Generational Dynamics: Forecasting America's Destiny Generational
 Forecasting America's Destiny ... and the World's


Generational Dynamics Web Log for 24-Nov-2011
24-Nov-11 World View -- Thanksgiving - a time to prepare as the world darkens

Web Log - November, 2011

24-Nov-11 World View -- Thanksgiving - a time to prepare as the world darkens

Germany's bond auction called a 'complete disaster' as bond panic spreads

This morning's key headlines from

* Happy Thanksgiving
* Germany's bond auction called a 'complete disaster' as bond panic spreads
* EU President Barroso makes strong pitch for 'Stability Bonds'
* Merkel affirms her rejection of Eurobonds in budget debate
* European bank run is starting
* Opposition leader Samaras in Greece continues political theatre
* Turkey's Erdogan offers apologies for killing 14,000 Kurds in 1930s
* Yemen's President Saleh finally agrees to step down after 33 years
* Power struggle is likely in Yemen
* With much wisdom comes much sorrow

Happy Thanksgiving

The news from Europe was very bad on Wednesday. A full scale bond panic is accelerating, and the rift between Germany and France is growing. It's getting harder and harder for the desperate eurozone leaders to find some way of delaying the final disaster. It might be only a few weeks now.

People are hoping that the U.S. can escape the consequences, but that's a fantasy. A bank run across Europe will quickly devastate the economies of the U.S. and China and the Mideast and, even worse, will lead to conflict and war.

This is 100% certain, and no politician can prevent it. You can't stop 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.

Thanksgiving day is a good day to start.

Germany's bond auction called a 'complete disaster' as bond panic spreads

Like the United States, Germany has had little trouble borrowing money by selling government bonds at extremely low yields (interest rates). But that suddenly changed on Wednesday, when the German Finance Agency was able to borrow only €3.89 billion, after expecting to sell some €6 billion in bonds. One analyst said, "This is a complete disaster." Another one said, "A growing number of institutional investors have reservations about German government bonds. If Germany's responsibility for the European Financial Stability Facility (EFSF) euro backstop fund should increase, the risk for German sovereign bonds will also increase." Spiegel

EU President Barroso makes strong pitch for 'Stability Bonds'

On the same day that Germany suffered a "disaster" in its bond auction, European Commission president José Manuel Barroso made an impassioned plea for the adoption of euro bonds, which he cutely renamed "Stability Bonds." The idea is that the euro bonds are backed by all 17 eurozone nations, and so investors will feel safe investing in them. Germany is opposed to the euro bonds, because it's the strongest European economy and thus would its taxpayers would be most exposed to backing the bonds. However, the pressure is growing on Germany to accede to the eurobond demand, and that's probably one of the main reasons why Germany's bond auction fared poorly. Guardian

Merkel affirms her rejection of Eurobonds in budget debate

 Social Democrat chair Sigmar Gabriel accuses Merkel's government of hypocrisy (DPA)
Social Democrat chair Sigmar Gabriel accuses Merkel's government of hypocrisy (DPA)

In a debate in parliament on Wednesday, German Chancellor Angela Merkel staunchly defended her opposition to the "euro bond" proposal, calling Barroso's proposal "inappropriate." She said:

"I consider it extremely worrying and inappropriate that the European Commission is directing the focus to eurobonds today. ... [It is false to assume that the] collectivization of debt would allow us to overcome the currency union's structural flaws."

The opposition, including the Greens and the Left party, accused Merkel's government of hypocrisy, since her government plans to take on €4 billion euros more debt next year than in the current year. "We ought to save up today, so that we have jobs in this country tomorrow. You are calling for strict austerity in Europe. How credible do you really think this policy is when you're increasing the debt in Germany?" Deutsche-Welle

European bank run is starting

Spain on Monday paid a whopping 5.22% for three month bonds, and 5.33% for six-month bonds, as Spanish banks are now too weak to support their own government's debt issuance. The reason is a withdrawal of deposits -- a quiet bank run -- that is now in full swing in the banking systems of several southern European countries. The ongoing crisis is putting European banks under enormous pressure. Even German banks are in difficulty. Particularly hard hit is Commerzbank, which may have to ask for government money because of a significantly higher need for recapitalization than thought so far. Commerzbank alone will have an additional need of €5bn, which market analysts think the bank will be unable to raise on the markets. Euro Intelligence

Opposition leader Samaras in Greece continues political theatre

Antonis Samaras
Antonis Samaras

Greece has not yet received a commitment for the next €8 billion bailout payment partially because of some political theatre being played by Antonis Samaras, leader of the opposition New Democracy party. He has refused all along to agree to the austerity measures that Greece committed to when the EU agreed to provide the bailout payments. Led by German Chancellor Angela Merkel, the euro leaders are firmly refusing to pay the bailout money unless all political parties are firmly committed to the austerity measures, and they're demanding that Samaras sign a letter expressing his commitment. On Wednesday, Samaras finally wrote a letter making a partial commitment, saying that "certain policies will have to be modified." Samaras is repeating a previous statement that Merkel has already rejected. Kathimerini (Athens)

Turkey's Erdogan offers apologies for killing 14,000 Kurds in 1930s

Turkey has been fighting an on-and-off conflict with a separatist terrorist group, the Kurdistan Workers' Party (PKK), since the 1980s, and the policies of Prime Minister Recep Tayyip Erdogan have been under attack by opposition parties for not being able to settle the PKK conflict. In a parliamentary debate on Wednesday, Erdogan responded to opposition leader Kemal Kilicdaroglu by apologizing for a 1930s attack that killed 14,000 members of the rebelling Kurdish minority:

"Am I going to apologize or are you? If there is need for an apology on behalf of the state, if there is such a practice in the books, I would apologize and I am apologizing."

The apology was actually a political barb aimed at Kilicdaroglu. At the time of the rebellion, the leader was the revered Kemal Ataturk, in the same party as Kilicdaroglu today. Turkey is also under pressure to acknowledge other dark pages in its history, including the mass killings of Armenians in 1915, a special wealth tax imposed on Jews in the 1940s and attacks on its Greek minority in 1955. AP

Yemen's President Saleh finally agrees to step down after 33 years

Saleh meets with Saudi King Abdullah in Riyadh (AP)
Saleh meets with Saudi King Abdullah in Riyadh (AP)

After ten months of huge "Arab Spring" street protests, in which his security forces killed hundreds of unarmed street protesters, Yemen's President Ali Abdullah Saleh has agreed to step down within 30 days, after being leader for 33 years. The deal was backed by the United States, and brokered by the Saudi-led Gulf Cooperation Council (GCC). When he finally signed the agreement to step down, he did so in the Saudi capital of Riyadh after most of his allies had abandoned him and joined the opposition. Several months ago, Saleh's palace mosque was bombed and he was treated in Saudi Arabia for severe burns. It's not clear when or if Saleh will return again to Yemen, as he plans to travel to New York for unnamed medical treatment. The agreement gives him immunity from prosecution. AP

Power struggle is likely in Yemen

The deal opens the way to what will likely be a messy power struggle. Among those possibly vying for power are Saleh's son and nephew, who command the country's best-equipped military units; powerful tribal leaders; and the commander of a renegade battalion. According to one analysis, "What should be one of Yemen's main historical events is tainted by fear of an armed conflict in between General Mohsen's dissident troops, Al-Ahmar tribesmen and the remnants of the regime as many former power-players feel the GCC agreement is not serving their immediate interests. Already clashes in al-Hasaba and near the Square were reported in the early hours of the afternoon and fighter jets were seen hovering above Arhab, north of Sana'a." Yemen Post

With much wisdom comes much sorrow

My study of Generational Dynamics over almost ten years has taught me a great deal, and has brought me a great deal of grief and sorrow. On this Thanksgiving Day, I'd like to repeat a quote from the Old Testament, which is considered a holy book by Jews, Christians and Muslims alike. Here's Ecclesiastes 1:9-18:

"What has been will be again, what has been done will be done again; there is nothing new under the sun. Is there anything of which one can say, "Look! This is something new"? It was here already, long ago; it was here before our time.

There is no remembrance of men of old, and even those who are yet to come will not be remembered by those who follow.

I, the Teacher, was king over Israel in Jerusalem. I devoted myself to study and to explore by wisdom all that is done under heaven. What a heavy burden God has laid on men!

I have seen all the things that are done under the sun; all of them are meaningless, a chasing after the wind. What is twisted cannot be straightened; what is lacking cannot be counted. I thought to myself, "Look, I have grown and increased in wisdom more than anyone who has ruled over Jerusalem before me; I have experienced much of wisdom and knowledge."

Then I applied myself to the understanding of wisdom, and also of madness and folly, but I learned that this, too, is a chasing after the wind.

For with much wisdom comes much sorrow; the more knowledge, the more grief."

Something to think about on Thanksgiving.

(Comments: For reader comments, questions and discussion, see the 24-Nov-11 News -- Thanksgiving - a time to prepare as the world darkens thread of the Generational Dynamics forum. Comments may be posted anonymously.) (24-Nov-2011) Permanent Link
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