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


Web Log - July, 2006


Investors cheer at the good news: The economy's sinking.

The stock market perversely took a big jump on Friday on news that GDP growth was sharply lower.

The economy grew at an annual rate of 2.5% in the second quarter, substantially lower than the 3-4% that had been predicted by economists. The downturn is attributed to reduced spending by consumers, resulting from high energy prices and the increasing cost of credit.

The Dept. of Commerce report specifically mentions deceleration in exports, and reduced consumer demand for durable goods (especially computers and cars), and a downturn in federal government spending. Also mentioned was a decrease in residential fixed investment. This reflects the end of the housing bubble, and reduced ability of consumers to refinance their homes.

Most of these negative factors are likely to continue. The price of credit has been going on and will not go down soon. The price of a barrel of oil in the last few years has gone from the $20s, then the $30s, then the $40s, then the $50s, then the $60s, and now has been over $70 per barrel for the last couple of months. A return to the good ol' days of cheap oil (and energy and gas) does not seem likely to happen.

So the factors that contributed to fall in GDP growth are likely to continue, and should continue to have a negative effect on the economy.

And yet, exuberant investors saw this as a reason to give the stock market a major boost. Major indexes increased by 1-2%. The DJIA rose 3.2% for the week, the highest weekly gain since November, 2004.

Why is bad news for the economy good news for investors? Because bad news for the economy means that is less likely to raise interest rates further, and raising interest rates further might be bad for the economy, so not raising interest rates further would be good for the economy.

If you think that doesn't make sense, you're right. Investors aren't thinking anywhere nearly that much. They've learned through experience that when some pundit says that the Fed will continue to raise rates, then the stock market goes down; if the pundit says that the Fed will stop raising rates, then the stock market goes up. If the news changes the next day, then the stock market reverses the next day.

We sometimes see the same thing with the price of oil. When oil was in the $40s per barrel, the stock market went up when oil went down, and vice versa. Well, if oil is now over $70 per barrel, then why isn't the stock market a lot lower than when oil was $45 a barrel?

On this web site, I frequently complain that no one considers anything important that happened before they were born. But investors are much worse than that -- they can't even remember what happened yesterday.

As usual, the question is: What's the real, actual value of a share of stock today, or the stock market as a whole? This is a question that no one ever seems to ask.

If you buy a car, then you have an idea in advance what you want to pay. If the price is higher than you expect, then you demand to know why.

Well, why don't investors ever demand to know why stock prices are higher?

There are two possibilities: Either you believe that stock market prices should be whatever the market determines, or you believe that stocks have "real" values like cars and other tangible goods.

The market today is priced at around Dow 11000. Is that the right price?

If you believe that stock market prices should be at whatever the market determines, then why not Dow 20000? Dow 50000? Dow 1 million? What's the difference? But if that's true, then of course it could also be Dow 10000, Dow 5000, Dow 1000? In this case, the stock market is no different than roulette wheel.

If you believe that the stock market has a "real" value, based on earnings, then there's no question where that computation comes out: The value of the stock market is around Dow 4500. The stock market today is overpriced by more than 200%, same as in 1929.

Either way, the stock market is overdue for a huge fall.

From the point of view of Generational Dynamics, we're been predicting since 2002 that the stock market would fall to the Dow 3000-4000 range. The fact that it will fall below 4500 is based on the law of "Mean Reversion."

We're still on the path for an early stock market crash, as I described in my May 30 essay, "Speculations about a stock market panic and crash."

Last month, I said that there are three possible ways to get off that path. None of those conditions have occurred. What we're seeing is that investors are not investing in individual stocks, but in the stock market as a whole, based on ridiculous reasoning like: If GDP growth is down, then the Fed won't raise interest rates, so it's time to buy. A stock market panic could occur tomorrow, next week, next year, or thereafter, but right now it still looks like a 50-50 chance that it will occur in the next few months, before the end of this year. (30-Jul-06) Permanent Link
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International concern is growing over China's "overheating" economy

It was only supposed to grow 8%, but it grew 11.3% in the second quarter.

In 2004, in an article stock market volatility, I mentioned China's economy in passing: "During the last three weeks, the Chinese government has been applying harsh controls to 'cool down' the economy, with the goal of achieving a 'soft landing.' China has been growing at 9% per year for almost 20 years, and international economists have been expressing concern about overheating since early 2003. China appears to be in a generational 'unraveling' period stock market bubble that has to burst at some point, and that a bursting bubble is very hard to control with a 'soft landing.'"

Now, two more years have passed, and not only has the Chinese economy not slowed down, it's accelerating even faster. It grew at 10.9% in the first half of 2006, and an even faster 11.3% in the second quarter.

Normally, the Chinese don't make any negative comments on the economy, since to do so would be to admit that the Communist Party is not in control. However, things have gotten so bad that Prime Minister Wen Jiabao has publicly stated that the economy needs to be 'rebalanced.'

From the point of view of Generational Dynamics, China is going through an economic unraveling that's very similar in many ways to the type of unraveling that America went through in the late 1990s, when crazed investors created an enormous "tech bubble," which finally collapsed with the Nasdaq crash of 2000.

But the story doesn't stop there. After the Nasdaq crash, the Fed lowered interest rates to near-zero, causing the tech bubble to morph into a general stock market bubble, a credit bubble, a real estate bubble, and a commodity bubble. The bubbles might have started collapsing in 2004, when the Fed started raising interest rates again, if it hadn't been for the Chinese economy.

China's unraveling era really began in earnest around the same time. For several years, China has been purchasing enormous amounts of American debt (usually in the form of ten-year Treasury bonds), pouring money back into the American economy that could be used to purchase Chinese textiles and other goods.

Today, with even Chinese economists calling economic growth "alarmingly high," China holds an incredible $941.1 billion in US dollar reserves as of the end of June -- soon to be over $1 trillion.

As I said, China's been trying to bring about this "soft landing" for four years now, and has failed for four years. Not only is the unraveling not being controlled, it's actually getting worse at an accelerating rate.

As I've described many times before, China is becoming increasingly unstable and is approaching a massive civil war as its bubble economy unravels. America's economy is also in a precarious situation, because of the astronomically high and exponentially increasing public debt, and because of the vastly overpriced stock market.

Conflict risk level for next 6-12 months as of: 9-Feb-2006
W. Europe 1 Arab Israeli 3
Russia Caucasus 2 Kashmir 2
China 2 North Korea 2
Financial 3 Bird flu 3
Key: 1=green 1=Low risk 2=yellow 2=Med 3=red 3=High 4=black 4=Active

A financial crisis in either China or America or, for that matter, in Europe or Japan will cause a "domino effect" that will precipitate financial crises around the world, and trigger a civil war in China, which will lead to war crises around the world. Generational Dynamics predicts that we're at a unique time in history, 60 years after the end of World War II, and that we'll soon have a new "clash of civilizations" world war. (28-Jul-06) Permanent Link
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Which war came first, Korea or Vietnam?

This is the kind of question that today's journalists typically need help with, if we're to judge by an article about NPR's 90-year-old senior news analyst Daniel Schorr.

According to the article, it's not unusual for NPR producers to ask Schorr, on deadline, "Which war came first, Korea or Vietnam?", not having even a clue that the Korean war was in the 1950s, while the Vietnam war was in the 1960s-70s. Or to ask Schorr, "You covered the Spanish-American War, didn't you?" not realizing that even a 90-year-old couldn't have covered an 1898 war.

To someone in my (Boomer) generation, for someone who receives a salary to write or report the news not to even know in what order the Korean and Vietnam war occurred is incredible. Don't you need to know stuff like that to graduate from high school? Perhaps it's true that this isn't a REALLY important question, like whether Elvis or the Beatles came first, or how many times Britney Spears has gotten pregnant, but these are WARS for heaven's sake.

And the fact that it's NPR producers asking the questions doesn't mean that NPR is worse than the NY Times or USA Today or any other news organization. The fact is that most journalists working journalists today are young enough to have no personal knowledge of the Vietnam War. Some of them don't even know anything about the Gulf War.

Here's a quiz. For each of the following American wars, listed in alphabetical order, tell when it happened (approximately), and what the war was about (anything you know):

Chances are that you'll know something about any war that you actually lived through, so if you're younger than 55, you probably won't know anything about the Korean War.

Of the wars that occurred before you were born, there are probably three that you know something about: For World War II, you'll probably know something about Hitler and Pearl Harbor; for the Civil War, you probably know that it was fought between the North and the South and that slavery was an issue; and for the Revolutionary War, you probably know that it was the war of independence from England.

There are other wars that you may remember by name, but really know nothing about; the Vietnam War and World War I are in that category. You may also have been able to guess when the War of 1812 took place.

And did you get the trick questions? In two different cases, the above list contains three different names for the same war.

From the point of view of Generational Dynamics, there are good reasons for this.

We frequently talk about "crisis wars" on this web site. These are the worst kinds of wars, the genocidal wars, If you want recent examples of crisis wars, think of the Darfur genocide going on today or the Rwanda civil war of 1994 or the Bosnian war of the 1990s. These were crisis wars for other countries, though not for America.

America has been in two crisis wars since the Revolutionary War that founded it: The Civil War, in which Northern General Sherman marched through the South, and conducted the world's first "scorched earth" war campaign, burning all buildings and crops to the ground; and World War II, in which we firebombed Dresden and Tokyo, killing millions of civilians, and dropped nuclear weapons on two other Japanese cities. (I'm not blaming America for this, only stating that it occurred.)

This brings me back to the quiz: Chances are that the only wars you know anything about are the crisis wars. Non-crisis wars tend to become forgotten or near-forgotten very quickly -- within a decade or two of when they occur. But crisis wars are remembered for much longer periods, often centuries. These are wars that make cataclysmic changes to history.

Incidentally, if you're Mexican, they you probably know something about the Mexican-American War. That's because the Mexican-American war was a crisis war for Mexico, though not for America. Similarly, World War I was a crisis war for Russia (through the Bolshevik Revolution), but not for America.

Now we're headed for another war, a "clash of civilizations" world war that will make cataclysmic changes to history. We can see that war gathering steam today in Lebanon, Iraq and Afghanistan.

We call already see terror groups (like al-Qaeda and Hizbollah) and their sponsors (Iran, China, North Korea) begin to exhibit genocidal fury, including a wanton disregard for the lives of civilians, and a willingness to target and kill women and children in brutal, humiliating ways as a war tactic. And we can also see Israel, desperately fighting an "existential war," beginning to show increasing signs of the same "crisis era fury": destroying civilian infrastructure, but still careful to harm as few civilians as possible. The turning point will be some kind of trigger -- a chaotic event of some kind that will infuriate either the Israelis or the Palestinians, triggering an Israeli-Palestinian crisis war. It might be something explosive (think of bombing Pearl Harbor) or it might be something extremely humiliating (think of the Bataan death march of World War II).

Soon these regional wars in Lebanon, Iraq and Afghanistan will spread to other regions.

The reason that this is happening is because three generations have passed since the end of World War II, and all the people who remember how horrible that war was are disappearing rapidly and are almost gone.

That's the mechanism by which Generational Dynamics works. People don't remember non-crisis wars that happened before they were born. But people also don't remember the crisis wars that happened before they were born. All they remember is a series of sound bytes, like, "The Civil War was started because Abraham Lincoln wanted to free the slaves," which is completely untrue. Even when people remember a crisis war, they don't remember the horror and anxiety of it.

What's happening in the world today is both exciting and horrific. It's exciting because we all get to see, first hand, how a crisis war builds -- the anxieties and self-doubts, the rising outrage and fury -- and we can see it build step by step. It's thrilling to see how we're witnesses to what is the greatest event world history. And it's most thrilling for you, dear reader, because this web site tells you what's going on in a way that no other web site in the world does.

And it's horrific because of the consequences it will mean for all of us.

It would be nice if today's journalists knew enough history to know that the Korean War came before the Vietnam War, but Generational Dynamics tells us that people never know much of anything that happened before they were born, and that's why "clash of civilization" crisis wars are still necessary. (27-Jul-06) Permanent Link
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Lebanon: Storm over airstrikes on UN observer post has a darker side

The presence of Chinese observers was previously unreported. What are they doing there?

UN secretary general Kofi Annan and Israel swapped bitter accusations on Wednesday, following the killing of four international observers by Israeli airstrikes. The observers were from China, Austria, Finland and Canada.

Kofi Annan condemned the "apparently deliberate targeting" of the UN observer post by Israel, and defended this choice of words by the fact that the UN had made several requests to stop bombing in the area. Israel expressed "deep regret," but condemned Annan's implication that the Israelis killed the UN observers purposely. There will be an investigation.

However, an analysis by Debka points out that the presence of Chinese observers has never previously been reported, and it's likely that they're "observing" as spies.

"Our intelligence experts compare the incident to the inadvertent US bombardment which destroyed the Chinese embassy in Belgrade in 1998," killing a number of Chinese 'diplomats,'" according to the analysis. "It was discovered that from that building the Chinese had operated sophisticated surveillance to track the performance of American warplanes, missiles and smart bombs."

We'll have to wait and see if any sophisticated Chinese spy equipment is found in the ruins of the UN outpost. (27-Jul-06) Permanent Link
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Lebanon war escalates as UN officials are killed and Nasrallah threatens deeper strikes in Israel

Kofi Annan accused of Israel of "apparent deliberate targeting" of a lookout post in southern Lebanon where UN officials were stationed. Four UN observers were killed.

As I concluded in the the lengthy analysis of the Israel-Lebanon war that I posted yesterday, the best scenario that can be hoped for is a stopgap return to an equilibrium, but an equilibrium that will continue to degrade into full-scale war. The events of the last 24 hours are exactly on that path.

United Nations Secretary General Kofi Annan accused Israel of "apparently deliberate targeting" the post. "This coordinated artillery and aerial attack on a long established and clearly marked U.N. post at Khiam occurred despite personal assurances given to me by Prime Minister Ehud Olmert," Annan said. But Israeli officials called Annan's accusations outrageous and demanded an apology. They promised a thorough investigation.


Almost simultaneously with these events, Hizbollah leader Sayyed Hassan Nasrallah defiantly promised deeper missile attacks of Israeli civilians. It appears that Nasrallah is threatening to target the densely populated city of Jerusalem.

Beyond the atrocity of the killing of UN observers, even the accidental deaths of the UN observers is a public relations disaster for Israel, but good ol' Nasrallah's speech, confidently promising to target and kill even more Israeli civilians, continues to make Israel into a public relations victim. This makes it impossible for the world community to pressure Israel to accept a ceasefire, and so risks further escalation.

If Hizbollah does indeed land a missile, killing civilians in Tel Aviv, the level of fury among the Israeli people is liable to rise even further, raising the stakes in the confrontation between Hizbollah and Israel.

The level of fury is also rising among Arabs, according to Saudi King Abdullah. "If the option of peace fails as a result of Israeli arrogance, then the only option remaining will be war, and God alone knows what the region would witness in a conflict that would spare no one," said Saudi King Abdullah. "It must be said that patience can't last forever, and if the brutal Israeli military continues to kill and destroy, no one can foresee what may happen."

A worried international community is scrambling to find a solution, by means of an international conference to be held in Rome starting today. The plan is to put together an international force that will guard the border and separate Hizbollah from the Israelis. They'll be desperately trying to restore the "Nash equilibrium" that so far has prevented a world war.

As I wrote yesterday, there isn't a snowflake's chance in hell that Iran and Hizbollah will allow this for long, or at all. Iran has already invested in hundreds of millions of dollars in Hizbollah, whose sole purpose is to play a role in "wiping Israel off the map."

Meanwhile, let's not forget that the confrontation with the Palestinians continues as before. On Wednesday, 50 tanks moved into northern Gaza while the air force carried out three air strikes, killing or wounding several Hamas operatives.

Palestinian Authority President Mahmoud Abbas, once identified by the world as the great hope to implement the "Roadmap to Peace" with side-by-side Palestinian and Jewish states, is now almost completely irrelevant to the events unfolding in the Mideast.

Conflict risk level for next 6-12 months as of: 9-Feb-2006
W. Europe 1 Arab Israeli 3
Russia Caucasus 2 Kashmir 2
China 2 North Korea 2
Financial 3 Bird flu 3
Key: 1=green 1=Low risk 2=yellow 2=Med 3=red 3=High 4=black 4=Active

In the year 2000, Israel pulled all its forces out of southern Lebanon. Hizbollah used the six years since then to prepare for war with Israel. In 2005, Israel pulled all its forces out of Gaza, and Hamas used the last year to prepare for war with Israel.

Listening to tv pundits the last few days, I've been hearing something new: People are beginning to openly question whether Israel should continue to exist, whether a Jewish state could possibly ever exist peacefully in the midst of so many Muslim states.

From the point of view of Generational Dynamics, the Mideast is headed for all-out war between Palestinians and Israelis. Generational Dynamics tells us that the war is coming, but doesn't tell us when. However, as events develop on a day to day basis, it looks like the time isn't too far off any more.

As to the question of whether a Jewish state could possibly ever exist peacefully in the midst of so many Muslim states, Generational Dynamics tells us that the region will be at war at regular intervals whether there's a Jewish state or not. (26-Jul-06) Permanent Link
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Some random notes on the Mideast crisis

First off, dislodging Hizbollah from the Israeli border is almost impossible.

That's just one conclusion I've reached today, listening to the coverage of the Mideast crisis on CNN International, Fox news, and BBC. (Sorry, no MSNBC yesterday.)

Here's why:

All day Thursday, a big topic of discussion was this: What about the Lebanese people outside of Hizbollah? Are they pro-Hizbollah or pro-Israel?

The answer appears to be that the country is split on being pro-Hizbollah or anti-Hizbollah, but either way, the people are anti-Israel. The population is increasingly furious at Israel because of the civilian deaths and the destruction of the infrastructure.

Things have gotten so bad in Lebanon that the Lebanese defense minister has announced that the Lebanese army will fight with Hizbollah against Israeli forces, if Israel ground forces invade.

However, a Lebanese pundit in Beirut told CNN that there's another possibility: If the Lebanese army moves into southern Lebanon to join Hizbollah in the fight against Israel, Lebanese army may end up bringing Hizbollah under control. I can't tell whether that's a realistic hope or wishful thinking, but it's the one thing I heard all day that might bring an end to the fighting.

One interesting thing about the discussion of the Lebanon people is that the pundits were discussing all day whether to expect a renewal of the civil war in Lebanon, the civil war that ended in the 1980s.

From the point of view of Generational Dynamics, regular readers of this web site know that since only one generation has passed since the 1980s crisis civil war, a new civil war is impossible, for the same reason that a civil war in Iraq is impossible. I've written dozens of times on this web site why a civil war in Iraq is impossible, and I won't repeat the reasons here.

In a BBC report on Wednesday, the reporter in Beirut was asked by the London anchor whether he thought that there was a new civil war building. He said that every Lebanese he's spoken to has said that nothing of the sort is happening, which is exactly what Generational Dynamics would predict.

Incidentally, since I'm posting "random notes" on the Mideast crisis, let me post a random note on something else.

A major situation has been developing in Somalia as the country's government is being overthrown by radical Islamists, turning the country into yet one more stronghold for radical terrorists.

Yesterday, the neighboring country Ethiopia, has sent troops into Somalia to oppose the Islamists.

This is a very dangerous situation, but I simply haven't had time yet to put together an article on it. But readers of this web site should at least be aware of the situation, and keep any eye on it. (21-Jul-06) Permanent Link
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Iranian representatives witnessed North Korea's July 4 missile tests

According to Assistant Secretary of State Chris Hill, "it is our understanding" that one or two Iranian officials attended the multiple missile tests that North Korea conducted on July 4, after being warned by the international community not to do so.

Last week, the U.N. Security Council unanimously approved a resolution condemning North Korea, and demanding an end to nuclear weapons development. As I wrote recently, I believe that China voted for this resolution to humiliate North Korea, in retaliation for North Korea's humiliating China by launching the missile tests after being told not to.

But the fact that Iranians were present at the missile test, if confirmed, seals the issue that North Korea, China and Iran are working together to plan the results of the "clash of civilizations" world war that's approaching. My reading is that China is going to have some problems keeping the control it wants over its recalcitrant "kids," Iran and North Korea. (21-Jul-06) Permanent Link
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Online video available for June 5 TV appearance

On June 5, I appeared on Jim Pillsbury "Live", a cable local-access interview show.

I've just become aware that a video of the show is available online, at the following URL:

I was the second of two guests in the one-hour interview show, so my interview starts at 35:29 (35 minutes, 29 seconds).

The interview took place prior to the recent Mideast crisis, and most of the discussion was about Iran and the antiwar movement.

I'm scheduled to appear on the Jim Pillsbury show again on Monday, July 24, to talk about Lebanon, Israel and the Mideast crisis. I'll post a notice when the video becomes available online.

If you live in Eastern Massachusetts, you can watch the show on most cable systems. The show times schedule is at: (20-Jul-06) Permanent Link
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Why did China agree to join a U.N. Security Council resolution condemning North Korea?

Henry Kissinger has one theory, but mine is quite different.

Much to many people's surprise, on Saturday the U.N. Security Council voted unanimously to condemn North Korea for continuing to develop nuclear weapons.

The big surprise was that China voted to go along with the resolution. The Chinese had frequently said that they opposed any Security Council resolution, and indicated that they would veto any such resolution.

Even though the final resolution was watered down from what the U.S. and Europe originally wanted, this is nonetheless being considered a major victory for the U.N., and an indication that the nuclear proliferation issue is on its way to a solution.

Henry Kissinger
Henry Kissinger

One of the strongest such statements was provided by Henry Kissinger on Monday, when he was interviewed on CNN's "Lou Dobbs Tonight" program. Here's an excerpt:

" Dobbs: US policy seems to be ad hoc, disjointed, against what is a global effort on the part of the radical Islamist terrorists to take on new targets. Is that an incorrect perception?

Kissinger: I look at the events of this week, painful as they are, as a kind of a turning point. We have the UN resolution on Korea. And I think that should be a landmark on the road to bringing the Korean issue to some conclusion. We've been negotiating now for two years - now we have a unanimous United Nations resolution on the the missile issue.

The missile issue is only the tip of the iceberg. What we really have to deal with is the nuclear issue. It seems to me that the nations involved in the negotiation now have to face he choice of whether they want to demonstrate their impotence, and demonstrate that we're living in a lawless world.

The same would apply to Iran. Everyone is arguing which kind of sanctions we should have. But the fact of the matter is that six nations have said, "There should be no enrichment." If the enrichment issue is not resolved in a reasonable time, what is the conclusion the world can draw?

Dobbs: Is there, in your judgment, an intelligent, well-centered -- and by centered I mean an expression of concern about us interests -- in our geopolitical policy globally - because these events seem disjointed but they seem united, except for the case of North Korea, by radical Islamist terrorist.

Kissinger: There has never been a period in history in which so many changes have been were taking place simultaneously, and it's not easy to form an overriding geopolitical concept. I think we've done well getting the Iranian negotiation to this point, in which we've united the six countries.

We've got the Korean negotiation to that point -- this I consider a good design. Now the question is - can we go from here to the next step - which is to implement the design, and that is going to be the tough decision."

Henry Kissinger is considered by many -- myself included -- to be one of the greatest minds on geopolitical policy in the world. His greatest successes occurred during the Nixon administration. He developed the policy of "détente" with the Soviet Union, he engaged in "Shuttle Diplomacy" to resolve disputes in the Middle East between Israel and Egypt, and he used "Ping Pong Diplomacy" to open up diplomatic relations to China, by setting up a match between the American and Chinese Table Tennis teams.

His geopolitical philosophy worked during the 1970s, when much of the world was in a "generational awakening" era, a time when countries are willing to compromise. The willingness to compromise is a basic assumption of Kissinger's philosophy, as it is in the case of many other politicians. But that philosophy doesn't work at other times.

I remember well a particular time when Kissinger got something majorly wrong.

In 1990, after Saddam Hussein invaded and conquered Kuwait, there was a great debate in Congress over whether we should go to war to free Kuwait. I was particularly interested in the testimony of two people: Henry Kissinger, the Republican expert from the Nixon and Ford administrations, and Zbigniew Brzezinski, the Democratic expert from the Carter administration. I knew that the politicians would just have political spin positions, while Kissinger and Brzezinski would give principled opinions, so their opinions would be the most valuable.

Brzezinski said that we shouldn't invade, and Kissinger said we should. So, in retrospect, Brzezinski was wrong and Kissinger was right. Right?

Well, no. Kissinger was wrong too. Kissinger strongly urged going ahead with the invasion, but he firmly believed that Saddam would back down at the last minute, and President Bush would have to call off the invasion. Kissinger said that repeatedly before the 15-Jan-1991 invasion, and after the invasion began, Kissinger said how shocked he was that Saddam didn't back down after all.

What Kissinger didn't understand was that, having just gone through the genocidal Iran/Iraq war, Saddam and the Iraqi people were in no mood to compromise on anything that they didn't feel was in their interest.

Today, he's making the same mistake as he interprets the situation with China and North Korea. He's very pleased that China changed its mind and backed the U.N. Security Council resolution because he believes that by creating the right geopolitical design and applying it, the North Korea problem is on its way to a resolution.

But you don't have to be an expert on Generational Dynamics to see that there's no resolution in sight. Could Kissinger really believe that North Korea is going to stop building nuclear weapons because of a U.N. Security Council resolution and because China didn't veto the resolution? Actually, that might be possible in a generational awakening or unraveling period, times when the desire to compromise and contain problems is highest.

But China and North Korea are in generational crisis periods, times when compromise and containment give way to confrontation.

The attitude of the North Koreans toward Americans is very clearly shown by the following picture, snapped by an American Congressman, of a billboard appearing prominently in Pyongyang, North Korea, in 2003:

Prominent billboard in Pyongyang, North Korea, 2003.  The right-most frame shows a North Korean spearing an American with a bayonet.
Prominent billboard in Pyongyang, North Korea, 2003. The right-most frame shows a North Korean spearing an American with a bayonet.

Note on the right, the bayonet spearing an American soldier. Especially during a generational crisis period, this billboard represents a level of hatred that will not be changed by any U.N. resolution.

So why did China abruptly change directions and agree to the Security Council resolution? Here's my analysis and my guess:

So the whole U.N. Security Council resolution was not the culmination of some grand geopolitical design and strategy, leading to a great solution of the nuclear proliferation problem, as Kissinger believes.

No, it was just international geopolitical game-playing, grand theatre that means nothing in terms of where the world is going.

Furthermore, the North Korean situation is highly related to the crisis in the Mideast that's been going on for the last week or two.

According to a Time Magazine article credulously titled, "Why the U.N. North Korea Resolution Might Really Work," a State Department official wishfully says, "North Korea's two biggest customers for missiles and missile technology are Iran and Syria. Those states would also be prohibited from any kind of missile cooperation with North Korea. They'll try to get around it, but they'll be in violation of a Security Council mandate."

These are presumably the missiles that have been supplied to Hizbollah in the latter's war to "wipe Israel off the map."

From the point of view of Generational Dynamics, we're headed for a new "Clash of Civilizations" world war. In this war, we can see how the new "axis of evil" is forming itself: North Korea, China, Iran, Syria and Pakistan. Hizbollah will form an important part of their strategy is tying down American and Allied forces in the defense of Israel.

Unlike what Kissinger and other pundits are saying, the U.N. resolution is in no way a resolution to any problem. Instead, it's a power play by China that shows that China will be calling the shots and deciding when the "Clash of Civilizations" world war will begin. (19-Jul-06) Permanent Link
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Mideast war now centers around Hizbollah's Hassan Nasrallah

Nasrallah splits the Arab world and draws international support for Israel

Hizbollah chief Sheik Sayyed Hassan Nasrallah, gloating about missile strikes on Israeli civilians. <font size=-2>(Source: al-Jazeera via</font>
Hizbollah chief Sheik Sayyed Hassan Nasrallah, gloating about missile strikes on Israeli civilians. (Source: al-Jazeera via

Hizbollah has launched over 1000 missiles on northern Israeli cities, but it was the sight of Hizbollah chief Sheik Sayyed Hassan Nasrallah on tv with a shit-eating smile, gloating about missile strikes on Israeli civilians and promising more of them, that seems to have done the impossible -- made almost everyone agree that Israel is the victim.

"We are at the beginning of the confrontation with Israel", Nasrallah said, adding, "the Islamic world has the opportunity to be victorious against the Israeli enemy." Hizbollah is known to have thousands of missiles, supplied by Syria and Iran, pointed at northern Israel, but observers have been surprised that some of these missiles have been capable of reaching as much as 40 to 50 miles into Israel. "The enemy doesn't know our capabilities or what we have," said Nasrallah.

France, which had formerly been condemning Israel, agreed that "Israel has a right to defend itself."

U.N. Secretary General Kofi Annan made a middle of the road statement by saying, "I appeal to all parties to spare civilian life and civilian infrastructure," referring to Hizbollah's missiles and Israel's strikes at Lebanon's roads and bridges.

This followed a bitterly confrontational emergency summit meeting of the Arab League in Cairo on Saturday. The emergency meeting had been called to deal with the situation in Lebanon, but failed to produce any consensus.

The underlying issue was differences between Shia Muslims and Sunni Muslims. (These are the same two branches of Islam that have opposed each other in Iraq.)

More and more, Nasrallah's adventure is being seen as a means for Iran to use Shia Islam to penetrate the mostly Sunni Arab world.

Hizbollah is considered to be a creation of Iran with support from Syria, and receives $100 million funding per year from Iran. Hizbollah's weapons are clearly from Iran, and Hizbollah shares with Iran the goal of wiping Israel off the map.

Thus, Sunni Arab countries, including Jordan, Saudi Arabia, and Egypt, are not willing to give carte blanche to Shia Hizbollah, supported by Shia countries Syria and Iran. The centuries-old violence between Shia and Sunni Islam is just as great as the centuries-old violence between Islam and Christianity.

So we have a war between Israel and Hizbollah. Where is it going?

From the point of view of Generational Dynamics, what I'm watching for in this situation is what I'm always watching for -- changes in attitude in large masses of the public.

While the mainstream media always focus on what the politicians do, what's really always important to Generational Dynamics is how the masses of people react. Mainstream journalists and politicians and pundits really have very little understanding of how little influence politicians have on world events. It's the shifts in public opinion that tell what's really coming, since politicians are always forced to follow public opinion.

In this case, the Hizbollah missiles have unified the Israeli public in support of the IDF (Israeli Defense Forces), for the first time in a long time.

This isn't so significant, however, since the public is unified against the politician Nasrallah and his band of men launching missiles from people's homes in southern Lebanon.

What's still missing, and what I still haven't seen, is any massive shift in the level of animosity between Israelis and Palestinians. That shift has been taking place gradually, to be sure, over a period of months, but the point is that the current war does not appear to have made a difference in that picture.

So as I wrote a couple of days ago, this situation does not appear to be heading for a major regional war. The problem is that there's no clear way for the current war to reach a ceasefire, since neither Hizbollah nor Israel appears willing to back down.

The United Nations is putting together a peace force, and U.S. Secretary of State Condoleezza Rice will travel to the region to broker a ceasefire, but whether that will be achieved in hours, days or weeks is unknown.

With so many missiles flying around, the possibility for miscalculation is enormous, and some event, possibly even some "little" event, a chaotic event with big consequences, could change public opinion very quickly. We saw something like this a few months ago when massive Muslim rioting occurred over the Danish cartoon controversy. The region is ripe for exactly that kind of trigger to occur. From the point of view of Generational Dynamics, a massive regional war between Jews and Arabs is 100% certain, but what will trigger that war, and when it will occur, cannot yet be predicted. (17-Jul-06) Permanent Link
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Israel and Hizbollah declare war

However, the Palestinians are staying out of it so far

I heard someone on the news today debating whether the Mideast is at war, with one person claiming that this isn't a real war yet.

That's a semantic argument, but one thing's for sure on the ground: We don't have any large armies fighting each other yet.

We have the Israelis, led by Ehud Olmert, bombing Lebanese infrastructure, destroying roads and bridges, to prevent Hizbollah from importing more weapons from Iran.

And we have Hizbollah, led by Sheik Hassan Nasrallah, launching hundreds and perhaps thousands of missiles on Israeli cities.

And finally, we have Nasrallah's patrons, Syrian President Bashar al-Assad and Iranian President Mahmoud Ahmadinejad, who supply Hizbollah with the thousands of missiles that are now being aimed at Israeli cities.

According to a report by Chinese news agency Xinhua, al-Assad and Ahmadinejad have been discussing the situation on the phone. Ahmadinejad has repeatedly and very vocally stated that he wants Israel "wiped off the map."

But there's a big piece missing from all this -- a war between PEOPLE, as opposed to a war between POLITICIANS.

This distinction is not always clear, but it's crucially important from the point of view of Generational Dynamics, because the worst wars, the crisis wars, come from the people, while non-crisis wars come from the politicians.

In particular, I'm not hearing rage and fury from the Israeli people or the Palestinian people. The Israelis are fleeing from cities near the Lebanese border, to avoid Hizbollah's missiles. And the Palestinians in Gaza are dealing with crowded, electricity-free world with difficulty. But we don't hear the Israelis say, "Kill the Palestinians," and we don't hear the Palestinians say, "Kill the Israelis."

As I described at length a couple of days ago, Lebanon, Syria and Iran had their last crisis wars in the 1980s. Only one generation has passed since then, so they're far from ready for a new crisis war, unless it's forced on them. You won't see large armies of Iranians, Syrians or Lebanese any time soon.

But for the Palestinians and Israelis, the last crisis war was the genocidal crisis war between Arabs and Jews in 1948-49, triggered by the partitioning of Palestine and the creation of the state of Israel.

This is a generational crisis era for Arabs and Jews, and it would just take a "sufficient outrage" to launch either side into a crisis war. What's a "sufficient outrage"? It could be any chaotic event, but an example would be that one side kills several hundred civilians on the other side and says that they deserved to die.

Meanwhile, poor Lebanon is being battered and bashed by all sides. In a very emotional speech just carried live (through a translator) on CNN, Lebanese Prime Minister Fouad Siniora said that "Lebanon is a disaster zone," and he asked for international help for his country and to rescue his people. He said that the Lebanese people are "pained, angry, determined and patient," and that they will survive.

So we now see two possible scenarios for the near future:

Of course, these two scenarios aren't mutually exclusive. We might have the first scenario for a few days, and then the second scenario. From the point of view of Generational Dynamics, the second scenario must occur sooner or later. (15-Jul-06) Permanent Link
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July 11 coordinated railway bombings on Mumbai (Bombay) infuriate people of India

Indians wonder: Should Pakistan be blamed?

Approximate locations of the seven Mumbai train attacks on 7/11. <font size=-2>(Source: BBC)</font>
Approximate locations of the seven Mumbai train attacks on 7/11. (Source: BBC)

On Tuesday, July 11, seven bombs exploded in Mumbai railway stations across the city, within a few minutes of each other. It's believed that they were detonated by timers. Over 200 people have died, with over 700 injuries.

India, Pakistan, Bangladesh and Kashmir.  Mumbai (Bombay) is a large city on the Arabian Sea coast. <font size=-2>(Source: Peter N. Stearns)</font>
India, Pakistan, Bangladesh and Kashmir. Mumbai (Bombay) is a large city on the Arabian Sea coast. (Source: Peter N. Stearns)

Although the perpetrators have not been identified, two Kashmir separatist groups (Lashkar-e-Taiba or Lashkar-e-Toiba (LeT) and Jaish-e-Mohammad (JeM)) are considered the most likely. These two groups use this kind of terror to attempt to further their cause of removing Indian control of the provinces of Kashmir or Jammu. In fact, the July 7, 2006, London subway bombers were also associated with Kashmir separatist movements.

India's prime minister, Manmohan Singh on 7/11. <font size=-2>(Source: CNN)</font>
India's prime minister, Manmohan Singh on 7/11. (Source: CNN)

"No one can make India kneel," said India's prime minister, Manmohan Singh. "No one can come in the path of our progress. We will win this war against terror. Nothing will break our resolve."

Beyond the fact of the bombings themselves, the major issue is the effect of the bombings on relations between India and Pakistan.

Generational Dynamics has been predicting for some time that India and Pakistan were headed for certain war over the disputed Kashmir region, but the two countries have maintained friendly relations because of a remarkable détente that Pakistan's President Pervez Musharraf and India's Prime Minister Manmohan Singh have engineered over the last few years.

The détente survived a major terrorist attack in March of this year, and will probably survive this event as well.

However, both Pakistan and India have taken shots at each other over the bombings. Many of India's people are blaming Pakistani Muslims for harboring terrorist groups, and Pakistan's Foreign Minister Khurshid Mahmud Kasuri hinted that the bombings were caused by India's intransigence in Kashmir.

However, mainstream media reporters are beginning to notice that something is happening in the world.

Speaking to another anchor, CNN's Wolf Blitzer said, "Are you getting the sense that with the situation in North Korea, Iraq, Iran, India, Israel, Lebanon, that the world is falling apart?"

A number of reporters on CNN and Fox on Wednesday evening remarked about the speed with which the situation in the Mideast has deteriorated. "I've seen things get bad here, but never this bad so quickly," said one person reporting from Gaza.

But that's just because they haven't been noticing. As I've pointed out many, many times, hardly a day has gone by in many months that the situation in Gaza hasn't gotten measureably worse than it was the day before.

And as I pointed out a few weeks ago, the descent to war started out fairly slowly following Yasser Arafat's death, but has been accelerating ever since. It's like a huge tsunami that everyone has ignored until it's too late to run for higher ground.

Conflict risk level for next 6-12 months as of: 9-Feb-2006
W. Europe 1 Arab Israeli 3
Russia Caucasus 2 Kashmir 2
China 2 North Korea 2
Financial 3 Bird flu 3
Key: 1=green 1=Low risk 2=yellow 2=Med 3=red 3=High 4=black 4=Active

The same thing is going to happen in all the other regions in my little conflict risk graphic. The North Korean missile crisis is speeding up militarization plans in Japan, and presumably in China as well. And the Mumbai bombings are almost certain to increase the historic tension between Hindus and Muslims.

From the point of view of Generational Dynamics, the world is headed for a new "Clash of Civilizations" world war, 60 years after the end of World War II, just as all the people who lived through World War II are all disappearing (retiring and dying), all at once. With the bombings in Mumbai, and with events moving more and more quickly in the Mideast, it looks more and more that the world will be a very different place within a few more months. (13-Jul-06) Permanent Link
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Israel mobilizes reserves and invades Lebanon

Calling Hizbollah capture of Israeli soldiers an 'act of war', Olmert promises "very painful and far-reaching" response.

Israel's incursion into Lebanon is just one of several escalations to the Mideast situation in the last day.

For several days, there have been news reports of IDF (Israeli Defense Force) plans for a new "major assault" into Gaza, and it began on Tuesday evening with an incursion into central Gaza that cut the strip in two.

Several Hamas officials, but also several civilians, were killed when Israel dropped a quarter-ton bomb on the Gaza home of a Hamas official.

On Wednesday morning, the Lebanese militia group Hizbollah crossed the Lebanese border into northern Israel, killed three Israeli soldiers and took two more as hostages, bringing them back to a "safe place" in Lebanon.

How the day unfolded, July 12, 2006 <font size=-2>(Source: <i>Times Online</i>)</font>
How the day unfolded, July 12, 2006 (Source: Times Online)

What makes Olmert's declaration that the capture of the Israeli soldiers is an "act of war" is particularly significant because Olmert is accusing the Lebanese government, as opposed to the Hizbollah militia, of an act of war.

(Evening update: According to an analysis by Times Online, Hizbollah's actions today are "hugely popular" among Arabs increasingly furious about the Israeli incursion into Gaza. Hizbollah's actions are fully supported by Syria and Iran, supporting the view given below that these countries, especially Iran, are interested in provoking a war, with Iran to be left as "the last country standing.")

However, the Lebanese government has little control over Hizbollah, which actually has close relations to Syria, Lebanon's perennial enemy, and to Iran.

From the point of view of Generational Dynamics, there's a patchwork quilt of differences among these countries.

Mideast, showing Israel/Palestine, Muslim countries, and Orthodox Christian countries
Mideast, showing Israel/Palestine, Muslim countries, and Orthodox Christian countries

Iran, Iraq, Syria and Lebanon are all on the World War I timeline, having all been part of the (Muslim) Ottoman Empire centered in Turkey. The Ottoman Empire was destroyed in the aftermath of WW I. As regular readers of this web site know, genocidal crisis wars tend to come in 70-90 year cycles, and all of these countries have had their next crisis wars. I've discussed the Iran/Iraq war of the 1980s many times on this web site.

A crisis civil war began in Lebanon in 1975, and it became a war with Syria in 1976. Israel was an off-and-on participant, and the war reached an explosive climax in 1982 when Christian Arab forces, allied with Israel, massacred and butchered hundreds or perhaps thousands of Palestinian refugees in camps in Sabra and Shatila.

Thus, all four of these nations -- Iran, Iraq, Syria and Lebanon -- have all had relatively recent generational crisis wars, and the traumatized populations are in no mood for another genocidal experience. Thus, using the terminology of "chaotic attractors" (in the sense of Chaos Theory) that I've explained many times on this web site, political events in Palestine and Israel are "attracted to war," but political events in Iran, Iraq, Syria and Lebanon are "attracted away from war."

But that wouldn't prevent any of these nations from participating in the Israeli-Palestinian war by proxy -- by supplying weapons or other support, and this appears to be what's happening.

The Lebanese government actually has good relations with the United States, and is cooperating with the FBI investigation of the recently revealed al-Qaida plot to blow up New York's train tunnels. Lebanon arrested the prime suspect, Assem Hammoud, and made information from Hammoud's computer available to the FBI.

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However, Lebanon became sharply split last year when beloved former prime minister Rafiq Hariri was killed by a suicide bomber in Beirut. Most Lebanese blamed the killing on Syria, and the Lebanese became polarized into pro-Syria and anti-Syria factions, with the militia group Hizbollah leading the pro-Syria group.

Since that time, Hizbollah has been developing a close 'mentor' relationship with Hamas, and is encouraging further Palestinian terrorist attacks on Israel.

Iran, through its President Mahmoud Ahmadinejad, has repeatedly expressed the intention to "wipe Israel off the map." As we wrote last January, Iran is positioning itself to be the "last country standing" after an Israeli-Palestinian war, to gain hegemony over the entire Mideast for decades to come. In addition, Iran appears to be joining with China as part of a new "axis" in the coming "Clash of Civilizations" world war, undoubtedly making plans to split the world between them.

The situation between Israelis and Palestinians moves measurably towards war each and every day, and full-scale war cannot be much farther off, as Israelis and Palestinians become increasingly enraged with each other.

From the point of view of Generational Dynamics, we can see that the war between Israelis and Palestinians will be bloody and genocidal, like the war they fought in the late 1940s, after the partitioning of Palestine when the state of Israel was created, and also very much like the 1994 Rwanda genocide, and the genocidal war being fought in Darfur today. Of course, America and Europe will also be drawn into a major Mideast war as well.

But the role of Hizbollah, Lebanon, Syria and Iran remains to be seen. They'll certainly be supplying weapons and logistics to the Palestinians, but whether they also supply armies to the Palestinians remains to be seen. On the other hand, with so much violence spreading so quickly, undoubtedly including the use of weapons of mass destruction, it may not make any difference what they'd like. (12-Jul-06) Permanent Link
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Shamil Basayev is dead

The Chechen terrorist responsible for the Beslan school massacre in September 2004, in which 330 hostages, half of them children, died is now dead himself, a victim of a huge explosion. There is evidence that he died in the midst of preparing for a new terrorist attack to coincide with this week's G-8 summit in St. Petersburg. In another terrorist attack, Basayev was responsible for the downing of two passenger planes in flight from Moscow by "black widows," women carrying bombs.

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In June 1995, Basayev-led terrorists entered Budyonnovsk, a small town in southern Russia, where they captured a large hospital and took over 1,800 people hostage. In the end, more than 100 hostages were killed, and Basayev and his men were allowed to retreat safely back to Chechnya, using hostages as human shields.

In an ABC News interview with Basayev conducted soon after the Beslan massacre, Basayev said that there would be many more attacks similar to Beslan. “It’s not the children [of Beslan] who are responsible,” Basayev said. “Responsibility is with the whole Russian nation... If the war doesn’t come to each of them individually, it will never stop in Chechnya.” Asked if a Beslan-type attack could occur again, Basayev said: “Of course ... As long as the genocide of the Chechen nation continues, as long as this mess continues, anything can happen.”

The fact that ABC News gave air time to such a bloody, ruthless terrorist may be surprising, but it seems to be typical of today's arrogant Boomer-led media, who seem to know little of what's going on in the world. The interview absolutely infuriated Putin and the Russian people, and Russia barred ABC News reporters from Russia. I don't know whether the interdiction is still in effect today.

The death of Basayev is bringing relieved smiles to the faces of many Russians.

Russian President Vladimir Putin was 'jubilant' at the news. "For the bandits, this is just retribution for our children in Beslan … and for all the terrorist attacks they carried out in Moscow and other regions of Russia," he said.

Unfortunately, many Russian commentators are in a state of denial. "I think Russia's latest Caucasian war is over," says political commentator Pyotr Romanov, "and the killing of warlord Shamil Basayev is yet another serious argument in favor of this opinion. Individuals have always played a particularly important role in the Caucasus. Now that Basayev is dead, there is no one else in the region to hate Russia and despise life, his own and the lives of others, as much as he did."

Well, that's surely a vain hope. The Causasus is a region of major, repeated crisis wars between Orthodox Russians and Muslims for many centuries, and a new crisis war is overdue. The death of Basayev will no more stop the terrorist attacks or prevent a war in the Caucasus than the death of Abu Musab al-Zarqawi stopped the terrorist acts in Iraq or prevented a war in the Mideast.

Conflict risk level for next 6-12 months as of: 9-Feb-2006
W. Europe 1 Arab Israeli 3
Russia Caucasus 2 Kashmir 2
China 2 North Korea 2
Financial 3 Bird flu 3
Key: 1=green 1=Low risk 2=yellow 2=Med 3=red 3=High 4=black 4=Active

From the point of view of Generational Dynamics, it's impossible to predict the effect of the death of as powerful a figure as Basayev. His death may trigger a power struggle that ends up launching a major crisis war, or things may settle down for a while. The one thing that's certain is that a new major crisis war in the Caucasus in the near future cannot be avoided. (11-Jul-06) Permanent Link
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To everyone's surprise, tax receipts skyrocketed in 2005, lowering the deficit

Similar surprises occurred in 1996 and 2000

Tax revenue from corporations and wealthy investors rose steeply in 2005, catching everyone by surprise.

Needless to say, the air is thick with political spin. The White House press release attributes it to "strong economic growth and fiscal discipline," which is silly because economic growth has been weak, and there's no sign of fiscal discipline anywhere in Washington. The Democratic National Committee press release says that "the Administration that inherited record surpluses has turned them into record deficits," and that's also silly because the problem began in the Clinton administration.

Federal income and outlays as percentage of GDP - 1930-2005
Federal income and outlays as percentage of GDP - 1930-2005

The above graph shows the federal budget income and outlays as a percentage of the GDP (Gross Domestic Product), going back to 1930. As you can see, government outlays reached 44% of GDP during World War II, but then settled into the 15-25% range since then. Outlays today are around 20% of GDP, about average by historical standards since World War II.

Now let's focus on the last 25 years:

Federal income and outlays as percentage of GDP - 1980-2005
Federal income and outlays as percentage of GDP - 1980-2005

What this graph shows is that the current high deficit is not caused by exceptionally high spending, even with the Iraq war going on. It's caused by a steep drop in receipts that began in the year 2000.

My main reason for wanting to post this graph is to show that what's going on could not possibly have had anything to do with any politician, and that all political spin is nonsense.

So now we have three surprises in the last ten years:

The collapse in tax receipts since 2000 appears to be related to the loss of jobs to China and India since then. A factory in America pays taxes to America, while a factory in China pays taxes to China, so the massive shift of jobs to China and India would explain the drop in tax receipts.

The unexpected rise in tax receipts in 2005 is not substantial, and cannot be expected to continue. As we've previously discussed, corporate earnings have increased at more than double historical rates of increase during the last 10-20 years, and by the principal of mean reversion, earnings must drop sustantially, possibly this year.

From the point of view of Generational Dynamics, we're entering a new 1930s style Great Depression, as I've been reporting since 2002. The major surprises in tax receipts are all related to the generational patterns triggered in the 1990s when the generation of senior financial managers with personal memory of the horrors of the 1930s Great Depression all disappeared (retired or died) all at once, leaving behind a new generations (Boomers and Xers) with little or no instinctual ability recognize risky investments. (11-Jul-06) Permanent Link
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A year after the July 7 London subway bombing, a generational gap in North London mosques

Young radical Islamists meet in a room next door to the main mosque.

Someone named Abu Muwaheed, who looks like a teenage boy with a head scarf, leads a large group of more teenage boys with head scarfs in a discussion of the "Saviour Sect." The subway bombings were, he explains, the fault of the British government, as well as the fault of the British people who elected that government. There's a multimedia presentation showing scenes of wounded Iraqis and messages from Osama bin Laden. The crowd cheers when 9/11 is mentioned.

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Robert Pape's : Dying (to)
Defiant Britons join people around the world in two minutes of silence: The revelation that the subway suicide bombers were young native-born Britons has thrown Western Europe into alarm... (15-Jul-05)
British political parties uniting around Prime Minister as death toll mounts: Proposed laws to require identity cards and allow detention without trial are given new impetus,... (7-Jul-05)
G-8 leaders react to "particularly barbaric" London subway bomb blasts: England and France are unified once more -- against terrorism.... (7-Jul-05)

Next door, in the Lea Bridge Road Mosque, Imam Ghulam Rabbani says that he was unaware of the tenor of these meetings, and is shocked at what's occurring. When Rabbani preaches in the main mosque, the average age of the people in his audience appears to be around 50.

This report appeared on Friday afternoon on CNN International, during the extensive coverage commemorating the London subway bombings of a year ago, on July 7.

Suicide bomber Shehzad Tanweer <font size=-2>(Source: The Sun)</font>
Suicide bomber Shehzad Tanweer (Source: The Sun)

As I explained in detail last year, the London bombers were ordinary Muslim British citizens, born near London, but radicalized by trips to Pakistan, their parents having come from the explosive Kashmir region disputed by Pakistan and India.

One of the suicide bombers, Shehzad Tanweer, was a very wealthy young man. In a moved timed to coincide with the July 7 commemoration, an Islamic website associated with al-Qaeda released a video of Tanweer, identifying him as having been trained by al-Qaeda.

The bombings were a shock to everyone, but none more so than the mortified Muslim parents of kids living in the same neighborhood. "What if my son decides to do the same thing?" they wondered.

This generational gap is a good example of where things are going, and it shows why I keep reminding readers that the median age in the Gaza strip is 15.6.

Most people think that "children learn from their parents." That's true to some extent, but the whole point of Generational Dynamics is that children don't learn from the parents or, more precisely, learn the wrong things from their parents.

From the point of view of Generational Dynamics, it's this younger generations, in cultures around the world, that are going to lead the world into the next world war, the "Clash of Civilizations" world war. As we see London-born youngsters become increasingly radicalized, and as we see the violence escalate in the Mideast, we have to realize that the time cannot be very far off. (7-Jul-06) Permanent Link
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Fighting in Darfur has increased since a peace deal was signed in May.

Palestinians and Israelis will soon go the way of the people of Sudan and Darfur.

Janjaweed militias continue to murder Darfur civilians, and all deadlines for implementing May's peace agreement have been missed, leading Jan Pronk, the U.N. envoy to Darfur and Sudan, to say that the situation was "worse" than it was before the peace deal.

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Early in 2004, the United Nations held a conference commemorating the tenth anniversary of the 1994 Rwanda genocide, At that time, there were two ethnic groups in Rwanda -- the Hutus and the Tutsis. They had lived together for decades, had intermarried, had their kids play games with each other and so forth.

Then one day, a Hutu leader announced over the radio, "Cut down the tall trees." The radio announcement, which was heard all over the country was some sort of prearranged signal. On cue, each Hutu did something like the following: Picked up a machete, went to the Tutsi home next door, or down the street, murdered and dismembered the man and children, raped the wife and then murdered and dismembered her. Close to a million Tutsis were tortured, raped and murdered in a three month period.

So at the 2004 United Nations conference, Kofi Annan said "never again."

It was only weeks later that "never again" was challenged by the situation in Darfur. Kofi Annan called on the world to stop the genocide there.

I wrote that the U.N. is completely irrelevant to the Darfur genocide, and that it would not be stopped until it's run its course.

Now, two years later, it still hasn't run its course.

From the point of view of Generational Dynamics, the Darfur war is a "crisis war." I like to compare a crisis war to a tsunami, because a crisis war is propelled by a huge wave of people, motivated by hatred and fury, who can no more be stopped than a tsunami can.

And sure enough, the Darfur war is now being compared to the 1994 Rwanda genocide, and is nowhere near close to being stopped.

If you wish to understand what's close to happening between the Arabs and the Jews, just look to Darfur, because the same kinds of emotions are involved. The trigger won't be "cut down the tall trees," but there'll be some trigger. (In fact, the trigger may already have occurred -- the kidnapping of the Israeli soldier.)

I hear talking heads on TV talk about a possible war between Israelis and Palestinians as being some minor thing -- a few people will be killed, the rest of the world will go on with life as usual.

Well, the war in Darfur can be ignored, because none of the major superpowers have any emotional connection to Darfur. Even among American blacks, there are few who feel a connection to Darfur.

But anyone can see how different the situation is with Israel. America has a strong emotional connection to Israel, and countries like Egypt, Jordan and Iran have strong emotional connections to the Palestinians. The coming war between Israelis and Palestinians will be like the Darfur war -- as unstoppable as a tsunami. But unlike Darfur, the Palestinian / Israeli tsunami will drown a lot of Americans as well. (7-Jul-06) Permanent Link
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Olmert promises retaliation after missile lands in Israeli city

Another day, another escalation.

While the world's attention is focused on test missiles fired by North Korea (and there were SEVEN of them, not just six), an escalating situation is occurring in the Mideast, thanks to a REAL missile.

The level of panic among Israelis was turned up a few notches on Tuesday, when a rocket from Gaza hit Israeli city of Ashkelon. The rocket, evidently fired by Hamas' military wing, uses slightly more advanced technology than previous rockets, and so reached farther into Israeli territory. It landed near a school, but no one was hurt. Even so, Prime Minister Ehud Olmert called the rocket attack a "major escalation."

An editorial in the Israeli newspaper Ha'aretz says that the missile "constitutes an unequivocal invitation by Hamas to war."

Israeli diplomatic sources are said to be planning "a very harsh response" to the incident.

Uri Ariel, a conservative member of the Knesset (Israeli parliament) called on Prime Minister Ehud Olmert to "stop the games and begin taking serious action" to stop the rocket attacks.

After a Wednesday morning meeting with his security cabinet, Prime Minister Olmert has ordered the army to expand its offensive against Hamas.

According to a statement from Olmert's office, "Given the abduction and continued ballistic salvoes, including the (rocket) launched at Ashkelon, the rules of the game in dealing with the Palestinian Authority and Hamas must be changed." The statement said that strikes against Hamas Islamists in Gaza and the West Bank will focus on "institutions and infrastructure facilitating terrorism".

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From the point of view of Generational Dynamics, the Mideast is in a "generational crisis" period and is heading, with 100% certainty, to a new major genocidal war between Arabs and Jews, 57 years (almost three generations) after the end of the the major war that was fought in the late 1940s, following the partitioning of Palestine and the creation of the state of Israel.

This is to illustrate again the concept of "chaotic attractor," in the sense of Chaos Theory. Political events are random, but in a generational crisis period, political events are "attracted" to war. This has been lucidly illustrated in the Mideast, where hardly a day has gone by in the last 16 months where political events haven't measureably brought the region closer and closer to war. As I predicted in May, 2003, when the "Mideast Roadmap to Peace" came out, the disappearance of Yasser Arafat and Ariel Sharon from the scene has removed the last major generational inhibitions to full-scale war. (5-Jul-06) Permanent Link
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In an Independence Day surprise, North Korea launches multiple test missiles towards Japan

Sticking its thumb in the eye of the United Nations and the United States, North Korea has launched not just one, not two, not three, not four, not just five, but SIX missiles. The test missiles were launched in the direction of Japan, but fell into the Sea of Japan between the two countries.

One of the six missiles was the long-range Taepodong-2 missile, but apparently it malfunctioned shortly after takeoff.

Since the launchings were apparently tests that posed no immediate danger to America or Japan, this might be similar to the little joke that President Kim Jong-il played on the world last September, when it first promised to end nuclear testing, and then said "ha, ha, we were just kidding" a few days later.

Nonetheless, this is the same kind of "screw you" tactic as was used by Iranian President Mahmoud Ahmadinejad announced in April when he announced that Iran is going to enrich uranium. That particular announcement came after statements that Israel "should be wiped off the map." Both Kim and Ahmadinejad are adopting postures of complete contempt towards America, Europe and the West, including the United Nations.

All the silly chatter on television right now is whether the Bush administration offered the right collection of carrots and sticks, and whether the Clinton administration coddled the North Korea regime. You'd have to be a total moron to believe that North Korea's decision to continue or abandon an aggressive weapon system depends on the number of people sitting in on peace negotiations, or on whether Bush said the right "magic words" to Kim in the past, but that's what we're hearing on TV this evening.

But from the point of view of Generational Dynamics, the Bush administration has little or no ability to affect either situation. North Korean President Kim Jong-il and Iranian President Mahmoud Ahmadinejad are both saying the same thing: "We're going to do what we want, and there's nothing you can do about it."

Actually, it was just a couple of weeks ago that the United States warned North Korea of "countermeasures," if the missile tests were continued.

I guess now we get to see what those "countermeasures" are, if any.

If there are any military countermeasures (such as bombing a Korean missile launcher), then China will be angered.

If the "countermeasures" are just words, or complaining to the useless United Nations Security Council, or if there are no countermeasures at all, then the Americans will look like idiots, and the Japanese will be scared to death.

Actually, it's pretty certain that the Japanese, who are just waking up on Wednesday morning, are going to be pretty frightened anyway.

The Japanese were freaked out in 1988 when North Korea launched a missile that overflew Japan and landed in the Pacific Ocean.

Japan's relations with the Koreans and Chinese have been deteriorating sharply in the last two years. This incident is sure to raise the level of anger.

Japan has territorial disputes on all sides, with Korea, China and Russia, and has been increasing its military capabilities, preparing to defend its territory. In addition, Japan and America have been speeding up plans to deploy American Patriot missiles on Japanese soil, to counter the North Korean threat.

On the other hand, Iran, North Korea and China have been developing closer diplomatic relationships in recent months, and there have been uncomfirmed reports that Iran is purchasing nuclear technology from North Korea. Furthermore, since China gives a great deal of food and energy aid to North Korea, it seems safe to assume that China could have prevented the multi-missile launch, but chose not to.

Conflict risk level for next 6-12 months as of: 9-Feb-2006
W. Europe 1 Arab Israeli 3
Russia Caucasus 2 Kashmir 2
China 2 North Korea 2
Financial 3 Bird flu 3
Key: 1=green 1=Low risk 2=yellow 2=Med 3=red 3=High 4=black 4=Active

Thus, as I mentioned in passing a couple of weeks ago, it appears that China, Iran, Pakistan and North Korea are forming a new "axis," corresponding to the Germany-Italy-Japan axis of World War II. This axis, headed by China, would be opposed to the new allies -- Japan, Australia, India, Russia, UK, led by America.

At the present time, I'm still leaving China and North Korea at level 2, medium risk, on my little "Conflict Risk" graphic, because I don't yet hear the drums of war from either of those countries, and I don't see this situation spiraling out of control the way the situation in Gaza is. But that could change any day, if this kind of confrontation continues. (4-Jul-06) Permanent Link
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Whose side will Germany be on in the "Clash of Civilizations" world war?

A reader of this web site offers an opinion.

People I talk to are almost always stupefied when I talk about a new West European war, the first since World War II. They act as if such things were as scarce as hen's teeth, even though there have been such wars as regularly as clockwork for millennia, and nobody so far has been able to point out a new Law of Nature that would keep such a war from happening again, now that we're coming close to the next "clockwork" cycle.

Defiant French President Jacques Chirac in June, 2005 <font size=-2>(Source: LeMonde)</font>
Defiant French President Jacques Chirac in June, 2005 (Source: LeMonde)

At this point, the question of who will be fighting whom is largely speculation. Based on history, we can reasonably assume that one of the three countries UK, France and Germany, will be at war with the other two. However, this assumption must be heavily qualified by the fact that a clash on European soil between indigenous Europeans and Muslims from Turkey and North Africa is shaping up to be a certainty.

However, the heavy recriminations between Britain and France in 2003 in the U.N. Security Council over the Iraq war, and then again in June, 2005, over the European Union budget, makes it pretty clear that the wars that have occurred regularly since 1066 between England and France will be repeated. (Ironically, as I'm writing this, I'm listening to the July 4 Boston Pops concert playing the 1812 Overture, with its intermingled strains of the French national anthem, La Marseillaise. How things can change in a mere 200 years.)

That leaves the question of whom Germany will side with. A web site reader offers the following opinion:

"Germany and Britain up until the First World War were allies. The German nations (Prussia, Hanover, Hesse specifically) either worked for Britain or supplied Royalty to Britain. The current ruling family of Britain is of German descent and so were Kings George I,II and III (Hanover). I would expect Germany to fight alongside Britain and the US in a future conflict."

Well, if this is true, then why did Germany fight Britain in World Wars I and II?

"Things changed between Germany and Britain after the 1880's or so. Once Germany was unified, they quickly became a rival to Britain economically. It was the economic rivalry as well as the web of political alliances that led to Britain and Germany fighting in WW I. Many of the British royalty changed their names during this time to hide their German heritage (Mountbatten's real family name is Battenberg). ... Hitler did not want to fight Britain and regarded them as "Aryans." He ended up doing so because of Britain's pledges to Poland. The two nations have historically been allies rather than enemies and given that we seem to be returning in some ways to old rivalries, it stands to reason that Britain and Germany would most likely be allied against France if they ever came to blows."

I'm not taking sides on this question until more facts emerge except to say, as I've mentioned once or twice in the past, that when I spent quite a bit of time in Europe in the 1970s, it was perfectly clear even then that the Germans liked Americans and the French hated Americans.

This seems a good time to mention that comments and questions and e-mail messages are welcome. (If you prefer, you can also post a message in the Objections to Generational Dynamics thread of the Fourth Turning forum.) So far I've been able to keep up with answering all of them, although when the load is too heavy it sometimes takes me a week or two. I know from the web logs that I have 1,000-2,000 regular readers out there. I don't know who you are, but I'm always happy to hear from you, if you don't mind the fact it may take me a day or a few days to answer.

(4-Jul-06) Permanent Link
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The European Union is "extremely concerned" about Mideast tensions

But guess what the EU politicians express "particular concern" about!

On Monday, the European Union issued a statement expressing extreme concern about the situation in the Mideast -- as well they might, inasmuch as the level of confrontation and hostility gets measurably worse every day, and the region appears to be speeding to war in the near future.

But what was the EU's greatest concern?

Was it the fate of the Israeli soldier abducted by Palestinian militants?

Was it the fate of the Gaza people, living without electricity, with little money or food?

Was it the fate of the West Bank Israeli settler who was killed by militants?

Was it the fate of the Gaza civilian, killed on Monday by an Israeli airstrike?

Those were all areas of concern, but none of them was the area of greatest concern.

What was the area of greatest concern?

The EU politicians expressed "particular concern" about Hamas politicians in the West Bank that the Israelis had detained.

I guess EU politicians are just like everyone else -- they really don't care about anyone but "their own kind." (3-Jul-06) Permanent Link
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Politicians commemorate Battle of the Somme, July 1, 1916

"Lions led by donkeys," as the British army were slaughtered like cattle is how people started portraying World War I in the months following the slaughter of over a million British soldiers, 20,000 in one day alone, July 1, 1916, the Battle of the Somme.

On Saturday, hundreds of English, French, Germans, Canadians, and people from other nations memorialized the massive deaths in the battle that triggered and reinforced anti-war movements in both Britain and Germany.

British soldiers in trenches at Battle of the Somme
British soldiers in trenches at Battle of the Somme

The British Generals botched the situation badly, so badly that by the 1920s, many veterans were describing the entire war a "Lions led by Donkeys."

By 1916, the War had been going on for two years, and the British politicians were demanding a quick victory to end the war against the Germans. But they made obvious preparations for the battle the entire week before, thus telegraphing their intentions to the Germans. The Germans were prepared for their overconfident assault, and slaughtered them.

The anti-war movement (World War I)

Antiwar writings began appearing in both countries. In England in 1917, Wilfred Owen, a 24-year-old soldier, wrote "Anthem for Doomed Youth":

Ironically, Owen died in 1918 in the same week that WW I ended.

The war was botched on the German side as well. They were pulled into the war unwillingly, because of a defense treaty with Austria. Then they hoped to overrun France quickly, as they'd done in the 1869 in the Franco-Prussian war, and in August 1914, Germany planned a quick, total victory over France, requiring only six weeks -- too quick for the British troops to be deployed to stop the advance into France. The plan went fantastically well for about two weeks -- but then the Germans sent two corps of soldiers to the eastern front to fight the Russians. Without those soldiers, Germany's rapid sweep was halted by the French long enough to give the British troops time to reinforce the French. Both the German and French sides dug themselves into static trenches.

There was even a famous "Christmas truce." During the Christmas season of 1914, the German high command shipped thousands of Christmas trees to the front lines, cutting into its ammunition shipments. This led to a widely publicized Christmas truce between the British and German troops, where soldiers and officers on both sides all got together and sang Christmas carols.

By 1918, the German people were sick of the war, and when the Americans joined the war, that was the last straw for the German people, who forced their country's leaders to capitulate.

After the war, the young German soldier Erich Maria Remarque wrote Im Westen Nichts Neues (All Quiet on the Western Front), depicting the heroic soldiers as becoming a "lost generation," following a completely pointless war.

Today there are few people, even among historians (as I've discovered), who have any idea what the Great War (WW I) was about. Most people seem to believe that WW I was the same as WW II -- some pre-Hitler Hitler-type decided to invade France and started a world war.

But the botched prosecution of WW I in Western Europe is one of the signs that it was quite different from WW II.

It was principally an East European war, leading to genocide in the Balkans, the Bolshevik Revolution, and the destruction of the Ottoman (Muslim) Empire.

In Western Europe, World War I was a non-crisis war (in the sense defined by Generational Dynamics), for both England and Germany -- and for America as well.

That's why it's wrong to compare World War I to World War II for America or Western Europe. The correct comparison is World War I and the Vietnam War, both non-crisis wars for America. In both cases there was huge political opposition to the war, and although the soldiers fought bravely, the prosecution of the war was sloppy and faulty.

World War I and the Iraq War

If you google the phrase, "lions led by donkeys," you'll get mostly two kinds of results:

This comparison of the Iraq war to WW I makes as little sense as comparing it to the Vietnam War. I discussed this at length in "Why aren't college students protesting against the Iraq war?"

Wilfred Owen and Erich Maria Remarque were young men, both soldiers who fought in the war. Today's anti-war protesters are old folks like John Kerry and Cindy Sheehan -- the same old folks who, as young folks 30-40 years ago, had protested against the Vietnam war.

Today's young folks are not anti-war protesters. They care about their parents and their country. They will be the next "Greatest Generation."

Infant Mortality and Dying as cattle

"What passing-bells for these who die as cattle?" was the line by Wilfred Owen that we quoted above.

Why did so many people die in both World War I and World War II?

For centuries prior to the 1900s, the death rate for major wars was something like 80 per 100,000 population. But in World War I, the death rate suddenly jumped to 300 per 100,000 population, and in World War II it was 700 per 100,000.

In other words, after centuries of fairly constant death rates, the death rate jumped by a factor of almost 10 in the 1900s.

Why did that happen? Why did so many more people die in the 1900s than in earlier centuries?

You might guess that it was due to new technologies, and indeed that's the reason that Prince Charles gave at Saturday's commemoration of the Battle of the Somme:

"For the first time in our history, we put mere boys into an assault against the bomb, bullets and the terrible wire entanglements, equipped with little more than raw courage," the prince said. "It is impossible not to be overwhelmed by a mix of deep emotion, humiliation and awe, sadness and pride."

But there had been new technologies in earlier centuries as well, with no great effect on the number of war dead. The "bomb, bullets and terrible wire entanglements" might have had some increase in war dead, but doesn't explain a factor of four or five.

It turns out that a more relevant question is this: Where did all those soldiers come from?

The stories of the Battle of the Somme are horrifying -- fields packed with dead bodies, soldiers forced to walk over those dead bodies for the next assault on the enemy.

Well, where did all those soldiers come from, all of a sudden?

Estimated infant mortality rates - 1870-1999 - in Chicago
Estimated infant mortality rates - 1870-1999 - in Chicago

The answer is dramatic. It took me a long time to connect the dots on this issue, but the short answer is provided by looking at the adjacent graph.

Prior to 1870, some 30% of all infants died before their first birthday. (By age 5, the figure was about 50%.)

But infant and child mortality fell dramatically in the 1890s, and again in the 1920s, as you can see from the graph. This fall in infant mortality meant that a lot more infants lived long enough to become soldiers. That's why there were so many more soldiers in WW I, and then again in WW II. And that's why there were so many more soldiers to be killed.

The Clash of civilizations

I've mentioned many times in this web log that the median age in the Gaza Strip is 15.6. Gaza is also one of the most densely populated regions in the world.

And although Gaza is not the subject of this particular essay, it's worth pointing out that the latest conflict with Israel has left many parts of Gaza as a large prison with no electricity or running water, and little money. Gasoline and food are running out. No matter how justified the Israeli missile strikes are, they're leaving behind this large, crowded, young population of virile and increasingly angry young men with increasingly deprived angry young girlfriends and wives. The situation in the Mideast gets measurably worse each and every day, and these young men will soon lead the Palestinians into a war against Israel, and this war will end up engulfing the region.

The population situation in Gaza might have come about anyway, but it was certainly helped by the advances in medicine that have reduced the level of infant mortality still further since 1950.

And Gaza is not unique. There are highly densely populated regions around the world, as women give birth to more and more babies, and these babies survive into young adulthood, where they might have died in infancy in the past.

There's no longer enough farmland for these huge masses of people, and so more and more people are crowding into densely populated rural areas. This year, for the first time in history, there are more people on earth living in cities than in rural areas.

This has been made possible by the rise of huge, densely packed "mega-cities" around the world.

According to the book Planet of Slums, by Miles Davis, in 1950 there were 86 cities in the world with a population of more than one million; today there are 400.

Large cities breed (in both senses) even larger cities. Today, there are six cities -- Mexico City, Seoul-Injon, New York, São Paulo, Mumbai (Bombay), and Delhi -- with populations around 20 million.

These are not cities of people living in glamorous apartments; they're often people living in slums. If you live in a home with a back yard, you can at least grow some crops of your own to survive if necessary. But in a crowded city, that's impossible, and an economic recession that hits the entire region can cause the starvation of tens or hundreds of thousands of people.

Manila is a city of 14.3 million. Here's how Amy Chua, in her book World on Fire (pp. 3-4), describes life in Manila:

"In the Philippines, millions of Filipinos work for Chinese; almost no Chinese work for Filipinos. The Chinese dominate industry and commerce at every level of society. Global markets intensify this dominance: When foreign investors do business in the Philippines, they deal almost exclusively with Chinese. Apart from a handful of corrupt politicians and a few aristocratic Spanish mestizo families, all of the Philippines' billionaires are of Chinese descent. By contrast, all menial jobs in the Philippines are filled by Filipinos. All peasants are Filipinos. All domestic servants and squatters are Filipinos. in Manila, thousands of ethnic Filipinos used to live on or around the Payatas garbage dump: a twelve-block-wide mountain of fermenting refuse known as the Promised Land. By scavenging through rotting food and dead animal carcasses, the squatters were able to eke out a living. In July 2000, as a result of accumulating methane gas, the garbage mountain imploded and collapsed, killing something over a hundred people, including many young children."

This is not a rare situation, but a situation that's occurring around the world.

And it's a situation that's come about for a number of reasons, but one of the major reasons is a reduction in infant and child mortality.

The last 20 years have been a time of exceptional worldwide prosperity, especially during the last ten years, thanks to the various bubbles -- the stock market bubble, the real estate bubble, the credit bubble, and so forth.

But if there's a worldwide recession -- and there must be sooner or later, and probably sooner -- then poverty levels around the world will increase quickly, and suddenly tens or hundreds of millions of men will no longer be able to feed themselves or their families.

And when a young man can no longer afford to feed himself or his family, then he has little reason not to go to war. These young men will go to war against those whom they perceive to be wealthy oppressors -- whether it's the Palestinians against Israel, Mexican immigrants against American Anglos, North Koreans against South Koreans, or Chinese peasants against wealthy, corrupt government officials.

The United Nations has many conflicting goals, and two of the most prominent are: Reduce poverty and starvation around the world; and reduce infant mortality around the world.

Unfortunately, reducing infant mortality increases the population so much that there's not enough food to feed them, and so the reduction of poverty and starvation become an unrealistic goal.

It would be nice if it were possible for human beings to create a "paradise on earth," where everyone was healthy and everyone was well fed. But that's impossible, because you always run out of food, and then there has to be war.

We're approaching the Clash of Civilizations world war, at a time when infant mortality has fallen far, leading to masses of people, packed by the millions into large megacities, in a fragile world where any economic dislocation can cause mass starvation, creating huge pools of young men ready for war.

So the Battle of the Somme, and the slaughter of masses of "these who die as cattle" still has a lot to teach us today.

The earth currently has about 6.5 billion people. If we want to have the same amount of food per person as we had in 1950, then the Clash of Civilizations world war will have to reduce the population to about 4 billion, meaning that 2.5 billion people will have to die. And with the world getting more and more crowded each day, that world war cannot be too far off. (2-Jul-06) Permanent Link
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