it takes."<END QUOTE>

Some officials are expressing the fear that jihadists and terrorist
would hide in the crowd of migrants in Calais, and use the chaos to
travel to the UK. Telegraph (London)

****
**** Palestinians to submit war crimes charges against Israel to ICC
****

The Palestinian Authority (PA) on Thursday will submit to the
International Criminal Court (ICC) in The Hague files describing
alleged war crimes by Israel.

According to reports, there will be charges in three areas:

• Israeli settlement activity in the West Bank and East
  Jerusalem
• The treatment of Palestinian prisoners in Israeli jails.
• Last summer's Israeli vs Hamas war in Gaza.

With regard to the third item, we reported last year in July,
while the war was in progress, that
Palestinian lawyers are saying that they are on solid grounds in some
areas, but that Hamas would face war crimes charges themselves, for
shooting rockets indiscriminately into Israel from heavily populated
Gaza neighborhoods, and for storing weapons in civilian neighborhoods.
Both of these are war crimes.

Although the accusations will be embarrassing to Israel, they're
not expected to have any legal force, and any investigation that
occurs will likely not begin for many months.
Reuters and YNet and Guardian (London)


KEYS: Generational Dynamics, European Union, Hungary, Austria, Serbia,
Afghanistan, Syria, Viktor Orbán, Britain, France, Calais,
Palestinian Authority, International Criminal Court, ICC,
Israel, Gaza, Hamas

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*** 26-Jun-15 World View -- Turkey denies responsibility for ISIS massacre on Kurds in Kobani

This morning's key headlines from GenerationalDynamics.com

• Pakistan gives 'Save the Children' a partial reprieve
• Turkey denies responsibility for ISIS massacre on Kurds in Kobani
• European leaders prepare for Greece to default

****
**** Pakistan gives 'Save the Children' a partial reprieve
****


A guard stands in front of the locked and sealed Save the Children office in Islamabad (The Nation)

Pakistan is now permitting Save the Children to reopen its
headquarters office in the nation's capital Islamabad, as well as 13
of 73 offices across the country. Save the Children will be forbidden
from operating in the Federally Administrated Tribal Areas (FATA),
Balochistan, Gilgit-Baltistan and other sensitive areas.

Pakistan's government has shut down the aid organization Save the
Children, locked and seized their office building in Islamabad, and
gave them 15 days to leave the country.

On June 11, Pakistan unexpectedly shut down Save the Children, sealing
all its offices, giving them 15 days to leave the country. The
interior minister announced that it was clamping down on
non-government organizations (NGOs) that provide aid:

<QUOTE>"We will not allow anyone to work under the table. We
will not allow any NGO to work in this country against Pakistan’s
interests, culture and values."<END QUOTE>

No explanation was given for closing Save the Children, and government
officials were accused in the media of paranoia and xenophobia.
Pakistan began to back off almost immediately, and now has allowed
some of the offices to reopen.

Pakistan's campaign against NGOs is believed to have been triggered by
the American administration bragging in 2011 that a vaccination
program in Pakistan was used as a cover to locate and capture Osama
bin Laden. Save the Children says they had nothing to do with that,
but since 2011, every foreign aid program has come under suspicion.
Pakistan Today and Nation (Pakistan) and BBC

****
**** Turkey denies responsibility for ISIS massacre on Kurds in Kobani
****

The Islamic State (IS or ISIS or ISIL or Daesh) on Thursday killed
dozens of Kurds, mostly civilians, in a brutal attack on Kobani. The
ISIS militants disguised themselves in YPG uniforms, so they were
undetected, until they opened fire. The is attack is apparently in
revenge for recent gains by Kurdisk YPG militias.

As we reported just two days ago,

Kurdish YPG militias have inflicted some major military defeats on
ISIS in the latter's stronghold province Raqqa in northern Syria. The
YPG victories were attained in combination with forces from the
US-backed Free Syrian Army (FSA), and supported by hundreds of
airstrikes from the US coalition.

In Turkey, the pro-Kurdish People's Democratic Party (HDP) accused the
government of president Recep Tayyip Erdogan of allowing of playing a
part in the ISIS victory. It's not known where the ISIS militants
came from before entering Kobani, and some HDP officials are
suggesting that they crossed over from Turkey with the help of the
Turkish government.

An outraged Erdogan accused the HDP of being a "tool of the Bashar
al-Assad regime and some international lobbies which are enemies of
Turkey," and said:

<QUOTE>"We see that the circles close to the separatist
organization [Kurdistan Workers' Party (PKK)], I mean prominent
figures from the political party [HDP], are carrying out a slander
and black propaganda campaign in the wake of this nefarious
attack. They are trying to provoke our nation with these
completely baseless claims .... I am saying this openly once
again, nobody can dare to show Turkey on the same line with
terrorism."<END QUOTE>

The HDP described the ISIS attack on Kobani as a massacre and blamed
it on Turkish state support for the militants, a claim which was
strongly denied by the Turkish government. Daily Mail (London) and Today's Zaman (Istanbul)

****
**** European leaders prepare for Greece to default
****

The high stakes Game of Chicken being played out in Brussels took new
steps forward on Thursday as a Eurogroup meeting of eurozone finance
ministers ended without any decision. Another Eurogroup meeting will
be held over the weekend.

Greek citizens have withdrawn billions of euros from the Greek banking
system in recent weeks. To keep the banking system from collapsing,
the European Central Bank (ECB) has been providing money to the banks
in the form of its Emergency Liquidity Assistance (ELA).

Plans are being made to end the ELA on Monday, if there's no deal over
the weekend. In that case, capital controls would be imposed on Greek
banks, meaning that Greeks would be severely limited in the amount of
money they would be allowed to withdraw.

If that's a European threat that's directed at Greece, then the
Greeks have their own threats directed at Europe. First, the
Greeks can threaten to go to Moscow for a bailout, which would
give Russia sweet revenge for the European sanctions imposed
on Russia. And second, Greece could send all the African
and Syrian migrants in Greece across the borders into other
European countries.

Actually, the negotiations are continuing to follow the Game of
Chicken scenario. The logic of the Game of Chicken, where two cars
race towards each other at top speed to see who veers first to avoid a
collision, is that neither car veers until the last nanosecond, if at
all. So if we're really following that scenario, then we shouldn't
expect a deal until Tuesday, which is supposed to be the final, final,
final deadline. Kathimerini and Irish Examiner


KEYS: Generational Dynamics, Pakistan, Save the Children,
Turkey, Kurds, YPG militias, Recep Tayyip Erdogan,
Islamic State / of Iraq and Syria/Sham/the Levant, IS, ISIS, ISIL, Daesh,
People's Democratic Party, HDP, Kurdistan Workers' Party, PKK,
Greece, Emergency Liquidity Assistance, ELA, Game of Chicken

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*** 27-Jun-15 World View -- Terror attacks in Kuwait, France, Somalia and Tunisia highlight growing sectarian war

This morning's key headlines from GenerationalDynamics.com

• Al-Qaeda linked al-Shabaab launches massive terrorist attack in Somalia
• ISIS-linked terrorists attack Shia mosque in Kuwait City, killing 27
• France in shock after beheading and attack at US-owned factory
• Terrorist gunman creates bloodbath in Tunisia, killing 37
• Analysis of Friday's four terror attacks
• China's stock markets continue their free-fall

****
**** Al-Qaeda linked al-Shabaab launches massive terrorist attack in Somalia
****


Dead bodies on the beach after terrorist attack in Tunisia (CNN)

The al-Qaeda linked terror group al-Shabaab attacked an African
Union base in the village of Lego in Somalia, killing dozens
and taking complete control of the village and the region. The
base is part of the Amisom peacekeeping force.

The dawn raid started with a suicide bomber driving a car loaded with
explosives into the entrance of the base, and then dozens of militants
armed with machine guns and rocket-propelled grenades began their
assault.

According to an al-Shabaab spokesman, "The Black Islamic flag is
flying over the main base of Amisom in Lego this morning and the dead
bodies of the enemy are scattered around the area, the mujaheddin
fighters have taken all their military supplies."

Al-Shabaab had previously promised to step up its attacks during the
holy month of Ramadan. AP and AFP

****
**** ISIS-linked terrorists attack Shia mosque in Kuwait City, killing 27
****

The terror group "Najd Province" claimed responsibility for a suicide
bombing attack on the Imam Sadiq Mosque in Kuwait's capital city,
Kuwait City, during Friday prayers, killing 27 people and wounding
over 200. The terrorist wore a white robe that concealed the bomb,
and was not prevented from entering the crowded mosque.

The name "Najd Province" refers to the central region of Saudi Arabia
where the ultraconservative Sunni ideology of Wahhabism originated.
It claims to be an affiliate of the Islamic State (IS or ISIS or ISIL
or Daesh). The group also claimed responsibility for bombing
attacks at two Shia mosques in Saudi Arabia in late May,
killing 26 people.

Kuwait is a predominantly Sunni Arab nation, where 1/3 of the
population is Shia.

ISIS has been openly promoting a sectarian war between Shias and
Sunnis, and the attacks on Shia mosques are meant to trigger that war.
KUNA - Kuwait News Agency and AP

****
**** France in shock after beheading and attack at US-owned factory
****

The French people have barely recovered from the Charlie Hebdo
terrorist attack in Paris in January ( "11-Jan-15 World View -- France officials criticized for not stopping Charlie Hebdo terror attack"
).

So it's certain that Friday's attack on the US-owned Air Products
factory is going to inflame the French people's anxieties and lead to
demands for further action for protection from terrorists.

The suspect, Yassin Sahli, accelerated the van he was driving, and
rammed it into a warehouse containing canisters of acetone, liquid air
and gas, resulting in an explosion that was seen miles away. The
explosion killed two people.

What was particularly grisly about the attack was the discovery of a
severed head hanging from a fence after the blast. There were two
black flags with Islamic writing hanging near the victim's head. The
decapitated body was found later in the suspect's van.

The suspect was recognized as working for a delivery service that made
regular deliveries to the factory, so he was never questioned on
arrival. The decapitated body was that of his boss at the delivery
company.

The suspect has been married for ten years, and has three children.
His wife and sister have also been arrested. France24 and CNN

****
**** Terrorist gunman creates bloodbath in Tunisia, killing 37
****

A gunman disguised as a tourist opened fire at a Tunisian hotel in
Sousse on Friday, killing 37 people. According to some reports, he
arrived at the beach in a boat, and hid his weapons in an umbrella.
He removed the weapon, a Kalashnikov assault rifle, from the umbrella
and strolled through the hotel grounds, opening fire at the pool and
beach, reloading his weapon several times and tossing an explosive.

ISIS claimed responsibility for the attack. In a tweet, a spokesman
said: "Our brother, the soldier of the Caliphate, Abu Yihya
al-Kairouni, reached his target the Imperial hotel despite the
security measures."

As in the case of France, shocked Tunisians are just barely recovering
from a previous terror attack, at a museum in the capital city Tunis
in March. ( "19-Mar-15 World View -- Beneath the surface, Tunisia is a terrorist breeding ground"
) Friday's attack was the worst terrorist attack
in Tunisia since 2002.

It's thought that ISIS is targeting Tunisia because Tunisia is the
major success story of the "Arab Spring," which actually began in
Tunisia in 2011. However, unlike other Arab countries, Tunisia has
been a successful secular democracy. The terror attack actually
targets Tunisia's tourist industry, which accounts for 15% of its GDP
and most of its foreign currency revenues. BBC and Reuters

****
**** Analysis of Friday's four terror attacks
****

Some commentators are describing Friday's attacks as a further Muslim
attack against the West, but it's very hard to find much evidence of
that. The attack in Tunisia targeted Tunisia's tourist industry, even
though most of the victims were European tourists. The attack in
France is ambiguous because the suspect killed his boss, so it may
have been motivated by workplace violence rather than by ideology.
However, the attacks in Kuwait and Somalia were clearly targeted at
other Muslims.

As I've been writing for months, there is no Muslim war against
Christians and the West -- at least not yet. The number of Christians
being killed by Muslims is minuscule compared to the vast number of
Muslims being killed by Muslims in the Mideast, North Africa and Asia.

Other commentators are wondering if all four attacks are coordinated
by ISIS, and there's a little evidence of that, though not much.
ISIS has made a general call for more terror attacks during the
holy month of Ramadan, especially on Fridays, when the mosques
are packed for Friday prayers. Al-Shabaab has made a similar call.
So it's possible that the four attacks were not coordinated, but
coincided because of the opportunity of the first Friday in
Ramadan. At any rate, ISIS claimed credit for only the attacks
in Kuwait and Tunisia, and al-Shabaab is al-Qaeda linked, not
ISIS linked.

Finally, many commentators are confused about why ISIS would want to
trigger a sectarian war between Sunnis and Shias. I've explained this
many times, but now is a good time to repeat it.

For the west, the major generational crisis war of the last century
was World War II. Almost every policy of almost every Western
government has been a reaction to something that happened during
WW II. It's significance cannot be overestimated.

However, WW II was NOT the most significant war to the Muslims in the
Mideast. For them, the generational crisis wars were the collapse of
the Ottoman Empire around 1920, along with associated wars such as
Iran's Constitution Revolution in the 1900s, and then Iran's 1979
Great Islamic Revolution, along with associated wars such as the
Iran/Iraq war, Syria's civil war and Lebanon's civil war, all in the
1980s. Those two groups of wars were far more significant in the
Mideast than World War II, and almost every policy of almost every
Mideast country has been a reaction to something that happened during
those wars.

For ISIS, and previously for al-Qaeda, the most significant war was
Iran's 1979 revolution, which threw out a secular government and
replaced it with a hardline Shia near-dictatorship. For Sunni
jihadists, this is the dream war that they want to mimic, by
triggering a violent Shia-Sunni civil war in any of a number of
countries, expecting it to lead to a hardline Sunni dictatorship.

To them, and to Westerners who say that they would like a sectarian
Mideast war because it would mean more Muslims killing Muslims, I
would tell you: Be careful what you wish for. And I promise you that
if you survive, then you'll regret having ever wished for such a
thing.

At any rate, this will not be the last day with four terrorist
attacks. If anything, ISIS and al-Qaeda will try to repeat their
"success" in days to come.

****
**** China's stock markets continue their free-fall
****


What's happening in Chinese markets? (CNN)

As we reported a week ago on Friday,
China's huge stock market bubble began to burst, and the
Shanghai stock market index plunged 13% for one horrible week.

This past week has been just as horrible. On Friday alone, the index
fell 7.4%. Hundreds of individual stocks fell 10%, the maximum amount
permitted, suggesting that the index might have fallen much farther.
The index reached its peak on June 12, and has fallen 19% since then.

In the year preceding June 12, the stock market index surged 250%,
creating a huge stock market bubble. Individual Chinese, many of them
older citizens, poured their life savings into the stock market in
search of high returns. As one analyst said, "This is going to end in
tears." Bloomberg


KEYS: Generational Dynamics, Somalia, al-Qaeda, al-Shabaab, Lego, African Union,
Kuwait, Imam Sadiq Mosque, Najd Province, Wahhabism,
Islamic State / of Iraq and Syria/Sham/the Levant, IS, ISIS, ISIL, Daesh,
France, Paris, Charlie Hebdo, Air Products, Yassin Sahli,
Tunisia, Sousse, Abu Yihya al-Kairouni,
Ottoman Empire, Iran, Islamic Revolution, Iran/Iraq war,
China, Shanghai

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*** 28-Jun-15 World View -- Greece's Tsipras rejects 'extortionate ultimatum' and ends bailout negotiations

This morning's key headlines from GenerationalDynamics.com

• Furious Eurogroup members plan Greece's default after Tsipras ends bailout negotiations
• Greece's chaos may begin as early as Monday
• Tunisia will close 80 mosques that are 'spreading venom'

****
**** Furious Eurogroup members plan Greece's default after Tsipras ends bailout negotiations
****


Alexis Tsipras giving nationally televised speech early on Saturday (Kathimerini)

Members of the Eurogroup of eurozone finance ministers on Saturday
unanimously rejected a demand to grant a 2-month extension to the
existing bailout program, after Greece's government walked out of the
negotiations.

Early Saturday morning, Greece's prime minister Alexis Tsipras
surprised everyone, even members of Greece's negotiating team, by
tweeting that he was ending the negotiations and calling for a snap
referendum of the Greek people on July 5 to determine whether to
accept the Eurogroup's bailout conditions. This would be the first
time Greece has held a national referendum since 1974.

Tsipras addressed Greece's parliament in a nationally televised
speech:

<QUOTE>"I call on you to decide whether we should accept the
extortionate ultimatum that calls for strict and humiliating
austerity without end, and without the prospect of ever standing
on our own two feet, socially and financially. We never
considered giving in. ... These [Eurogroup] proposals prove that
certain partners are not interested in reaching a viable and
beneficial agreement for all parties, but rather the humiliation
of the Greek people."<END QUOTE>

The parliament approved the referendum in a vote late Saturday night.
However, many people are saying this referendum, if it is held, would
really be a historic vote on "Grexit," whether Greece should remain in
the euro, or even in the European Union. One commentator quoted an
anonymous Eurogroup official as saying, "Tsipras is like a cowboy who
walks into a saloon, takes his gun out of his holster, points it at
his own head, and shouts, 'Do as I say or I'll shoot!'"

Tsipras's announcement was a complete surprise to the Eurogroup
members, since they had been negotiating almost 24 hours a day all
week, and there had never been any mention of a referendum. The
Eurogroup members were said to be furious at Tsipras's betrayal. They
met again without Greece, after Greece walked out, with the stated
purpose of making plans to guarantee that the rest of the eurozone
would not be hurt by Greece's actions and possible default or Grexit.

German minister Sigmar Gabriel said: "There must be a clear
program. And what he (Tsipras) would like – for Europe to send €20
or €30 billion in aid programs to Greece, but without any conditions
– Europe cannot accept."

However, many European officials say that they stand ready to
negotiate if Greek officials change their minds. According to
Germany’s finance minister Wolfgang Schäuble:

<QUOTE>"We have no basis for further negotiations. Clearly
we can never rule out surprises with Greece, so there can always
be hope. But none of my colleagues with whom I've already spoken
see any possibilities for what we can now do. ...

We decided today that we will not extend the second program. We
did not decide to end the euro zone membership of
Greece."<END QUOTE>

As I've been saying for weeks, the logic of the Game of Chicken is
that there will be no deal until one minute to midnight on June 30,
when a 1.5 billion euro debt payment is due to the International
Monetary Fund (IMF). One angle is that if Greece misses the June
payment, then the IMF has the choice of calling it a default, or just
saying that Greece is "in arrears," and give them another month. But
after Greece walked out of the talks, Eurogroup members apparently are
now expecting Greece to default. Kathimerini and AFP and Guardian (London)

****
**** Greece's chaos may begin as early as Monday
****

Greece's people are close to panic, wondering what will happen
next week, even on Monday. There were long lines on ATM machines
on Saturday, since many Greeks do not feel confident that
the banks will even be open on Monday.

One question that the Eurogroup left open on Saturday was when
the Emergency Liquidity Assistance (ELA) program would be
terminated. The ELA is money that the European Central Bank (ECB)
has been supplying to the Greek banking system, as Greeks have
withdrawn billions of euros in the last few weeks. On the day
that the ELA is terminated, severe capital controls will be
implemented, meaning that withdrawals will be limited to a small
amount each day. Some banks are already setting limits.

Another question on everyone's mind is this: If the referendum is held
on July 5, exactly what will the Greeks be voting on, inasmuch as the
Eurogroup has announced that the entire program will end on at
midnight on Tuesday, June 30? Will they be voting on some bailout
deal, or will they be voting on their entire future in Europe?

Greece's institutional lenders -- the European Commission (EC),
European Central Bank (ECB) and International Monetary Fund (IMF) have
been demanding for months that Greece reduce pension payments by
increasing the retirement age over time, cut the defense budget,
reduce the public payroll, reduce planned tax increases on businesses,
and increase the VAT (value added tax) in some areas.

Since Alexis Tsipras and his far left Syriza government came to
power in January, he's added public employees, increased taxes
on businesses, and refused to touch the retirement age.

As I've said many times in the last few years, no solution exists for
the Greek debt problem, and that's why no solution has been found, or
will be found. But even if some kind of deal can be agreed on,
presumably at one minute to midnight on Tuesday, all it will do is
kick the can down the road for a few weeks. The deal under discussion
is for the last €7.2 billion tranche of the second bailout loan.
Greece needs a third bailout loan, and that will begin negotiations
all over again in a few weeks, something that is so painful, both
sides are wondering whether it's worth it.

The long-suffering Greek people are watching all this drama and are
pretty sure of only one thing: That things are about to get a lot
worse. Irish Times and Reuters and Bloomberg and Kathimerini

****
**** Tunisia will close 80 mosques that are 'spreading venom'
****

Tunisia's Prime Minister Habib Essid accused 80 mosques of "spreading
venom," and announced that they would all close, as part of a
clampdown on security. This follows Friday's terrorist attack on a
beach in the Sousse holiday resort in which 38 people were killed.

Many Tunisians are demanding to know why stronger security measures
weren't taken after the March terrorist attack on a museum in the
capital city Tunis. ( "19-Mar-15 World View -- Beneath the surface, Tunisia is a terrorist breeding ground"
)

As I wrote at the time, some 3,000 Tunisians have traveled to Iraq and
Syria to join the Islamic State (IS or ISIS or ISIL or Daesh), more
than any other country in the world, and Tunisian preachers are
extremely skillful at convincing young men to join ISIS. So
the charge that some Tunisian mosques are "spreading venom" is
widely believed.

However, many analysts question how effective closing mosques will be.
According to one analyst, the closures will end up creating a two sets
of mosques:

<QUOTE>"You will have a parallel religious sphere where
people don’t go to the mosques because they think the mosques only
tell us what the state would like us to hear, so they go to
private meetings. Once you have this parallel market, radical
ideas can spread much more quickly, because you have no
control."<END QUOTE>

Nonetheless, after Friday's terrorist attack, one of the worst
in decades, people are going to be demanding that the government
"do something."

As I reported yesterday,
there
were four major terrorist attacks on Friday, the others being in
Somalia, Kuwait and France. This kind of widespread terrorism is
going to increase demands in many countries to take steps, even if the
steps won't work, to prevent further terrorist attacks. Indeed, it's
thought to be impossible to stop "lone wolf" terrorist attacks, such
as the ones in Tunisia, Kuwait and France on Friday.

As I've been writing for years, nationalism and xenophobia are
increasing in country after country as the World War II survivors die
off, as the generational Crisis era deepens. We've seen this in story
after story -- Russia's xenophobia towards Caucasian Muslims,
Europeans toward Jews, Roma and Muslims, Chinese towards Americans and
Japanese, Sunni and Shia towards each other, and so forth. Note that
Generational Dynamics does not make a moral judgment about these
trends, any more than a weather forecaster makes a moral judgment
about an approaching rainstorm. But Generational Dynamics predicts
that this nationalism and xenophobia will continue to increase in
country after country, and lead to World War III. This global
increase in xenophobia and nationalism is a trend that cannot
be stopped, certainly not be closing a few dozen mosques.
CS Monitor and BBC


KEYS: Generational Dynamics, Greece, Alexis Tsipras, Syzira, Eurogroup,
Sigmar Gabriel, Wolfgang Schäuble, Game of Chicken,
International Monetary Fund, IMF, European Commission, EC,
European Central Bank, ECB, Emergency Liquidity Assistance, ELA,
Islamic State / of Iraq and Syria/Sham/the Levant, IS, ISIS, ISIL, Daesh,
Tunisia, Habib Essid, Somalia, Kuwait, France

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*** 29-Jun-15 World View -- Global financial crisis -- Greece, China, Puerto Rico

This morning's key headlines from GenerationalDynamics.com

• China makes desperate move to prevent stock market crash
• Puerto Rico's governor says the island's debts are 'not payable'
• Greece's Tsipras appeals for calm after banks are forced to close
• How complex systems fail

****
**** China makes desperate move to prevent stock market crash
****


People's Bank of China

As we've been reporting,
China's
stock markets have been in free fall since June 12, falling almost
20% in a couple of weeks.

Desperate Chinese officials are scrambling to stop the implosion and
restore the bubble, and so the People's Bank of China (PBOC) made a
major move, cutting interest rates sharply, to a record low. This
makes more money available to banks, which officials hope will flow
into the stock markets and prop up stock prices.

According to a Nomura analyst quoted by ZeroHedge:

<QUOTE>"The policy easing should be viewed as a measure to
contain the risk of a hard landing or systemic crisis rather than
one to achieve faster growth. In this case, the
stronger-than-expected monetary easing may help stem the decline
in the equity market following a 10.6% drop over the past two
trading days. The positive wealth effect of the equity market on
consumption or aggregate demand is limited in China, but an equity
market collapse would hurt millions of mid-class households and
pose great danger to the economy and social
stability."<END QUOTE>

In other words, the purpose of the policy measure is to prop up the
stock market, but will have little effect on growth, which is the
"normal" purpose of interest rate easing. Whether it will even
succeed in propping up the stock market and preventing "an equity
market collapse" remains to be seen in the next few days.

As of this writing on Sunday evening ET (Monday morning in Shanghai),
stocks are up 2%, though it's been bouncing in and out of negative
territory. Bloomberg and ZeroHedge and Reuters

****
**** Puerto Rico's governor says the island's debts are 'not payable'
****

In an admission that will have wide-ranging financial repercussions,
Puerto Rico's governor Alejandro García Padilla has announced that the
island territory will be unable to pay off its $72 billion in debts.
According to Padilla:

<QUOTE>"The debt is not payable. There is no other option. I
would love to have an easier option. This is not politics, this is
math."<END QUOTE>

This was not a surprise. As I wrote in March,
a bankruptcy was a virtual bankruptcy, probably as early
in July.

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

The unemployment rate is 13.7%. Only 700,000 of the 3.5 million
people, or 20%, work in the private sector. The other 80% either are
on welfare, or they receive unemployment or other aid, or they work
for the government. Year after year, Puerto Rico sells more and more
bonds, and investors eat them up because of the high tax-free yields.
But now their string has run out. NY Times and Reuters

****
**** Greece's Tsipras appeals for calm after banks are forced to close
****

Greece's banks will be closed indefinitely, starting on Monday, after
the European Central Bank (ECB) announced that it will end liquidity
funding that was being used to prevent a Greek banking collapse.

As we reported yesterday,
Greece's
prime minister Alexis Tsipras suddenly terminated negotiations with
the European lending institutions, surprising everyone, and called for
a referendum of the Greek people on July 5. The Eurogroup of eurozone
finance ministers met without Greece present, to take steps for the
protection of the eurozone.

They announced the termination of Greece's bailout program, but left
open the question of whether the European Central Bank (ECB) would
continue the Emergency Liquidity Assistance (ELA) program. Greeks
have been withdrawing billions of euros from their savings accounts in
recent weeks, as much as a billion euros each day in the last week.
This has been made possible by the ECB's ELA program, which provided
liquidity to the Greek banks so that withdrawals were possible.

On Sunday, the ECB announced that the ELA would be terminated
immediately. Tsipras went on nationwide tv and appealed for calm,
saying that everyone's savings, salaries and pensions were safe. He
announced that the banks and stock markets would not open on Monday,
and would remain closed at least until July 7.

Tsipras also announced that capital controls would be imposed. ATMs
will be open on Monday, but bank withdrawals will be sharply limited,
to as little as 60 euros per person per day.

On July 5 there is supposed to be a national referendum in Greece.
The referendum will be a vote on a bailout proposal that has already
been terminated, and will no longer exist. There's a lot of hopin'
and prayin' going on, but no matter what analysts say, no one has any
clue what will happen. Kathimerini and Market Watch

****
**** How complex systems fail
****

When complex systems fail, it's seldom because of one problem, because
each potential problem has usually been foreseen and a workaround
developed.

Catastrophic system failures when several problems occur at once, and
interact in a way that was not predictable.

Today we have major financial crises in China, in Europe and in Puerto
Rico. In each case, officials have made some preparations. But can
the global financial system handle all three simultaneously?

As I've been reporting regularly,

the S&P 500 price/earnings ratio is far above historical norms,
indicating that Wall Street stocks are deeply into bubble territory.
That bubble is going to burst. There's no way to predict whether the
current group of problems will be the catalyst, but sooner or later it
will happen.

It's well to remember that we don't know to this day what triggered
the 1929 panic and crash, and so we have no way of knowing what will
trigger the next panic, but we can be sure it's coming.

At this writing on Sunday evening ET, Asian stocks are mostly falling,
and Wall Street futures are down 1-1.5%.


KEYS: Generational Dynamics, China, People's Bank of China, PBOC, Nomura,
Puerto Rico, Alejandro García Padilla,
Greece, Alexis Tsipras, European Central Bank, ECB

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*** 30-Jun-15 World View -- Turkey and Jordan separately plan invasions of Syria

This morning's key headlines from GenerationalDynamics.com

• Greece's chaos continues as banks are closed
• Turkey considers invasion of Syria to prevent a Kurdish state
• Jordan makes plans for Syria invasion to protect its northern border

****
**** Greece's chaos continues as banks are closed
****


Greeks rally in Athens on Monday in favor of 'NO' vote on referendum (Kathimerini)

With Greece's banks closed, citizens stood in long lines at ATMs,
where they are limited to withdrawals of 60 euros per person per day.
Thousands of pro-government protesters gathered in Syntagma
(Constitution) Square in Athens on Monday to demand that citizens vote
"NO" on Sunday's planned referendum. An anti-government rally is
expected on Tuesday, to demand a vote of "YES".

One commentator is describing Greece's referendum this way: If you
want to be executed vote YES; if you would rather commit suicide say
NO. Another says that only God can save Greece now.

It's really hard to believe the farcical proceedings going on with
the Greece crisis. On Monday Greece's government finally released
the wording of the referendum question to be asked on Sunday:

<QUOTE>"Should the proposal that was submitted by the
European Commission, the European Central Bank and the
International Monetary Fund at the Eurogroup of June 25, 2015,
which consists of two parts that together constitute their
comprehensive proposal, be accepted?"<END QUOTE>

It's referring to the Eurogroup proposal that's been withdrawn. What
are we to make of this?

Greece's prime minister Alexis Tsipras has referred to the June 25
proposal using the words "blackmail," "humiliation" and "ultimatum,"
making it clear that he would like Greeks to vote "No."

So what happens if the Greeks vote "No"? Tsipras seems to believe he
can go to the Eurogroup and say, "See? I won the referendum. Give me
all the bailout money I want, and I'll spend it as I please." What do
you think the Eurogroup of eurozone finance ministers will respond to
that demand?

What happens if the Greeks vote "Yes"? I heard a Syriza spokesman on
the BBC say that they still wouldn't agree to the Eurogroup proposal.
So what's the point of a referendum if the results are going to
ignored?

One analyst has suggested that Tsipras chose the above wording for an
emotional reason -- not to make sense, but to link this referendum to
Benito Mussolini’s October 1940 ultimatum to occupy Greece, which the
Greeks firmly rejected.

I've been asked to state my opinion as to whether Greece will remain
in the euro currency.

This is certainly NOT a Generational Dynamics prediction, but my
personal opinion is that Greece will, one way or another, remain in
the euro currency. The reasoning is that even if Greece issues
drachmas, there's no way to expel Greece from the euro. There are
even off-the-wall scenarios possible, where the drachma would simply
be equivalent to, say, one-tenth of a euro, or something like that,
probably with a variable exchange rate.

Another possibility is that the Game of Chicken is still being played.
The June 30 date may be a day of default, but otherwise it has
apparently become somewhat meaningless now, and the next crucial date
will be July 6, the day after the referendum. Some formula may yet be
found to reach an agreement at the last moment. However, this would
just "kick the can down the road" for three or four months, and new
negotiations on a new bailout loan would have to begin immediately.

Whatever scenario unfolds, it's going to be horrible for the Greek
people, and dangerous for the global financial system. Kathimerini and Forbes and Greek Reporter

****
**** Turkey considers invasion of Syria to prevent a Kurdish state
****

Turkish officials are sending shock waves through the Mideast by
notifying Nato and US officials that they are preparing plans to
invade Syria for humanitarian reasons.

By itself, this would be a significant escalation of the war in Syria.
But it also comes at a time when Jordan is considering its own
invasion of Syria to create a buffer zone (see next story), and at a
time when Israel is considering entering the Syrian war to protect the Druze community.

Turkey's stated objective is to create a buffer zone in Syria for
refugees who are targeted by the Islamic State (IS or ISIS or ISIL or
Daesh), but it's believed that the real reason is the prevention of a
Kurdish state along Turkey's border in Syria.

Over the weekend, Turkey's president Recep Tayyip Erdogan said:

<QUOTE>"We will never allow the establishment of a state in
Syria’s north and our south. We will continue our fight in this
regard no matter what it costs."<END QUOTE>

At a separate event, prime minister Ahmet Davutoglu said that Turkey
would take "all measures" to protect its borders:

<QUOTE>"No one should be concerned that the fire would spread
to Turkey. Even if we are in power for one second, we won't remain
silent; we will take all necessary measures. State structures will
implement these measures. No one is more important than the
comfort and peace of Turkey."<END QUOTE>

The triggering event for these concerns was the stunning victories of
the Kurdish YPG militias in the ISIS stronghold of Raqqa province,
especially the seizure of the town of Tal Abyad, which is right on
Turkey's border. ( "24-Jun-15 World View -- US aligns with Kurds and Shias in Syria and Iraq, angering Turks and Saudis"
)

According to reports, some 18,000 soldiers are expected to take part
in the operation to take place on both sides of the border, with plans
to establish a 110-km long and 28-km wide buffer zone.

A Turkish invasion of Syria would have significant implications for
Europe and Nato. Since Turkey is a member of Nato, the invasion would
technically mean that Nato was at war in Syria.

Reports indicate that Turkey will first try to get diplomatic support
of its Nato allies and US-led coalition forces. Failing that, "Plan
B" will come into plan, and Turkey will create a buffer zone on its
own, and will train and equip the Free Syrian Army. Daily Sabah (Turkey) and Telegraph (London) and Hurriyet (Turkey) and Today's Zaman (Turkey)

****
**** Jordan makes plans for Syria invasion to protect its northern border
****

While Turkey considers an invasion of Syria to create a buffer zone in
Syria's north, Jordan is considering an invasion to create a buffer
zone in Syria's south. This is apparently a completely separate plan,
with the joint timing a coincidence.

As in the case of Turkey, the stated object would be humanitarian, for
the protection of refugees. Like Turkey, Jordan is hosting millions
of Syrians who have been forced to flee their homes to escape the
fighting.

The plan is to bolster rebels from the anti-Assad Southern Front
alliance and the Free Syrian Army, many of whom have already received
US-supplied training in Jordan. It's not clear to what extent
Jordan's own army will participate, or whether Jordan will also build
a militarized zone that will separate the buffer zone from the Syrian
government forces in the north. However, this would be a significant
escalation of Jordan's involvement in Syria, and would contradict
oft-repeated statements by Jordanian officials that they would stay
out of the war.

As we've been writing for many months, there is a growing trend of
Muslims killing Muslims in the Mideast, heading for a major sectarian
war that will engulf the region. Middle East Eye and Times of Israel


KEYS: Generational Dynamics, Greece, Alexis Tsipras, Eurogroup,
Turkey, Recep Tayyip Erdogan, Ahmet Davutoglu,
Islamic State / of Iraq and Syria/Sham/the Levant, IS, ISIS, ISIL, Daesh,
Kurds, YPG militias, Tal Abyad, Nato, Syria, Bashar al-Assad,
Jordan, Free Syrian Army, Southern Front, Israel, Druze

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*** 1-Jul-15 World View -- France reverses policy, will sell advanced defense weapons to Georgia

This morning's key headlines from GenerationalDynamics.com

• France reverses policy, will sell advanced defense weapons to Georgia
• Greece joins Zimbabwe and Cuba in missing an IMF payment
• Congress may enable bankruptcy courts for Puerto Rico
• What were you doing last night at 23:59:60?

****
**** France reverses policy, will sell advanced defense weapons to Georgia
****


French Crotale (rattlesnake) anti-aircraft missile system

Ever since Russia invaded Georgia in 2008, annexing two Georgia
provinces, Abkhazia and South Ossetia, it's been an unwritten
European Union policy not to sell advanced weapons to Georgia, for
fear of angering Russia and increasing tensions.

However, there's little support for such a policy anymore, after
Russia invaded Ukraine, and annexed Ukraine's Crimea peninsula. As a
result, France has agreed to sell Georgia "advanced air defense
systems." The exact weapons systems to be supplied are top secret,
but it's known that the supplier will be ThalesRaytheonSystems (TRS),
which is a joint venture of the French defense electronics group
Thales and US arms maker Raytheon. The company produces a range of
ground-based surveillance radars, air defense command-and-control
systems, as well as cyber capabilities.

Supplying just radars to Georgia would not be a big deal, as France
supplied radars to Georgia after the end of the 2008 war with Russia.
The unknown is whether the weapons will include either anti-aircraft
systems or advanced anti-missile systems.

First discussions with France last year about the air defense deal
triggered a major political crisis in Georgia. Former Defense
Minister Irakli Alasania, who initiated the process of purchasing
French air defense units, was unexpectedly fired last year, and made
the sensational accusation that the deal was sabotaged by the prime
minister, presumably at Russia's request.

Alasania claimed last year that the air defense systems to be
purchased from France would be able to shoot down not only any type of
Russian aircraft, but also even Russian ballistic missiles of the
"Iskander" type. This claim was significant because Russia fired an
Iskander missile into Georgia on August 12, 2008, killing dozens of
civilians and a Dutch cameraman.

However, the current Georgia government is making no mention of
Alasania's statement, causing the political opposition to be
suspicious that the new deal with France was watered down to meet
demands by Russia. EurasiaNet and Georgian Journal and Jamestown

****
**** Greece joins Zimbabwe and Cuba in missing an IMF payment
****

At midnight on Tuesday, June 30, Greece became the first "developed"
nation to miss a payment to the International Monetary Fund (IMF),
joining the ranks of "undeveloped" nations, including Zimbabwe and
Cuba, that have also missed IMF payments.

Greece is now "in arrears" in payments to the IMF, but is not "in
default." The three major credit-rating companies have said failure
to pay the IMF doesn't constitute a default because that term is
reserved for private-sector creditors. Greece has requested an
extension for payment to the IMF, but it's thought to be unlikely that
the IMF will grant the request.

Earlier in the day, a panicky prime minister Alexis Tsipras made a
desperate last gasp proposal to the Eurogroup to request a new 2-year
bailout program. The Eurogroup rejected it immediately.

It now appears that there will be several days of arguing and
posturing on the part of both the Greek government and the European
leaders. Right now, it seems the most significant next event will be
the referendum on Sunday.

Since the referendum refers to a bailout plan that no longer exists,
no one knows what YES means or what NO means. So it's now being
widely assumed that YES will mean that Greece will remain in the
eurozone, and NO means that Greece should leave the eurozone. As
I wrote yesterday,
my personal
opinion, not a Generational Dynamics prediction, is that one way or
another Greece will remain in the eurozone, even if the referendum
vote is NO. Bloomberg and Kathimerini

****
**** Congress may enable bankruptcy courts for Puerto Rico
****

With $72 billion in debts and an extremely weak economy, Puerto Rico
is in an economic death spiral, and may run out of cash within a few
weeks, and be unable to pay salaries, pensions and other government
expenses.

The White House has stated that there are no plans to bail out Puerto
Rico.

Puerto Rico currently is barred by U.S. law from using Chapter 9 of
the federal bankruptcy code, a last-resort tool that enables
municipalities to resolve their debt in court. Detroit and other
municipalities have used the bankruptcy courts to resolve their own
debt issues, but Puerto Rico is barred from doing that.

Congressional leaders, led by New York Senator Charles Schumer, are
considering a bill that would give Puerto Rico access to the
bankruptcy courts.

A Puerto Rico bankruptcy, whether handled by a bankruptcy court of
not, would have major consequences for Americans. Two-thirds of
pension and retirement funds are holding Puerto Rico bonds, and these
funds stand to lose billions of dollars. Bloomberg and NY Daily News

****
**** What were you doing last night at 23:59:60?
****

The above headline may look like it contains a typo, since the last
second of every day is supposed to be 23:59:59. But on Tuesday, June
30, the last minute of the day was 61 seconds long, rather than 60.
Most days are 86400 seconds long, but Tuesday was 86401 seconds long.
The extra second was added as 23:59:60 GMT, or 7:59:60 ET.

Historically, an earth day has for centuries been defined as 84600
seconds long. But as it turns out, the rotation of the earth is a
variable fraction of a second longer than that. Furthermore, the
amount of variation can depend on things like earthquakes. The leap
second is added at irregular intervals, by international agreement, to
make up for that variation.

The fact that the dates of the leap seconds cannot be predicted in
advance causes severe problems for some computer software developers.

Even in 1972, the time of the first leap second, system programmers
for IBM mainframe operating systems had to deal with problems
associated with leap seconds.

But today, the problems are much more severe. The guidance system for
a rocket or missile may fail because of an added second at an
unexpected time.

Real time financial systems have to deal with potentially thousands of
transactions per second, and if a leap second is thrown into the mix,
any financial system might make an incorrect computation or even
crash.

For that reason, many stock exchanges decided to shut down their
trading systems for a few minutes before and after Tuesday evening's
leap second. Better to be safe than sorry. Bloomberg and Time Service Dept., U.S. Naval Observatory


KEYS: Generational Dynamics, France, Russia, South Ossetia, Abkhazia, Georgia,
Ukraine, Crimea, ThalesRaytheonSystems, Thales,
Raytheon, Irakli Alasania, International Monetary Fund, IMF,
Greece, Zimbabwe, Cuba, Alexas Tsipras, Eurogroup,
Puerto Rico, Detroit, Charles Shumer, leap seconds

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*** 2-Jul-15 World View -- Egypt in a 'state of war' in northern Sinai

This morning's key headlines from GenerationalDynamics.com

• Egypt in a 'state of war' in northern Sinai
• Israel approves Egypt's military buildup in Sinai
• Kuwait in 'state of war' with ISIS, will require nationwide DNA testing

****
**** Egypt in a 'state of war' in northern Sinai
****


Egyptian army near Al-Arish in the Sinai peninsula on Wednesday (Reuters)

Egypt's Prime Minister Ibrahim Mahlab said, "We’re in a real state of
war," at a cabinet meeting on Wednesday, as Egypt's army was fighting
a protracted battle in northern Sinai with jihadist militants.

Egyptian F-16 warplanes and Apache helicopters attacked the militants'
positions for several hours Wednesday afternoon and killed more than
90 jihadists, according to Egyptian sources. The militant assault
targeted military and police personnel in two towns, El Arish and
Sheikh Zuweid, located in northern Sinai near the border with Gaza and
Israel. More than 70 Egyptian soldiers and policemen were also
killed.

This was different from the "usual" terror attack that Egypt has been
experiencing, in that it was a sustained militia attack on Egypt's
security forces.

The militants were from the terror group Ansar Bayt al-Maqdis (ABM -
Ansar Jerusalem - Champions of Jerusalem), which has conducted
numerous attacks in Egypt's Sinai, along the border with Israel and
Gaza, and last year changed its name to "Sinai Province," meaning
"Sinai Province of Islamic State," when it repudiated its allegiance
to al-Qaeda and declared its allegiance to the Islamic State (IS or
ISIS or ISIL or Daesh).

Sinai Province has issued a statement claiming that they conducted
simultaneous coordinated terror attacks at 15 different locations.
They also claimed to have downed an Egyptian warplane with an
anti-aircraft missile, but that claim was unconfirmed.

Wednesday's attack followed by two days the assassination of Egypt's
top public prosecutor when a car bomb struck his convoy in Cairo.
Egypt's president Abdel al-Fattah al-Sisi had already promised a
crackdown in response to the bombing. It's now expected that he's
going to be pressured to seek revenge for Wednesday's attack, the
worst in Egypt's recent history. El Ahram (Cairo) and Bloomberg and El Ahram

****
**** Israel approves Egypt's military buildup in Sinai
****

The 1979 Camp David peace treaty between Egypt and Israel requires the
approval of each country for the other to deploy additional military
forces near their common border.

Following Wednesday's terror attack in North Sinai, Israel has
reportedly decided to grant all Egyptian requests to reinforce troops
in the Sinai Peninsula. Jerusalem Post

****
**** Kuwait in 'state of war' with ISIS, will require nationwide DNA testing
****

Kuwait's interior minister Sheikh Mohammad Al-Khaled Al-Sabah
said on Wednesday:

<QUOTE>"We are in a state of war. It's a war that had been
decided with this cell. But there are other cells, and we will not
wait for them to try their luck with us."<END QUOTE>

Al-Sabah was alluding to the Kuwait terror attack of last week, one of
the four terror attacks that occurred in four countries on a single
day. ( "27-Jun-15 World View -- Terror attacks in Kuwait, France, Somalia and Tunisia highlight growing sectarian war"
) All four attacks targeted Friday
prayers at mosques during the holy month of Ramadan.

The terror group "Najd Province" claimed responsibility for a suicide
bombing attack on the Imam Sadiq Mosque in Kuwait's capital city,
Kuwait City, during Friday prayers, killing 27 people and wounding
over 200. The terrorist wore a white robe that concealed the bomb,
and was not prevented from entering the crowded mosque.

The name "Najd Province" refers to the central region of Saudi Arabia
where the ultraconservative Sunni ideology of Wahhabism originated.
Like "Sinai Province" in Egypt, the name was adopted when the
militants pledged allegiance to ISIS. Al-Sabah was referring to "Najd
Province" as the cell that triggered this war.

The first step in Kuwait's war against ISIS is a new law that requires
mandatory DNA testing on all of the country's citizens and foreign
residents. The interior ministry will establish a DNA database of all
1.3 million citizens and 2.9 million foreign residents. The database
will be used to make quick identification and arrests during
terror attacks, according to the law's sponsors.

Anyone who refuses to give a DNA sample will be jailed for one year,
and anyone who gives a fake sample can be jailed for seven years.

As we reported last week,

Tunisia is responding to the terror attack it suffered by
closing 80 mosques that are "spreading venom."

What we're seeing is a broad trend where leaders of countries where
terror attacks have occurred are being forced by public opinion to
take repressive measures, in the hopes of preventing future terror
attacks. Today we've described such repressive measures in Egypt,
Kuwait and Tunisia. It's not thought that any of the repressive
measures will prevent "lone wolf" terror attacks, which are becoming
increasingly common.

Generational Dynamics predicts that the Mideast is headed for a major
generational crisis war, refighting the bloody, genocidal 1948 war
that followed the partitioning of Palestine and the creation of the
state of Israel, and expanding to a full-scale sectarian war between
Sunnis and Shias. International Business Times (London) and AFP


KEYS: Generational Dynamics, Egypt, Sinai, Ibrahim Mahlab, Abdel Fattah al-Sisi,
El Arish, Sheikh Zuweid, Sinai Province, Israel, Camp David,
Ansar Jerusalem, Ansar Bayt al Maqdis, ABM, Champions of Jerusalem,
Islamic State / of Iraq and Syria/Sham/the Levant, IS, ISIS, ISIL, Daesh,
Kuwait, Sheikh Mohammad Al-Khaled Al-Sabah, Najd Province

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*** 3-Jul-15 World View -- Egypt's military brings the Sinai '100 pct under control' in 2nd day of fighting

This morning's key headlines from GenerationalDynamics.com

• Egypt's military brings the Sinai '100 pct under control' in 2nd day of fighting
• Israeli general says that Hamas is supporting terrorist group in Sinai
• ISIS attack on Hamas pushes Hamas and Egypt closer together
• Possible panic in China's stock markets

****
**** Egypt's military brings the Sinai '100 pct under control' in 2nd day of fighting
****


Mourners carry flag-wrapped casket during the funeral of a slain soldier, in Alexandria, Egypt, on Thursday (Al-Ahram)

The fighting in Sinai continued into a second day. Air strikes from
Egypt's warplanes killed 22 militants in dawn raids on Thursday The
situation in Sinai is now "100% under control," according to Egyptian
officials. However, in the town of Sheikh Zuweid, where the militants
attacked a string of army checkpoints on Wednesday, the army is still
going from house to house, searching for extremists, and removing
explosive booby traps and mines.

According to Egyptian officials, at least 300 militants launched the
offensive on Wednesday, of whom 100 were killed, while 17 soldiers and
security officers were killed.

The militants were from the terror group Ansar Bayt al-Maqdis (ABM -
Ansar Jerusalem - Champions of Jerusalem), which has conducted
numerous attacks in Egypt's Sinai, along the border with Israel and
Gaza, and last year changed its name to "Walayat Sinai" (Sinai
Province), meaning "Sinai Province of Islamic State," when it
repudiated its allegiance to al-Qaeda and declared its allegiance to
the Islamic State (IS or ISIS or ISIL or Daesh).

There's been a surge in violence across the Mideast since ISIS called
for increased violence during the holy month of Ramadan. Egyptian
officials are going beyond blaming ISIS, and placing the blame on the
Muslim Brotherhood, which is a banned organization in Egypt. Al Ahram (Cairo) and BBC and
AP

****
**** Israeli general says that Hamas is supporting terrorist group in Sinai
****

An Israeli Defense Forces (IDF) general says that Hamas is actively
assisting the ISIS-linked Sinai Province terror group that
conducted the huge terror attack in Sinai on Wednesday.
According to Major General Yoav Mordechai:

<QUOTE>"We have clear information that Hamas supports the
Walayat Sinai organization, which belongs to ISIS.

In the latest attacks, Hamas gave assistance in the form of
weapons and organization to the group that supports ISIS. We have
examples of commanders in Hamas who took an active part in this
aid. Wael Faraj, a battalion commander in Hamas's armed wing,
smuggled wounded casualties from Sinai to Gaza."<END QUOTE>

However, other reports indicate that Egypt may not agree with this
assessment. Jerusalem Post

****
**** ISIS attack on Hamas pushes Hamas and Egypt closer together
****

ISIS has released a video targeting Palestinians that calls Hamas
heretical and accuses its officials of apostasy. The main charges
appear to be too much interest in democracy, too close relations with
the Shia Muslim Hezbollah and Iran, and refusal to govern by Sharia
law.

According to the video:

<QUOTE>"The Islamic State has its eyes set on Jerusalem and
is getting closer day after day to Al-Aqsa Mosque along the path
paved by Abu Musab Al-Zarqawi [the head of al-Qaeda in Iraq] and
Sheikh Osama Bin Laden [the head of al-Qaeda].

A message to the tyrants of Hamas, you are nothing in our
reckoning. You, Fatah and all the secularists, we count you as
nothing. God willing, we shall uproot the state of the Jews. You
are nothing but froth that will be gone as we move in. God
willing, Gaza will be governed by Sharia despite
you. ...

By Allah, we shall make your young and old weep just as we did
very recently to your dogs, the apostates, the hypocrites and the
liars, those who grew rotten beards in Yarmouk camp, those who
fought against the law of God. By God, we shall do it again and
Gaza will see the blood and the dismembered bodies."<END QUOTE>

Egypt's policy remains that many of the terrorist cells in Sinai
are receiving people and supplies from Gaza, through illegal tunnels
dug underneath the wall separating Gaza from Egypt.

However, with Hamas and Egypt having common interests in fighting
ISIS, the possibility exists that Hamas can be convinced to support
Sinai terrorism less. Egypt's media have sharply reduced the
anti-Hamas rhetoric and incitement, and there have been reports in
Arab media outlets of a "honeymoon" in relations between Hamas and
Egypt. It's fair to assume that comes from Egypt's president Abdel
al-Fattah al-Sisi.

Regional politics also play a part. Egypt used to be the main
mediator between Israel and Gaza, but since last summer's Gaza war,
when Egypt clearly sided with Israel, Hamas has turned to Qatar as a
mediator, with reports of talks about a long-term ceasefire between
Israel and Hamas. Egypt would like to return to its former central
role as a mediator, and a cooling of hostilities would serve that
purpose. Middle East Monitor and YNet (Israel)

****
**** Possible panic in China's stock markets
****

As of this writing on Thursday evening ET, Friday morning in China,
the Shanghai stock market has fallen over 6%, and it's only
been open for a little over an hour. Whether this is a full-scale
panic remains to be seen.

The Shanghai index has fallen 30% since June 12.


KEYS: Generational Dynamics, Egypt, Sinai, Abdel Fattah al-Sisi,
Sheikh Zuweid, Walayat Sinai, Sinai Province, Israel,
Ansar Jerusalem, Ansar Bayt al Maqdis, ABM, Champions of Jerusalem,
Islamic State / of Iraq and Syria/Sham/the Levant, IS, ISIS, ISIL, Daesh,
Muslim Brotherhood, Israeli Defense Forces, IDF, Yoav Mordechai,
Abu Musab al-Zarqawi, al-Qaedi in Iraq, Osama bin Laden, al-Qaeda,
Hezbollah, Iran, Qatar, China, Shanghai

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*** 4-Jul-15 World View -- Greece heads for further chaos with referendum on Sunday

This morning's key headlines from GenerationalDynamics.com

• Greece heads for further chaos with referendum on Sunday
• IMF report on Greece raising concerns about IMF's credibility
• China hunts for 'stock manipulators' as market crashes

****
**** Greece heads for further chaos with referendum on Sunday
****


A woman in Athens puts up referendum campaign posters. 'OXI' means 'NO' in Greek. (Reuters)

On Sunday, Greece will vote in a referendum to choose whether to
accept Europe's last bailout deal, which has already expired on
Tuesday and no longer exists. No one has any clue what a YES or NO
vote will mean, except that it's essentially a referendum on Greece's
prime minister Alexis Tsipras and his far left Syriza party.

Alexis has been campaigning non-stop, telling people nonsense -- that
he guarantees that their pensions and salaries and bank accounts are
safe, and that a NO vote will mean that the European creditors will
have to back down, and give the Greeks back their dignity, with no
more austerity. Others say that a NO vote will mean that Greece will
leave the euro currency, and possibly even the European Union.

There have been huge rallies by YES and NO proponents in Athens.
Polls show about 44% each for the YES and NO voters, with about 12%
undecided.

Another bizarre twist occurred on Thursday, when the International
Monetary Fund (IMF) issued a report saying that Greece's debt
situation was far worse than previously reported, and is not
sustainable. What's bizarre about it is that it was good news to
Tsipras. According to Tsipras:

<QUOTE>"Yesterday an event of major political importance
happened. The IMF published a report on Greece's economy which is
a great vindication for the Greek government as it confirms the
obvious - that Greek debt is not sustainable."<END QUOTE>

So Tsipras's message is: "Hooray! The country is totally screwed,
which is good for me! Yayyyyyyyy!"

Europeans are worried that if the far left wins in Greece because of
this "bad news is good news for me" message from Tsipras, then far
left and communist parties in Spain, Portugal and Italy will try the
same thing.

If we can put aside Tsipras's glee for a moment, then to the rest of
us it looks like a disaster either way, NAI or OXI. Kathimerini and BBC and Reuters

****
**** IMF report on Greece raising concerns about IMF's credibility
****

Thursday's report by the International Monetary Fund (IMF), described
above, is raising questions about the credibility of the IMF, and its
leader Christine Lagarde.

First, we have to look how we got here. Long-time readers know that
I've been saying from the beginning that there is no solution to
Greece's crisis -- not that no solution has been found, but that no
solution exists. Other people have said similar things. And I've had
lots of fun mocking European leaders who spoke nonsense, especially
Jean-Claude Jüncker, who said, When it becomes serious, you have to lie.
I've certainly had a lot of
fun with that.

But the institutional lenders to Greece -- the European Commission
(EC), European Central Bank (ECB) and International Monetary Fund
(IMF), formerly known as the "Troika" -- have been engaged in a kind
of game with Greece. The Troika would demand austerity reforms,
Greece would promise to implement the reforms another partial bailout
payment would be paid to Greece, but then Greece would implement as
few of the reforms as possible. The "can would be kicked down the
road" for a few months, at which time the process would start again.

When Alexis Tsipras came to power in January, he decided to call the
Troika's bluff, and say: Your method won't work (because nothing can
work), so I'm going to force you to do what I want (which is my far
left agenda).

However, the Troika kept up the pretense that there exists a solution
to the Greek crisis, and blamed Tsipras for being so unreasonable.
But now the IMF report on Greece has undermined the Troika's
pretenses, saying that Greece's growth is unsustainable. And Tsipras
is jumping up and down with glee because, he says, they agree with
him.

And that's causing problems for the IMF and Christine Lagarde. If I
and other people have known since the beginning that Greece's debt is
unsustainable, and there's no solution to the debt problem, then why
didn't Lagarde speak up sooner? Was she lying? And why did she waste
so much IMF money going to a lost cause?

Inquiring people want to know, and this is just one more element in
the unending crisis in the Greece debt story. Australian Financial Review and Reuters

****
**** China hunts for 'stock manipulators' as market crashes
****

The Shanghai stock exchange index fell 6% on Friday, 10% for the week,
and nearly 30% since June 12. The China Securities Regulatory
Commission (CSRC) has been desperately trying different measures, such
as cutting interest rates and allowing more stocks to be purchased on
credit (margin), but the measures have been ineffective.

According to one Chinese analyst, "The government must rescue the
market, not with empty words, but with real silver and gold. It's a
disaster. If it's not, what is it?" What it is -- is a huge stock
market bubble bursting.

Over 100 million Chinese investors, including many older people who
have invested their life savings, have been spending 6 hours a day
staring glumly at their mobile phones, watching the stock market index
fall, and watching their own savings be destroyed. This feeds into
the Chinese Communist Party's greatest paranoia - a people's
rebellion.

Now the CSRC has set up a team to look at "clues of illegal
manipulation across markets." This should be a laugh. Some poor slob
who sold some stocks last week is going to be blamed and sent to jail.

When I wrote last week that, "It's well to remember that we don't know
to this day what triggered the 1929 panic and crash," a web site
reader wrote to say that Milton Friedman had written extensively about
it. Actually, Milton Friedman has written extensively about the 1930s
Great Depression, but nobody knows why the stock market panic occurred
on the particular day, October 28, 1929, rather than a few months
earlier or later.

Wall Street stocks are also in a large bubble, as I've described many
times, with the S&P 500 Price/Earnings ratio at a historically high
21.3. What can happen in Shanghai can happen on Wall Street. If you
have your life savings in stocks, it's not impossible that you too
could lose 30% of your savings in three weeks. Reuters


KEYS: Generational Dynamics, Greece, Alexis Tsipras,
European Central Bank, ECB, International Monetary Fund, IMF,
European Commission, EC, Troika, Syriza, Christine Lagarde,
China, Shanghai, China Securities Regulatory Commission, CSRC,
Milton Friedman, Great Depression, October 28 1929

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*** 5-Jul-15 World View -- Greece's referendum revives memories of a bloody civil war

This morning's key headlines from GenerationalDynamics.com

• Greeks are deeply divided over Sunday's referendum
• Greece's referendum revives memories of a bloody civil war
• Tunisia declares a 'state of war' as Mideast meltdown continues

****
**** Greeks are deeply divided over Sunday's referendum
****


Greeks in Athens wait in line to use the ATM (Kathimerini)

Greeks are deeply divided as they prepare to vote on Sunday on the
referendum nominally whether to agree to the lenders' austerity plan
in return for a new infusion of bailout cash.

News reports indicate that Alexis Tsipras's government has taken over
all communications channels, plastering "OXI" (NO) posters all over
Athens, and broadcasting Tsipras's speeches constantly. The polls
indicate that Greeks are split, 44% for each side, with about 12%
undecided. However, some analysts have pointed out that there's so
much pressure to vote NO that people may be afraid to say YES to a
pollster, which might suggest that many of the undecided voters will
actually vote YES in the polling booth. This in fact happened in the
case of case of the UK's May poll on Scotland's independence, where
polls completely failed to predict the overwhelming vote to reject
independence. ( "9-May-15 World View -- Britain's surprise election and Chaos Theory"
)

Some Greeks are using Bitcoins to circumvent the capital controls that
have been imposed this week. BTCGreece is the only Greece-based
Bitcoin exchange, and thousands of people have been depositing their
euros. Then can then transfer the money out of Greece as Bitcoins,
which is otherwise illegal.

Thousands of people will be unable to vote because they can't afford
to travel to their home regions, usually where they were born.
According to one woman who works in the tourism industry and would
have to travel 220 miles from Athens to vote:

<QUOTE>I don’t want to spend the money and I don’t want to
vote. To travel all that way and to spend the money, for what?
It’s not going to change anything. There is no good option for
Greece."<END QUOTE>

Indeed, things may get worse very quickly after the referendum. The
chairman of the National Bank of Greece, Louka Katseli, said that
Greece's banks will completely run out of money on Monday evening.
"Liquidity is adequate through the end of the bank holiday," according
to Katseli. After that, it will depend on whether the European
Central Bank (ECB) will extend more emergency liquidity assistance
(ELA), and that may depend on the result of the referendum vote.

Exit polls should start coming out until 7 pm in Athens, or 1 pm ET on
Sunday. Final results will probably be available on Monday. Kathimerini and Reuters and Bloomberg

****
**** Greece's referendum revives memories of a bloody civil war
****

Sunday's referendum is stirring several historical memories. The
country hasn’t held a referendum since 1974, when 69 percent voted
against the return of the former king after the fall of a military
dictatorship.

However, for many older Greeks, the strongest memory is of Greece's
bloody civil war following the expulsion of the Nazis after World War
II. Al-Jazeera's Athens correspondent John Psaropoulos told how the
referendum is stirring memories of the civil for his mother (my
transcription):

<QUOTE>"I came home very late the other night, and had a
conversation with my mother, who remembers the civil war, 1946-49,
fought in this country between the resistance to German occupation
which had been predominately communist, and then after the
departure of the German occupation, attempted to seize power by
force.

And I said to her what do you think of the NO vote, which would
strengthen the ruling left wing Syriza government. She says, I
don't know, I greatly fear another civil war. I remember they did
terrible things last time around.

She remembers when her local police station was besieged by the
communist forces. The young policemen inside were convinced that
if they walked out and surrendered the property, their lives would
be spared.

Instead, they were taken to a mountain top which is just to my
left here on the outskirts of Athens, and their throats were cut
using cans -- food cans -- opened tins.

This is the sort of brutality that Greece remembers from the civil
war. It's been a taboo subject for many decades, because it split
families apart, it split the entire country.

This is the first time that the left wing has been in power, and
that was the last time it made a serious bid for power. So people
have been connecting the divisive events of 1946-49 with the
present. It's not that Syriza now threatens to take up arms
against half the nation, but people are wondering whether people
who have made such a violent and ultimately unsuccessful bid for
power, and now have come to it with such a great thirst, with a
sense of historic vengeance - are capable of wielding it in a way
that unites the country, rather than divides it."<END QUOTE>

From the point of view of Generational Dynamics, this is a very real
concern. There have been huge rallies in Athens, with tens of
thousands of extremely passionate demonstrators on each side. These
rallies have been overwhelmingly peaceful, and no one really expects
any violence next week, no matter which side wins the referendum.

But Greece's economy is a disaster, with no hope of improving for
years. Those same opposing rallies, with tens of thousands on
each side, could reappear in the weeks to come, and with a lot
more venom.

Psaropoulos was asked what he thought would happen after the
referendum. He gave a very pessimistic answer:

<QUOTE>"Well, anything can happen this week. The entire
country has been in hiatus for the last 7 days. Because banks
have been closed, businesses have been semi-operational, a lot of
them have actually sent people home for several days.

Now we're in a political hiatus as well. We don't know if the same
government will be in office Monday night. We don't know whether
Greece's creditors will continue to extend any kind of offer of
financial assistance, a cash-for-reforms sort of program such as
those that Greece has been dependent upon since 2010. Everything
for the moment is up in the air. The degree of uncertainty is
such that a lot of people are going out and stocking up on food.

An account I spoke to earlier today said, I'm afraid of the NO
vote, but then again I know that if we vote yes to this package of
austerity measures, none of my clients can possibly do them. 23%
VAT on electricity and other utilities, impossible, she said.
100% of next year's tax income paid in advance this year, in
addition to the current tax income - that's one of the measures on
the austerity package going on the referendum tomorrow. .

Also impossible, she said. Nobody can possibly do these things.

So I think the best case scenario here is that the Greeks can
ultimately come to some sort of deal that they can't fully honor,
and only partially honor. I think those are the terms in which
many people are thinking the day following this referendum here in
Athens."<END QUOTE>

These last two sentences are interesting. This is exactly what I described yesterday
has been
happening all along, since 2010. Greece would promise to implement
many reforms in order to get another bailout loan, but then Greece
would implement as few of the reforms as possible. This would "kick
the can down the road" a few more months, and then the whole cycle
would start all over again.

It's interesting that Psaropoulos is putting this out as the best
scenario to continue. That would mean that it's being talked about in
Athens, and probably in Brussels as well, as the best way to continue,
and to "kick the can down the road" once more.

****
**** Tunisia declares a 'state of war' as Mideast meltdown continues
****

Two days ago, I reported that leaders of Egypt and Kuwait
were declaring that their countries were in a
"state of war," thanks to terrorist activities. This followed terror attacks in Kuwait, France, Somalia and Tunisia
on June 26.

Now Tunisia's President Beji Caid Essebsi on Saturday said that the
country was in a "state of war." He declared a 30-day state of
emergency powers. The declaration is linked to the terror attack that
struck Sousse, Tunisia, on June 26. A terrorist with a Kalashnikov
assault rifle strolled through the hotel grounds, opening fire at the
pool and beach, reloading his weapon several times and tossing an
explosive. He killed 37 people. There had also been an equally
horrific terror attack at a museum in Tunis
on March 18, killing 21 tourists and a policeman.

Essebsi gave a nationwide televised speech on Saturday:

<QUOTE>"Tunisia faces a very serious danger and it should
take any possible measures to maintain security and safety.

Terrorism is spreading. I believe, and I say this plainly and
clearly. If this were to happen, which happened in Sousse. If this
were to happen again, the country would collapse.

Now, we are on a state of war. We have to confront this with what
is necessary to fight a war. Undoubtedly, in a way, the armed
forces have a role, and they have to be on a state of alert. The
national guard, the police. But this war is special."<END QUOTE>

When Essebsi said that "the country would collapse" if there were
another similar attack, he may not have been exaggerating.

Tunisia depends heavily on its tourist industry. According to
Tunisia's Tourism Ministry, travel and tourism was 15% of Tunisia's
GDP in 2014. 473,000 jobs are supported by travel and tourism, 13.8%
of total employment.

The two terrorist attacks specifically targeted foreign tourists, with
the result that Tunisia's tourist industry has already been pretty
much wiped out for the year. In this sense, the terrorists have
already won. AFP and Reuters and Daily Mirror (London)


KEYS: Generational Dynamics, Greece, Alexis Tsipras, BTCGreece, Bitcoin,
European Central Bank, ECB, National Bank of Greece, Louka Katseli,
Greece, Emergency Liquidity Assistance, ELA,
Al-Jazeera, John Psaropoulos,
Tunisia, Sousse, Beji Caid Essebsi

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I just heard on NPR this afternoon that the Greeks voted "OXI" (no).

Originally Posted by The Wonkette

I just heard on NPR this afternoon that the Greeks voted "OXI" (no).

Overwhelmingly.

*** 6-Jul-15 World View -- China announces 'Market Stabilization Fund' to stem stock market panic

This morning's key headlines from GenerationalDynamics.com

• Europe enters a dangerous period after Greece's Tsipras wins overwhelming victory
• China takes emergency measures to stem stock market panic
• China's 'Market Stabilization Fund' mimics America's 'Organized Support' in 1929
• In lavish ceremony, the new King of Tonga is crowned -- by an Australian

****
**** Europe enters a dangerous period after Greece's Tsipras wins overwhelming victory
****


German Finance Minister Wolfgang Schäuble has suggested Greece could leave the Eurozone 'temporarily'

Greece's far left prime minister Alexis Tsipras won an overwhelming
referendum victory on Sunday, with 61% of the voters favoring his
position. No one knows what this means, except that it represents a
major political victory for Tsipras, and a major humiliation for
Merkel and the Eurogroup.

Tsipras's Syriza party won the victory in a campaign where he called
the Germans "terrorists," and where promised that his victory would
make the Eurogroup of eurozone finance ministers bend to his will and
immediately give him a new bailout deal. He also promised that the
banks would open on Tuesday.

The relations between Tsipras and other European leaders is now
vitriolic, and it will be necessary for German Chancellor Angela
Merkel and the others to swallow hard to force themselves not to shut
out Tsipras completely. On the other hand, it may be politically
impossible for Tsipras to compromise, after the overwhelming
referendum victory. At the very least, the communists in his
own governing coalition will not tolerate compromise.

Jeroen Dijsselbloem, head of the Eurogroup, said: "I take note of the
outcome of the Greek referendum. This result is very regrettable for
the future of Greece."

Germany's Economy Minister Sigmar Gabriel said:

<QUOTE>"With the rejection of the rules of the euro zone
... negotiations about a program worth billions are barely
conceivable. ...

Tsipras and his government are leading the Greek people on a path
of bitter abandonment and hopelessness. ... [Tsipras has] torn
down the last bridges on which Greece and Europe could have moved
towards a compromise."<END QUOTE>

Germany's Finance Minister Wolfgang Schäuble said:

<QUOTE>"Greece is a member of the eurozone. There's no doubt
about that.

Whether with the euro or temporarily without it: only the Greeks
can answer this question. And it is clear that we will not leave
the people in the lurch."<END QUOTE>

As this suggests, EU leaders have drawn up emergency plans in cases
Greece becomes insolvent, and the country is forced to leave the euro
currency.

One part of this would be "humanitarian assistance," to help the
Greek people survive.

The most important part of this would be a parallel currency, such as
government IOUs. Unlike the euro, a parallel currency could be
depreciated by Greece. According to Dr Jörg Krämer, Chief Economist
at Commerzbank:

<QUOTE>"If the Greek state were to become insolvent, it could
pay its employees, pensioners and suppliers by means of promissory
notes (IOUs) --- as the US state of California did in 2009. Banks
would credit the recipients of these promissory notes with the
equivalent value on separate accounts.

This parallel currency would allow the Greeks to pay their
taxes. Moreover, the value of this parallel currency would
depreciate significantly versus the euro, which would improve the
price competiveness of goods produced in Greece.

A parallel currency would be legally possible if the Greek state
avoided giving it the status of legal tender, prohibited by
Article 128 of the Treaty on the Functioning of the European
Union. But even without this status, a parallel currency could
circulate if the state offered the possibility of using it to pay
taxes."<END QUOTE>

Once the currency had become stable, Greece could return to the euro.

As I've said several times in the past, my expectation is that, one
way or another, Greece is going to remain in the euro currency.
But whether Greece stays in the euro or not, it's only going
to be after multiple crises.
Daily Mail and FxStreet and Reuters

****
**** China takes emergency measures to stem stock market panic
****

China appears to be in or close to a state of panic over the
accelerating collapse of the stock market bubble since June 12,
resulting in a 30% fall in the Shanghai Composite Index.

• On Friday, the China Securities Regulatory Commission (CSRC)
  set up a team to look at "clues of illegal manipulation across
  markets." Some reports suggest that American banks are causing the
  losses.
  
• Chinese authorities followed up on Saturday by arresting a man who
  posted on social media that "there are people, because of the stock
  market crash, who have jumped off buildings in Beijing's Financial
  Street." This is reminiscent of the people who jumped off buildings
  in New York after the 1929 panic.
  
• The CSRC has frozen new public stock offerings (IPOs). The
  reasoning is that people are buying stocks in the new offerings,
  rather than buying stocks in the older companies. The older companies
  are the ones in the Shanghai Composite Index, and so if no one buys
  those stocks, then then index falls.
  
• The CSRC will relax margin trading requirements, making it easier
  to buy stocks on credit (always a good thing, naturally).
  
• Officials are setting up a "market stabilization fund": Fund
  managers and brokers will invest close to $19 billion of their own
  money in stocks, in order to push up prices.

The "market stabilization fund" is tiny compared to the more than $3
trillion worth of market capitalization that the Chinese markets have
lost in the past two weeks. Reuters and Business Times (Singapore) and Reuters

****
**** China's 'Market Stabilization Fund' mimics America's 'Organized Support' in 1929
****

A close reading of the classic book "The Great Crash - 1929" by
John Kenneth Galbraith reveals that China is following the same
path as America's 1929 panic.

During the year prior to June 12, China's stock market shares
increased by 250%. Here's what happened in 1928, according to
Galbraith:

<QUOTE>"Brokers' loans reached four billion on the first of
June 1928, five billion on the first of November, and by the end
of the year they were well along to six billion. Never had there
been anything like it before. ... People were swarming to buy
stocks on margin -- in other words, to have the increase in price
without the costs of ownership. This cost was being assumed, in
the first instance, by the New York banks, but they, in turn, were
rapidly becoming the agents for lenders the country over the and
even the world around. ...

Never had there been a better time to get rich, and people knew
it. 1928, indeed, was the last year in which Americans were
buoyant, uninhibited, and utterly happy. It wasn't that 1928 was
too good to last; it was only that it didn't last. ... As Walter
Begehot once observed: 'all people are most credulous when they
are most happy.'"<END QUOTE>

As in recent months in China, people were getting worried about a
bubble and a recession by mid-1929, but everyone was optimistic:

<QUOTE>"The official optimists were many and articulate.
Thus in June, Bernard Baruch told Bruce Barton, in a famous
interview published in The American Magazine [[June 1929]]
that "the economic condition of the world seems on the verge of a
great forward movement." He pointed out that no bears had houses
on Fifth Avenue. Numerous college professors also exuded
scientific confidence. In light of later developments, the record
of the Ivy League was especially unfortunate. In a statement
which achieved minor notoriety, Lawrence of Princeton said that
"the consensus of Judgment of the millions whose valuations
function on that admirable market, the Stock Exchange, is that
stocks are not at present over-valued." He added: "Where is that
group of men with the all-embracing wisdom which will entitle them
to veto the judgment of this intelligent multitude?" [[WSJ,
mid-1929]]

That autumn [1929] Professor Irving Fisher of Yale made his
immortal estimate: 'Stock prices have reached what looks like a
permanently high plateau.' [Fisher added: 'I expect to see the
stock market a good deal higher than it is today within a few
months']"<END QUOTE>

Until September or October of 1929, the decline in economic activity
was very modest. But on Friday, October 18, the market fell 2.5%, and
on Sunday, the NY Times headline read, "Stocks driven down as wave of
selling engulfs the market."

That was the day of the announcement of "organized support" or, as the
Chinese are calling it, a "market stabilization fund." According
to Galbraith:

<QUOTE>"Never was there a phrase with more magic than
“organized support.” Almost immediately it was on every tongue
and in every news story about the market. Organized support meant
that powerful people would organize to keep prices of stocks at a
reasonable level.

Opinions differed as to who would organize this support. Some had
in mind the big operators like Cutten, Durant and Raskob. They, of
all people, couldn’t afford a collapse. Some thought of the
bankers — Charles Mitchell had acted once before, and certainly if
things got bad, he would act again. Some had in mind the
investment trusts.

They held huge portfolios of common stocks, and obviously they
could not afford to have them become cheap. Also, they had
cash. So if stocks did become cheap, the investment trusts would
be in the market picking up bargains. This would mean that the
bargains wouldn’t last. With so many people wanting to avoid a
further fall, a further fall would clearly be
avoided."<END QUOTE>

So that brings us to where China is today. Four days following the
announcement of "organized support," the market began a full-scale
panic.

So officials in China are going to be very nervously watching the
market in the days to come, following the creation of the "market
stabilization fund."

****
**** In lavish ceremony, the new King of Tonga is crowned -- by an Australian
****

The newly minted 56-year-old King Tupou VI of Tonga, Polynesia's only
constitutional monarchy, was crowned on Saturday in a lavish ceremony
costing $1.9 million. Tens of thousands of Tongans were in the
streets chanting, "Long live his majesty, long live the queen."

What I found interesting about this story is that the crown was placed
on his head by an Australian, not by a Tongan. By tradition, Tongans
are forbidden to touch the head of the king. So a retired Methodist
minister D'Arcy Wood, of Gisborne, Victoria, in Australia, placed the
crown on his head.

News stories don't indicate whether or not Queen Nanasipau'u is
allowed to touch her husband's head. Beyond that, I guess they're
going to have to import a barber from Australia as well, whenever the
King needs a haircut. Sydney Morning Herald


KEYS: Generational Dynamics, Greece, Alexis Tsipras, Syriza,
Germany, Sigmar Gabriel, Wolfgang Schäuble, Angela Merkel, Jörg Krämer,
China, Shanghai, Market stabilization fund, John Kenneth Galbraith,
Tonga, King Tupou VI, D'Arcy Wood, Queen Nanasipau'u

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*** 7-Jul-15 World View -- Surge in Boko Haram attacks raises questions about new president of Nigeria

This morning's key headlines from GenerationalDynamics.com

• Greece's crisis deepens as German position hardens
• Surge in Boko Haram attacks raises questions about new president of Nigeria

****
**** Greece's crisis deepens as German position hardens
****


Pro-Tsipras Greeks celebrate referendum win (Getty)

Greece's prime minister Alexis Tsipras made several promises to the
Greek people to secure their "NO" vote on the referendum. He promised
that the eurozone leaders would immediately come to him with a new,
more favorable proposal, and that the new deal would be signed within
two days. He promised that the European Central Bank (ECB) would keep
Greece's banks open with plenty of liquidity, and that the banks would
re-open the day after the referendum. And he promised that the Greek
people would keep their dignity.

Now the Greek people face the harsh light of reality. Even if
everyone agreed to a new deal, it would take weeks to implement,
because the German parliament would have to approve it. But Tsipras
can't make any concessions after his overwhelming referendum victory,
and the Germans, the Dutch and Finns are opposed to making any
concessions at all. The ECB on Monday rejected any further liquidity
infusions into Greek banks, and they'll have to remain closed for at
least a few more days, and possibly many days. The 60 euro per day
cap on ATM withdrawals will probably have to be reduced further,
possibly to 10-20 euros per day.

Compounding the problem is that Greece is a different country than it
was two weeks ago, a much poorer country. A country's economy is like
a huge engine that can take weeks or much to come up to speed.
Greece's economy has been almost completely shut down, so even if
Tsipras's fantasy of a quick deal came true, it would still take
months for Greece's economy to fully recover.

The eurozone leaders are meeting in Brussels on Tuesday, and Tsipras
is supposed to make some proposals.

There's a great deal of irony about this. Tsipras made some
commitments to the Eurogroup when he took power in January, and
promised within a couple of weeks to submit proposals for meeting
those commitments. He stalled and stalled, and never made those
proposals.

Now he's back where he was -- he has to make proposals to the
Eurogroup to meet his commitments. The referendum gained nothing, but
it further impoverished the Greeks.

According to reports, he will "propose a deal based on the most recent
set of proposals published by the European Commission." Well, he
could have proposed that deal two weeks ago, and Greece will be a lot
better off today.

If there is no deal, then the country will run out of money within a
few days. At that point, the government will have to issue IOUs in
lieu of salary and pension payments. These IOUs will serve as a
"parallel currency" that can be used until the country returns to
stability and can return to the euro. Kathimerini and BBC and CNBC and Kathimerini

****
**** Surge in Boko Haram attacks raises questions about new president of Nigeria
****

Like national leaders in other countries, Nigeria's new President
Muhammadu Buhari made promises during his campaign that he is now
finding himself unable to fulfill. During the campaign, his
billboards read, "We will defeat Boko Haram."

But in a surge in violence, Boko Haram in the last week slaughtered
more than 145 people in villages in the northeast, and bombed churches
and mosques across Nigeria's north.

Buhari promised to crush Boko Haram, and he made some initial gains,
with the Nigerian army recapturing most of the territories from the
militants this year. But the recent attacks show that Nigeria is
nowhere near defeating the jihadists. According to one Nigerian
analyst:

<QUOTE>"Most Nigerians expected something drastic, something
dramatic, something concrete on the ground. They did not expect
this spate of bombings across the country. They feel that OK, by
now, Boko Haram should truly be a thing of the past. They do not
seem to be impressed by the handling of the situation so
far."<END QUOTE>

However a Buhari spokesman says that the president is working on a
plan. Leadership News (Nigeria) and VOA and The Hindu (India)


KEYS: Generational Dynamics, Greece, Alexis Tsipras, European Central Bank, ECB,
Nigeria, Boko Haram, Muhammadu Buhari

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Originally Posted by John J. Xenakis

... Greece's prime minister Alexis Tsipras made several promises to the
Greek people to secure their "NO" vote on the referendum. He promised
that the eurozone leaders would immediately come to him with a new,
more favorable proposal, and that the new deal would be signed within
two days...

-Unless I missed something, the 48 hours is up.

Originally Posted by JDG 66

> -Unless I missed something, the 48 hours is up.

You're absolutely right. And Tsipras showed up today at the eurozone
leaders meeting in Brussels empty-handed. His government referred to
the leaders as "terrorists" last week, and he continues to be as
offensive and contemptuous as possible.

Originally Posted by John J. Xenakis

****
**** IMF report on Greece raising concerns about IMF's credibility
****

Thursday's report by the International Monetary Fund (IMF), described
above, is raising questions about the credibility of the IMF, and its
leader Christine Lagarde.

First, we have to look how we got here. Long-time readers know that
I've been saying from the beginning that there is no solution to
Greece's crisis -- not that no solution has been found, but that no
solution exists. Other people have said similar things. And I've had
lots of fun mocking European leaders who spoke nonsense, especially
Jean-Claude Jüncker, who said, When it becomes serious, you have to lie.
I've certainly had a lot of
fun with that.

But the institutional lenders to Greece -- the European Commission
(EC), European Central Bank (ECB) and International Monetary Fund
(IMF), formerly known as the "Troika" -- have been engaged in a kind
of game with Greece. The Troika would demand austerity reforms,
Greece would promise to implement the reforms another partial bailout
payment would be paid to Greece, but then Greece would implement as
few of the reforms as possible. The "can would be kicked down the
road" for a few months, at which time the process would start again.

When Alexis Tsipras came to power in January, he decided to call the
Troika's bluff, and say: Your method won't work (because nothing can
work), so I'm going to force you to do what I want (which is my far
left agenda).

However, the Troika kept up the pretense that there exists a solution
to the Greek crisis, and blamed Tsipras for being so unreasonable.
But now the IMF report on Greece has undermined the Troika's
pretenses, saying that Greece's growth is unsustainable. And Tsipras
is jumping up and down with glee because, he says, they agree with
him.

And that's causing problems for the IMF and Christine Lagarde. If I
and other people have known since the beginning that Greece's debt is
unsustainable, and there's no solution to the debt problem, then why
didn't Lagarde speak up sooner? Was she lying? And why did she waste
so much IMF money going to a lost cause?

Inquiring people want to know, and this is just one more element in
the unending crisis in the Greece debt story. Australian Financial Review and Reuters

Anyone who looks at history and current events with no agenda or bias, will quickly conclude that globalism is a type of naivete. Every past attempt at globalism has gone down in flames and the most recent previous attempt (The League of Nations and the supposed Peace of Versailles) not only ended up in flames but at the end of the flame out the flames were nuclear.

That ought to have been a portent. But what did we do? But of course, a bigger, badder and supposedly better League of Nations, etc, etc.

So what we now have is a type of religion, belief in Globalism. It is beyond the realm of what we'd normally deem logic. Those who represent the Post WW2 Globalist Order are so well invested in it, that they not only lie to the world, they lie to themselves. It is a bad affliction and most of the masses also believe in this crap. Not if but when the current version goes down in flames there will be billions of dumbfounded idiots (at least those not already dead will be dumbfounded).

*** 8-Jul-15 World View -- China halts trading on 1,000 companies as stock bloodbath continues

This morning's key headlines from GenerationalDynamics.com

• Greece's Tsipras shows up at Brussels empty-handed
• Greece's finance minister tells himself not to gloat
• Report on Obama's plans for the Mideast strategy into total fantasy
• China halts trading on 1,000 companies as stock bloodbath continues

****
**** Greece's Tsipras shows up at Brussels empty-handed
****


Euclid Tsakalotos (R) exposes his personal notes to cameras, where they can be photographed and examined (AP)

Everyone is getting sick of this story, but it's so awful and so
horrible every day that it's impossible to take your eyes off of it.

Tuesday's news is that Greece's prime minister Alexis Tsipras was to
come to a meeting of eurozone leaders in Brussels with new proposals,
but showed up empty-handed. Last week, during his referendum
political campaign, he referred to eurozone leaders as "terrorists,"
and now he continues to be as offensive and contemptuous as possible
to the people that he wants to provide his government with many
billions of dollars.

Exasperated eurozone leaders gave Tsipras until Thursday to provide a
written plan, and scheduled a full summit of all 28 European Union
nations for Sunday.

According to France's president François Hollande: "It's not just the
problem of Greece - it's the future of the European Union" that is at
stake.

Thursday and Sunday are supposed to be the final, final deadlines, but
we've heard that before, haven't we? BBC

****
**** Greece's finance minister tells himself not to gloat
****

An amusing sideshow to Tuesday's meeting in Brussels is related to the
arrival of Greece's new finance minister Euclid Tsakalotos at the
meeting. He held his papers with his personal notes on top, where
they could be photographed and examined.

Tsakalotos is being especially mocked because of the notes reads "No
triumphalism." This is being interpreted to mean that Tsakalotos
wants to keep himself from openly gloating over the size of his
government's referendum victory on Sunday. Perhaps he's unaware that
his country staring into the abyss. Guardian (London)

****
**** Report on Obama's plans for the Mideast strategy into total fantasy
****

As I've said in the past, I didn't care much about President Obama's
ridiculous promises during the 2008 campaign, such as saying that with
his election the earth would heal and the tides would recede. I
assumed he'd become more serious after the election. But then,
after the election, I heard him say similar stuff, like his
promise that the world would be a different place on January 21,
the day after he took office. My reaction was that if Obama
believed something so delusional, then we would be in a great
deal of trouble. Now, six years later, Obama has had one
foreign policy disaster after another, after evidently having
no clue what's going on in the world, and now it's widely believed
that he's so desperate to have a foreign policy achievement that
he'll concede anything to Iran to get a nuclear agreement.

But now an article in Tuesday's WSJ describes Obama's Middle East
strategy for the next 18 month, and it's so out of touch with reality
that it's clear that he's learned absolutely nothing in six years.

According to the article, he's seen an Iran deal as a kind of
"gateway" to bring about massive changes in the Mideast:

<QUOTE>"The White House is crafting a Middle East strategy
for the remaining 18 months of President Barack Obama’s term that
would more forcefully address conflicts in Iraq, Yemen and Syria
amid tensions over the conclusion of talks with Iran. ...

[S]enior administration officials said the president is intent on
cleaning up leftover messes in the region before leaving office in
2017, including relations with key allies that have been strained
by the Iran talks."<END QUOTE>

How is anyone supposed to react to this? This is completely
delusional. As I've been writing since May 2003 in "Mideast Roadmap - Will it bring peace?",
no peace plan can work because Generational Dynamics predicts that
Arabs and Jews would be refighting the 1948 war that followed the
partitioning of Palestine and the creation of the state of Israel.
Since that times there have been four wars among various combinations
of Israel, Hezbollah, and the Palestinians. And in recent years,
there's been the war in and disintegration of Libya, the war in and
disintegration of Yemen, and the rise of the Islamic State (IS or ISIS
or ISIL or Daesh) in both Syria and Iraq, threatening neighboring
states.

The idea that Obama wants to "[clean] up leftover messes in the
region" in the next two years is utter fantasy, but it's exactly the
kind of thing that Obama believes.

According to the article:

<QUOTE>"White House officials see the conclusion of Iran
talks as a gateway for Mr. Obama to press for a political
resolution in Syria that would facilitate the exit of President
Bashar al-Assad, a close Iranian ally.

“It’s something I’d expect to see more pickup on as the Iran talks
conclude,” a senior administration official said. “There’s a
growing sense that momentum has turned against Assad and that is
feeding a belief that there could be more opening on the political
track.”

The conclusion of talks would thrust the U.S. into unfamiliar
territory in a volatile region where years of diplomacy with
Tehran has left relations with America’s allies, including Israel
and Saudi Arabia, deeply strained.

Those alliances could be further frayed if the U.S. takes steps
toward a broader rapprochement with Iran, and U.S. officials face
a significant task in smoothing regional strains."<END QUOTE>

Obama is a Generation-Xer who, like many Generation-Xers, believes
that he's the smartest person in the room, no matter who else is in
the room. He's particularly contemptuous of Boomers and older people
in general. This includes the Saudi Arabia's new King Salman bin
Abdulaziz al Saud who has been so often offended by Obama, that he
snubbed Obama by not attending a Gulf Cooperation Council (GCC)
meeting hosted by Obama. Salman and other Gulf leaders are in their
70s, and consider Obama to be a kid who has no clue what's going on in
the Mideast. ( "15-May-15 World View -- Obama repudiates the Carter doctrine at bizarre GCC meeting"
)

So as Obama goes about "cleaning up the mess" in the Mideast, you can
be certain that he's only going to insult and offend Salman and the
others even more.

And the Iran nuclear deal is extremely alarming to the Saudis and
other Arabs, because Iran is a mortal enemy. Obama's oratorical
skills will be worthless to change that.

As for convincing Iran to help bring about the exit of Syria's
president Bashar al-Assad, it's far more likely that the opposite will
happen. The lifting of sanctions on Iran will increase Iran's income
by tens or even billions of dollars, and much of that money will be
redirected to Bashar al-Assad, as well as to the terrorist group
Hezbollah.

Finally, the article says:

<QUOTE>"In Yemen, where Saudi Arabia is fighting Iran-backed
Houthi militants, White House officials are also considering ways
to work with Tehran toward a diplomatic resolution. Iranian
leaders view the conflict in Yemen as a low-cost opportunity to
challenge Saudi Arabia, but less critical to Tehran’s future, one
senior administration official said."<END QUOTE>

Once again, this is sheer delusion. Even without support from Iran,
the Houthis will continue to fight the pro-Saudi Sunnis in Yemen, as
well as the militias that form Al-Qaeda in the Arabian Peninsula
(AQAP), which is headquartered in Yemen.

Some people may say that, as the saying goes, it's better to see the
world as it should be, rather than as it is. History provides no
support for this view, and Generational Dynamics says that it can only
lead to disaster. WSJ and CNN and Politico

****
**** China halts trading on 1,000 companies as stock bloodbath continues
****


Chart comparing Shanghai Composite Index today to DJIA in 1929 (USA Today)

As we've been reporting, China appears to be in a state of panic over
the 30% loss in stock share value since June 12, and analysts are
comparing it to America's 1929 crash. Last week, China announced a 'Market Stabilization Fund'
that was similar to an 'Organized Support' support fund that
America announced just before the 1929 crash.

China's stock markets fell only slightly on Tuesday, and did not
continue the kind of huge plunge that we've seen. However, there's a
good reason for that, and it's not because investors are suddenly
confident about Chinese stocks.

About 1,000 Chinese mainland-listed companies, or over a third of
firms on the Shanghai and Shenzhen stock exchanges, suspended trading
on Tuesday precipitated mainly by the continuous drop in share prices.
So when the Shanghai Composite Index lost only 1.29% on Tuesday,
it was because the prices of stocks for 1,000 companies were
frozen, and owners of these shares were stuck with them, unable
to sell them.

Many of the remaining companies were those able to benefit from the
'Market Stabilization Fund', where fund managers and brokers are
investing $19 billion of their own money in stocks, in order
to push up prices.

According to analysts, no reason was given for suspending trading on
the losing stocks, but analysts say that "they wanted to sit out the
market turbulence" that caused the decline. If they believe that,
then they're in for a long wait.

Halting trading on stocks is extremely dangerous because it
exacerbates the pressures that caused the losses in the first place,
meaning that the fall will be far more precipitous when trading begins
again. If trading remains halted for more than a few days, then a
secondary market will be created, where investors trade the losing
stocks outside the stock market, and that can cause additional harm.

As of this writing on Tuesday evening ET, Wednesday morning in China,
the Shanghai Stock Exchange opened 4-7% down. Since trading is still
halted on over 1,300 stocks, it appears that the desperate policies to
halt the bloodbath have failed. China News Service and
Breitbart and USA Today


KEYS: Generational Dynamics, Greece, Alexis Tsipras, Euclid Tsakalotos,
François Hollande, Saudi Arabia, Salman bin Abdulaziz al Saud,
Islamic State / of Iraq and Syria/Sham/the Levant, IS, ISIS, ISIL, Daesh,
Syria, Bashar al-Assad, Yemen, Houthis,
Al-Qaeda in the Arabian Peninsula, AQAP,
China, Shanghai Stock Exchange, Market Stabilization Fund

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*** 9-Jul-15 World View -- Greece's Alexis Tsipras compares himself to the tragic Antigone

This morning's key headlines from GenerationalDynamics.com

• Greece's Alexis Tsipras compares himself to the tragic Antigone
• Furious European MEPs plan for humanitarian aid for Greece
• Tunisia to build a wall and a moat along the border with Libya

****
**** Greece's Alexis Tsipras compares himself to the tragic Antigone
****


Antigone - oil painting by Trung Cao

According to reports, many officials in Brussels are worried that
Greece's prime minister Alexis Tsipras is "sleepwalking to disaster."

A speech that Tsipras gave to the European Parliament in Strasbourg on
Wednesday has raised those concerns. Tsipras said:

<QUOTE>"We want an agreement that will bring a final end to
the crisis and show there is light at the end of the tunnel. The
money that was given to Greece [went to the Greek and European
banks and] never went to the people. ...

In ‘Antigone,’ Sophocles taught us that there are times when
justice for men is above the laws of men. This is such a
moment."<END QUOTE>

It's really weird that Tsipras is referencing the tragic Antigone
character. Antigone was famously the daughter of the incestuous
relationship between Oedipus and his mother, Jocasta. Antigone's
situation does resemble Tsipras's in some ways, but the story does not
end well. This is from the Cliff Notes summary of Antigone:

<QUOTE>"As the heroine of Antigone, Oedipus' daughter
grapples with Fate on her own, not just as a child or a dutiful
daughter. Her decisiveness and courage appear in stark contrast to
Ismene's passive timidity, and, in this tragedy at least,
overshadow even her brother Polynices' bold attempt to take
Thebes. In championing the laws of the gods above the laws of the
state, Antigone occupies the ultimate high moral ground, but she
is not impervious to doubt. Just before she is led off to her
death, Antigone mourns the life she is leaving by her own choice
and even seems to regret her decision. The moment passes, however,
and may represent simply a small proof of human weakness that
makes Antigone's strength all the more dramatic."<END QUOTE>

So what should we make of Tsipras's reference to Antigone? She
championed the laws of the gods above the laws of the state, and
occupied the high moral ground, which I'm sure Tsipras feels is true
of himself as well. But at the end:

<QUOTE>"Antigone has hanged herself and Haemon, in desperate
agony, kills himself as well. On hearing the news of her son's
death, Eurydice, the queen, also kills herself, cursing Creon.
Alone, in despair, Creon accepts responsibility for all the
tragedy and prays for a quick death. The play ends with a somber
warning from the chorus that pride will be punished by the blows
of fate."<END QUOTE>

Is that where Tsipras sees himself and Greece going? Kathimerini and Cliff Notes
and Trunc Dao

****
**** Furious European MEPs plan for humanitarian aid for Greece
****

Greece's prime minister Alexis Tsipras received applause from the
left-wing members of the parliament, and boos from the right-wing
members. However, it's clear even those members of the European
parliament (MEPs) who would like to help Greece are exasperated by his
behavior, and this was reflected in some of their responses.

The liberal Jean-Claude Jüncker, the president of the European
commission, was deeply offended by Tsipras's campaign rhetoric last
week, and was extremely angry at Wednesday's meeting:

<QUOTE>"I'm strongly rejecting all these accusations which
were thrown to the public during the campaign that we are not
respecting the dignity of the Greek people, that we are
terrorists. I don't like this word. Who are they, and who do
they think I am?<END QUOTE>

European Council President Donald Tusk spoke calmly, but firmly:

<QUOTE>Until today I have avoided talking about deadlines.
But tonight I have to say it loud and clear: that the final
deadline ends this week."<END QUOTE>

Guy Verhofstadt, former prime minister of Belgium, and now leader of
the Alliance of Liberals And Democrats for Europe (ALDE) in the
European Parliament was shouting as he spoke:

<QUOTE>"Greek political class didn't do enough themselves in
the case of Greece. That is the problem today.

And I'm angry I have to tell you, I'm angry, because you are
talking about reforms [[waving his hands for emphasis]] and WE
NEVER SEE concrete proposals of reforms."<END QUOTE>

At this point, Tsipras has almost no credibility left, even with
this supporters, because he's repeated lied.

He has now been told that he must have specific written proposals
submitted by midnight Thursday, to give European Union leaders time to
review them. There will be a meeting of EU (EU, not eurozone) leaders
on Sunday to decide whether to approve the plan. The mood seems to be
that nothing short of a major capitulation by Tsipras will be
accepted.

If not, then all economic aid to Greece will end. Since this will
mean the collapse of Greece's banks, the EU on Sunday will discuss
humanitarian aid to Greece -- emergency handouts of food, water and
other essential supplies -- something normally reserved for war zones
and third world countries. AP and Business Insider

****
**** Tunisia to build a wall and a moat along the border with Libya
****

Last weekend, Tunisia's President Beji Caid Essebsi said the country was in a 'state of war'
against
terrorists, and imposed a 30-day state of emergency, after the terror
attack that struck Sousse, Tunisia, on June 26. A terrorist with a
Kalashnikov assault rifle strolled through the hotel grounds, opening
fire at the pool and beach, reloading his weapon several times and
tossing an explosive. He killed 37 people.

The investigation has revealed that the terrorist had been trained in
Libya, and so Essebsi announced on Wednesday on state TV that the
Tunisian army will build a 160 kilometer-long wall along the length of
the country's border with Libya, with a moat next to it. The prime
minister indicated that the wall would be made of sand and would be
finished by the end of the year. He said security cameras and
surveillance posts would be placed at regular intervals.

My personal belief is that a determined terrorist will find a way
around a wall and a moat, but the government of Tunisia is desperate,
and willing to try almost anything.

Tunisia would join Kenya which is planning a wall along its porous
border with Somalia, following frequent infiltration by Somali
militant group Al-Shabaab, which has carried out deadly attacks that
has harmed the tourism-dependent economy.

Walls and fences are becoming very fashionable these days. As we
reported last month,
Hungary is
setting aside $23.5 million to build a temporary security fence along
Hungary's entire border with Serbia. The fence will be 4 meters high
and 175 km long. VOA and Mail and Guardian Africa


KEYS: Generational Dynamics, Greece, Alexis Tsipras, Antigone, Sophocles,
Jean-Claude Jüncker, Donald Tusk, Guy Verhofstadt,
Alliance of Liberals And Democrats for Europe, ALDE,
Tunisia, Sousse, Beji Caid Essebsi, Libya, Kenya, Somalia

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When was the last time a Prime Minister or President of a country committed suicide?