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European officials demand forced fingerprinting of migrants
This morning's key headlines from GenerationalDynamics.com
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Venezuela and Colombia each recalled its ambassador to the other country on Thursday. This was the latest diplomatic action in a bitter border dispute between the two countries.
The situation was triggered by an attack two weeks ago, when unidentified gunmen left three Venezuelan border guards and one civilian injured. Venezuela's president Nicolás Maduro quickly announced that Colombia was at fault -- particularly paramilitary groups within Colombia linked to Colombia's former president Alvaro Uribe.
Maduro then sent troops into the shantytowns on Venezuela's side of the border, where Colombians have been living. Under Maduro's orders, over 1,000 Colombian immigrants were deported with almost no notice given to collect belongings.
Colombians and Venezuelans are accustomed to crossing the border freely for shopping. Colombians cross into Venezuela to purchase gasoline and food that is subsidized by Maduro's socialist government. Venezuelans cross into Colombia to purchase medicines and other goods unavailable in Venezuela because of disastrous shortages caused by price controls.
Apparently there's no firm evidence of Colombian government involvement in the attacks on the border guards, although it is common for armed Colombian groups to cross into Venezuela and purchase large quantities of price-controlled fuel and food, and then smuggle them back into Colombia to sell at much higher prices. Venezuela's president Maduro and Colombia's president Juan Manuel Santos Calderón have been on nationwide television in their respective countries, each accusing the other of causing the crisis.
Colombia and Venezuela are two of three countries (the third being Ecuador) that emerged from the victories of the indigenous population led by Simón Bolívar in the 1810s-1820s over the colonial powers from Spain. There have been numerous border disputes since then. The 1948-58 civil war known as La Violencia was a shared generational crisis war of the two countries.
Maduro routinely blames capitalist speculators or other countries, usually the United States, for any problem. This time the Colombian refugees in Venezuela have been picked as the scapegoat. AP and Bloomberg
As each week goes by, Europe's migrant crisis seems to get even worse. Just on Saturday morning, around 100 inflatable boats reached the Greek island of Lesbos in the Aegean sea, carrying over 4,000 refugees. This is a factor of 4 higher than just a few weeks ago. Lesbos is turning into a vast camp of undocumented migrants, with hundreds of refugees packed in squares and sidewalks, and with women, children and even elderly people sleeping on the ground.
Many migrants are refusing to be fingerprinted when they arrive in Greece or Italy. Most migrants prefer to reach the wealthier countries such as Britain or Germany, and if they're fingerprinted then they be forced to remain in Greece or Italy.
According to one EU official:
"Over the last year it became apparent that certain nationalities (Syrians and Eritreans) were refusing to comply with fingerprinting procedures.‘This cannot go unchallenged: we agree with the [European] Commission that individuals must be given the opportunity to understand that non-compliance will have consequences."
It's now being proposed that coercion will be used to fingerprint migrants when they arrive, and to deport any migrants who refuse to be fingerprinted. Greek Reporter and Daily Mail (London)
(Comments: For reader comments, questions and discussion, see the 31-Aug-15 World View -- Colombia and Venezuela withdraw ambassadors over border dispute thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(31-Aug-2015)
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Al-Jazeera journalists used as pawns by Egypt and Qatar
This morning's key headlines from GenerationalDynamics.com
Egypt triggered international outrage on Saturday when a court sentenced three al-Jazeera journalists to three years in jail. The three men had originally been sentenced to 7-10 years in jail on charges of spreading lies to help a terrorist organization, referring to the Muslim Brotherhood, but those charges were apparently dropped in this new trial.
Instead, the Egyptian judge said that they "are not journalists and not members of the press syndicate" and broadcast with unlicensed equipment. The three were convicted of "operating without a press license and broadcasting material harmful to Egypt," charges that almost everyone outside of Egypt consider to be farcical.
In the past, Egypt's president Abdel al-Fattah al-Sisi has said that he wished that the journalists had never been brought to trial because of the huge international outcry against Egypt, and he suggested that if they were convicted then he might pardon them. Many people are hoping that al-Sisi will do exactly that. Al-Ahram (Cairo) and Jerusalem Post
It's widely believed that the three al-Jazeera journalists are being used as pawns by Egypt against Qatar, where al-Jazeera is funded.
When Mohammed Morsi and his Muslim Brotherhood government were in power in Egypt, then Egypt and Qatar had close relations, and Qatar was providing aid to Egypt. However, in July 2013, army general Abdel al-Fattah al-Sisi engineered a coup that overthrew Morsi, and later became president himself.
Since then, Al-Sisi has conducted an extremely brutal and bloody crackdown on Muslim Brotherhood supporters, beating, torturing and jailing innocent protesters, and sentencing hundreds to death in phony trials.
This caused a serious split between Egypt and Qatar, but the split deepened substantially over last summer's 60-day war between Gaza and Israel.
As I wrote several times, the Gaza war brought about a major Mideast realignment, splitting the Gulf nations apart. When the Gaza war between Israel and Hamas began last summer, al-Sisi supported Israel and the Palestinian Authority, and turned against Hamas, an offshoot of the Muslim Brotherhood. Iran and Turkey supported Hamas. This created a de facto realignment of the Mideast, with Israel plus Egypt plus Saudi Arabia plus the Palestinian Authority in alliance versus Hamas plus Qatar plus Turkey plus Iran.
This fissure ran very deep, although there have been several major events since then that have served to bring Egypt and Qatar closer together:
In fact, I wrote last month in "19-Jul-15 World View -- Behind the scenes in the Iran nuclear deal", that the Iran nuclear deal is forcing yet another realignment in the Arab world, as the entire region continues to deteriorate into war.
Saturday's court actions amount to more than the sentencing of three reporters. They're also a slap in the face of al-Jazeera and Qatar, and relations between the two countries are certain to be inflamed further. AP
(Comments: For reader comments, questions and discussion, see the 30-Aug-15 World View -- Egypt inflames tensions with Qatar with al-Jazeera reporter verdicts thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(30-Aug-2015)
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Deadly MERS virus cases surge in Saudi Arabia as Hajj approaches
This morning's key headlines from GenerationalDynamics.com
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In what could be a major humiliation for Iran, Yemen Saudi Arabia-backed government in exile says that it's prepared to launch an attempt to recapture the capital city Sanaa within two months.
The Iran-backed Shia ethnic Houthi militias seized Sanaa last September, forcing the president Abdu Rabu Mansour Hadi to flee to the south to the port city of Aden, Yemen's second largest city. The Houthi militias then swept south, first capturing Taiz, the third largest city, and continuing to the south to Aden. Hadi was forced to flee to Saudi Arabia as a government in exile.
A Saudi-led coalition began airstrikes on Houthi targets in Yemen on March 26, in support of Sunni militias allied with Hadi. These recaptured Aden and then Taiz. Reportedly, some troops from the United Arab Emirates (UAE) have taken part in some fighting in the south. On Friday, Yemen's foreign minister in exile said that government forces intend to launch the battle to recapture Sanaa with two months.
Saudi Arabia has appeared loath to send their own troops into the war, but for the first time, Saudi Arabian troops have entered Yemen, crossing the Saudi border into Yemen near a site where Houthis have launched shelling attacks on Saudi targets.
If Hadi government forces are able to recapture Sanaa, then it would be a major victory for Saudi Arabia, and a major humiliation for Iran. Earlier this year, Iran was bragging endlessly that it was in control of four major Mideast capital cities -- Damascus, Baghdad, Beirut and Sanaa, in Syria, Iraq, Lebanon and Yemen, respectively. The loss of Sanaa would be particularly humiliating, in view of the recent defeats that have been inflicted on Syria's president Bashar al-Assad.
Iran has never called for a ceasefire by the al-Assad regime in Syria to stop using chlorine-laden barrel bombs on innocent women and children civilians in Syria, but it's now desperately calling for a ceasefire in Syria. Iran is demanding that the Saudi-led airstrikes on Houthi targets in Yemen must stop, and that an immediate ceasefire must be followed by negotiations, since “adopting a political solution and avoiding war” would be beneficial not only for Yemen but for the entire region as well. Arab News and International Business Times
Yemen has always been one of the poorest countries in the world, and the war in Yemen that began with the Houthi capture of Sanaa last year in September has brought a great deal of destruction to the country.
According to the United Nations, more than 4,300 people have been killed in the conflict, most of them civilians, but that figure is consider to be an almost certain underestimate.
According to Human Rights Watch, the blockade imposed by the Saudi-led coalition has had a severe impact on civilians. The activist organization says that 80% of the population need assistance, and half the population face food insecurity. The blockade has made it difficult to deliver food and medicines, according to HRW.
HRW says that both sides are guilty of war crimes. Houthi militias repeatedly fire mortar shells and rockets indiscriminately into populated area. But HRW particularly condemns the Saudi airstrikes which it says have killed nearly 2,000 civilians, including hundreds of children.
HRW is also claiming that Saudi warplanes have been dropping cluster munitions. Cluster bombs release hundreds of bomblets in order to cause blanket damage over a wide area. Some bomblets will often fail to detonate and remain on the ground as a latent explosive threat. More than 100 countries have signed the Convention on Cluster Munitions, which bans the use and stockpiling of the weapons, though Saudi Arabia and the United States have not. Human Rights Watch and Vice News and AP
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A surge in cases of deadly MERS-CoV (the Middle Eastern Respiratory Syndrome coronavirus) in Riyadh, Saudi Arabia's capital city, has killed 26 people in just the last two weeks. Saudi officials are taking immediate steps to isolate all cases as quickly as possible. There's an additional threat of spreading when more than 5 million Saudi students resume school on Sunday after summer vacation.
The sudden surge in new MERS cases is raising concerns because the annual Hajj will take place this year from September 20-25. The Hajj is a pilgrimage to Mecca that every Muslim is required to make at least one in his lifetime. Plane loads of Muslims have already begun to arrive for this year's Hajj. Millions of Muslims from around the world will arrive in Saudi Arabia in the next few weeks for their once in a lifetime Hajj pilgrimage.
Saudi officials are saying that even one case of MERS can present a major threat. With millions of people attending, a single infected person could transmit the disease to many others. The danger is increased because an infected person may not show symptoms for several days.
This is now the third year that MERS has appeared as a serious threat to the Hajj. Saudi officials are confident that the procedures that they followed for the last two years will keep everyone safe this year. Arab News and On Islam
(Comments: For reader comments, questions and discussion, see the 29-Aug-15 World View -- Iran calls for Yemen ceasefire as Saudi-backed troops threaten Sanaa thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(29-Aug-2015)
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Discovery of decomposing corpses worsens Europe's migrant crisis
This morning's key headlines from GenerationalDynamics.com
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German Chancellor Angela Merkel was meeting in Vienna Austria on Thursday with leaders of the western Balkan countries -- Croatia, Serbia, Bosnia and Herzegovina, Montenegro, Kosovo, Macedonia and Albania -- to discuss the "huge challenges" the countries face in view of the huge tsunami of migrants entering Europe.
However, the meeting was overshadowed by the discovery of 30-50 corpses in the back of a truck abandoned off of a highway in Austria near Vienna.
When the police first approached the putrid-smelling truck, they thought it was just having motor difficulties. But then they discovered that there was no driver, and blood was leaking. They opened the truck and found the corpses. The truck had been parked for several days in the searing summer heat, and the bodies were so decomposed that it was impossible for the police even to determine how many there were.
Merkel said of the horrific discovery: "This reminds us that we must tackle the issue of immigration quickly and in a European spirit. That means in a spirit of solidarity - to find solutions."
Unfortunately, Europe is finding few solution. The massive influx of migrants and refugees from Syria, Iraq, Afghanistan and Africa is forcing the European Union into discussions of whether the EU has any morality.
There are two agreements under particular discussion. One is the Schengen Agreement of 25 nations that permit free travel with no visa requirements or border restrictions. Once a migrant reaches a country like Hungary in the Schengen zone, he can travel freely to any other country.
The other agreement is the "Dublin Regulation," which establishes which country is responsible for processing the asylum application. This is usually migrant's first country of entry to the EU, but this ends up placing an enormous burden on Greece and Italy.
The core problem is that hundreds of thousands of migrants are expected to enter Europe illegally this year, and the EU has no coherent policy for dealing with them, or for distributing them among member nations.
The gruesome discovery of the decomposing Austrian corpses is making it more difficult to decide exactly what the European Union stands for. Al-Jazeera and Washington Post and Schengen Agreement and Dublin Regulation
In Camelot, there's a legal limit to the amount of snow that can fall in Winter. As far as I know, the US has never made earthquakes or snowstorms illegal, but on August 27, 1928, the United States signed a pact making war illegal.
The agreement was signed in Paris. Fifteen nations signed the pact on that day in Paris. Signatories included France, the United States, the United Kingdom, Ireland, Canada, Australia, New Zealand, South Africa, India, Belgium, Poland, Czechoslovakia, Germany, Italy and Japan. Later, an additional forty-seven nations followed suit.
Did it work? I guess not.
The first major test occurred in 1931 with the Manchurian Incident or Mukden Incident, which I described a couple of weeks ago. ( "15-Aug-15 World View -- Japan's Shinzo Abe blames WW II on the Smoot-Hawley Tariff act")
Japan had signed by Kellogg-Briand pact, but still invaded Manchuria in 1931, and no other country nor the League of Nations did a thing to stop them.
Like Barack Obama and probably John Kerry, Secretary of State Frank B. Kellogg received the Nobel Peace Prize in 1929 for his work on the Kellogg-Briand pact, which made war illegal. Dept. of State
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If you listen to CNBC or Bloomberg TV, then you know that they're always showing graphs, and they're always talking about stock valuations, but for some strange reason they never show graphs of stock valuations. One look at the above graph, which shows the S&P 500 Price/Earnings Ratio back to 1871, and you know why they never show it.
As the graph shows, the historic average for the P/E ratio is 14. The P/E ratio today is 21.63, which is far above the historic average. In fact, thanks to the Tech Bubble, the Real Estate Bubble, the Credit Bubble, and the Stock Market Bubble, the P/E ratio has been well above 14 continuously since 1995.
By the Law of Mean Reversion, the P/E ratio not only must fall below 14 again, it has to stay well below average to make up for the 20 years it was above average. Roughly speaking, that means it will be below average for 20 years.
How low will it go? Well, it fell to the 5-6 range three times in the last century -- in 1917, in 1949, and in 1980. That's going to happen again with absolute certainty, and that means that the Dow Jones Industrial Average will fall below 3000.
Let me go on to mention a couple of very technical points.
As I've said many times, analysts on CNBC lie constantly about stock valuations. I used to quote analysts doing this, hoping to name and shame them. (See, for example, "14-Apr-12 World View -- Wharton School's Jeremy Siegel is lying about stock valuations" from 2012.) However, these people don't shame. After Monday's 4% plunge on Wall Street, I saw one analyst on CNBC say that now is the time to buy stocks because stock valuations are the lowest in decades.
Starting in the 2000s, analysts found the best way to lie. If you listen to them, listen for the words "based on forward earnings" or "based on operating earnings." The P/E ratio is computed by dividing the stock price by the annual earnings, and the easiest way to lie is to use bloated earnings that come from a company's public relations department. "Oh yes," a company president might say, "our earnings next year will be twice as high as this year!!" If you increase the earnings, then the P/E ratio goes down.
Then to complete the lie, they refer to the historical average of 14. "Universal Widgets stock has a P/E ratio of 12, based on forward earnings, which is much lower than the average of 14!!!"
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That historical average of 14 is only valid for P/E ratios based on "one year trailing earnings." Those are the company's earnings in the past 12 months, as actually reported in SEC filings and tax forms. They're not public relations numbers, and they're the only numbers you can count on.
If you want to use "forward earnings" or "operating earnings" to compute the P/E ratio, then you can, provided you use the correct historical average -- which I've estimated to be about 8. So if Universal Widgets stock has a P/E ratio of 12, based on forward earnings, then it's way overpriced, much higher than the historical average of 8.
One more technical note. Professor Robert J. Shiller of Yale University, who compiles the price/earnings data that I use, prefers to use "PE10", referring to the price of the stock divided by the average annual earnings for the past ten years. I prefer to use PE1 because it gives essentially the same results, and because it's easier to explain. Robert J. Shiller online data
(Comments: For reader comments, questions and discussion, see the 28-Aug-15 World View -- Explanation of Price/Earnings ratio and Stock Valuations thread of the Generational Dynamics forum. Comments may be posted anonymously.) =eod
(28-Aug-2015)
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Wall Street on Wednesday goes from boom to super-boom in final hour
This morning's key headlines from GenerationalDynamics.com
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Karachi, the huge port city in Pakistan's south, remains one of the most dangerous cities in the world, almost ungovernable, with an average of 2.7 murders reported per day in 2015, according to data compiled by the UK-based Institute for Conflict Management(ICM).
However, as bad as those figures are, they're a very big improvement of 2014, when there were 5.7 murders per day in the same period.
Pakistan's army is taking credit for the dramatic reduction in violent crime from the "evil nexus" between terrorism, perpetrated by Taliban-linked jihadists, and criminal mafias, represented in the major political parties, particularly the Muttahida Qaumi Movement (MQM) political party.
Pakistan's army launched the "Karachi Operation" in September 2013, at a time when the death toll from murders was mounting.
Although MQM leaders initially supported the operation, they now claim that the Pakistan Rangers have singled them out, and that 4,000 of their supporters have been arrested over the past two years, with some saying they were tortured for crimes they did not commit. However, the army points to hundreds of arrests this year alone of suspects allegedly associated with al-Qaeda, Tehrik-e-Taliban (TTP), Lashkar-e-Jhangvi (LeJ), and Al Qaeda in the Indian Subcontinent (AQIS). The Rangers “are arresting criminals across the board,” according to retired brigadier supporting the operation.
On August 10, the Pakistan Rangers announced that the first stage of the operation has been completed, and that the second stage will begin:
"[We] are well prepared to start Stage 2 from Aug 14th 2015 till the time it is successfully completed. Stage 2 will be more severe than Stage 1 as the main task is to hunt down Land Grabbers, Target Killers, Extortionists, Kidnappers, Terrorists to Justice. Pak Rangers Sindh is committed not to spare any criminal. If you have information or if you are a victim yourself than please do not hesitate to contact Pakistan Rangers Sindh through email or telephone numbers. Do not worry even if the criminals are very powerful because Pakistan Rangers Sindh are more powerful by the will of Allah. Credentials of the complainant will be kept highly confidential."
The News (Pakistan) and South Asia Terrorism Portal (SATP - India) and Washington Post (27-July)
One of the worst wars of the 20th century was the bloody genocidal war between Hindus and Muslims that followed Partition, the 1947 partitioning of the Indian subcontinent into India and Pakistan. The scale of civilian displacement from their homes was so massive that it was called by some an "exodus of biblical proportions."
The Partition war occurred when the new boundaries between India and Pakistan were put into place. The politicians, including India's Mahatma Gandhi and Pakistan's Muhammad Ali Jinnah is the founder of Pakistan, had thought that the remaining Muslims living in India and the remaining Hindus living in Pakistan could all live in peace with their neighbors. Instead, there was a forced migration of 14 million people and the killing of a million more, making it one of the largest mass migrations in history.
That war occurred mostly in along the northern border between India and Pakistan, mainly in Punjab province, with the fiercest fighting between Muslim Punjabis and Hindu Punjabis. The Kashmir and Jammu regions are still a source of continuing conflict between the two countries.
But after the Partition war, millions more Urdu-speaking Muslims living in India migrated to Pakistan, where they became known as Mohajirs ("migrants") and formed the the Mohajir Qaumi Movement (MQM - Migrant National Movement) political party. This party changed its name to the Muttahida Qaumi Movement (United National Movement) in the 1990s, but its members are still referred to as Mohajirs.
The Mohajirs settled mainly in Karachi, which became a business-oriented city, a cosmopolitan home to many ethnic groups.
The first major fault line emerged after the Soviet Union's invasion of Afghanistan in 1979. Karachi became one of the biggest refugee camps for Afghans fleeing the war, mostly Pashtuns. This provided a big boost for religious organizations and in 1983 the first large-scale Shia-Sunni riots broke out. This also occurred near the end of a generational Awakening era, a typical time for this kind of riot to occur, but then to fizzle quickly.
After 9/11, a new fault line grew between the Pashtuns and Taliban-linked jihadist organizations versus the MQM and Shia groups. This resulted in increased sectarian violence throughout the 2000s decade.
Then in 2010, a major disaster happened to Pakistan and to Karachi. ( "5-Aug-10 News -- Multiple crises overwhelm Pakistan")
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It's hard to overstate the catastrophic impact of the massive 2010 floods in Pakistan, the worst floods since 1929, since before Pakistan was even a country. The flooding wiped out hundreds of villages from the top of Pakistan to the bottom, along the Indus River. All the major roads and bridges were destroyed and so were the police stations, administration buildings, and telephone exchanges. Thousands of houses were razed to the ground by the storm and at least one million people became homeless.
This created a huge new crisis for Karachi, as massive numbers of refugees flooded into the city.
After that, the city became almost completely lawless. There were jihadist groups. There were ethnic, sectarian, and anti-state militants -- generally two young men on a motorcycle engaging in daily targeted killings of their rivals and enemies. There were extortionists, real estate mafias, terrorist networks and kidnappers. And there was violence between MQM and the city's other political parties, as they fought for governmental control.
For many residents of Karachi, the arrival of the Pakistan Rangers and the "Karachi Operation" in September 2013 has been welcome, because of the reduction in crime. But no one believes that the violence is over. Pakistan is in a generational Crisis era, meaning that fault lines are likely to be inflamed into further violence. With the Pakistan Rangers having made so many enemies, a backlash may bring back the violence worse than ever. Center for the National Interest (Washington)
Wednesday on Wall Street was sort of the opposite of Tuesday.
As of 3 pm on Tuesday, the Dow Jones Industrial Average (DJIA) had had gained about 400 points. Then, as I wrote yesterday, Wall Street went from boom to bust in the final hour with a wild 600 point downward swing, resulting in a loss for the day of 205 points.
But not on Wednesday. At 3 pm, the DJIA was up about 400 points, but in the last hour of trading it started going up by a point every few seconds, ending up 620 points for the day, for a kind of "super-boom."
Wednesday was the kind of day that I was expecting and wrote about two days ago ( "25-Aug-15 World View -- What to expect after Monday's global stock selloff"). The expectation is of wild swings upward and downward, and Wednesday was a wild swing upward.
The USA Today headline reads, "Dow roars back, rallies 620 points, in sign of market stabilization." It's a sign of the foolishness of the mainstream media that these wild swings could be interpreted as "market stabilization."
There are two scenarios. One scenario is that these swings really do stabilize in the next few days and weeks, and that the DJIA goes up or down no more than 50-100 points in a single day.
The other scenario is that these wild swings increase in amplitude, triggered by events such as the continuing crash in China's stock market. In that scenario, a Wall Street panic and financial crisis is increasingly likely. As I've repeatedly pointed out, the S&P 500 Price/Earnings ratio index (stock valuation index) is over 21, far higher than the historic average of about 14. And by the Law of Mean Reversion, it will return to the 5-6 level, which it did several times in the last century. When it does, the DJIA will fall well below 3000. USA Today
(Comments: For reader comments, questions and discussion, see the 27-Aug-15 World View -- Pakistan's army continues 'Karachi operation' to eliminate terrorists and criminal mafias thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(27-Aug-2015)
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Wall Street turns around on Tuesday, goes from boom to bust in one hour
This morning's key headlines from GenerationalDynamics.com
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There are about 10,000 migrants on the Greece's Aegean Sea island of Lesbos, having arrived from Turkey. There are also migrants on the islands of Chios and Kos. Greece is running a ferry that's takes 2,000 migrants per day from the islands, in a trip that takes 12 hours at sea. In Athens, Greece provides buses to the Macedonia border.
There are now about 3,000 migrants per day traveling along the route from Greece to Macedonia to Serbia to Hungary, which is a Schengen zone country. From there they can travel to wherever they want, but in most cases the desired destination is through Austria to Germany. Germany processed 173,070 asylum applications in 2014, and expects to process 800,000 in 2015, which would add 1% to Germany's population.
The flow of migrants is so large that Germany decided it had no choice but to suspend the "Dublin rules" for Syrian migrants. Under the Dublin Rules, if a migrant reaches Germany and requests asylum, then Germany would not even process the paperwork. Instead, the migrant would be shipped back to the first EU country that the migrant arrived in, usually Italy, Greece or Hungary. With almost 3,000 migrants arriving every day, that would mean shipping 3,000 migrants per day back to Italy, Greece or Hungary for processing, and those countries are already overwhelmed. Under the new rules, Germany will process the paperwork in Germany.
The tsunami of migrants is overwhelming Europe. Every attempt at a fence or other border control is being swept away, and Europe is showing little sign of finding a way to deal with the situation. Telegraph (London) and Daily Mail (London) and AFP and Guardian (London)
Paul Ronzheimer, a journalist for the German newspaper Bild, was interviewed on al-Jazeera on Tuesday. He joined a group of Syrian migrants from Aleppo as they traveled from Turkey to Germany, and outlined what preparations the migrants make for the trip:
Ronzheimer said that the group he was with were well-prepared, but others just travel without advance preparation, and they usually get into trouble with smugglers or the police.
The People's Bank of China (PBOC) lowered interest rates by 0.25% on Tuesday, to make it easier to borrow money, after the Shanghai Stock Exchange suffered another rout, falling 7.6%, falling a total of 22% in four days since August 19.
Presumably the purpose of the move was to allow people to borrow money to invest in the stock market, in the hope of pushing up the stock market. However, some analysts criticized the move, because the stock market bubble was caused by stock purchases using borrowed money, and lowering interest rates makes the situation worse.
China's debts have increased by almost $21 trillion since 2007, and total debt is now 282% of GDP. No big country has avoided suffering a big crash, sooner or later, under these conditions. Bloomberg and Bloomberg
Wall Street stocks seemed finally to be bouncing back upward on Tuesday from the 588-point rout in the Dow Jones Industrial Average on Monday. China's interest rate cut seemed to encourage buyers, and at one point the DJIA was up 442 points.
But starting at 3 pm, in the last hour before close, the stock market plummeted, with the DJIA ending the day losing 205 points. This was the sixth day of a losing streak on Wall Street.
Each day that passes in this way looks more and more of the prelude to a major crash. As I wrote yesterday, I expected Wall Street to bounce up on Tuesday, and I expected it to stay up through the close. ( "25-Aug-15 World View -- What to expect after Monday's global stock selloff")
So I was as surprised as anyone when stock prices plummeted in the final hour.
However, as I wrote yesterday, the overall picture to expect a lot of volatility, with possible huge gains one day and huge losses the next day. With the S&P 500 price/earnings ratio (stock valuations) at historic highs, this will continue until a panic occurs. USA Today
(Comments: For reader comments, questions and discussion, see the 26-Aug-15 World View -- Europe increasingly overwhelmed by tsunami of migrants thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(26-Aug-2015)
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North Korea 'expresses regret', defusing war threat with South Korea
This morning's key headlines from GenerationalDynamics.com
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Monday was one of the most volatile days in Wall Street history, with high-volume wild swings. The DJIA fell almost 1100 points within minutes after the opening, and then recovered most of the loss, finally ending down 588 points, or almost 4%.
The selloff was global. In Europe, stock exchanges in Britain, Germany and France fell around 5%, and in Asia, stock markets in Japan, Hong Kong and Australia fell 4-5%.
So let's start with where we are.
Generational Dynamics predicts that we're headed for a global financial panic and crisis. According to Friday's Wall Street Journal, the S&P 500 Price/Earnings index (stock valuations index) on Friday morning (August 21) was at an astronomically high 21.63. This is far above the historical average of 14, indicating that the stock market is in a huge bubble that could burst at any time. Generational Dynamics predicts 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.
I've been pointing out for years that the Wall St bubble had to burst at some point, with 100% certainty. It's impossible to predict the exact time. It's worth noting that we still don't know to this day why the stock market crashed on that particular day, Black Monday, October 28, 1929, instead of a few weeks earlier or later.
So it's quite possible that when the crash comes, we'll never know why it occurred on precisely that day.
Most of the commentators and analysts on Monday were their usual glib selves, saying things like, "This is a healthy correction," and "This is a buying opportunity, and "China has too small economy to affect the rest of the world."
I listened to a number of analysts on CNBC and Bloomberg TV on Monday, and I did notice a change. Normally, mentioning the price/earnings ratio (stock valuations) is always strictly forbidden, or if it's mentioned, then the analysts simply lie, saying "it's low," which is ridiculous. But on Monday, I actually heard two or three analysts mention, however briefly, that stock valuations were unsustainably high. This is quite remarkable, as if some secret code were being violated.
There's was one particular exchange that was especially interesting. Mohamed El-Arian is quite possibly the most glib analyst on TV, always taking a professorial tone, and answering every question by intoning something like, "There are three reasons: one ... two ... three...." On Monday, he was specifically asked if stock valuations were high. He said, almost under his breath, that they were, and then quickly changed the subject to something completely different. Apparently he is not ready yet to break the secret code by saying clearly that valuations are unsustainably high, though he evidently is aware of it. It was one of the many weird things on a weird day.
Some analysts are calling this Monday the new "Black Monday," but it's not.
From the point of view of generational theory, October 28, 1929, is a very special day because it was a day of total panic, and it traumatized the nation, and it's remembered to this day. But this day was nothing like that, not a day of total panic. It was a bad day, but it will be soon forgotten. This was no new "Black Monday."
What this Monday seemed like was a prelude to the real day of panic. And with stock markets plunging globally, the panic may not begin on Wall Street at all -- it may begin elsewhere and spread to Wall Street. As I wrote yesterday ( "24-Aug-15 World View -- Asian stock markets in freefall, with China in full-scale panic"), it may be that China already appears to be in full-scale panic, though it's hard for me to judge for sure from this distance.
If I were to guess what's going to happen in the next few days it would be this: I would expect Wall Street stocks to bounce back up on Tuesday. Expect to see a lot more volatility, with stocks rebounding one day, and plunging the next. Then, one day, a real panic will occur, and that will be the day that will be remembered for years. That day has to come, with 100% certainty. We just don't know exactly when. AP and ZeroHedge
Stock markets usually get most of the attention, but in fact the global selloff is applying to currencies and commodities as well.
As we wrote last week ( "21-Aug-15 World View -- Kazakhstan joins the 'currency wars' as global stocks plummet"), a number of currencies are falling against the dollar, following in the lead of China's surprise devaluation of its yuan currency.
African economies, and African currencies, are being hit hard China's devaluation and economic slowdown. More than one-quarter of Africa's exports go to China, and countries like South Africa, Kenya and Zambia are being hit hard. Zambia derives almost 70% of its export earnings from copper, and with copper prices falling, Zambia's currency fell 4.6%. The price of oil keeps falling, and oil-exporting countries Nigeria and Angola are losing substantial portions of their income.
The price of oil is falling dramatically, reaching as low as $38 per barrel on Monday. Countries outside Africa, such as Venezuela, Russia and Saudi Arabia, are suffering because their income depends on oil being closer to $100 per barrel.
What makes the global financial situation so precarious is that there doesn't seem to be any good news anywhere. Economic growth is tepid in the the U.S. and slowing, while there's no growth to speak of in China, Europe, or any of the developing countries with the possible exception of India.
Another bizarre twist in today's world is that investors are very concerned when the US Federal Reserve is going to raise interest rates, with the base Fed Funds Rate currently almost zero (0.13%). With all of these currencies weakening and devaluing against the dollar, the dollar is getting stronger, which will make America less competitive in the world, and affect the US economy.
However, there's another angle to this. With near-zero interest rates in the U.S., it's been possible for countries and businesses around the world to borrow a lot of money, and go deeply into debt. If the Fed Funds Rate goes up, then the interest rates on those debts will also grow, causing further problems for these borrowers. Bloomberg and BBC and Zero Hedge
As we reported yesterday, North and South Korea were both mobilizing for war, but were negotiating for peace at the same time. South Korea was demanding that the North apologize for planting landmines in the demilitarized zone (DMZ), causing two South Korean soldiers to be wounded. North Korea was refusing to apologize, or to admit laying the land mines. South Korea was using loudspeakers to broadcast anti-North propaganda across the DMZ, and the North was demanding that the loudspeakers be turned off.
Some analyzed were predicting that the North and South would reach an agreement, whereby the North would "express regret," without actually apologizing, and that the South would accept that as an apology.
And that's exactly what's happened. North Korea said that it "regrets" that South Korean soldiers were injured by landmines and lifted its "semi-state of war."
Even though this was neither an admission nor an apology, it was good enough for the South to claim that the North had apologized. The South shut down the loudspeakers, and the national security chief, Kim Kwan-jin, said:
"I wish that we can build the new South and North Korea relationship that our people (wish for) by sincerely carrying out the agreed issues and building trust through dialogue and cooperation. During the meeting, it is very meaningful in the aspect that the North apologized over the landmine incident and that they agreed on making efforts to prevent such incidents from reoccurring and easing tension."
Nobody believes that this new agreement will bring about any fundamental changes. It won't be long before the North once again does a military provocation, or threatens the South with war. Korea Herald and CNN
(Comments: For reader comments, questions and discussion, see the 25-Aug-15 World View -- What to expect after Monday's global stock selloff thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(25-Aug-2015)
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North and South Korea negotiate as both sides prepare for war
This morning's key headlines from GenerationalDynamics.com
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Although peace negotiations between North Korea and South Korea are ongoing, the North has mobilized thousands of its troops near the DMZ, the border with the South, and 50 North Korean submarines, about 70% of its fleet, have left port and remain undetected by South Korean radar. This is the highest level of North Korean military activity in years.
In response, the South Korean military is maintaining full readiness and mobilizing more antisubmarine assets such as destroyers, P-3C patrol planes and Lynx antisubmarine helicopters.
These activities come in the midst of long-scheduled joint military exercises between South Korea and the U.S. Arirang (Seoul) and Yonhap (Korea) and Korea Herald
It's very hard for me to get excited about the threats of war from North Korea's child dictator, Kim Jong-un, that have been going on almost daily for years, or for South Korea's empty expressions of outrage over any hostile action that the North Koreans take.
In April 2010, North Korea launched a torpedo that sank the Cheonan, a South Korean navy warship, in South Korean waters, drowning 46 people. Then in November 2010, North Korea launched an artillery attack on on South Korea's Yeonpyeong Island, killing civilians. ( "26-Nov-10 News -- South Korea in chaos over North's attack")
In those and other cases, South Korea responded by carefully avoiding officially blaming the North Koreans, even though there was never any doubt that the North Koreans were to blame. The reason for the reticence was that to blame the North Koreans would force South Korea to respond military, resulting in a war.
(As an aside, the Chinese have conducted massive cyber attacks against the US government, and the US government uses every possible wording to avoid blaming the Chinese. The reason is the same -- blaming the Chinese for an act of war would require American retaliation.)
Although South Korea did not retaliate, there was a substantial increase in public nationalism, and hostility to the North. The South Korean government promised that the next military provocation by the North would be met with a military response.
Earlier this month, two South Korean soldiers were wounded by land mines planted in the so-called demilitarized zone (DMZ) that separates the two countries, and was defined in 1953 by the armistice that ended the active fighting in the Korean War.
Once again, South Korea decided not to take military retaliation. Instead, the South Koreans began broadcasting anti-North propaganda via loudspeakers on the end of the DMZ into North Korea.
As mild as this form of retaliation seems to be, it appears to have completely infuriated the child dictator, who threatened war if the loudspeakers were not turned off.
The South Koreans offered to turn them off only if the North Koreans apologize for the landmine in the DMZ earlier this month. The North refused to do so, and set a deadline of 5 pm on Saturday for the South to turn off the loudspeakers or face war.
However, peace talks began on Saturday, and are apparently continuing into Monday.
So the question remains whether North Korea will actually use those troops and submarines it's mobilized. Analysts are suggesting that the negotiations will succeed with the North expressing regret for the landmine but not apologizing, and the South turning off the loudspeakers. Arirang (Seoul) and Reuters
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Because of the weather, this is probably the peak season for migrants from the Mideast and Africa attempting to reach Europe.
On Saturday, there were some 5,000 migrants in Greece on the border with Macedonia. Macedonian police officers tried to prevent them from entering their country, but more than 1,500 pushed through the barbed wire, with the police trying to stop them with batons and stun grenades.
In the meantime, the Greek passenger ship "Eleftherios Venizelos" is traveling back and forth carrying 2000-2500 migrants each trip from the islands of Lesbos, Kos and Chios to the Port of Piraeus. Many of them will take buses to Thessaloniki, and from there join the throng trying to pass into Macedonia.
The Macedonians are now letting most of them into the country, since they're only going to pass through to Serbia. From there, they'll try to pass through to Hungary, which would put them into the Schengen zone, allowing visa-free travel from country to country. They want to get through the border as quickly as possible, since Hungary is building a double-fence to keep them out, and it's supposed to be completed within a couple of weeks.
The other route taken by Syrian refugees is overland to Libya, where human traffickers pack them into rubber boats and push them out into the Mediterranean Sea, where the migrants hope that European naval vessels will rescue them before the rubber boats sink, drowning them all.
Italy's coast guard rescued 4,400 migrants on Sunday, the biggest single-day operation mounted to date. The increase in rescues prompted criticism from an Italian government official:
"This must be a joke. We are using our own forces to do the people smugglers' business for them and ensure we are invaded."
Greek Reporter and BBC
As of this writing on Sunday evening ET (Monday morning in Asia), Asian markets are down 1-3% in different countries, that is being called a "broad-based meltdown."
An hour after the Shanghai stock market opened, the index was down over 7%. It seems pretty clear that China's stock markets are in a state of full-scale panic.
Futures in the Dow Jones Industrial Average are down 220.
(Comments: For reader comments, questions and discussion, see the 24-Aug-15 World View -- Asian stock markets in freefall, with China in full-scale panic thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(24-Aug-2015)
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A report on Obamacare and the Obamacare web sites
This morning's key headlines from GenerationalDynamics.com
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For three months I've been investigating the Heathcare.gov disaster -- the federal web site and multiple web sites all failed disastrously on launch day, October 1, 2013. It can't be a coincidence that so many software development projects all failed disastrously in the same time frame, so there has to be a core reason.
My investigation has shown that the core reason was that the Obama administration poured a tsunami of money into these projects -- so much money that the contractors hired thousands of incompetent programmers in order to spend that money, with the result that the software projects failed. Spending the money became more important than getting the web sites working. As the projects failed, the coverups, corruption, lies and fraud began, and continue to this day.
I also expanded my investigation into Obamacare in general, and found that almost every aspect is thoroughly drenched in corruption and fraud. The Obama administration took the money in the $710 billion Medicare fund and used the money to fund one disastrous Rube Goldberg component after another. These components, such as the "risk corridors," the "co-ops," and the state-run "Obamacare exchanges," were all supposed to be self-sustaining by now, but instead they're all financial disasters. And now that the confiscated Medicare money is running out, they'll have to be shut down.
The Obama administration has confiscated the $710 billion dollar Medicare fund that millions of people worked for decades to create, and essentially thrown it into the garbage. The contributions of those millions of people have all been lost, with nothing to show for it.
Many of the state-run Obamacare exchanges are working today, but only barely. Since they were implemented with thousands of incompetent programmers, where the objective was simply to spend money, they're technological dinosaurs with billions of lines of code that's now almost completely unsupportable. In addition, they're financial disasters, and will have to be thrown out.
This World View article is a summary of two lengthier articles on my web site:
Earlier this month, I wrote "5-Aug-15 World View -- Britain's National Health Service (NHS) faces existential financial crisis". In that article, I described how both the NHS and the Veterans Administration health care system were quickly becoming financial disasters. The same is true of Obamacare.
On October 1, 2013, Healthcare.gov went "live," and was soon revealed as the biggest IT (information technology) and computer software disaster in history. That it was a disaster was clear, as President Barack Obama was completely humiliated after announcing that the slow response was because millions of people were signing up for insurance.
Two months after the launch, I wrote "1-Dec-13 World View -- Obamacare: 500M lines of code, $500M, only 60% completed". In that article, I said that the reported number of 500 million lines of code was impossible. It was impossible to develop a working web site with 500 million lines of code, and anything that size would be unsupportable anyway. I added:
"I get a picture in my mind of 1,000 monkeys sitting at computers typing code, without worrying about whether or not it works. Given the size of the catastrophe, some variation of that must have happened."
I was thinking "criminal fraud" when I wrote that article, but I didn't use those words without any proof. Now, almost two years later, we finally have reports coming out that provide evidence of criminal fraud. There weren't thousands of monkeys typing random code, charging $200/hour each, but there might as well have been.
We now know exactly why Healthcare.gov was such a disaster:
There's little doubt in my mind that if the Obama administration had granted $20 million per web site instead of $150-500 million per web site, then they would have gotten working web sites to start with. By pouring out a tsunami of money, they got a disaster and major humiliation, which is what they deserved.
The above conclusions were based on a detailed examination of the Massachusetts Health Connector project, and briefer looks at other Obamacare exchange projects.
In the case of the Massachusetts Health Connector project, there was development contractor, CGI Corp., and an overseer contractor, the University of Massachusetts Medical School. The evidence from the whistleblowers indicates that both these contractors allegedly committed criminal fraud, and furthermore that they were allegedly in a criminal conspiracy to defraud the government.
This story is full of criminals and a few heroes. The heroes are the ones who told their bosses that the project was in trouble, and were ordered to keep quiet, or were treated abusively and fired. The criminals are the ones who lied and cheated, committed fraud, and conspired to commit fraud.
Now let's turn to what happened to the Massachusetts Health Connector web site. Much of the following depends on extensive research done by by Josh Archambault at the Pioneer Institute. (See Josh Archambault's report).
There were two contractors involved. CGI Corp. was responsible for coding and implementation, and the University of Massachusetts Medical School (UMass) was hired to do oversight on CGI's work.
"Dave" was the Interface Manager at UMass early in the Mass Connector development. He ended up being a whistleblower, and he asked me not to use his real name. He said that a small team could have done the Mass Connector for very little money:
"One of the last conversations I had with the program managers was that I said I wanted to take this over. I said that we don't need 200 or 300 people that CGI is using. You can't herd information through 300 people fast enough for them to develop anything. They'll never get it done. Give me six people, and we'll get it done, and it will work. I was fired the next day."
This is an important statement, and it explains why I wrote the comment about the "1,000 monkeys" typing random code in my original article. It's literally impossible to spend the kind of money that the Obama administration was pouring out to its supporters to get a technical project done. As Dave says, "You can't herd information through 300 people fast enough for them to develop anything."
Like Dave, I could have developed the Mass web site or the federal web site within a few months, working with a team of five to ten people. And it would have actually worked.
The following is a brief summary of what happened, omitting many technical details. The full story, including technical details, can be found in the lengthy article "Healthcare.gov -- The greatest software development disaster in history".
In the fall of 2012, CGI was missing deadline after deadline. More importantly, CGI was unable even to provide any technical specifications of what it was doing. CGI had hired hundreds of programmers in order to spend all the money they'd been given, and it was becoming clear that in order to hire so many programmers, CGI had had to lower their standards substantially, with the result that many of the programmers were too incompetent even to produce technical specifications. And if CGI was too incompetent to produce any technical specifications, then they certainly were too incompetent to produce usable code.
In the aftermath, UMass claimed that they didn't know that CGI had been missing deadline after deadline. However, Dave says that that claim was completely untrue:
"I was reporting to management, calling meetings, and we had a JIRA [problem reporting] system set up. Report in JIRA, escalate it, escalate it. So when UMass said they didn't know that CGI was missing deadlines, that's absolutely not true - there were meetings and JIRA reports."
UMass had been hired to provide oversight over CGI. But instead of being an overseer, the contractor became a collaborator.
In December 2012, CGI had to perform a live test that required sending test messages back and forth between CGI's software and the servers in Washington. CGI proposed to cheat on the test, and then lie to government officials. Dave refused to approve the fraudulent test, despite intense pressure from his bosses at UMass. Dave was removed from his job and fired shortly thereafter. The fraudulent test was approved by UMass's management.
After Dave was fired, CGI continued to miss deadlines and fake tests, and lie to government officials. When launch day came along, October 1, 2013, the web site didn't work at all.
According to Archambault's report, problems just continued. In the Spring of 2013, CGI faked tests by using dummy screens on its web site, and claimed that it had performed a valid test. By that time, CGI knew that the project would fail, but refused to tell anyone. CGI never ran the end to end tests that it had committed to, and by the October 1 launch date, the software was completely untested. Indeed, it was not working at all, as they knew, but they lied and claimed that it was working, and accepted hundreds of millions of dollars in payment for software they knew wouldn't work. UMass was fully informed about the lying and fraud, but collaborated with it.
CGI and UMass had violated one of the oldest and most important rules about software development projects: Brooks' Law: Adding manpower to a late software project makes it later. This is discussed in detail in my full-length article.
CGI and UMass had spent hundreds of millions of dollars to produce a piece of garbage, and as bad as that is, there's one more completely disgusting thing that happened.
By the beginning of 2014, it was clear that CGI Corp.'s development effort was a total disaster, and the State of Massachusetts transferred the project to a new consultant firm, Optum Inc. CGI was paid $17 million for the task of turning the work they had completed over the Optum But when Optum received CGI's code, they unable to use any of it -- it was complete garbage. So CGI had already spent close to $200 million for a $10 million project, and with that money they produced nothing but garbage. And they were paid ANOTHER $17 million to turn the garbage over to Optum. As cynical and jaded as I am, this is almost too much to bear. It illustrates the level of corruption and fraud throughout the Healthcare.gov project.
What happened here, based on years of experience as a Senior Software Engineer and as a tech journalist, is that the cause of the disaster was that the Obama administration paid CGI and UMass had been paid hundreds of millions of dollars for a $10-20 million software development project. If they'd paid only $10-20 million, then the project would have been completed successfully. This was a major humiliation to the Obama administration, and they got what they deserved.
What's remarkable is that similar disasters occurred in one state Obamacare exchange after another, with different contractors, but always with the same problem: Being given $150-500 million for a $10-20 million project.
In my full-length article, I discuss Covered California, the Vermont Health Connector Obamacare exchange, the Cover Oregon Obamacare exchange, the Nevada Health Link Obamacare exchange, and the Maryland Health Connection Obamacare exchange.
All of these were disasters, and they were all drenched in corruption, fraud and criminality.
There were four state Obamacare exchanges that ran reasonably well on launch day, October 1, 2013: Connecticut, Kentucky, Rhode Island and Washington State. What those four had in common was that the contractor was Deloitte Consulting.
I made repeated requests to Deloitte Consulting for technical information on how they had accomplished this, but they just made non-credible excuses and refused to provide any information, so I'm unable to report whether Deloitte accomplished this through technical expertise or because of some corrupt relationship with the Obama administration. However, Deloitte does prove one thing: Whatever they did could have been done by the contractors for the other Obamacare state exchanges, so any excuses the other contractors give are sure to be phony.
Long-time readers are aware that from the day it was first proposed in 2009, I've referred to President Barack Obama's health care plan as a proposal of economic insanity, because it's a repeat of President Richard Nixon's price controls, which were an utter, total disaster for the economy. What I now refer to as the "Nixon-Obama Price Controls" have been equally disastrous.
As part of my research on the Healthcare.gov software development projects, I investigated other aspects of Obamacare. Here's a summary of my findings:
These are all discussed in detail in my full-length article "Healthcare.gov -- The greatest software development disaster in history".
I'm very passionate about this story because I've been a Senior Software Engineer for decades, and I well understand how software development efforts work, and how criminality would have brought about the Healthcare.gov disaster.
As far as I know, I'm the first journalist to write at length about the massive corruption, fraud and criminality in Obamacare, but I'm hardly considered mainstream. There should have been thousands of stories about this in the mainstream media by now, but there have been almost none. But almost no mainstream reporter would dare to criticize Obamacare in any way, because they know they would face massive retribution from the Obama administration, just as would happen to an Iranian reporter who criticized the Supreme Leader.
I'm perhaps uniquely qualified to do this Healthcare.gov analysis. I'm an apolitical, non-ideological, highly analytical writer. My background is both as a Senior Software Engineer and a technology journalist. The following is a very brief summary: Over the years, I've successfully developed hundreds of software applications for dozens of employers, from operating systems to compilers to web sites to complex enterprise-wide systems, working as both a consultant and an employee. (Resume: jxenakis.com/resume) I was Boston Bureau chief for InformationWeek magazine for two years, and Technology Editor for CFO Magazine (part time) for ten years, and I've interviewed hundreds of CEOs, CIOs, CFOs software developers and managers. (Examples: http://ww2.cfo.com/author/john-xenakis/).
(Comments: For reader comments, questions and discussion, see the 23-Aug-15 World View -- Fraud and subversion in Healthcare.gov - the greatest IT disaster in history thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(23-Aug-2015)
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Wall Street stocks in free fall on Friday
This morning's key headlines from GenerationalDynamics.com
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A couple of weeks ago, I wrote about 'total chaos' on Greece's islands Kos, Chios and Lesbos, because thousands of migrants were arriving at the islands from Turkey, crossing the Aegean Sea in rubber boats. After human rights activists expressed outrage at the inhuman conditions on the islands, Greek authorities agreed to send a ferry to carry them to the mainland.
On Friday, the ferry Eleftherios Venizelos carried about 2,200 migrants from the island of Lesbos to the port city of Piraeus on the mainland. Buses were waiting to carry the refugees, many of them families with young children, to train statements. Typically, they head northwards by train or bus to the city of Thessaloniki, hoping to travel through Macedonia and Serbia into Hungary and the Schengen zone. Reuters
It was just a few days ago that I wrote about A train station in Macedonia that has become the new European migrant choke point. Two weeks ago, there were 500-600 migrants per day crossing the border into Macedonia from Greece, having arrived in the Greek city of Thessaloniki from Syria or Afghanistan or Iraq, through Turkey. But in the last few days, the number of migrants has increased to 3,000-3,500 per day.
Up until now, the Macedonian authorities have been sanguine about the migrants arriving from Greece, because almost none had any intention of remaining in Macedonia, but were planning to take the train to northern Serbia and then cross the border into Hungary. When they're in Hungary, they're in the Schengen zone, which means that they can travel from country to country with no visa or passport restrictions.
It's believed that the enormous surge in migrants arriving at the Macedonian border has been triggered by Hungary's announcement in June that they would build a fence along the border between Serbia and Hungary. Migrants have been rushing to cross into Hungary before the fence has been built.
But as of Friday, Macedonian border forces blocked migrants from crossing the border, beating them back with truncheons, riot shields, and teargas. Razor wire is now being rolled along the border to prevent people from entering. Macedonia has declared a state of emergency, meaning that the country's army will be called on to help deal with the crisis.
Human rights activists are expressing outrage. According to one, "Macedonian authorities are responding as if they were dealing with rioters rather than refugees who have fled conflict and persecution."
Macedonian authorities say that going to permit a limited number of migrants to enter Macedonia each day.
Unless I'm misunderstanding the situation, that means that within a few days there are going to be perhaps tens of thousands of migrants on the Greek side of the border, waiting to enter Macedonia. This might not end well. BBC and CNN
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Four new fires broke out on Friday morning at the site of the massive explosions in Tianjin, China, two weeks ago ( "13-Aug-15 World View -- Massive explosion in Tianjin highlights China's dismal industrial safety record")
New fires keep arising from the blast site, which is scattered with smoldering chemicals and flammable substances. Almost 5,000 soldiers and armed police officers have been sent to Tianjin to clean up the tons of dangerous chemicals.
Chinese officials had declared the air and the drinking water around Tianjin to be safe, but then tests showed that cyanide in the water and air were hundreds of times higher than acceptable levels.
Masses of dead fish, numbering in the thousands, were found on Friday to be piling up on the shores of a river in Tianjin, six kilometers from the site of the explosions. Chinese officials say that dead fish are normal this time of year, but local residents say that they've never before witnessed so many dead fish in the area.
The disaster has caused China's State Council to order nationwide inspections of facilities handling dangerous chemicals and explosives. According to government announcements, more than 100 chemical firms across seven provinces have been told to suspend operations or shut down due to safety violations in the recent days." Xinhua and Asia Times and Shanghaiist
The Dow Jones Industrial Average fell 530 points on Friday, the biggest one-day plunge in years, as part of a global selloff. (See "21-Aug-15 World View -- Kazakhstan joins the 'currency wars' as global stocks plummet".) China's Shanghai stock index fell another 4.3% on Friday, adding to the 8.2% plunge in the preceding three days. Britain's FTSE index fell 2.8%.
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Generational Dynamics predicts that we're headed for a global financial panic and crisis. According to Friday's Wall Street Journal, the S&P 500 Price/Earnings index (stock valuations index) on Friday morning (August 21) was at an astronomically high 21.63. This is far above the historical average of 14, indicating that the stock market is in a huge bubble that could burst at any time. Generational Dynamics predicts 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.
Millions of people invested in China's stock markets when the bubble was being created. In fact, the Chinese government encouraged people to pour their life savings into the stock market, and many elderly people did so with their life savings. When the bubble was growing, no one could conceive that one day the bubble would implode, and that's what it's doing now.
Similarly, few people seem to believe that the Wall Street bubble could ever implode, but it's 100% certain that it will. The timing cannot be predicted, but it's possible that it's happening right now.
A lot of American investors are going to stay up late on Sunday evening (Monday morning in China) to see what happens to the Shanghai stock exchange on Monday. Whichever way Shanghai goes, it's possible that Wall Street will follow in the same direction. India.com and Fox Business
(Comments: For reader comments, questions and discussion, see the 22-Aug-15 World View -- Macedonia declares state of emergency along border with Greece thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(22-Aug-2015)
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Global stock markets plummet over currency devaluations
This morning's key headlines from GenerationalDynamics.com
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Yesterday, we reported that China's yuan devaluation was causing currency chaos in Asia. On Thursday, that chaos deepened in Asia, and spread to global stock markets.
Thursday's most dramatic event was the crash in Kazakhstan's currency, devaluing by 23%.
Kazakhstan's economy has been hit from all sides. Its biggest export is oil, and the price of oil has fallen almost 60% in the last year, and is still falling. The 23% tenge devaluation means that now Kazakhstan will get about 23% more for its oil. Russia and China are its top trading partners, and both Russia and China have already had substantial currency devaluations against the US dollar. The 23% tenge devaluation will help Kazakhstan's balance of trade with these and other countries.
The global currency war that we discussed last week ( "12-Aug-15 World View -- China's yuan devaluation a humiliating setback for 'China dream'") seems to be in full swing. South Africa's rand, Brazil's real, and Malaysia's ringgit currencies all fell to multi-year lows against the US dollar in the last week.
That's only going to be the start, according to a new report by Morgan Stanley that lists the top ten troubled currencies: Taiwan dollar, Singapore dollar, Russian ruble, Thai baht, South Korean won, Peruvian sol, S. African rand, Chilean peso, Colombian peso, Brazilian real.
According to Morgan Stanley's foreign exchange strategy head Hans Redeker: "It’s all about vulnerability. Major victims of the policy change this time are currencies of countries with high export exposure and export competitiveness with China." A 1930s-style global currency war, or "race to the bottom," appears to be in full swing.
So far, the United States dollar is not directly affected by the devaluations, but that may have to change. All of these currency devaluations have been against the US dollar, which is the international reserve currency, which means that as the other currencies have been getting weaker, the US dollar has been getting stronger. Currency devaluations are a zero-sum game, in that one country's devaluation is another country's revaluation.
The global devaluations and the dollar's strengthening are going to affect America's balance of trade with other countries, which means that the US will be able to export fewer goods. This will affect the US economy, as hinted by the sharp Wall Street plunges on Wednesday and Thursday, and that effect will grow as the devaluations continue, so that at some point the US may have to devalue as well, and join the race to the bottom. Bloomberg and Reuters and Bloomberg(8/16)
China's Shanghai stock market index plummeted 8.2% in the last three days (Tuesday-Thursday). As those who have been following the situation in China will recall, China's stocks are in huge bubble that began to implode on June 12, with the index quickly plummeting 30% within a couple of weeks.
The Chinese Communist Party (CCP) went into full-scale panic, and poured hundreds of billions of dollars into the stock market to prop it up, and also passed regulations making it illegal for large companies to sell stocks, or for the media or bloggers to use words like "panic."
So the significance of the 8.2% fall in the last three days, beyond just the fact that a lot of elderly Chinese are losing their life savings, is that the CCP is rapidly losing more and more credibility, and chances of a "people's rebellion" against the CCP are increasing.
Other stock markets followed suit. Wall Street stocks sold off broadly, as did European and Asian shares.
The S&P 500 price/earnings ratio (stock valuation index) is still above 21, far above the historical average of 14, indicating a huge Wall Street stock market bubble. China's bubble had to implode sooner or later, and the same is true of Wall Street. It's possible that it's happening right now. Guardian (London) and Reuters
(Comments: For reader comments, questions and discussion, see the 21-Aug-15 World View -- Kazakhstan joins the 'currency wars' as global stocks plummet thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(21-Aug-2015)
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Slovakia will accept 200 migrants -- but only if they're Christian
This morning's key headlines from GenerationalDynamics.com
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With the European Union receiving hundreds of thousands of migrants, mostly arriving in Greece and Italy, the European Commission has been trying get agreement from the member states to agree to resettle the migrants equitably. On July 20, the Commission reached agreement on resettling 40,000 migrants to different countries. However, even that low target has not yet been met, as individual member states only committed to accepting 32,000, with the remainder to be decided later in the year.
On Wednesday, the plan received another blow, when Slovakia announced that it would accept 200 migrants for resettlement, but only if they're all Christians. According to the plan, Slovakia will ask each migrant to name his religion upon arrival, and Muslims would be turned away.
A government spokesman explained that there are now so few Muslims in Slovakia that any new additions would not even want to remain there, and would transit through the country to Germany, where there are already large numbers of Muslims:
"We want to really help Europe with this migration wave but... we are only a transit country and the people don't want to stay in Slovakia.We could take 800 Muslims but we don't have any mosques in Slovakia so how can Muslims be integrated if they are not going to like it here?"
One EU official said that turning away Muslims would be "discriminatory and of dubious legality." The Slovakian government statement is provoking outrage, as it challenges the European Union's multiculturalism ideal. Europa and BBC and Daily Sabah (Turkey)
The euro currency has devalued 20% against the dollar this year, but that devaluation is not causing as much worldwide concern as China's devaluation last of the yuan currency by 4.4% against the dollar. ( "12-Aug-15 World View -- China's yuan devaluation a humiliating setback for 'China dream'")
The reason why China's devaluation is so disruptive is because it affects the balance of trade throughout Asia. If China's yuan currency is devalued 4.4%, then a businessman in any other country purchasing goods from China will have to pay roughly 4.4% more, and if he sells goods to China, he'll receive roughly 4.4% less money (in his own country's currency). That means that his prices are a lot less competitive, and China's are a lot more competitive.
On Wednesday, two Asian countries, Vietnam and Kazakhstan, devalued their own currencies. Vietnam devalued its dong currency by 1%, and Kazakhstan devalued its tenge currency by 4.5%.
Kazakhstan has been especially hurt by the 50% fall in oil prices in the last year. Kazakhstan depends on oil revenues, and requires an oil price of at least $86 per barrel to balance its budget. Oil prices are now getting close to $40 per barrel.
Oil isn't the only commodity whose prices are collapsing. This was highlighted on Wednesday when the Switzerland based global mining giant Glencore Plc announced a disastrous earnings fall of 29%. The collapse was blamed on copper, aluminum and coal prices all at multi-year lows. And the reason that commodities prices have been collapsing is because of a slowdown in the economy of China, the world's largest importer of commodities. So this brings us back full circle to China's devaluation, and a possible vicious cycle.
As one analyst on BBC pointed out, mining companies like Glencore and Rio Tinto are part of the manufacturing infrastructure that keeps the world running, and produces things like cars and trains. If Facebook disappeared tomorrow, then nothing much would happen. But if Glencore or Rio Tinto disappeared, then the effects on business could be, in the words of the analyst, "apocalyptic." Bloomberg and Reuters and Bloomberg
(Comments: For reader comments, questions and discussion, see the 20-Aug-15 World View -- China's yuan devaluation causes currency chaos in Asia thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(20-Aug-2015)
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Chinese fear thunderstorms will bring new explosions and death in Tianjin
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The railway station in Gevgelija Macedonia has become the latest choke point for waves of Middle East migrants escaping violence in Syria, Iraq and Afghanistan, and hoping to establish residence in Europe. The migrants travel from Turkey through Greece to the Gevgelija train station, then take the train to Belgrade, Serbia, and move on to the border with Hungary.
Macedonia and Serbia are NOT part of the European Union's "Schengen zone," which permits free travel across borders. However, Hungary IS a Schengen country. So if a migrant can reach Hungary, then he can freely travel to any other Schengen country, such as Germany or France. However, the UK is NOT a Schengen country, so he cannot freely travel there.
As we reported two weeks ago, Hungary is speeding up construction of a 109 mile fence along Hungary's border with Serbia, to prevent exactly the kind of migrant traffic that's occurring in Gevgelija. Some 120,000 migrants have crossed from Serbia into Hungary this year alone, and so the government is using prisoners and unemployed people to build the fence as quickly as possible.
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Several weeks ago, there were about 1,000 migrants making this trip each day. But ever since Hungary announced the building of the border fence, the number has doubled to 2,000 per day. Now Hungary is planning to send thousands of police officers to the border with Serbia to prevent migrants from entering Hungary.
This isn't the only way to the Schengen countries, of course. Hundreds of thousands of migrants travel to Libya, and risk death crossing the Mediterranean, in the hope of being rescued by Italy's navy. But the path through Turkey to the Gevgelija is completely overland, so many migrants prefer it. Daily Mail (London) and Reuters and Schengen Visa Info
The number of migrants at the EU's borders reached a record high of 107,500 in July. This figure was up from 70,000 in June, which was also a record high. Germany has seen a wave of migration from Syria and the Balkans, and now says it could receive as many as 750,000 asylum seekers this year.
Only two EU countries, Germany and Sweden, take in the majority of refugees, but other countries are being pressured to take their share. BBC
As we reported yesterday, the weather report for Tianjin China calls for thunderstorms on Wednesday, followed by several days of additional raid. This water could react with the hundreds of tons of deadly sodium cyanide and calcium carbide to produce new explosions and deadly gases.
According to a Twitter tweet (unconfirmed), the USA embassy in Beijing is sending out the following message:
"The following unconfirmed text message is said to have originated at the Embassy:For your information and consideration for action. First rain expected today or tonight. Avoid ALL contact with skin. If on clothing, remove and wash as soon as possible, and also shower yourself. Avoid pets coming into contact with rains, or wet ground, and wash them immediately if they do. Rise umbrellas thoroughly in your bath or shower once inside, following contact with rain. Exercise caution for any rains until all fires in Tianjin are extinguished and for the period 10 days following. These steps are for you to be as safe as possible, since we are not completely sure what might be in the air. Remember the brave firefighters and their families along with all those suffering from the accident in Tianjin. Stand strong together China!"
However, officials say that there have been no substantial leaks of sodium cyanide, and that all waterways leading into the sea from the blast site have been sealed off.
As of Tuesday, 50 firefighters were confirmed killed and 52 others were among the 57 missing, making the disaster the deadliest ever for Chinese first-responders. About 1,000 firefighters responded to the disaster.
The Chinese Communist Party has moved rapidly to correct any problems by arresting Yang Dongliang, head of the State Administration of Work Safety. At times like this, it's good to know that the person causing the problem is no longer at large, and we can all feel safe. AP and Weather Channel and Twitter - DanWatanabe and Radio Free Asia
(Comments: For reader comments, questions and discussion, see the 19-Aug-15 World View -- A train station in Macedonia becomes the new European migrant choke point thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(19-Aug-2015)
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Perpetrator unknown for bombing in downtown Bangkok Thailand
This morning's key headlines from GenerationalDynamics.com
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Last week's disastrous explosions in Tianjin, China, occurred in a warehouse containing toxic industrial chemicals including hundreds of tons of sodium cyanide, which emits deadly hydrogen cyanide when mixed with water, and calcium carbide, which explodes on contact with water.
Wednesday's weather forecast calls for thunderstorms, followed by five more days of rain. Want China Times and Weather Channel
Details are beginning to emerge of an imminent agreement, first reported last week, mediated by former British prime minister Tony Blair, between Hamas and Israel. According to reports, the agreement has been endorsed by Hamas's Shura Council, the movement's highest deliberative body, and Hamas's leader Khaled Mashaal. Israel's government is not commenting.
The terms of the reported deal are:
The Palestinian Authority (PA/PLO), which governs the West Bank, is opposed to the deal because it excludes the PA, and does take into account the needs of the West Bank. A PA press statement asks:
"Why has the land corridor with the West Bank, known as the ‘safe passage,’ not been proposed before anything else, given that the PLO delegation raised the issue forcefully? Is Gaza a humanitarian issue [only] or is it part of the Palestinian homeland?"
The deal was negotiated with Qatar and Turkey. Concerns have also been raised that Egypt did not participate. Times of Israel and Jewish Telegraphic Agency
Thailand is in shock over the bomb explosion in Bangkok on Monday. The pipe bomb was planted in the busiest part of the shopping district, near the Erawan Shrine, a Hindu shrine that's also a big tourist attraction. There were 19 people killed, mostly Asian tourists.
No one has claimed responsibility for the bombing, and analysts are suggesting several possibility:
This attack was large enough to shock all of Thailand, but it's not the first attack. Two pipe bombs exploded outside a luxury shopping mall in the same area in February, but caused little damage. Bangkok Post and BBC and Bangkok Post (4-Aug)
(Comments: For reader comments, questions and discussion, see the 18-Aug-15 World View -- Report: Comprehensive Hamas - Israel peace agreement is 'imminent' thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(18-Aug-2015)
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Tianjin explosion poses new threats to China's government
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China is overdue for its next "people's rebellion," and so nothing frightens Chinese Communist Party (CCP) officials more than angry people. And the Chinese people are expressing fury over last week's massive industrial explosion in Tianjin, and the stonewalling by officials.
Last Wednesday's series of explosions killed at least 112 people. More than 700 have hospitalized, and dozens are still missing. Dozens of the dead are firefighters who sprayed water on a warehouse to put out the fire, and apparently ignited an explosion when the water mixed with calcium carbide.
On Friday, there were reports that the warehouse contained between 100 and 700 tons of sodium cyanide. Sodium cyanide can be "rapidly fatal" if it's inhaled or ingested. If it's dissolved or burned, then it gives off the highly poisonous gas hydrogen cyanide. Regulations permit only 10 tons of sodium cyanide to be stored in a warehouse. If there's a rainstorm before these chemicals are cleaned up, then there could be many further deaths.
As usual in Chinese society, the disaster exposed massive corruption. All of these dangerous chemicals were stored close to a high-rise apartment complex, in violation of Chinese law. This is raising speculation about possible corruption and criminal negligence, and an official cover-up.
In fact, CCP officials are actively trying to cover up the situation by suppressing news. There was a televised press conference on Friday, but the coverage cut away when questions were about to begin. Journalists who attended the press conferences said that propaganda officials gave no answers to questions, beyond "Let me check." Security personnel were physically harassing foreign media trying to speak to family members of the missing. Some people were joking that local television in Tianjin was showing cartoons during much of the crisis.
There are still hundreds of firefighters trying to put out the still smoldering fire in Tianjin.
At the same time, Chinese authorities are trying to put out a raging fire in online social media. Online users are furious at CCP officials because family members are not being told anything and official negligence is being covered up. Posted messages called the situation "A real life Pinocchio," and demanded the truth, as well as severe punishment for responsible officials.
The widespread criticism is casting doubt on the credibility of the CCP, something that officials fear very much. And this disaster comes just as China's economy is slowing and the stock market bubble is collapsing. This is a potent combination for social discord. Globe and Mail (Toronto) and BBC and AP
Two suicide bombers were used on Sunday to target Shuja Khanzada, a senior government official, Home Minister of Punjab province in Pakistan. Khanzada was holding a Jirga (meeting) in his home with about 100 people. Once suicide bomber stood outside the home, and the other went inside in the meeting. The resulting explosions caused the large concrete slabs that made up the roof to collapse, trapping people inside. Khanzada and 17 others were killed, while dozens were injured.
Several terrorist groups claimed responsibility, but the most likely perpetrator was Lashkar-e Jhangvi (LeJ). I've written about LeJ many times. It's dedicated to the extermination of all Shia Muslims, especially the Hazara ethnic group.
Late in July, LeJ's leader Malik Ishaq was killed in gunfight while he was in police custody. It's believed that the gunfight was a setup by the police to allow them to kill Ishaq, rather than return him to jail.
Shuja Khanzada has been vigorously attacking militant groups in Punjab province, so an attack on him is not a surprise. However, this attack may have occurred at this time because of the perception that Khanzada was responsible for Ishaq's death.
What's remarkable is that Khanzada was certainly going to be targeted by militants, and yet had no protection at all, since two suicide bombers had no trouble approaching him.
Sunday's attack sends an unmistakable message to Pakistan's political leadership across the country that no one is safe. If there are other successful operations targeting terrorist or extremist groups, then they can and will retaliate. There is no safe ground, and no one is safe. Pakistan Today and Express Tribune (Pakistan)
(Comments: For reader comments, questions and discussion, see the 17-Aug-15 World View -- Suicide attack in Pakistan means no politician is safe thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(17-Aug-2015)
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Russian women increasingly marrying Chinese men
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It seems like a match made in heaven. There's a shortage of men in Russia because of super-high mortality rates, and there's a shortage of women in China because of the decades-old "one child policy."
According to the Hong Kong paper Wenhuebao, "Russian beauties are a good choice for Chinese men." The article says that Chinese men have “every chance” to find a wife in Russia because “there are few men in that country” and more than half of the women work. Consequently, many Russian women would like to marry and have children.
"In the [Russian] Far East, the number of Russian-Chinese marriages is much greater than you can imagine. Many [Russian] girls from this region think that only in China will it be possible for them to find happiness. [Thus], it is obvious that Russian girls very much need Chinese men."
The article adds that Russian girls like the fact that few Chinese men "drink wine, which is extremely important for the Russian girls."
The article also recommends to Chinese men that they seek out wives in Singapore, Japan, South Korea and Africa. However, the poorest choices for Chinese men are Vietnamese women, according to the article, because of the language barrier, and because they're only in it for the money. Window on Eurasia / Paul Goble and Wenhuebao (Hong Kong) (Trans)
Germany stationed batteries of Patriot missiles in Turkey, 60 miles north of the border with Syria, in January 2013. Turkey requested the help from NATO after a Turkish jet had been shot down by Syrian forces in June 2012, and Syrian shellfire killed Turkish civilians four months later. The Patriot missiles would have been used to shoot down Syrian missiles coming into Turkey from Syria.
Germany now says that it will withdraw the Patriot missiles in January 2016. Germany gives as reasons that the deployment is expensive. In addition, German's Defense Ministry says, "The decision was taken after the present assessments made by the NATO in June 2015, which concluded that the threat against Turkish territories by Syrian ballistic missiles is very low."
In 2013, additional Patriot missile batteries were sent to Turkey by the United States and the Netherlands. Early this year, the Netherlands withdrew their Patriot missiles, and they were replaced by units from Spain. Deutsche Welle (Berlin) and Today's Zaman (Istanbul)
(Comments: For reader comments, questions and discussion, see the 16-Aug-15 World View -- Germany ends its Patriot missile deployment in Turkey thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(16-Aug-2015)
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Brief generational history of Japan
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Japan's prime minister Shinzo Abe on Friday gave his long-awaited speech commemorating the 70th anniversary of VJ day, ending World War II. It was closely watched by Asian countries, especially Korea and China, to see if he'd renew the apologies of his predecessors for Japan's brutality during WW II, and particularly for Japan's use of Korean and Chinese "comfort women."
Abe did not apologize again, though he expressed profound grief. What was really interesting was the historical perspective of his speech, particularly his claim that Japan's actions in World War II were triggered by the Smoot-Hawley Tariff Act, the June 1930 law passed by Congress that erected enormous trade barriers and worsened the Great Depression.
I've said many times in the past that the Smoot-Hawley Act could be considered the beginning of World War II, so it's interesting to me that Abe is implying the same thing.
In Friday's speech, Abe said:
"After World War I, which embroiled the world, the movement for self-determination gained momentum and put brakes on colonization that had been underway. It was a horrible war that claimed as many as ten million lives. With a strong desire for peace stirred in them, people founded the League of Nations and brought forth the General Treaty for Renunciation of War. There emerged in the international community a new tide of outlawing war itself.At the beginning, Japan, too, kept steps with other nations. However, with the Great Depression setting in and the Western countries launching economic blocs by involving colonial economies, Japan’s economy suffered a major blow. In such circumstances, Japan’s sense of isolation deepened and it attempted to overcome its diplomatic and economic deadlock through the use of force. Its domestic political system could not serve as a brake to stop such attempts. In this way, Japan lost sight of the overall trends in the world.
With the Manchurian Incident, followed by the withdrawal from the League of Nations, Japan gradually transformed itself into a challenger to the new international order that the international community sought to establish after tremendous sacrifices. Japan took the wrong course and advanced along the road to war.
And, seventy years ago, Japan was defeated."
Abe left out many imperialistic acts that occurred earlier, such as annexing Korea and part of China in 1910.
The "major blow" that Japan's economy suffered was the Smoot-Hawley Tariff Act. The Great Depression was hurting Japan just as much as it was hurting America but, in addition, Japan's exports of its biggest cash crop, silk, to America were almost completely cut off.
The "Manchurian Incident" to which Abe refers, or "Mukden Incident," occurred a year later. On September 18, 1931, an explosion destroyed a section of railway track owned by Japan in the city of Mukden in Manchuria. Japan blamed Chinese nationalists, though many believe that the Japanese military planted the bomb to provide a pretext. Either way, Japan invaded Manchuria.
Abe said that Japan had suffered enormously for its mistakes in WW II:
"On the 70th anniversary of the end of the war, I bow my head deeply before the souls of all those who perished both at home and abroad. I express my feelings of profound grief and my eternal, sincere condolences.More than 3 million of our compatriots lost their lives during the war: on the battlefields worrying about the future of their homeland and wishing for the happiness of their families; in remote foreign countries after the war, in extreme cold or heat, suffering from starvation and disease. The atomic bombings of Hiroshima and Nagasaki, the air raids on Tokyo and other cities, and the ground battles in Okinawa, among others, took a heavy toll among ordinary citizens without mercy. ...
Upon the innocent people did our country inflict immeasurable damage and suffering. History is harsh. What is done cannot be undone. Each and every one of them had his or her life, dream, and beloved family. When I squarely contemplate this obvious fact, even now, I find myself speechless and my heart is rent with the utmost grief."
Having learned its lesson, according to Abe, Japan turned into a pacifist nation, and vowed to never let anything like that happen again. He said that it should not be necessary for future generations to continue to apologize:
"In Japan, the postwar generations now exceed 80 per cent of its population. We must not let our children, grandchildren, and even further generations to come, who have nothing to do with that war, be predestined to apologize. Still, even so, we Japanese, across generations, must squarely face the history of the past. We have the responsibility to inherit the past, in all humbleness, and pass it on to the future.Our parents’ and grandparents’ generations were able to survive in a devastated land in sheer poverty after the war. The future they brought about is the one our current generation inherited and the one we will hand down to the next generation. Together with the tireless efforts of our predecessors, this has only been possible through the goodwill and assistance extended to us that transcended hatred by a truly large number of countries, such as the United States, Australia, and European nations, which Japan had fiercely fought against as enemies.
We must pass this down from generation to generation into the future. We have the great responsibility to take the lessons of history deeply into our hearts, to carve out a better future, and to make all possible efforts for the peace and prosperity of Asia and the world."
International Business Times and Dept. of State
Japan was almost completely isolated for centuries, but in 1853, US Commander Matthew Perry brought four warships to Edo (Tokyo). There was a brief naval battle that the Americans won easily. In 1854, Japan signed a treaty with the US that opened up several Japanese ports in a limited way. In the next two years, Japan signed similar treaties with Great Britain, Russia and the Netherlands.
This humiliating defeat triggered a crisis civil war in Japan that was finally resolved in 1868, when the family that had ruled Japan since 1603 was overthrown. The new emperor took the name Meiji ("enlightened rule"), and the crisis war climax is known as the "Meiji Restoration."
Generational Awakening eras, which begin around 15 years after the end of the preceding crisis war, are always a reaction to the crisis war by a rising post-war generation rebelling against their war survivor parents. (America's last generational Awakening era was the 1960s-70s.)
Young people in the 1890s rebelled against the isolation of pre-war Japan, and also took note of the successful colonization of many countries by Britain, France, and other countries. Japan entered an imperialist era, and from 1894-1910, Japan engaged in a series of wars against China and Russia, resulting in one victory after another. In the treaties resulting from these wars, Japan was given Taiwan, Korea, and southern Manchuria, along with other territories. By the way, Japan was not considered to be an enemy of the West at this time, but was thought to be an advanced, "westernized" nation.
Japan became giddy with its military successes, and in the 1920s, turned into a completely militaristic state. There was censorship of the press, complete state control by the military, and open plans for military expansion into China and Russia. Japan felt insulted by America's 1924 decision to block immigration by the Japanese, and then hurt by the 1930 Smoot-Hawley Tariff Act, which devastated Japan's economy and was considered almost an act of war. Japan went to war in Manchuria in 1931, and was at war continually until the end of World War II.
After surrendering, almost overnight, the Japanese people reverted to their old non-imperialistic selves they used to be before Commodore Perry's visit. The country became strongly pacifist and disbanded its armed forces.
Today, Japan is torn between two generational crisis eras. One of them is World War II, which was a disaster for Imperialistic Japan; and the other is the civil war following Commodore Perry's visit, which was a disaster for isolationist Japan.
Today, Japan is a pacifist nation, while China has become an Imperialist nation, and an existential threat to Japan. Japan has to struggle to find a way to reject both its isolationist past and its Imperialist past, and still be prepared for the inevitable war with China. The reinterpretation of Japan's pacifist constitution to permit "collective self-defense" is an important part of that struggle. And Friday's speech is an attempt to describe, in words, a pathway between those two imperatives.
(Comments: For reader comments, questions and discussion, see the 15-Aug-15 World View -- Japan's Shinzo Abe blames WW II on the Smoot-Hawley Tariff act thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(15-Aug-2015)
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Brief generational history of Uzbekistan
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Uzbekistan, Kyrgyzstan and Tajikistan have sent troops and officials to a Fergana Valley (or Ferghana Valley) border regions where there are violence is increasing in border disputes. Negotiations are ongoing to prevent the further spread of violence.
The densely populated Fergana Valley sits at the intersection of Uzbekistan, Tajikistan, and Kyrgyzstan. In 2009, I wrote about the rise of the al-Qaeda linked Islamic Movement of Uzbekistan (IMU), and about the importance of the Fergana Valley to the U.S. for Afghan war logistics. (See "Islamist Uzbeks lead terrorists in Pakistan and Afghanistan" from 2009.)
In 2010, there was extremely bloody violence in the Fergana Valley on the Kyrgyzstan side of the border. A U-shaped region stretching along the border between the cities of Osh and Jalalabad was devastated, causing hundreds of deaths, thousands of injuries, and hundreds of thousands of refugees. ( "15-Jun-10 News -- Uzbekistan closes border to refugees from Kyrgyzstan")
Almost all of the casualties were Uzbek victims of Kyrgyz violence, including violence by the Kyrgyz army. Some people blame Josef Stalin for the carnage because, in the 1920s and 1930s, Kyrgyzstan, Uzbekistan and Tajikistan were established as Soviet republics, and divided by arbitrary borders in the Fergana Valley. These arbitrary boundaries, which ignored ethnic realities, created the ethnic tensions and rivalries that are the basis of the current violence and atrocities that began occurring after the collapse of the Soviet Union in 1991.
In the last few weeks, violence has been flaring separately across Kyrgyzstan's disputed borders with Uzbekistan and Tajikistan. Two days ago, there was a shootout along the border of Tajikistan and Kyrgyzstan, which resulted in the injury of six Tajiks. And in late June, an Uzbek border guard was wounded in a shootout on the border of Uzbekistan and Kyrgyzstan. Both food and water are available in the Fergana Valley, but not enough to meet the needs of local residents. As a result, residents are blocking roads and waterways that cross the disputed borders.
These conflicts are raising concerns that either or both might spiral out of control into a repeat of the 2010 violence around Osh and Jalalabad.
Unfortunately, there does not exist any durable solution to these border conflicts short of all-out war. Each of the ethnic groups -- Uzbeks, Tajiks and Kyrgyz -- has enclaves in all three countries where ancestors have been living for centuries, and ethnic hatred runs deep.
In the last century, population in the Fergana valley has increased five-fold. There is plenty of water in the valley, but still not enough for the rapidly growing population. Due to poverty and government corruption, the Fergana Valley is becoming a hotbed of discontent, led by Islamic radicals. Trend Agency (Azerbaijan) and The Diplomat and Strategy Page and Jamestown
The Uzbeks are one of the many tribes that have populated Central Asia for centuries, and the wars they fought were mainly with one another until the Russians conquered the region in the late 1800s. Although the wars in Central Asia were primarily ethnic, it's worth noting that the residents are mostly Sunni Muslim, and the Russians are Orthodox Christian.
Uzbekistan's last generational crisis war was World War I and the Bolshevik Revolution of 1917.
World War II thus occurred during a generational Awakening era for the Uzbeks. Thus the Uzbeks stayed out of the war, and in fact carried out a "humanitarian mission" during the war, by sheltering in their families the hundreds of thousands of refugees from the fascist occupied territories. There were hundreds of thousands of refugees from Russia, Ukraine, Baltic States, Poland, and other countries.
As part of Stalin's Soviet Union, Uzbekistan became a cotton powerhouse starting in the 1920s. In support of the cotton trade, millions of ethnic Russians began pouring into the country, especially into the fertile Fergana Valley.
The old Uzbek / Russian fault line became critical again, starting in the 1980s with the Russian invasion of Afghanistan. At that time, Uzbek militants began joining the Pashtuns in Afghanistan to fight against the Soviets. When the Soviet Union collapsed in 1991, Uzbekistan became an independent republic. A consequence was a great deal of financial hardship for the Russians in the Fergana Valley. The result was the first signs of Islamic fundamentalism in Uzbekistan when some unemployed young Muslims seized the Communist Party headquarters in the city of Namangan in the Fergana Valley.
The leaders of this terrorist action, Tohir Yuldeshev and Juma Namangani, eventually made their way to Afghanistan in 1996, after the Taliban had taken control of the government. They joined Osama bin Laden and al-Qaeda, and formed the Islamic Movement of Uzbekistan (IMU). The IMU has been playing an important role in terrorist acts in Afghanistan and Pakistan.
While Central Asian countries have always been concerned about Islamist militancy, the rise of the self-described Islamic State (IS or ISIS or ISIL or Daesh) is raising concerns about new, more dangerous threats.
The International Crisis Group think tank estimates 4,000 people have traveled to Syria to join ISIS. The Islamic Movement of Uzbekistan (IMU) last week pledged allegiance to ISIS, only days after the death of the Taliban leader Mullah Omar was announced. These developments are raising fears of destabilization of the Central Asian countries.
As a result, authorities are taking draconian measures to stamp out militant Islam. Uzbekistan has banned beards, outlawed Islamic dress, shut restaurants that refuse to sell alcohol and warned teahouses not to celebrate the nightly end of the Ramadan fast with "Iftar" meals. In Kyrgyzstan, where the authorities vet preachers to ensure mosque sermons do not stir up unrest, there have been shootouts between the secret police and militants.
However, these harsh measures risk a backlash in the form of even more young Muslims traveling to Syria to join ISIS.
One researcher, who has interviewed ISIS militants in Central Asia, found that poverty was not the primary motivation for joining ISIS. Nor were they particularly knowledgeable about Islamic tenets for fighting in such a war (somewhat refuting the popular belief that jihadists are being trained in radical madrassas). Many joined for reasons of social justice -- to help Muslim brothers, to fight a regime that oppresses them, to defend the weak. Others chose to join because of adventure, romanticism, love (especially women), their wish to become heroes, or just because they feel the caliphate is the right place for a good Muslim life and they want to contribute to its development. Reuters and Eurasia Net and The Diplomat
(Comments: For reader comments, questions and discussion, see the 14-Aug-15 World View -- With rise of ISIS, violence flares in Central Asia's Fergana Valley thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(14-Aug-2015)
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Greece's island Kos moves to center of Europe's migrant crisis
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A massive series of industrial explosions occurred early on Wednesday in Tianjin in China. There was one large explosion, equivalent to 3 tons of TNT, and followed by an enormous explosion a few minutes later, equivalent to 21 tons of TNT. The explosions were felt ten miles away. Hundreds of people were hospitalized. The area where the blast happened has many factories, but also worker dormitories and apartment buildings.
Tianjin has a population of 15 million, the fourth biggest city, behind Shanghai, Beijing, and Guangzhou. It's a major industrial hub for China, with hundreds of Fortune 500 companies based there.
Bribery and corruption are common in China, and factory owners often use it to evade regulations, with the result that there are frequent building catastrophes. In July, 15 people were killed and more than a dozen injured when an illegal fireworks warehouse exploded in northern Hebei province. And at least 71 were killed in an explosion at a car parts factory in Kunshan, near Shanghai, in August last year.
The Tianjin disaster is the third in a series of major recent humiliations for China in its attempt to displace the United States as a world economic and military leader. First, China's huge stock market bubble has been imploding, and China has almost destroy the Shanghai stock market as a market by using regulations and a tsunami of money to prop it up. And then, in the last few days, China effectively declared war on the world's currencies with a surprise 2-3% devaluation of the yuan (renminbi) currency. As of Thursday, China has devalued its currency each day for three days in a row. AFP and Al Jazeera
Europe is facing its biggest refugee crisis since World War II. With over 200,000 migrants having arrived in Europe this year alone, including 124,000 in Greece, the news focus has moved from place to place, including Italy, Athens, Hungary, and Calais.
Focus is now moving to the Greek island of Kos, where migrants have arrived from Turkey, usually having escaped from Syria or Afghanistan.
Kos has a population of 33,000, and around 7,000 migrants are now waiting to apply for immigration papers. On Tuesday, police beat back migrants with truncheons and sprayed them with fire extinguishers and teargas to prevent a stampede as they were being relocated to a local football stadium after camping along roads and beaches for weeks.
The migrants, including women, children and the elderly, are locked in the football stadium for hours, in the open air under an extremely hot sun, without access to washing facilities or toilets, according to reports. International humanitarian organizations are speaking of "totally shameful" conditions.
Greece's government is sending a cruise liner with a capacity for at least 2,500 people, converted with a reception center, to process migrant arrivals. In addition, riot police from Athens have been dispatched to Kos. The extra police deployment came after the island's mayor warned of "bloodshed." Kathimerini and AFP
(Comments: For reader comments, questions and discussion, see the 13-Aug-15 World View -- Massive explosion in Tianjin highlights China's dismal industrial safety record thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(13-Aug-2015)
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China shocks the world with 2% currency devaluation
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The ripples coming out of China's early Tuesday morning currency devaluation are turning out to be larger than one might have expected. China devalued the yuan (renminbi) currency by 2% against the dollar. This means, for example, that Chinese-manufactured goods being sold in the United States, or any other country, will now be 2% cheaper. It also means that any goods manufactured in the US or Japan or any other country being sold in China will now be 2% more expensive.
Obviously, this has big implications for global trade. It means that China's goods will sell better in countries around the world, and that other countries' goods will sell worse in China. So what's good for China will be bad for everyone else.
So stocks on Wall Street and in Europe fell sharply on Tuesday. But the implications go farther than that.
According to an analyst in India:
"The devaluation will affect India's exports not only to China but to other countries also with increasing competitiveness of Chinese exports.This may swell the trade deficit further, which is already touching $50 billion, as imports from China may increase particularly as China is having excessive capacity in diverse sectors of manufacturing."
India's rupee currency fell sharply against the dollar, apparently because currency traders are expecting India's central bank to be forced to devalue the rupee as well to compete with China. Other currencies fell sharply on Tuesday for the same reason: the euro, the Japanese yen, the Brazilian real and the Turkish lira.
There was a "currency war" during the Great Depression of the 1930s, and the countries that moved the fastest to devalue their currencies were the countries that suffered the least unemployment. During the last ten years, there have been concerns raised occasionally about a new currency war. The China yuan devaluation is raising those concerns to a fever pitch.
And with good reason. It's quite possible that central banks in China's neighbors in Asia will be the first to be forced to devalue their own currencies to compete with China. Europe may then follow suit, in what was called in the 1930s the "race to the bottom." Devaluation of all of these currencies will make the dollar stronger, which could eventually crush American exports and harm American multinational firms, so the US may be forced to follow suit.
Right now, this is just speculation, but it's a concern that's being expressed widely today.
I've been amazed the past few years with the willingness of governments to paper over problems by blanketing the problems with a tsunami of money. Trillions of dollars have been thrown into global stock markets by quantitative easing, and Wall Street stocks are in a huge bubble. Obamacare is a financial disaster held together by the $710 billion Medicare insurance fund, which has essentially been thrown into the garbage with nothing to show for it.
The claim by politicians is always that the tsunami of money is only temporary, because it buys time for the problems to solve themselves. Thus, flooding the stock market with money is OK, because soon economic growth will take over. Flooding Obamacare with money is OK, because soon the various Rube Goldberg Ponzi Scheme businesses will become self-sustaining.
Those assumptions are now provably wrong, and the only way to keep things from collapsing is to keep the tsunami going and growing. But even a tsunami eventually runs out of water.
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From the point of view of Generational Dynamics, a major global financial crisis is coming, and something will trigger it. China's stock market bubble is imploding. Global trade is slowing significantly. The S&P 500 price/earnings ratio is at an astronomically high 21.69, indicating a major Wall Street stock market bubble.
At some point, something will trigger the global financial crisis. Maybe the China devaluation will be the trigger, by creating a domino effect of some kind. Or, maybe the central banks of the world will find a way to increase the tsunami of money still further, flooding the problems for a while longer. They're certainly going to try -- though of course that's exactly what would create a currency war. All we can do is watch to see what happens next. Reuters and Bloomberg and New Delhi TV
The "China dream" is for China to replace the United States militarily, by taking control of the Pacific and Indian Oceans, and also to do so financially, by replacing the dollar with the Chinese yuan as the global reserve currency. This is the second disastrous setback to the "China dream" within the last month.
First, in order to prove that it can replace the United States economically, China has to prove that it can provide a world-class stock market that can operate free of government intervention. And that objective is completely in shreds, after the multi-trillion dollar tsunami of money that was used to intervene in the Shanghai stock market, almost completely destroying it as a market.
And now China has its second disaster with the surprise yuan devaluation, effectively declaring war on other countries' currencies.
The humiliating devaluation was a move of almost complete desperation. China's economy is in serious trouble, and that's not the worst of it. China has a history of massive "people's rebellions" against an oppressive government, the last one being Mao's Communist Revolution that ended in 1949. From the point of view of Generational Dynamics, China is now overdue for the next one, and a Chinese financial crisis could be the trigger. Bloomberg
(Comments: For reader comments, questions and discussion, see the 12-Aug-15 World View -- China's yuan devaluation a humiliating setback for 'China dream' thread of the Generational Dynamics forum. Comments may be
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(12-Aug-2015)
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Europe's bond yields go negative
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Terrorist opened fire at the U.S. Consulate in Istanbul, Turkey, on Monday. No one was killed during the assault, but one of the two female attackers was killed by police as she fled. A far left terrorist group, the Revolutionary People's Liberation Army-Front (DHKP-C) took credit for the attack.
Earlier Monday, an overnight bomb attack at a police station in Istanbul injured three policemen and seven civilians and caused a fire that collapsed part of the three-story building. Unknown assailants later fired on police inspecting the scene of the explosion, sparking another gunfight with police that killed a police officer and two assailants. No one has claimed responsibility, but government sources blame the terrorist Kurdistan Workers' Party (PKK).
Also on Monday, four policemen were killed in southeastern Turkey when terrorists fired at a helicopter, and when an armored vehicle was attacked by a roadside bomb. Once again, the PKK was blamed.
Things seem to be changing very quickly in Turkey, ever since the July 20 massive terror attack on Suruç. Since then Turkey has rapidly changed from a country determined to avoid war to a wars on multiple fronts, fighting the self-described Islamic State (IS or ISIS or ISIL or Daesh) in Syria and Iraq, the PKK in northern Iraq and southeastern Turkey, and now the DHKP-C in Istanbul. It's amazing how quickly things can change.
The Revolutionary People's Liberation Army-Front (DHKP-C) is listed as a terrorist organization by the United States and Turkey, and was responsible for a suicide bombing of the US embassy in Ankara in 2013. Both the PKK and the DHKP-C are far left terrorist organizations, and they've cooperated in the past, although it's not known whether Monday's attacks were coordinated by the two groups. Today's Zaman (Istanbul) and Hurriyet (Ankara) and AP
Russia's recession deepened substantially in the second quarter, as the gross domestic product (GDP) shrank by 4.6% compared with a year earlier.
Earlier estimates that the GDP would fall only 3.6% were based on the assumption that oil prices would be above $60 per barrel. But oil has continued to fall, and Russian oil is now selling for just $57 per barrel, down 47% from a year earlier. Russia relies on oil and gas for about half of its budget revenue. This has caused the ruble currency to lose about 20% of its value since mid-May, 43% in the past 12 months.
Russia's president Vladimir Putin is increasingly trapped, running out of options. This is particularly true in Ukraine. Russia invaded and annexed Crimea, and has invaded and controls eastern Ukraine. But instead of a glorious return to Novorossia (New Russia), Russia is stuck in a massive economic quagmire in Ukraine that's further draining Russia's treasury.
Putin badly needs a relaxation of the Western sanctions that were imposed after the annexation of Crimea, but for that to happen, he would need to climb down in Ukraine, a move that would undermine the whole rationale for his rule and infuriate the nationalist supporters who make up his base. AFP and Bloomberg and RFE/RL
Germany's bond yields are below zero. France's two-year bond yields are less than -0.2%. In fact, $1.5 trillion of securities issued by eurozone countries have negative yields. That 23% of the market.
Normally when you purchase a bond, it's like a savings account that pays interest. If the yield is 2%, then if you sell the bond a year later, you could expect to have earned 2% interest.
But when a bond's yield is negative, that means that you lose money when you sell it. You buy the bond for $1,000, and then a year later you sell it for $998.
Why would anyone do that, you may ask? If you're a big institution with millions of dollars, then you have to put it somewhere. With a negative bond yield, it means that you're putting it somewhere safe, and you're paying someone to keep it safe.
Eurozone inflation was at 0.2% in July, well below the 2% target set by the European Central Bank (ECB). The eurozone had four months of deflation before April. The ECB is considering more quantitative easing to try to prevent any further deflation. Bloomberg and Reuters
(Comments: For reader comments, questions and discussion, see the 11-Aug-15 World View -- Vladimir Putin increasingly trapped as Russia's GDP plunges 4.6% thread of the Generational Dynamics forum. Comments may be
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(11-Aug-2015)
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Palestinians promise to continue efforts to pursue Israeli 'criminals'
This morning's key headlines from GenerationalDynamics.com
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Japan has been holding a series of very emotional commemorations, 70 years after American forces dropped atomic bombs on two Japanese cities, bringing World War II to an end. On Thursday there was a commemoration in Hiroshima, and on Sunday it was in Nagasaki.
Japan's prime minister Shinzo Abe called for a nuclear-free world in his speech on Thursday:
"Here today, at the opening of the Hiroshima Peace Memorial Ceremony on the 70th anniversary of the atomic bombing, I reverently express my sincere condolences to the souls of the great number of atomic bomb victims.I also extend my deepest sympathy to those still suffering from the aftereffects of the atomic bomb even now.
Seventy years have passed since that morning. A single atomic bomb dropped here in Hiroshima deprived a tremendous number of people, numbering around 140,000, of their precious lives and turned the city into ruins. In this catastrophe, even those who narrowly escaped death suffered unspeakable hardships in the days to come.
Looking around the city of Hiroshima today, we see that this City of Water has undergone a robust restoration and transformed itself into an International City of Peace and Culture. This morning as we mark 70 years since the atomic bombing, I once more profoundly contemplate how precious peace is.
As the only country to have ever experienced the horror of nuclear devastation in war, Japan has an important mission of realizing a world free of nuclear weapons by steadily carrying out a succession of realistic and practical measures. We also have a duty to communicate far and wide the catastrophic humanitarian impact of nuclear weapons, across generations and beyond national borders."
However, there was some controversy because Abe's speech omitted mention of the "three non-nuclear principles": Japan will not build or maintain nuclear weapons, and will permit any nuclear weapons on its territory. Activists expressed concern that the last of these three principles will be negated by passage of security legislation that will re-interpret the pacifist constitution that permits military action only in self-defense. (See "5-May-14 World View -- Japan debates 'collective self-defense' to protect America and Japan")
The two commemorations have revived the decades-old moral debate over whether America should have used nuclear weapons at all, since so many civilians were killed, first by the explosion and then afterwards by radiation poisoning.
From the point of view of Generational Dynamics, the fact that nuclear weapons were used is no surprise at all. During a generational crisis war, the value of an individual human life keeps falling, until the explosive climax of the war. At that time, the value of a human life is almost zero, and any means or method or weapon will be used to end the war, irrespective of civilian casualties. In fact, in WW II this was already apparent long before the nuclear weapons were dropped. In 1944, the Allies sent tens of thousands of soldiers onto the beaches of Normandy, knowing that thousands would be shot down and killed like fish in a barrel. The firebombing of Hamburg, Dresden and Tokyo in 1944 and 1945 actually killed more civilians than the nuclear weapons did.
Some of the criticism directed at President Truman for authorizing the atomic bombings was that Japan was about to surrender anyway, because the Soviet Union was entering the war against Japan. A historical analysis on the BBC made by Dr. Anthony Best, professor at London School of Economics, specializing in the history of Japan, made the following points:
Generational Dynamics predicts that there will be no nuclear-free world, and that by the time that the climax of the next world war is reached, every nuclear weapon in the world will have been used as a weapon somewhere. BBC and Japan Times and Shingetsu News Agency
On Thursday, Japan's prime minister will give a speech commemorating the 70th anniversary of the end of World War II, when Japan surrendered, several days after the bombing of Nagasaki.
The planned statement is major news in South Korea, where officials are waiting to see if Abe will apologize for Japan's use of Korean and Chinese "comfort women" during World War II. Two of Abe's predecessors have apologized, and both Korea and China are urging Abe to use words such as "aggression," colonial rule," "remorse" and "apology" in the upcoming statement.
However, Abe is apparently going to be guided by a report submitted last week by "The Advisory Panel on the History of the 20th Century and on Japan’s Role and World Order in the 21st Century," a panel established by Abe in February to provide input to Thursday's statement. The report recommends that Abe express remorse, but not apologize.
According to an editorial in the Korea Times, the panel's recommendations actually insulted the Koreans by differentiating between China and Korea, and claiming that "The Korean governments' policy on Japan has vacillated between 'reason and emotion.'" According to the editorial, "It befits all modifiers Japan is infamous for cunning, crafty and sly." Arirang (Seoul) and Korea Times and Japan Focus
Palestinians are calling for revenge after the second victim of last weekend's 'Jewish terrorism' died on Saturday. ( "1-Aug-15 World View -- Tensions with Palestinians soar after brutal Israeli settler 'price tag' attack")
An 18-month-old Palestinian boy was killed last weekend when attackers used Molotov cocktails to set two homes on fire in the West Bank. On Saturday, the child's father died. The brother and mother are still being treated in a hospital.
The brutality of the Jewish settler "price tag" attack has shocked even most Israelis. Israel's prime minister Benjamin Netanyahu has promised that the "Jewish terrorists" would be brought to justice, but so far no one has been charged.
However, three Israelis have been given "administrative detention," and this has caused controversies of its own. Israel holds hundreds of Palestinians in administrative detention, but this is the first time it's been used to detain Jews. Furthermore, the three Israelis were not linked to last weekend's attack.
Israel defends its use of detention for up to six months without trial, saying it is needed to stem violence and allow for further investigation in cases where there is insufficient evidence to prosecute, or where going to court would risk exposing secret informants.
However, human rights activists in Israel object to the use of administrative detention against either Israelis or Palestinians. According to activist Sarit Michaeli:
"These recent government actions look more like an attempt to divert attention and appease public outrage following this terrible attack in Duma than a real effort to enforce the law on settlers who attack Palestinians.There is a very long-term and clear unspoken policy to not enforce the law in these situations, by the Israeli authorities, to turn a blind eye, to not conduct proper police investigations into these matters, and therefore it's very hard to see how a couple of arrests will change that."
The Palestinian Authority government said Saturday it is planning to continue its diplomatic and legal efforts to pursue Israeli “criminals.”
A spokesman for the government in Ramallah said the father's death is "further proof of the gravity of the crime committed by a group of settler terrorists," adding that the "presence of Israeli occupation is the reason for all crimes committed against our people. The only way to stop these crimes is by ending this occupation." Jerusalem Post and Reuters and Jerusalem Post
(Comments: For reader comments, questions and discussion, see the 10-Aug-15 World View -- Japan's Shinzo Abe 'insults' Korea in plans for commemorating end of WW II thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(10-Aug-2015)
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Mulattos versus Noirs in Haiti
This morning's key headlines from GenerationalDynamics.com
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Today (Sunday), Haiti will hold its first parliamentary elections since the massive January 2010 earthquake that killed more than 200,000 Haitians, and devastated the entire country.
The elections were supposed to be held in 2011, but they were postponed repeatedly because toxic Haitian politics, led by president Michel Martelly, a former carnival singer known as "Sweet Micky." Martelly was elected in 2011 as a supporter of the majority "noirs," or descendants of slaves. The Parliament dissolved itself in January of this year, and since then Martelly has been governing by decree. Martelly is still popular, but these days he's accused of being too authoritarian, more in league with the minority "mulattos," supported by international élites.
More than 1,800 candidates from dozens of parties will be on the ballots on Sunday, running for 138 open legislative seats. It will take days or weeks to count the ballots and determine the winners, and then there will be runoff elections on October 25. October 25 is also the day when presidential elections will take place. Martelly will not be eligible to run for another term, but there will be more than 50 other candidates for voters to choose from. If necessary, a presidential runoff election will take place on December 27.
It's hoped that with fresh leadership, the country can finally begin to recover from the 2010 earthquake.
There has already been huge amounts of money donated to rebuilding Haiti after the earthquake, but it doesn't seem to have done much good. Bill Clinton and the Clinton foundation raised millions of dollars. Celebrities organized high-profile benefits. The American Red Cross raised almost $500 million, promising to rebuild homes, schools and infrastructure. According to a recent investigation, the actual number of permanent homes built through the Red Cross in Haiti is six. Thanks to the investigation, Red Cross officials have been in the process of making excuses. The money appears to have gone into the pockets of crony organizations in the form of grants which the Red Cross says can't be publicly disclosed. Apparently, these were all American organizations, not Haitian organizations, so little of the $500 million seems to have reached Haiti.
Because of the massive numbers of candidates, few people expect the elections to produce the kind of leadership that Haiti needs, or that Haiti will anytime soon be able to completely recover from the devastation of the 2010 earthquake. International Business Times and BBC and Chicago Tribune and NPR
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During the 1700s, Haiti was an extremely wealthy French colony, thanks to crops sugar, rum, coffee and cotton -- and thanks to the efforts of 500,000 slaves that the French had imported from Africa.
By the end of the 1700s, there were three groups of Haitians: The "whites," native Europeans; the "noirs" or "blacks," native black Africans whom the French imported as slaves; and the "mulattos," the children of mixed European and African blood.
At that time, the mulattos were theoretically free, but in practice had as few rights as the noirs. In 1791, the noirs and the mulattos united in a violent slave rebellion that led to a 13-year civil war, resulting in formal recognition, in 1804, of Haiti as the second Republic in the Western hemisphere. However, the United States didn't grant Haiti diplomatic recognition until 1862 -- when Lincoln's Emancipation Proclamation freed America's slaves during the Civil War.
Today the mulattos are a small French-speaking minority, under 5% of the population, generally light-skinned, but a "market-dominant" minority, controlling well over 50% of the nation's wealth. The noirs generally live in extreme poverty, and speak Creole, a mixture of French and African language elements. (Other different variations of Creole are spoken throughout the Caribbean, including parts of Louisiana.)
After the whites were overthrown in 1804, the mulattos became the new élite class. There was a new crisis civil war in the late 1840s, followed by several decades of peace and the growth of a Haitian intellectual culture. However, there was one bloodless coup after another, resulting in a succession of dozens of Presidents.
The 1915 coup was different, in that it turned into a major generational crisis rebellion. With total anarchy breaking out, President Woodrow Wilson eventually felt it necessary to take complete control of all governmental and financial institutions in Haiti.
The American armed forces remained in Haiti for 20 years, withdrawing only in 1934.
American armed forces came back in 1994, when it appeared that Haiti was once again heading for anarchy. The same thing happened in 2004. Now, since the earthquake, things are worse than ever.
Haiti is one of the most densely populated countries in the world, and is the poorest nation in the Western Hemisphere, with 60% of the population living under the poverty line, earning less than $2.44 a day. Racist hatred between the mulattos and noirs still runs deep in Haiti. Haiti is in a generational crisis era, and between the poverty and the racism, the future does not look good for the country. AfroEurope (Dec-2012) and The Star (Myanmar)
(Comments: For reader comments, questions and discussion, see the 9-Aug-15 World View -- Haiti's parliamentary elections promise little besides chaos thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(9-Aug-2015)
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Hungary speeds up construction of anti-migrant border fence
This morning's key headlines from GenerationalDynamics.com
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According to Hungary's prime minister Viktor Orbán, who is personally disliked by other EU leaders, more than 100,000 migrants have crossed into Hungary from outside the EU since the start of 2015. Most of the migrants have crossed into Hungary from Serbia, which is not an EU country.
On June 17, Hungary announced that it would build a 175km (109 mile) steel border fence along the Serbian border to keep migrants from entering Hungary. ( "25-Jun-15 World View -- Hungary and Austria in disagreement over migrants")
The fence was originally scheduled for completion by the end of November, but now construction has been sped up, with the intention of building it by the end of August. The government is using prisoners and unemployed people to build the fence as quickly as possible. In addition, Hungary plans to deal with migrants caught cutting through the fence by "punishing [them] in an exemplary manner," including prison sentences.
But in a sense, building the fence is backfiring. As word spread among migrants planning to come to Hungary that the fence was being built, many of them sped up their plans. As a result, daily numbers of migrants caught by police have been rising steadily, from 300 a day in April to 400 daily in May, to 1,500 a day since mid-July. BBC and AP
Although Italy has been the country most in the news recently with regard to migrants arriving in Europe, with Calais France close behind, the country that's actually had to deal with the most migrants is Greece.
About 124,000 migrants have arrived in Greece this year, about 50,000 in July alone. In most cases, they arrive via Turkey mostly from Syria, Iraq and Afghanistan. Their first point of arrival in Greece is usually three Greek islands: Kos, Chios and Lesbos.
The UNHCR (UN High Commissioner for Refugees) agency said on Friday that the situation on the three Greek islands is "total chaos," with inadequate accommodation, water and sanitation. According to Vincent Cochetel, the European director of the agency, the facilities for refugees on the Greek islands were "totally inadequate," and Greece must "lead and coordinate" the efforts of the EU countries:
"On most of the islands there is no reception capacity, people are not sleeping under any form of roof. So it's total chaos on the islands.After a couple of days they are transferred to Athens, there is nothing waiting for them in Athens."
Greece's prime minister Alexis Tsipras has been highly critical of European officials on the issue of Greece's bailout, and is demanding aid to handle the tsunami of refugees: "The EU is being tested on the issue of Greece. It has responded negatively on the economic front - that's my view. I hope it will respond positively on the humanitarian front." BBC and Reuters
(Comments: For reader comments, questions and discussion, see the 8-Aug-15 World View -- UNHCR: Greece's islands Kos, Chios, Lesbos are in 'total chaos' over migrants thread of the Generational Dynamics forum. Comments may be
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(8-Aug-2015)
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Puerto Rico default triggers selloff in municipal bond funds
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While the Iran nuclear deal has thrown the entire Arab world into political disarray, and while Turkey is increasingly at war with the terrorist Kurdistan Workers’ Party (PKK), the "moderate" Kurds are looking at what is apparently the best chance they've had in decades to get a Kurdish state.
The Arabs, Iran, Turkey, the al-Assad Syrian regime, the Kurds, and the U.S. are all involved in the war in Syria and Iraq in one way or another, all with completely different objectives. But they all have one thing in common: They're all fighting the so-called Islamic State (IS or ISIS or ISIL or Daesh) -- more precisely, they're all fighting ISIS and using the fight against ISIS as a cover for their own objectives.
The Kurds are one of America's key allies in Iraq and Syria in the fight against ISIS, and have benefited from airstrikes from the US-led coalition. With the help from these airstrikes, the Kurds have successfully taken control of substantial territory in northern Syria and Iraq, along Turkey's border.
Furthermore, the Kurds are getting substantial help from Iran. Reports are that Iran convinced the regime of Syria's president Bashar al-Assad to grant the autonomy and de facto local independence to the Kurds in Western Syria, and Iran convinced the Shia-led government in Iraq to give the a higher level of autonomy to the Kurds in Iraq.
As we wrote in "26-Jul-15 World View -- Turkey bombs ISIS targets in northern Syria to set up 'safe zone'", the Kurds in northern Syria are separated into two large enclaves, one in the east up the border with Iraq, and one in the west. If the Kurds can unite those two regions, then it can declare the entire region a Kurdish state, possibly including parts of Iraq, southeastern Turkey, and even northwestern Iran.
Even without a Kurdish state, Turkey would face on its southern border a stable and sustainable alliance headed by Iran, with the al-Assad government in Syria, Hezbollah, the Shia-controlled government, and Kurdish forces. This would give Iran control of a strip of land from Iran to the Mediterranean, isolating Turkey from the rest of the Mideast, and almost encircling Turkey with Iran's allies.
With or without a Kurdish state, this would be intolerable to Turkey. That's why Turkey needs its 110-km wide "safe zone" in northern Syria, separating the two Kurdish enclaves. The announced purpose of the "safe zone" was to provide a refuge to Syrians from ISIS, but that's not as important an objective as providing a refuge to Turkey from Iran and the Kurds. Geopolitical Monitor and Al Arabiya
A suicide bomber struck a Sunni mosque in the southwestern city of Abha in Saudi Arabia on Thursday, killing at least 13 people, 10 of whom were security or police forces. There have been previous attacks on Shia mosques in Saudi Arabia's east, perpetrated by the ISIS-linked Najd Province terrorist group. Since this time the target was a Sunni mosque in a city on the border with Yemen, the initial reactions were to suggest that the perpetrators were Houthi terrorists from Yemen, where the Saudis are fighting a war against the Iran-backed Houthis.
However, a previously unknown Sunni terrorist group, identifying itself as ISIS-linked "Hijaz Province," claimed responsibility for the terrorist attack. The "Hijaz" name is a reference to the historic western part of Saudi Arabia that is home to Islam's holiest sites of Mecca and Medina.
The attack was devastating, and it was the deadliest attack against Saudi security personnel in years. It's certain to increase demands, both domestically and internationally, for the Saudis to become more heavily involved in fighting ISIS in Syria, possibly putting troops on the ground.
These demands will come at a time when Saudi Arabia, popularly thought to be one of the richest countries in the world, is running out of money, forcing the government to borrow money by issuing bonds. The loss of reserves is caused by a sharp rise in military spending and a collapse in oil prices, the main source of revenue. Saudi Gazette and AP and CNN
Individual investors pulled $308 million from municipal bond funds in the last week, in a reaction to Puerto Rico's failure to make a $58 million debt repayment on Tuesday, putting Puerto Rico in technical default.
Puerto Rico is seeking to restructure its $72 billion of debt, which is widely held because the 10% interest is "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.
In the midst of the growing economic crisis, a severe drought is causing a water shortage, and is forcing businesses to temporarily close, public schools to cancel breakfast service and people to find creative ways to stay clean amid sweltering temperatures. Bloomberg and VOA
(Comments: For reader comments, questions and discussion, see the 7-Aug-15 World View -- As Iran rises in the Mideast, Kurds benefit in Iraq and Syria thread of the Generational Dynamics forum. Comments may be
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(7-Aug-2015)
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Hundreds of migrant deaths in Mediterranean highlight Libya-Calais relationship
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In the latest mass migrant death in the Mediterranean Sea, a boat from Libya with 600-700 migrants capsized just as rescue boats were approaching. Apparently the migrants became excited by the approaching rescue inflatable boats, and all crowded on one side of their ship, causing it to capsize and sink within a couple of minutes.
Most of the deaths were of people who were in the cabin below deck. Traffickers charge migrants a lower "below deck" fare than they charge migrants to remain on deck. However, traveling below deck in a massively overcrowded boat brings a much high risk of death.
Migrants are crossing the Mediterranean in massive numbers this summer. In a single weekend in June, Italian authorities rescued 5,800 migrants. The total number to have arrived by boat from Libya into Italy and France is over 100,000 so far this year.
In the meantime, the migrant crisis in Calais, France, is continuing unabated. ( "31-Jul-15 World View -- 'Swarm' of migrants causing crisis at Eurotunnel from France to Britain")
There are now some 5,000 migrants camping out in the migrant camp known as "The Jungle" on the outskirts of Calais, which is near the entrance to the Eurotunnel that connects France to Britain through the English Channel.
It's believed that many of the 5,000 migrants around Calais were among the 100,000 that crossed the Mediterranean to Italy and Greece. It's suspected that authorities in France and Italy, wanting to get rid of the problem, actively encouraged the migrants to go north to Britain.
Illegal migrants may try to make their homes in any of the European countries, but Britain is a favorite destination because of liberal welfare and medical services policies, and because they prefer an English-speaking country. Irish Times and Telegraph (London)
The al-Qaeda linked Jabhat al-Nusra (al-Nusra Front) has delivered a stinging defeat to the U.S.-trained Free Syrian Army Division 30, just days after it entered the battlefield for the first time. Of the 50-60 man division, seven men, including three of the group’s leaders, were captured and taken prisoner on Wednesday of last week by al-Nusra. On Friday, al-Nusra killed one more man, and wounded 8 others. Then on Monday of this week, five more men were captured.
In June of last year, the Obama administration announced a program costing $500 million, later increased to $1.1 billion, to train 5,000 "moderate" rebel fighters per year in Syria to fight the so-called Islamic State (IS or ISIS or ISIL or Daesh).
However, last month, Secretary of Defense Ash Carter was asked by Congress how many of the 5,000 had been trained in the last year, and he answered that only 60 had been trained.
Those 60 trained rebels made up the Free Syrian Army Division 30, the division that was decimated by al-Nusra in a series of attacks in the past week, putting the viability of the division and of the entire rebel-training program into question.
According to reports, the attacks by al-Nusra were a surprise to the American military, because they believed that al-Nusra would "welcome Division 30 as an ally in its fight against the Islamic State."
In fact, after last Friday's fighting, Division 30 put this statement on its Facebook page: "Division 30’s command calls, for the second time, on our brothers in Jabhat al-Nusra to cease these actions, preserve the blood of Muslims and protect unity." However, that was followed by the new al-Nusra attack on Monday. Guardian (London) and Middle East Eye and Vox
On Wednesday, the BBC World Service broadcast an interview with Captain Ammar al-Wawi, one of the remaining survivors of Division 30. My transcription:
"How come Daesh was created in a very short time, 6 to 12 months, then fights the entire world in Iraq and Syria, and occupies 50% of both Syria and Iraq with no international support, but this plan backed by many countries, trains only 54 fighters in 6 months?The Americans are ready to train and form a national army of 15,000 fighters, and they say they're ready to back it financially and militarily. In addition to the air cover.
The truth is that in the six months only 60 fighters have been trained, so if only 60 fighters get trained every 6 months, we'll need decades to train 15,000."
The BBC also spoke to Robert Ford, the US Ambassador to Syria until last year, and was asked whether the rebel training program is off to a bad start (my transcription):
"Yes, it's a terrible start, it's an awful start. The program from the beginning had a serious structural problems. The entire vision of the program made little sense, when they insisted that the fighters the Americans would train pledge -- in writing no less -- that they would only fight the Islamic State, and never fight the Assad regime, even though, as your correspondent mentioned, the Assad regime has been fighting them for four years, killing far, far, far more Syrians than the Islamic State ever did, as awful as the Islamic State is. ...Second problem is - the Americans didn't have a good sense before they started as to whether or not they would provide close air support, and there were the delays that you talked about. ...
And the bigger problem, though, really is, will people that the United States trains, but who pledge to fight only IS -- will they be viewed as loyal patriotic Syrians fighting in this horrible civil war by the other groups, or will they be viewed as American stooges, and basically as an American fifth column, and therefore, they will be more or less on their own all the time? ...
You're not going to be able to bomb the Islamic State into oblivion. We've just had stories based out of American intelligence sources earlier this week on the AP that American intelligence estimates that the IS basically replaced all of their casualties from American bombing with new recruits during the past year."
Right now, the $1.1 billion Obama administration program to train "moderate" Syrian rebels to fight ISIS appears to be collapsing, and it's not clear if the administration is able to do anything to save it. BBC
(Comments: For reader comments, questions and discussion, see the 6-Aug-15 World View -- U.S. program to train Syrian rebels appears near collapse thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(6-Aug-2015)
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Criminality and fraud in Veterans Administration and Obamacare
This morning's key headlines from GenerationalDynamics.com
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I've told a number of people that I was researching an article on Healthcare.gov, the greatest IT (information technology) disaster in history. I have in fact found a great deal of criminal fraud in the Healthcare.gov web sites software development projects, but I haven't finished the article yet because I've expanded it substantially to include an economic analysis of Obamacare. I hope to have it done within the next couple of weeks.
By way of introduction, it's worthwhile reviewing what's happened with the Veterans Administration healthcare system.
In 2006, far-left NY Times columnist Paul Krugman wrote the following, describing the Veterans Administration (VA) health care system:
"[The VA's] success story is one of the best-kept secrets in the American policy debate. ... [Conservative] pundits and policy makers ... can’t handle the cognitive dissonance."
Krugman is not known for his intelligence, or for much else besides his loony left ideology. After Krugman wrote this, the horror show of the VA health system began to come out in the media.
We now know that the VA system is loaded with fraud, corruption, lying, and unbelievably poor health care services. Since this has been well-reported in the media, we won't do more than list some of the well-documented problems:
The bottom line is that apparently no one in the VA actually gave a damn about medical care for veterans.
This appears to be exactly what's happening in Obamacare, according to the research that I'll be reporting within a couple of weeks.
There will also be a separate article posted on my web site on academic research into the general problem of sabotage, fraud and subversion in software development projects. This will be of interest to academic researchers and software development managers. Forbes (23-May-2014) and St Louis Today (8-Jul-2014)
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Those who favor copying the United Kingdom's single-payer National Health Service (NHS) should be aware that on Monday it was announced that NHS is facing an existential financial crisis. NHS health care providers are forecasting a deficit of over $3 billion in 2015-16. The deficit is growing rapidly, and the NHS is being required to find $35 billion in "efficiency savings" by 2020.
According to a letter sent on Monday to NHS from David Bennett, head of the Monitor agency that monitors the NHS:
"As you know, the NHS is facing an almost unprecedented financial challenge this year. Current plans are quite simply unaffordable. As I have said before, if we are to do the best we can for patients we must leave no stone unturned in our collective efforts to make the money we have go as far as possible."
This week, the NHS is being told to take the following steps in response to the financial crisis:
These minor tweaks to the NHS system will not come anywhere close to providing the required $35 billion in "efficiency savings." A massive restructuring will be required.
According to the Labor Party's health secretary Andy Burnham:
"This is a sign of a serious deterioration in NHS finances. It suggests that the financial crisis in the NHS is threatening to spiral out of control and hit standards of patient care.The suggestion that hospitals can ignore safe staffing guidance will alarm patients and the Government must decide if it will overrule this advice.
Morale in the NHS is already at an all-time low and doctors have lost confidence in the Health Secretary.
It will raise further questions about how the Government can possibly fulfil commitments on a seven-day NHS without the money to back it up."
Not surprisingly, with so much money involved, the NHS is filled with criminality and fraud, just as in the case of Obamacare and the Veterans Administration. A study last year by Portsmouth University found that fraud alone is costing the NHS something like $8 billion a year. Some of the fraudulent activities include:
Not surprisingly, "the NHS in recent years has stopped measuring its own losses," according to the report. When an organization stops collecting early warning data, that's a sure sign that a problem is turning into a full-scale disaster.
Britain's dentistry services have already become so bad that many people are buying "do-it-yourself (DIY) dentistry kits" that can be obtained from local stores. According to one resident, "DIY dentistry is fairly common round here. They sell a lot of those first aid kits ... and you’ve got people taking care of their whole family’s teeth with them."
The NHS financial crisis is so enormous that nobody doubts that it will seriously impact patient care. The NHS is facing a massive restructuring.
By American standards, an 18-week waiting time is ridiculously long, and now the NHS is scrapping even that waiting period. Any American who uses the NHS as a model has to be a total moron. Independent (London) and BBC and Independent (London) and BBC (24-Mar-2014) and Guardian (3-Apr-2015)
The following is a brief summary of my findings that I will be posting within a couple of weeks:
UK's National Health Service, Veteran's Administration health care, and Obamacare all share the same things: fraud, criminality and worsening health care. Unfortunately, there's little chance that any lessons will be learned.
By the way, I'm perhaps uniquely qualified to do this analysis. I'm an apolitical, non-ideological, highly analytical writer. I have decades of experience in software development (Resume: http://www.jxenakis.com/resume). And I also have decades of experience as a tech journalist, including two years as Boston Bureau Chief of InformationWeek Magazine, and ten years (part time) as Technology Editor for CFO Magazine (Examples: http://ww2.cfo.com/author/john-xenakis/).
(Comments: For reader comments, questions and discussion, see the 5-Aug-15 World View -- Britain's National Health Service (NHS) faces existential financial crisis thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(5-Aug-2015)
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Russia isolates itself further by vetoing MH17 investigation
This morning's key headlines from GenerationalDynamics.com
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Last week, Russia vetoed a United Nations Security Council resolution, proposed by Malaysia, to authorize an impartial investigation into the shooting down of a passenger airliner on July 17 of last year. It was Malaysian Airlines flight MH17, carrying 280 passengers and 15 crew members, when it crashed in east Ukraine near the border with Russia, killing everyone on board. All others voted in favor of the resolution, except for abstentions from Russia's three "allies": China, Venezuela and Angola.
Immediately after the MH17 airliner was shot down last year, Igor Strelkov, the commander of the Russian invasion forces in east Ukraine, tweeted the following to brag about the kill:
"We shot down AN-26 [military transport] near the city Torez, Donetsk People's Republic ... We warned, don't fly in our sky."
Later, when Strelkov learned that he had shot down a passenger plane, not a military plane, the tweet was taken down, but by then it was too late. Strelkov had already admitted about shooting down the plane -- actually bragged about it. Later evidence showed that the Russians had shot down the passenger airliner with a Russian Buk surface-to-air missile launched from the area controlled by the Russians in east Ukraine.
There followed a blast of Russian propaganda, attempting to confuse the issue and pin the blame elsewhere. The claims by Russia controlled media included:
That was followed by Putin's army of paid Russian trolls, whose job was to harass people like me who were describing what was really going on. I was targeted by no less than three of the trolls on different web sites in one week, and I've had frequent attacks by Russian trolls since then.
So Russia's veto of a resolution to set up an international tribunal to investigate the MH17 disaster is consistent with Russia's policies for the last year.
However, this time Russia received an additional humiliation: Russia's so-called ally China did not join Russia in vetoing the resolution; instead, China abstained, as did Russia's other "allies," Venezuela and Angola.
The fact that even Russia's allies did not join in voting against the resolution was a major defeat for Russian diplomacy, and indicates that even these countries refused to be associated with covering up as horrendous a crime as shooting down an airliner filled with passengers.
Russia is becoming increasingly isolated in the international community because its economy is cratering, mainly because of the collapse in oil prices. Russia Today and Jamestown
US Secretary of State John Kerry was in Doha, Qatar, on Monday, visiting the foreign ministers of the six-nation Gulf Cooperation Council (GCC). The GCC members are extremely anxious over the nuclear deal with Iran. As I wrote last month in "19-Jul-15 World View -- Behind the scenes in the Iran nuclear deal", the Iran nuclear deal is forcing yet another realignment in the Arab world, as it deteriorates into war.
Kerry on Monday told the GCC ministers that the United States had "agreed to expedite certain arms sales that are needed and that have taken too long in the past."
The arms sales that Kerry referred to were announced earlier this week. A $5.4 billion weapons deal involves the sale of PAC-3 Missiles as part of the upgrade of the Royal Saudi Air Defense Force. An additional $500 million sale includes ammunition, tracers, artillery shells and mines. Some of these weapons will resupply Saudi's military in Yemen, where the Saudis are fighting a proxy war with Iran.
And so, with the Mideast deteriorating into war, the Iranians will receive billions in sanction relief to purchase weapons, while the Saudis are going to receive US weapons. There is now apparently a major arms race going on between the Arabs and Iran.
As I've been writing for years, Generational Dynamics predicts a full-scale sectarian war in the Mideast, with Iran an ally of the West fighting the Sunni Arabs. AFP and Middle East Eye and Reuters and Sputnik News (Moscow)
(Comments: For reader comments, questions and discussion, see the 4-Aug-15 World View -- US in major weapons sale to Saudis to compensate for Iran nuclear deal thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(4-Aug-2015)
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Venezuela's collapsing economy receives $5 billion from China
This morning's key headlines from GenerationalDynamics.com
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The Athens stock market will open again on Monday, and analysts are expecting pent-up selling pressure to knock 20% or more off the Athens general index. According to one analyst, "The possibility of seeing even a single share rise in [Monday's] session is almost zero."
Also on Monday, new negotiations are to begin between Greece and the lending institutions over such things as fiscal adjustment, privatizations, bank recapitalization and structural reform, including pension overhauls. The objective is to reach agreement by August 11, when a new Eurogroup summit can give its approval. Greece has to secure a fresh bailout payment by August 20, when it has to make a payment to the European Central Bank, or again face default. Reuters and Kathimerini
As expected, Puerto Rico missed a $58 million bond payment on Saturday, but because the deadline was Saturday, Puerto Rico has until the end of Tuesday to make the missed payment. However, governor Alejandro García Padilla told journalists in San Juan on Friday, "We don’t have the money."
Puerto Rico faces $635 million in debt-service payments this month, and has to make $5.4 billion in bond payments through next summer, leaving little for services such as trash pickup, road maintenance, education and other government functions. It's expected that the default will cause an extremely chaotic international crisis. International Business Times
With inflation and shortages increasing in Venezuela, shoppers are breaking into supermarkets to steal scarce consumer staples including milk, rice and flour. In one such incident on Friday in the southeastern city of Ciudad Guayana, one person was killed in the mêlée, and dozens were arrested.
As usual, president Nicolás Maduro blamed it on the United States, particularly on U.S. General John Kelly, Marine Corps commander of the Southern Command, who predicted in February that there would be a "social implosion" in Venezuela in July. According to Maduro:
"You all know that a military general of the United States doesn't predict. He orders and the battered Venezuelan right-wing executes."
Venezuela's economy is in a state of rapidly increasingly hyperinflation, with the currency losing 32% of its value in the black market in the last month alone. The inflation rate is well into the triple digits, though precise figures have not been published. Businesses are quickly switching over the dollar currency as a result.
Venezuela's economy has been collapsing because of huge socialist spending programs begun by Maduro's predecessor Hugo Chávez, and because the price of oil has plunged to below $50 per barrel. Oil is the main export of Venezuela and provides most of the country's foreign currency.
However, on Friday Venezuela announced that it has received $5 billion in funding from China, according to a long-standing agreement. China is Venezuela's primary financier and has lent the nation more than $46 billion to be repaid in oil, after accords signed with late president Hugo Chávez in 2007. Reuters and Bloomberg (16-Jul) and Latin American Herald Tribune and Reuters
Venezuela's economic collapse has affected the country's relations with their neighbor Guyana. An 1897 treaty between Venezuela and Guyana (then British Guiana), set the borders between the two countries, but Venezuela wants to repudiate the treaty, now that ExxonMobil estimates that it has found 700 million barrels of crude oil in Guyana's waters. Jamaica Observer
Two weeks ago, Turkey was determined to avoid war. Turkey's announcement that it will make its airbases available to warplanes fighting the so-called Islamic State (IS or ISIS or ISIL or Daesh), and its decision to join the US-led coalition fighting ISIS, were greeted in the West as a sign of new hope.
But now Turkey is mainly embroiled in a new war with the Kurdistan Workers’ Party (PKK), both in northern Iraq and in southeast Turkey. While the West is bombing ISIS targets, Turkey is bombing PKK targets.
Turkey and the separatist terror group PKK fought an off and on civil war for almost four decades, but finally agreed to a ceasefire in 2012. On July 20, there was a massive terrorist attack in the town of Suruç, and on July 23, Turkey declared war on PKK.
Turkey has launched airstrikes on PKK camps in northern Iraq for the first time since 2012. The Kurdistan Regional Government (KRG) in northern Iraq, which governs the civilian Kurdish population in northern Iraq, and has been a U.S. ally in fighting against ISIS, is complaining that the airstrikes are killing civilians.
Turkey did an investigation, and said that the airstrikes targeted PKK bunkers, and that therefore there were no civilians killed.
The KRG has responded by asking the PKK to "withdraw its fighters from the Kurdish region so to ensure the civilians of Kurdistan don't become victim of that fighting and conflict."
For its part, the PKK on Sunday sent a suicide bomber in an explosive-laden tractor to an army outpost in southeastern Turkey. Two soldiers were killed, along with the suicide bomber.
The net result of all this is that the Turkish people are now facing the renewal of a conflict that they thought and hoped was over for good. The other result is that the Turks and the US are now fighting two completely different enemies in the same region. This situation can be spun, of course, but it looks like a total mess to me.
As I've been writing for years, Generational Dynamics predicts a full-scale sectarian war in the Mideast, with Iran an ally of the West fighting the Sunni Arabs. Furthermore, there's no jihadist war against the West, at least not yet, since the number of Christians killed by Muslims is minuscule compared to the number of Muslims killed by Muslims, especially in the Mideast. Events are moving very rapidly, changing on almost a daily basis. We don't know what's going to happen next week, but Generational Dynamics tells us what the destination is, and the destination is not good. Zaman (Istanbul) and Hurriyet (Ankara) and Zaman and Hurriyet
(Comments: For reader comments, questions and discussion, see the 3-Aug-15 World View -- Turkey returns to war with the Kurdish PKK thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(3-Aug-2015)
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Afghan Taliban in crisis over successor to Mullah Omar
This morning's key headlines from GenerationalDynamics.com
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The announcement that Afghan Taliban leader Mullah Mohammad Omar died two years ago has resulted in tensions among various tribal factions over the selection of a successor. ( "30-Jul-15 World View -- Bizarre Mullah Omar death announcement seals fate of Afghan peace talks")
The Taliban chose Omar's second in command, Mullah Akhtar Mansour. This weekend, they were supposed to take part in peace talks with the Afghan government and the Haqqani network about ending the violence in Afghanistan.
Those peace talks have been postponed, and an audio message delivered by Mansour on Saturday seems to indicate that they will be postponed indefinitely (my transcription):
"We won't have to ask friends to be tolerant, and prevent divisions. Rest assured, there'll be no problems. If we face any problems in the future, we'll seek guidance from religious scholars, and we'll act accordingly.Friends ask me if I've prepared for this role. I've told them that the responsibility I was given after the death of Mullah Omar is like carrying a mountain on your shoulders. But I accepted it, because it is a time of service, not a time of kingship.
Our struggle will continue until the Islamic system in the country is established. The enemy's propaganda about peace process and dialog -- all this is too much. They have used money, the media, false religious scholars and other means to weaken the jihad, and shatter our unity. We will ignore all this. We'll continue this jihad until an Islamic system is established in the country."
The speech was apparently made on Thursday to a group of Mansour's supporters.
Tribal leaders were not consulted before the secretive appointment of Mansour, and there are enormous tensions. The Afghan Taliban is thought to be at an existential crisis because of tribal divisions, and because some of the more radical Taliban groups may defect from Mansour and join the so-called Islamic State (IS or ISIS or ISIL or Daesh). BBC and Gulf News
Dai Lin, a high school student who had campaigned against "fine-tuning" changes being made to Taiwan's high school textbooks and curriculum, was found dead in his room lying in bed. Since he was lying next to a pan of lighted charcoal, which generates carbon monoxide and so is one of the top methods of suicide in Asia, it's believed that Lin took his life intentionally, in order to call attention to his anti-curriculum changes campaign.
Some of the proposed curriculum changes are minor corrections, but others of them appear to change history in order to favor making Taiwan part of China, as opposed to Taiwan being a fully independent nation.
One of the most controversial changes is that references to "China" are changed to "mainland China". According to activists, "China" and "Taiwan" are separate entities, while "mainland China" implies that Taiwan is part of China.
Other changes go deep into Taiwan's history. A proposed change from the "Qing Dynasty" to the "Qing Court in the Cheng Family Dynasty" implies that during this historical period, China had territorial ownership of Taiwan, which activists say is untrue.
These seemingly minor textual changes cut deeply into the major political fault line of Taiwan -- whether it will be recognized as an independent nation separate from China, or whether it will merely be another province of China.
The changes are favored by the current ruling nationalist party KMT (Kuomintang), which is the modern day incarnation of Chiang Kai-shek's original nationalist party of soldiers that fought against Mao Zedong's Communist Revolution and lost, and fled to Hong Kong, then a British colony, and from there to Formosa (Taiwan) in 1949, at the conclusion of the civil war. The KMT position has always been that Taiwan would reunite with China.
A strong pro-independence movement, especially among young people, began with the 1989 Tiananmen Square massacre in Beijing, which people in Taiwan viewed with horror. This proved to be a catalyst in turning many Taiwanese people against Beijing, bringing about the creation of the Democratic Progressive Party (DPP), which beat the KMT and won national elections in 2000.
The KMT regained power after a DPP corruption scandal in 2006. But in November of last year, KMT suffered disastrous losses in local elections across Taiwan, and DPP may win the next presidential election, to be held on January 16. ( "30-Nov-14 World View -- Taiwan voters choose independence from China")
The proposed curriculum changes have generated student protests in cities across Taiwan. Last week, protesters in the capital city Taipei broke into the offices of the Ministry of Education, which is sponsoring the curriculum changes. Many protesters, including Dai Lin, were arrested.
In his final Facebook post, Lin wrote:
"Wish me happy birthday. 8 5 12 16. I have only one wish: that the Minister [of Education] withdraw the curriculum guidelines."
Lin's friends later "decoded" the numbers 8-5-12-16 as corresponding to the letters for "h-e-l-p" in the English alphabet.
Lin's suicide will energize the anti-curriculum change activists, but it seems clear that the adjustments will be in force in the fall semester, while KMT is still in power.
During the years 2000-2006 when DPP was last in power, there were repeated threats of invasions by Beijing officials. In fact, in 2005 China passed a new law to provide legal justification for a Chinese invasion of Taiwan if there's any move at all towards independence from China. ( "China's 'Anti-Secession' law infuriates Taiwan")
Things have been a lot more peaceful since KMT came to power in 2006. But if DPP comes to power again in January, then we can expect additional invasion threats from China, as well as increased determination by young people in Taiwan to be fully independent. Taipei Times and National Institutes of Health and China Policy Institute Blog - UK
(Comments: For reader comments, questions and discussion, see the 2-Aug-15 World View -- Taiwan student commits suicide over 'fine-tuning' textbook controversy thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(2-Aug-2015)
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Five 'Hilltop Youth' extremists charged with 'price tag' Church arson
This morning's key headlines from GenerationalDynamics.com
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An 18-month-old Palestinian boy was killed early Friday in a night-time arson attack in the West Bank. The attackers used Molotov cocktails to set two homes on fire in the West Bank, and wrote graffiti saying "Revenge" in Hebrew on the walls. The parents of the baby and his 4-year-old brother suffered burns and had to be hospitalized.
The attack is thought to be a "price tag" attack by violent Jewish settlers.
I've described price tag attacks several times in the past few years. The phrase "price tag" is frequently used by far-right Israeli settlers to denote revenge attacks against Palestinians or IDF soldiers in response to moves by the Israeli government to evacuate illegal West Bank outposts, or as retribution for attacks by Palestinians. The attacks have usually been against mosques or other property, and sometimes even Christian property, but they've occasionally crossed the line into violence against Palestinians.
This attack on an innocent Palestinian family, burning a baby alive, is a major escalation in the price tag attacks, and the worst such attack since a Palestinian teen was murdered by Israeli settlers in July of last year.
Israel's Prime Minister Benjamin Netanyahu called it a "clear terrorist attack":
"I am shocked by this horrible criminal act. This is a clear terrorist attack. Israel takes a tough stance against terrorism regardless who the perpetrators are. I have instructed the security forces to use all means at our disposal to capture the killers and bring them to justice as soon as possible. Israel is united in its opposition to such terrible and heinous acts. On behalf of the citizens of Israel, I would like to commiserate with the family of Ali Dawwabshe and wish a speedy recovery to the injured family members."
However, Palestinian Authority president Mahmoud Abbas called the attack "a crime against humanity," and Hamas has called for an "exceptional" revenge attack against Israelis. YNet and Palestinian News Network and Jewish Press
On June 10 of last year, three Israeli teens were abducted and later found to be killed in the West Bank. Israeli online campaigns were calling for revenge against the Arabs. After the three Israeli teens were kidnapped, and before their dead bodies were discovered, one web site called for the killing of one Arab an hour until the teens were released.
A Jerusalem Post editorial said that Israelis are fed up with dead Jews, though it didn't suggest how the problem can be remedied:
"But something changed with the murder of these three innocent teens. It was not just the senselessness of the act; three defenseless teen boys killed for no reason other than that they were Jewish, for no other purpose but to indulge Palestinian hate. Rather, it was a feeling that this had happened one too many times. That there was a critical mass of dead Jews that had now been reached, beyond which the Israeli public and the world Jewish community is not prepared to mourn anymore."
Their dead bodies were found on June 30 of last year. Israel's prime minister Benjamin Netanyahu said the next day that the three were "kidnapped and murdered in cold blood by animals" and promised: "Hamas will pay."
On July 2, a 15-year-old Palestinian teen named Abu Khdeir was abducted, burnt and killed. The autopsy found soot in his respiratory canal, indicating that he was burnt alive. It's thought that the lynching of Khdeir was in revenge for the deaths of the three Israeli teens, and may have been triggered by Netanyahu's threat.
The lynching triggered massive riots and demonstrations by Palestinians in East Jerusalem and the West Bank, and may also have triggered the barrage of rocket attacks from Gaza. Israeli officials moved quickly to investigate and find the murders of Khdeir in the hope of cooling the tensions between Israelis and Palestinians. Six young Jewish extremists were arrested for the murder four days later, which quieted the rioting.
The murderers of the three Israeli teens were believed to be hiding out in the West Bank, but the Palestinian Authority did nothing to bring them to justice. The murderers were never found. [Correction: Two of the killers died in a shootout with Israeli soldiers on September 23. The third was sentenced to three life sentences. Jerusalem Post 6-Jan-2015](Paragraph modified. 1-Aug)
Violence between Israelis and Palestinians began to increase after these incidents. Both the Israeli and Palestinian populations wanted revenge. There was street violence in Jerusalem, and a barrage of rockets from Gaza into Israel. Within a couple of days, Israeli troops were massing on the Gaza border, and Israeli warplanes were targeting "Hamas terror sites" in the Gaza Strip. After a few more days, Israel and Gaza were at full-scale war.
In the aftermath, Hamas said that it was only trying to foment an "intifada," not a war. ( "22-Aug-14 World View -- Hamas says it didn't intend to start the Gaza War")
Things today are different for Hamas and the Arab world. The Gaza War split the Arab world into supporters of Hamas and de facto supporters of Israel. There was a conflict in Syria, but the so-called Islamic State (IS or ISIS or ISIL or Daesh) was only beginning to be felt.
Today, the Arab world is trying to unify. The Iran nuclear agreement has already unified much of the Sunni Arab world against Iran. There's now a war in Yemen that the Sunni Arabs and Iranians are fighting by proxy. ISIS has become much more powerful today than it was a year ago, and the Syria/Iraq wars are growing in intensity. As we've written several times recently, the Arab world is disintegrating into war.
So it's quite possible that Hamas does not want another war with Israel at this time. On the other hand, the burning alive of an 18-month-old baby by Israeli extremists is probably going to cause riots and revenge attacks. And those may spiral into another war whether either side wants it or not. Jerusalem Post (5-July-2014)
Police arrested on Wednesday five "Hilltop Youth" activists who allegedly were behind the June 18 arson at the Church of the Multiplication of the Loaves and Fishes at Tabgha on the shores of the Kinneret (Sea of Galilee).
The Hilltop Youth are third generation terrorist Israeli settlers who are living in Jewish settlements in the West Bank hilltops. It's believed that the arson attack on the Church was a "Price Tag" attack.
The blog of the head of the group on the “Jewish Voice” site on May 20 of this year sought to encourage attacks on Christian religious sites and stated:
"Only those who deny idolatry and fight against Christianity and aspire to remove the churches from the Holy Land – they are called Jews."
According to the Israeli police:
"This group operates in the context of an ideological infrastructure composed of a limited number of hilltop youth activists. This infrastructure has operated since 2013 and holds to an extremist ideology that aspires to change the regime and bring about the redemption via various stages of action.The infrastructure sought to hit ‘weak points’ in the State of Israel in order to arouse dialogue and win adherents and also tried (unsuccessfully) to disrupt the May 2014 visit of Pope Francis."
It had been hoped that the arrest would strike a fatal blow to the "hilltop youth" terrorist movement, but that was before Friday's price tag attack that killed the 18-month-old Palestinian boy. Jewish Press and Jewish Telegraphic Agency
Israeli soldiers shot dead a Palestinian teenager near the border fence in the northern Gaza Strip on Friday. An Israeli spokesman said that several suspects approached the fence, and did not heed calls by soldiers to stop. Israel enforces a 300-meter-(1,000-foot)-deep, security no-go zone on the Gaza side of the fence. The frontier has been largely quiet since a 2014 war between Israel and Palestinian militant groups in which more than 2,100 Palestinians and 73 Israelis were killed. Reuters
(Comments: For reader comments, questions and discussion, see the 1-Aug-15 World View -- Tensions with Palestinians soar after brutal Israeli settler 'price tag' attack thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(1-Aug-2015)
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