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 Forecasting America's Destiny ... and the World's


Generational Dynamics Web Log for 14-Mar-2010
14-Mar-10 News - Sri Lanka Tamils reject homeland

Web Log - March, 2010

14-Mar-10 News - Sri Lanka Tamils reject homeland

A German college student validates Generational Dynamics

Tamil Tigers reject independent homeland

The Tamil Tiger rebels that fought a civil war against the Sri Lanka government for almost 30 years to gain an independent homeland have now dropped their demand for a separate homeland.

The BBC reports that the Tamil National Alliance (TNA), a political group representing the Tamil minority in Sri Lanka, plans to participate in political elections, and is seeking a "federal solution," because of the "changed global and regional situation."

From the point of view of Generational Dynamics, we've been very lucky to have been able to follow the last few years of Sri Lankan history in real time. We were able to document the transition of the Sri Lankan civil war into a full-fledged generational Crisis war in 2006, reaching a full-fledged climax early in 2009. Since then, we've seen Sri Lanka make a clear red-line transition from a "Fourth Turning" generational Crisis era into a "First Turning" generational Recovery era. Today's announcement that the formerly warring Tamils are now pursuing politics is one more example.

And this web site is the only one that got it right. Stratfor, the BBC, and other analysts and journalists were predicting that the civil war that had gone on for almost 30 years would continue in one form or another. This web site said that a climax was approaching, and that once the climax was over, then the war would be over, period.

(For more information on generational eras, see "Basics of Generational Dynamics." For more information on the progress and climax of the Sri Lanka civil war, see "Sri Lanka, Pakistan and Gaza are all following the same path.")

I renew my challenge to anyone to find an analyst, journalist, politician or web site, anywhere in the world, with anything even remotely close to the predictive success of this web site. Other analysts' predictions are no better than chance; after eight years, Generational Dynamics predictions have proved to be almost 100% correct. The validity of generational theory has been proven by the consistently correct results posted on this web site.

However, there's some more interesting news today. According to Indian news portal Sify, the Tamils, through the TNA, are vowing to launch a Gandhi-style civil disobedience campaign, in order to seek regional authority for Tamils.

What you're seeing here are the early signs of a generational Awakening era. The Tamils today are the survivors of the crisis civil war, and they're exhausted, and just happy to be alive. They will not be participating in civil disobedience campaigns, because they're just happy to be alive. Right now, all they want to focus on is recovering from the war, and rebuilding their lives.

But their children are different. Their children will grow up hearing that their parents had lost the civil war, and that they're still being discriminated against. Once they come of age, in 15-20 years, they will be ready to take part in Gandhi-style civil disobedience campaigns. That will begin the "Second Turning," the generational Awakening era.

"Recovery Era" versus "High"

I'd like to take this opportunity to discuss this difference in terminology between Generational Dynamics and Strauss and Howe's "Fourth Turning" model.

S&H refer to the first turning, the era that immediate follows the climax of a generational crisis war, as a "High" era. This is the case because in the Anglo-American crisis wars, which are the only ones that S&H consider, the Anglo-American side was always victorious in one way or another. For example, Americans of the 1950s had defeated the Nazis and defeated the Great Depression, and they were in a "High" because they thought that they could accomplish anything as a nation.

But the term "High" really applies almost uniquely to America in the 1950s. There was no "high" for the South after the American civil war, for example.

And there's certainly no "high" for the Tamils today in Sri Lanka. The same could be said for people in Rwanda and Bosnia, who are also just recovering from their own crisis civil wars of the mid-1990s.

So in Generational Dynamics, the era that immediately follows the climax of a crisis war is called a "generational Recovery era," because recovery is something that all ethnic groups, societies and nations have in common after a crisis war.

For a more complete discussion of the differences between the Generational Dynamics theoretical model and S&H's Fourth Turning model will be found in "Chapter 10 - Strauss and Howe's Fourth Turning Model" of my long languishing book, "Generational Dynamics for Historians."

A student at Mannheim University evaluates and endorses Generational Dynamics

Martin Francis Lutes, a student at Mannheim University in Germany, has done an evaluation of Generational Dynamics. He sent me the following e-mail message, and has given me permission to post it:

"I just finished reading the entire draft manuscript of your book Generational Dynamics for Historians

First of all let me say Iīm convinced. My original interest lay in the application of the theory in the economic field, but since you base your theory on all kinds of historical occurences and the amount of usable market/stock-related historical data being so small, barely encompassing a single generational cycle, I wasnīt convinced by your explanation of market behaviour and financial crises based on rules, set by your theory.

The amount of bullcrap spewed around on the internet was just too big for me to believe it at first, so I started reading your other articles and posts, that were unrelated to the economy. By now, I probably read every single article written on your site, I purchased your first book and just finished reading the manuscript of your second one.

I spent many hours on historical study, I researched the most obscure events nobody ever heard off, occurring in nations nobody ever heard of, trying to find a contradiction or a hole in your theory but I couldnīt manage to find a single thing, even the German literary epochs fit in. I gave it up and had to acknowledge the genuineness of your theory. I started noticing things that complied with your theory, such as the difference in attitude, moral concepts and ideals people from different generations around me have and the growing political polarisation here (I live in Germany by the way).

Itīs like a revelation, the only downside being the impossibility to convincing anybody else of it. Itīs the facts stating political beliefs are in vain, crisis-wars being fought no matter what, that crisis-wars are an actual necessity and the repeating, unstoppable rise of a generation full of "visceral fear and fury". It disproves macroeconomic theory and every subfield of theory based on it. It interprets the most important, most heavily studied historical occurences in a vastly different way and attributed completely different causes and reasons for them. And lastly, which in my opinion is and always will be the biggest hindrance to achieving public recognition, the necessity of abolishing the belief that an individual has any meaning in how history plays out, and adapting to the general consensus that humanity and everything it achieves is already set by a mathematical pattern.

Itīs incomprehensible to me that there are hundreds of theories in existence trying to explain why things played out like they did and trying to predict how things will play out in the future. And basically all of them, if one leaves out the math based ones, turn out to be false or contradict themselves somewhere. Nobody has any idea what's going on. Macroeconomics and concurrently every other theory based on the rules established of it has turned out to be false, all the wars and crises going on without anybody that could explain the motives and reasons, absolutely no one understanding what's going on in the Middle East. Nobody knows what going on these days, and nobody can explain them because the theories they use as a basis all turn out to be false.

If one reads the entire manuscript explaining every aspect of the theory, the only way to put it off is arguing irrationally, holding on to one's ideals even though they turn out to be false. I donīt get it, Iīm an ordinary university-student, not exceptional in any way. So what lets me and the few others composing a tiny minority, let go of moral concepts, political ideals and ethical values when the models and theories they are based on turn out to be false? Why is the overwhelming majority unable to do so, when an impeccable model presents itself, which is capable of explaining every single "oddity" backed by irrefutable logic and math, while the evidence basically being the entire history of humanity?

I think the theory achieving recognition and belief in it, is dependent on the generation in power at the time. Waiting until the end of the clash of civilizations, while having definite proof that the clash itself and other things were foreseen through application of the theory long before they occurred. I really strongly believe that this has to become known. The theory explaining basically everything, while predicting singularity in the near future, resulting in the theory becoming irrelevant by then. The crap that some people won a Nobel Prize with already and stuff like this isnīt even known...

I secretly hope your theory turns out to be false. In any case I'm also going to purchase your second book when you publish it. And thanks for all the effort you put in to your site all these years."

I want to thank Mr. Lutes for the effort he put into validating Generational Dynamics, and for allowing me to post his wonderful endorsement.

Mr. Lutes is definitely NOT "an ordinary university student, not exceptional in any way." In fact, he's quite exceptional, and will go a long way.

However, I do have a couple of comments on what he's written.

First, things like macroeconomic theory are not completely disproven by Generational Dynamics. Quite the opposite, they're often consistent with and at least partially supported by generational theory.

But they are, at best, short-term forecasting and analysis tools. I frequently talk about short-term versus long-term analysis and forecasting. We can use an analogy in the case of weather forecasting. Even though we know that summer will be coming in a few months, we still find it useful to listen to the daily weather forecast to find out what the temperature will be tomorrow.

The second comment is that Generational Dynamics analysis and forecasts apply to great masses of people, entire generations of people, but not to individuals, who still have complete free will. I keep telling people this over and over: You can't prevent what's coming, but you can prepare for it. Treasure the time you have left, and use it to prepare yourself, your family, your community and your nation.

Incidentally, if anyone else out there has done any serious research, I'd welcome you publishing your research in the Generational Dynamics forum.

Why no inflation in post-bubble Japan?

While I'm talking about endorsements, I just became aware that someone who calls himself "flaskofcoffee" posted a YouTube video a year ago that references Generational Dynamics.

In 2007, I posted an article called "Will hyper-inflation make the dollar worthless (like the Weimar republic)?" in which I explained why there will NOT be hyper-inflation, but rather deflation.

According to the video, my article sparked a debate among some people in Japan as to why Japan has had no hyperinflation, even though they've had near 0% interest rates for years.

Here's the video, followed by the commentary accompanying the video:

Here is the commentary:

"This article sparked questions on potential for U.S. hyperinflation.....

Japan has had near 0% interest rates for decades, but still has no hyperinflation... Why?

Just a personal perspective.

I have lived in Japan for a decade now, enjoying deflation (deflation is good for cash-savers) as prices remain unchanged or continued to fall.

The main things I notice about Japan is that the public has just not fallen for the bait of cheap credit since the bubble burst. Houses are perceived as a depreciating cost, only bought after due comparison to rental costs. There has been no speculative mood for property since the bubble burst. They think America was simply nuts to have followed a speculation fueled asset-inflation model which already failed so spectacularly in Japan. During the bubble, banks were lending 130% against land.

Japanese people now save for goods rather than use extended credit. That is how it seems to me, anyway.

My credit card works more like a debit card. I am asked at the point of sale if I would like to extend the terms of repayment. I always choose 'one-pay' and the full amount is automatically debited from my bank account at the end of the month. That is hardly a recipe for hyper-inflation, even at zero percent interest rates.

The culture of consumerism is alive and kicking in terms of demand for goods (lining up an hour for Krispy Kreme donuts, the latest iphone, or the privilege of paying $100 to watch two fat men in diapers rolling around in sand ), but the mentality is completely different to the West in terms of attitude to debt. Save, then buy, not the other way around. That is how it seems to me anyway and it would certainly help to explain the apparent oxymoron of deflation accompanied by cheap credit availability. Credit here is like Betamax video; great quality, but no thanks.

I'm not Japanese, but I do have an aversion to debt and live a frugal lifestyle way, way, below my means. Much to the surprise of posters on another board, I do not own a fridge. ;-) Why do I need a fridge - the shops are all within a short walking distance so I let them store the food until I want to consume it.

Yes, I realize that 'frugal' can also be termed 'tight-wad', but I am not a miser, just averse to waste.

In brief; people like me (and there are now many in Japan - they *learned* from the bubble experience) will not be the source of a price bubble in anything. Too 'frugal'. ;-)

This is very interesting, because it shows how Americans have not yet learned their lessons. They're still living on credit, because they haven't yet suffered a sufficiently bad crisis, as Japan did in the 1990s, and America did in the 1930s. The worst is yet to come, but behaviors will change because of it.

Additional Links

Palestinian protests and rioting in the West Bank have been growing since Israel's announcement, last week, that it would be building 1,600 new settlements in east Jerusalem. The Israelis imposed a security lockdown in the West Bank to prevent Palestinians from entering Jerusalem. The lockdown had been set to expire on Saturday evening, but it's now been extended until Tuesday. Haaretz

The bankruptcy report on Lehman Brothers that we wrote about yesterday is taking even experts by surprise, since they hadn't realized that Lehman was so deeply into the "Repo 105" scam. NY Times

"I’m not obsessed with history," says well-known hedge fund mogul Barton Biggs. I guess he doesn't spend much time reading this web site, does he. The history-oblivious financier added, "I’m bullish because I think the global economic recovery is on track and is going to be surprisingly strong. The world was falling apart in 2009. There’s been a tremendous change." Bloomberg

Greece has 580 job categories deemed to be hazardous enough to merit retiring early -- at age 50 for women and 55 for men -- and to allow them to start collecting pensions at that age. The law includes dangerous jobs like coal mining and bomb disposal. But it also covers radio and television presenters, who are thought to be at risk from the bacteria on their microphones, and musicians playing wind instruments, who must contend with gastric reflux as they puff and blow. Incredible! That's why Greece is in so much trouble. NY Times

Another sign of big changes in China: There have been hundreds of millions of migrant workers who moved from rural areas to eastern cities earlier in the decade, but tens of millions of them are returning home. China Stakes

China is facing massive bank bailouts, after their enormous stimulus program. Bloomberg

A presidential candidate who's not crazy? Now, THAT would be news! -- Peggy Noonan. WSJ

(Comments: For reader comments, questions and discussion, see the 14-Mar-10 News - Sri Lanka Tamils reject homeland thread of the Generational Dynamics forum. Comments may be posted anonymously.) (14-Mar-2010) Permanent Link
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