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


Web Log - February, 2011


28-Feb-11 News -- Peripheral stock markets continue to plunge, pressuring the center

Turkish businessmen experience xenophobia in Morocco

Peripheral stock markets continue to plunge, pressuring the center

In the wake of the turmoil in the Mideast, stock prices in peripheral stock markets have continued to plunge, often by several percentage points in a day.

Recent stock market plunges
Recent stock market plunges

The Cairo stock exchange, which has been shut down for over a month, is going to reopen on Tuesday, according to Bloomberg.

There's one paragraph in this news story that I found amusing:

"The regulator announced a list of rules on Feb. 19 aimed at managing a possible selloff when trading resumes, including putting in place a 10 percent circuit breaker on the daily price movement of shares, reducing trading hours by one to three, and banning margin trading."

The reason that this is amusing is because officials at the Dhaka (Bangladesh) stock exchange did all the same steps when that market started crashing. The circuit breaker did no good, because the index crashed through the circuit breaker within five minutes of opening. Dhaka had banned margin trading (buying stocks on credit), but then decided to permit and even expand margin trading, in the hopes that investors would borrow a lot of money and pour it into stock purchases. It didn't work though, and the Dhaka stock exchange kept crashing, 6% on Sunday alone.

Saudi Arabia is a relatively recent member of the stock crash club, triggered by the protests in Libya, Yemen and Bahrain. The market fell 5.2% on Sunday, according to Bloomberg. The article points out that protests are also growing in next-door neighbor Oman, where stock market index has fallen to its lowest level in months.

"Higgenbotham," a contributor to the Generational Dynamics forum, described the situation as follows:

"It's because of all the various things we are seeing that indicate the periphery is once again beginning to collapse. This would be the same type of thing I wrote about in this forum on April 26, 2010 but instead of involving just Greece it involves many more areas on the periphery and it is spreading very quickly and unpredictably (small countries, states, local governments, and individuals). In order to keep the center of the system afloat, resources are being sucked from the periphery of the world into the center. As the periphery collapses, the center can't hold either because it runs out of resources to suck in. However, with the heavy government involvement in the markets, it's a lot harder to read the situation. It's like trying to monitor a backyard pond that had fish in it and now there is a whale in it."

This is a very profound description of what's going on. As I've been describing for years, each day there's less money in the world than there was the day before.

In 2007, the Bank of International Settlements was reporting that there were over one quadrillion dollars nominal value (that's quadrillion with a "Q") of synthetic credit derivatives in portfolios around the world. That figure included about $60 trillion in credit default swaps, and about $500 trillion in interest rate swaps.

These synthetic securities are not often thought of as "money," but they were at the heart of the credit bubble, since they were used as collateral or in trade for purchases of stock and other assets. During the credit bubble, these were the reason that there was more money in the world each day than there was the day before.

That's when the credit crunch began, and the "deleveraging" process began in financial institutions around the world. Today, the above figures have been approximately cut in half, meaning that there's about $500 trillion less in the world today.

And that's only part of it. The latest S&P/Case-Shiller release indicates that home prices fell 1% from November to December of last year, and Shiller is predicting another 15-20% fall in home prices, according to the Wall Street Journal (Access). So, the collapse of the housing bubble has already removed some $10 trillion in value in the U.S. alone, and there may be another $5-10 trillion or so lost.

When you hear someone on CNBC whine because so many investment firms are "keeping money on the sidelines," it's because the people in those firms are viscerally aware that they'd better hold on to what they have, while they still have it.

So, when all that money poured out of Washington in the form of quantitative easing, that money wasn't spent on factories, as politicians fantasized; it was redirected into the Wall Street Ponzi scheme, and into bubbles in various peripheral countries. And now, as Higgenbotham points out, that money is being sucked back out of the periphery into the center -- to London, Frankfurt and Wall Street.

In the diagram above, I included a graph of Portugal's 10-year bond yield (interest rate), which has now reached 7.54% and continues to grow steadily. It continues to follow the same path as Greece and Ireland, and the same is happening in other euroland countries as well, indicating that the Europeans are unable to suck money back in fast enough to keep yields down. This is at a time when Euro Intelligence reports that Germany's "academic establishment and business community are in open revolt against Angela Merkel's policy to bolster the European rescue [bailout] mechanism." The Germans, you'll recall, were absolutely furious at having to give their hard-saved euros to the profligate Greeks, and they're not going to be supportive of bailouts for Portugal or any other Club Med countries.

Meanwhile, back here in America, state budgets are crashing, as anyone who turns on a TV these days can see. Thanks to the Republican victory last November, Washington is as much in open revolt against bailouts as the Germans are.

It's just as well. Bailouts wouldn't do any good for long. Just as setting circuit breakers in Dhaka was a total failure, just as quantitative easing was a total failure, bailouts of states would also be a total failure. There's less and less money in the world every day, so there's less and less money to go around for bailouts. There's a massive deflationary spiral in progess that nothing can stop.

Here are some excerpts from an interview of Michael Lewis, author of "The Big Short", by CNN's Fareed Zakaria on Sunday:

"LEWIS: So there is - very clear that there's reckoning in the future, exactly what form it takes is less clear. I mean, it is incredible where we sit right now. If you told me in - in early 2009 that all of these big Wall Street firms would be back even bigger and paying big bonuses and essentially socialized, and then their loss is socialized but the gains privatized and that the American people would put up with it? That's the incredible thing is that there isn't a social revolution. ...

That's right. And the question I have is what happens if the United States Treasury ceases to be a credible backstop? What happens when marketers say we don't really want to lend to the United States anymore? Then you have - then you get the depression. They you get - then you get a much, much bigger problem. ...

Lewis makes two important points.

One is that we're headed for a depression -- something that few in Washington or New York want to admit.

Second, he points out that the bankers are back committing the same kind of fraud that they did in the credit bubble years.

This is something that can't be repeated often enough: The same people who caused the last crisis are still in the same jobs, committing the same kind of fraud again, and are causing a new crisis.

The credit crisis was caused by generational fraud committed in practically every financial and real estate firm in the world. The nihilistic Generation-Xers, beset by hatred and contempt for Boomers and Silents, created synthetic securities (mortgage-backed and others) that they knew were fraudulent, and sold them to investors around the world, making huge amounts of money. Their Boomer bosses, who were totally incompetent at anything except arguing with their parents and each other, just went along with the fraud because they were making huge amounts of money as well.

It was just a few years ago when I was ridiculed for the above characterizations, but today few people who would doubt them. In fact, a new article in Rolling Stone by Mike Taibbi called "Why Isn't Wall Street in Jail?" is a compendium of crimes by people who are still in their jobs, committing new crimes.

I see this all the time when I watch CNBC or Bloomberg TV. As I recently reported, financial executives come on and openly lie about stock valuations. It astounds me these crooks can openly commit new crimes right in front of our eyes, though it's no more astonishing than the crimes we see committed every day in Washington.

Here's a coincidence. As I'm typing this, the movie "Inside Job," about the financial crisis, has just won the Oscar for best documentary, and the producer Charles Ferguson says, "Forgive me, I must start by pointing out that three years after a horrific financial crisis caused by massive fraud, not a single financial executive has gone to jail, and that's wrong."

I write about the financial crisis all the time, as well as geopolitical crises around the world, and I just can't believe how fucked up the world is. I have to keep asking myself whether I'm crazy or the world's crazy, and it depresses me that it's the world that's crazy. As I write my web log every day, I feel like I'm watching an awful movie and they've locked the theatre doors and won't let me out.

I'll close by repeating my favorite quotation from Friedrich Nietzsche: "Insanity in individuals is something rare - but in groups, parties, nations and epochs, it is the rule."

Additional notes

Turkish businessmen are experiencing increasing anti-Turkish xenophobia in Morocco, a country where previously they've been welcomed. The result is that many Turks are fleeing the country, and they fear that some spark could launch widespread violence. Hurriyet (Istanbul)

There's a growing political crisis in India over claims that food prices are surging, while food is rotting in storage. Business Standard

The internet call by China's netizens to stage their own "Jasmine Protests" is apparently panicking Chinese Communist Party officials, who acted like thugs during Sunday's attempted rallies. Foreign reporters were singled out and assaulted. BBC

A number of iPhone and iPad scams are targeting kids. The scam is illustrated by the Smurf's Village app. The app is free, but it's made the vendor huge amounts of money. How? Because kids who play the app have to spend $10-100 of real money each time they want to buy some Smurf Berries to play in the game. This kind of crap infuriates me, but it fits well today because the main article is about the financial crisis. Pad Gadget

Ten things Americans waste the most money on. 24/7 Wall Street

(Comments: For reader comments, questions and discussion, see the 28-Feb-11 News -- Peripheral stock markets continue to plunge, pressuring the center thread of the Generational Dynamics forum. Comments may be posted anonymously.) (28-Feb-2011) Permanent Link
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27-Feb-11 News -- China cracks down ahead of planned 'Jasmine' protests on Sunday

US Ambassador to China Jon Meade Huntsman Jr. becomes involved in Beijing rallies

China cracks down ahead of planned 'Jasmine' protests on Sunday

China's authorities have blocked access to the internet search term "John Huntsman," after word had spread that Huntsman, the US Ambassador to China, was present at a pro-democracy rally in Beijing last Sunday according to Reuters.

Last Sunday's rally was the first of what is supposed to be a series of weekly multi-city rallies, to be held each Sunday, if the wishes of anonymous Chinese activists are to be followed. The call for a "Jasmine Revolution," named after the series of Mideast revolutions that began last month with Tunisia's Jasmine Revolution.

In fact, last Sunday's rallies were poorly attended, but that fact hasn't stopped Chinese authorities from cracking down hard, according to the LA Times, by arresting human rights activists, by imposing greater internet censorship, and by harassing foreign journalists.

The involvement of US Ambassador Jon Meade Huntsman Jr. is generating some internet discussion, since it is not know whether Huntsman "just happened" to be in the area at the time of the rally, or whether he attended on purpose. President Obama appointed Huntsman as ambassador to China, based on his experience as a politician and diplomat, including a great deal of Asian experience. However, Huntsman is also a moderate Republican, who may be planning to run for President in 2012. Huntsman may not be ambassador much longer.

Additional links

The UN Security Council voted unanimously on Saturday night to impose sanctions on Libya, and called for an international war crimes investigations. Even Russia and China voted for the sanctions, and it's though that they did that because Libya's own UN Ambassador, a personal friend of Muammar Gaddafi, expressed outrage at the violence against Libya's people, and begged the Security Council to impose the sanctions. NY Times

North Korea is threatening to fire artillery at South Korean border towns and destroy them, in retaliation for sending hundreds of thousands of balloons with propagand leaflets from the South into the North. The South Koreans began the propaganda campaign after the North Korean shelling of Yeonpyeong Island in December, killing several South Koreans, with the result that positions have substantially hardened on both sides. Associated Press

An international crisis was averted when China reversed its decision to forbid the display of 3,500 year old mummies Xinjiang province at a University of Pennsylvania museum. The exhibition had been planned for months, but suddenly China withdrew permission to display the mummies. The reason was apparently that the mummies displayed Caucasoid (non-Chinese) characteristics, and thus they would provide support for the claim of Muslim Uighurs nationalists that their Turkic ancestors had been the first to settle the region, rather than the Han Chinese. High level discussions took place between US and Chinese officials, and nine days later the Chinese relented and gave permission for the mummies to be displayed. Yale Global

A growing wave of violence sweeping through Russia's Kabardino-Balkaria (KBR) province in the North Caucasus has raised further doubts about the stability of the whole region, and brings into question whether the 2014 Olympics can be held in Sochi. Paul Goble

Pickpocketing in America was once a proud criminal tradition, but it's dying out in favor of more violent crimes. Slate

(Comments: For reader comments, questions and discussion, see the 27-Feb-11 News -- China cracks down ahead of planned 'Jasmine' protests on Sunday thread of the Generational Dynamics forum. Comments may be posted anonymously.) (27-Feb-2011) Permanent Link
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26-Feb-11 News -- Gaddafi's bloody fanaticism makes US/Nato military action increasingly likely

Growing Palestinian population is destabilizing Jordan

Gaddafi's bloody fanaticism makes US/Nato military action increasingly likely

Muammar Gaddafi on Friday
Muammar Gaddafi on Friday

Libyan leader Muammar Gaddafi continued his defiant rhetoric on Friday, saying that he would "crush any enemy," according to Reuters. He spoke to thousands of supporters in Tripoli's Green Square, and threatened to open his military arsenals and make weapons available to his supporters and tribesmen. He shouted and waved his fists. "Get ready to fight for Libya, get ready to fight for dignity, get ready to fight for petroleum! We can crush any enemy. We can crush it with the people's will."

Many observers now fear that, unlike the leaders in Tunisia and Egypt, Libyan leader Muammar Gaddafi will refuse to step down, and will fight to the death -- his own death, and the deaths of many Libyans.

As this opinion becomes more commonly held, and as the grisly violence on the streets creates a potential humanitarian crisis, there is increasing international pressure for military action to prevent further genocide. Even if Gaddafi does step down, there is a danger that Libya will collapse into tribal civil war, and this would probably be an even worse scenario.

Libya, showing the three historic divisions: Tripolitania, Fezzan and Cyrenaica
Libya, showing the three historic divisions: Tripolitania, Fezzan and Cyrenaica

If the United States intervened militarily, it would almost certainly be done through Nato, according to CNN. Initially, the only military action being considered is enforcement of a no-fly zone, to try to keep the Libyan air force from attacking protesters.

The U.N. Security Council is also considering possible sanctions, including an arms embargo, travel bans and freezing top officials' assets, and threatened the Libyan leadership with indictments for crimes against humanity.

Indeed, Debka is reporting that hundreds of US, British and French military advisers have already arrived in Cyrenaica to help organize the eastern tribes into a functioning government. If true, this force would also try to prevent a spillover of a civil war into Egypt.

Friday's riots and demonstrations weren't limited to just Libya. Hundreds of thousands of Arabs in countries across the Mideast poured out of mosques after midday prayers on Friday, according to Associated Press.

So what we see are two very dangerous major trends going on.

The first trend is increasing unrest and volatility in one country after another in the Mideast.

This is particularly critical in Yemen, the headquarters of Al-Qaeda on the Arabian Peninsula (AQAP), the terrorist organization that has replaced the Pakistan al-Qaeda as the most dangerous international terror organization. With Houthi rebels fighting in the north, and AQAP and secessionists fighting in the south, Yemen's government in Sanaa has almost lost control of the country.

The second dangerous trend is economic collapse in the region.

The original riots in Tunisia and Egypt were triggered by food riots, as international food prices reached historic highs. Since then, the economies of Tunisia, Libya and Egypt have been devastated, with knock-on effects in the Palestinian territories and Jordan. And a cutoff of Libyan oil could create knock-on effects around the world.

Now, add to that mix a new military front for American and Nato forces to add the big existing commitments in Iraq and Afghanistan. If American and Nato forces truly are being injected into Libya, then it won't be long for the Arab world to turn against those actions, irrespective of what Arab leaders may be saying today.

Generational Dynamics predicts that the Mideast is headed for a major new regional war with 100% certainty, re-fighting the genocidal war between Arabs and Jews that followed the partitioning of Palestine and the creation of the state of Israel in 1948.

World leaders are going to be rushing to do anything possible to stabilize the current unrest in the Mideast. However, it's hard for me, at least, to see how they're going to stop the two dangerous trends that I've described. If they can't, then the situation could spiral into a regional war this year.

Additional links

King Abdullah II of Jordan is facing another dangerous trend: the tribal structure is being stressed by the country's large and growing population of Palestinians. Officially, 49% of the population of Jordan is Palestinian, many believe that the figure has reached 60% and is growing. LA Times

The countries of the former Soviet Union, from Kyrgyzstan to Azerbaijan, have boosted their arms spending six times faster than their economies are growing, making very likely a renewal of conflicts in both the South Caucasus and Central Asia regions. Paul Goble

As mutual xenophobia between ethnic Russians and North Caucasus Muslims increases and leads to spurts of violence, the leadership of the Russian Orthodox Church is pushing the idea of a new term, "ethnic Orthodox," to combine nationality and religion. Paul Goble

"It looks this week as though the spirit of revolution has hit Germany, where first the Bundestag and the Bundesbank, and now the country's academic establishment and business community are in open revolt against Angela Merkel's policy to bolster the European rescue / bailout mechanism. This is a very serious situation in our view, on the verge of getting out of control. The conservative establishment is in open rebellion against a weak government about to face a string of electoral defeats. German business associations are also coming out in protest against an increase in the rescue umbrella." Euro Intelligence

(Comments: For reader comments, questions and discussion, see the 26-Feb-11 News -- Gaddafi's bloody fanaticism makes US/Nato military action increasingly likely thread of the Generational Dynamics forum. Comments may be posted anonymously.) (26-Feb-2011) Permanent Link
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25-Feb-11 News -- Libya's Muammar Gaddafi uses the 'Nescafé defense'

Stock market margin debt highest since 2008 financial crisis

Libya's Muammar Gaddafi uses the 'Nescafé defense'

In a telephone interview on Thursday, Libyan leader Muammar Gaddafi described the protesters, according to Reuters:

"Their ages are 17. They give them pills at night, they put hallucinatory pills in their drinks, their milk, their coffee, their Nescafe.

They are criminals ... is it logical that you let this phenomenon continue in any city? ... We do not see what is happening in Egypt and Tunisia happening in Libya, ever!

Those (in Egypt and Tunisia) are people needing their governments and they have demands; our power is in the hands of the people. ...

What is happening [violent clashes] in Zawiyah is a farce ... Sane men don't enter such a farce.

You people of Zawiyah, stop your children, take their weapons, bring them away from Bin Laden, the pills will kill them. Leave the country calm."

This is a very interesting generational exhortation. This might have worked 20 years ago, when the parents' generation was the same as his generation. But today, the parents' generation are much younger, and probably have the same contempt for Gaddafi that the young protesters have.

Additional links

Europeans fear a 'Biblical exodus' of hundreds of thousands of illegal immigrants fleeing to Europe, if the situation in Libya deteriorates further. Spiegel

Stock market margin debt has surged 4.7% in January, climbing to the highest level since the financial crisis in 2008. This means that investors are borrowing more and more money to invest in the stock market. This is what happened in 1929, and what happened in 2007. Nasdaq/DJ

According to poll results, most Palestinians in the West Bank and Gaza are planning to participate in the elections planned for July and September, and 75% want a change in leadership. 37% said that they "trusted Fatah," 9% said they trusted Hamas, and 36% said that they didn't trust any faction. Palestine News Network

China's leadership is getting increasingly concerned that they're losing control over the internet, and they fear that use of the internet will trigger a major rebellion. Bahukutumbi Raman.

Tens of thousands of trade unionists demonstrated in Delhi on Wednesday, protesting high food prices in India. Independent (London)

For super-geeks: If you enjoyed watching IBM's Watson supercomputer win at Jeopardy! last week (see "19-Feb-11 News -- IBM's Watson supercomputer bests human champions on Jeopardy!"), then here's how to build your own "Watson Jr." in your basement. IBM Developer Works

(Comments: For reader comments, questions and discussion, see the 25-Feb-11 News -- Libya's Muammar Gaddafi uses the 'Nescafé defense' thread of the Generational Dynamics forum. Comments may be posted anonymously.) (25-Feb-2011) Permanent Link
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24-Feb-11 News -- Clashes in Jos, Nigeria, pit Christians against Muslims

Iran's Ahmadinejad tells Arab leaders to respect protesters

Clashes in Jos, Nigeria, pit Christians against Muslims

Nigeria, showing major historic tribes.  Northern tribes (Fulani, Hausa) are generally Muslim, southern tribes (Yoruba, Igbo, Berom) are generally Christian.
Nigeria, showing major historic tribes. Northern tribes (Fulani, Hausa) are generally Muslim, southern tribes (Yoruba, Igbo, Berom) are generally Christian.

On Tuesday, attackers armed with rifles killed 18 people in a village just outside of Jos, in central Nigeria. The attackers are believed to be members of the mostly Muslim Fulani ethnic group, according to Reuters.

This is presumably revenge for attacks by Christian gangs last month. According to Reuters, Christian youth gangs from the Berom ethnic group set up illegal roadblocks around Jos, stopping vehicles, and pulling out and killing people believed to be Muslims.

Violence and atrocities between Muslims and Christians are a frequent occurrence in Jos, where at least 200 people have been killed since the beginning of December.

Jos is in the middle of Nigeria, right on the fault line between Muslims who live in the north and Christians who live in the south.

The northern part of Nigeria is mostly Muslim, because of centuries of migration from the Maghreb, the region in northern Africa that was conquered by Arab Muslims in the centuries following the death of Mohammed.

The southern part of Nigeria, especially around the Port Harcourt area, is predominantly Christian, following centuries of colonization by the Europeans, taking advantage of opportunities for mining and the slave trade. Over time, many of the southern tribes were converted to Christianity.

In the middle of Nigeria is the city of Jos, heavily populated by both Muslims and Christians. There have been a number of secular confrontations in Jos over time, so the current clashes are nothing new.

A farm owner in Jos writes the following in the blog for the Niger Delta Working Group:

"The situation is actually more frightening than open fighting because every day there are silent killings of individuals, mainly youth, who go into areas of the other faith. Muslim okada riders are killed in Christian areas, and Christian youth (also mainly on motorcycles) are killed in Muslim areas. This happens both at night and during day times. There is incredible bitterness on both sides. A lot of the killing is done between youth who actually know each other and were previously friends before the crisis intervened. Everyone is afraid to move freely around the town, and most people stay in their immediate environment where they have a sense of some security.

Jos town is traumatised and divided. Life in the town has been completely disrupted. Public transportation is very difficult, as Muslim drivers won't go into Christian areas and vice versa. The same for Okada riders. People try to find out the religion of the motorcyclist before engaging them for a journey for fear of being kidnapped and killed."

This is an example of the enormous level of mutual xenophobia that can develop between two ethnic or religious groups.

You might think that Nigeria is very close to civil war, and many people do think so, but Generational Dynamics tells us that Nigeria is actually very far from a civil war. (See "Basics of Generational Dynamics.")

Nigeria's last generational crisis war as the Nigerian civil war, or Biafran war, fought from 1967-69 between Muslims and Christians. The survivors of that extremely violent, bloody, genocidal war never want to see anything like it happen again. 40 years have now passed. The young post-war children are the Christian and Muslim gangs that are going out killing each other in gang fights. But as long as their parents are around, the gang fights will not take the next step into full scale civil war.

Additional links

The laugh of the day is from Iran's president Mahmoud Ahmadinejad. He condemned the brutal violence going on in Libya, and said, "How can a leader subject his own people to a shower of machine-guns, tanks and bombs? How can a leader bomb his own people, and afterwards say 'I will kill anyone who says anything?'. I seriously want -- from all heads of states -- to pay attention to their people and cooperate, to sit down and talk, and listen to their words. Why do they act so badly that their people need to apply pressure for reforms?" It's too bad that Ahmadinejad won't take his own advice and listen to Iran's people, instead of committing atrocities against them. Reuters

If Muammar Gaddafi is forced to flee Libya, and wonders who will take him in, one country that would have to take him in and provide refuge is Israel. Israel Today

Russia plans to evacuate hundreds of engineers working on investment projects in Libya, but it's not yet known how it will be able to execute the evacuations. Moscow Times

Bahrain is an island nation with only 500,000 citizens, so it's astonishing that more than 100,000 demonstrators packed Pearl Square in Manama, the capital city. NY Times

Tens of thousands of trade unionists in India, linked both with the opposition Communist Party and with the governing Congress Party, marched through Delhi on Tuesday, protesting high food prices. AP

According to a new study, the principal blame for the collapse of the Catholic mission to the Inca Empire in 16-17th century Peru goes to the policy of the Church itself, rather than to failings of the missionaries. Eurasia Review

It's been almost a year since Greece was bailed out by the European Union, and there is still plenty of discontent over the austerity measures that the government was forced to impose. On Wednesday, tens of thousands of union members attended a rally in Athens to protest the austerity measures. Violent clashes broke out. Some 15 policemen were injured, and nine suspected rioters were arrested, including a man who was allegedly armed with a longbow, arrows and an axe, police said. AP

I wrote last year about "The rise of left-wing violence around the world." No violence has yet occurred in the bitter union battle going on in Wisconsin but one Massachusetts Democratic party leader appears to be advocating violence. Rep. Michael Capuano is quoted as saying, "I’m proud to be here with people who understand that it’s more than just sending an email to get you going. Every once and awhile you need to get out on the streets and get a little bloody when necessary." The Hill

(Comments: For reader comments, questions and discussion, see the 24-Feb-11 News -- Clashes in Jos, Nigeria, pit Christians against Muslims thread of the Generational Dynamics forum. Comments may be posted anonymously.) (24-Feb-2011) Permanent Link
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23-Feb-11 News -- Libya's Muammar Gaddafi gives a psychopathic speech to his people

Germany's Merkel calls the speech 'very, very frightening'

Libya's Muammar Gaddafi gives a psychopathic speech to his people

It's fashionable these days for anyone to compare his political enemies to Hitler. But as I watched Libya's Muammar Gaddafi give his 75 minute speech on Tuesday on Al-Jazeera, all I could think was that Hitler had been resurrected. Gaddafi is truly a psychopath, and feels no guilt for the atrocities that he's launched against his own people.

Muammar Gaddafi on Tuesday
Muammar Gaddafi on Tuesday

I assume that comparison also crossed the mind of German Chancellor Angela Merkel, whom Reuters quotes as saying, "The news we've had from Libya yesterday and today is worrying and the speech by Colonel Gaddafi this afternoon was very, very frightening, especially because he virtually declared war on his own people."

Gaddafi spent half an hour bragging about his exploits. He had created Libya. He had fought in this battle or that battle. He had killed this and that enemy. He had brought safety, security and propserity to the Libyan people. So why aren't you people grateful? We are still building Libya. Why are young people burning it down? If young people don't follow me, then who will they follow? Someone with a beard?

He blamed the media, he blamed the Islamists. He said that he would never surrender. He said that drugged young people are acting against the constitution, threatening the military, threatening the country -- when they're caught, they will be begging for mercy, "and we will not be merciful." He said that he's leader of the revolution, and he'll always be leader of the revolution, and he'll die a martyr.

He was very bitter about the sycophants who used to kiss his hand, but have now turned against him. He was bitter and threatening.

Libya, showing the three historic divisions: Tripolitania, Fezzan and Cyrenaica
Libya, showing the three historic divisions: Tripolitania, Fezzan and Cyrenaica

Here are some more quotes from the Al-Jazeera live blog.

"Muammar Gaddafi is not the president, he is the leader of the revolution. He has nothing to lose. Revolution means sacrifice until the very end of your life

We challenge America with its mighty power, we challenge even the superpower

Muammar Gaddafi is not a normal person that you can poison.. or lead a revolution against

I will fight until the last drop of blood with the people behind me

I haven't even started giving the orders to use bullets - any use of force against authority of state will be sentenced to death

They are just imitating Egypt and Tunisia

Protesters want to turn Libya into an Islamic state

If you love Muammar Gaddafi you will go out and secure Libya's streets"

Here's one more quote from the speech, where he referred to the 1989 Tiananmen Square massacre by the Chinese: "People in front of tanks were crushed. The unity of China was more important than those people in Tiananmen Square. ... When Tiananmen Square happened, tanks were sent in to deal with them. It's not a joke. I will do whatever it takes to make sure part of the country isn't taken away."

This is the first time, as far as I can recall, that I've ever heard anyone, even the Chinese, speak of the Tiananmen Square massacre in a positive, approving manner.

I wish I could convey in words the screaming, ranting man that I saw. This is a guy who is capable of anything, without remorse. He's already using outside mercenaries to kill protesters, since he can't count on his own police to kill their fellow Libyans. Some commentators said that they feared that he might turn to poison gas to stop the protesters. The best thing that can happen is for someone close to him to put a bullet in his head.

Besides Hitler, Gaddafi also reminds me of Saddam Hussein. When Iraq annexed Kuwait in 1990, President Bush warned him months in advance that an invasion is coming. Up until the last day, Saddam could have stopped the 1991 Iraq war by retreating from Kuwait, but he refused to do so.

During the Clinton administration, Saddam was constantly blocking the U.N. from conducting WMD inspections, with the result that the Clinton administration was bombing Iraq on almost a daily basis. This eventually led to the ground invasion of Iraq in 2003. Once again, Saddam could have stopped the invasion instantly, by fully permitting inspections.

Even when he was captured and put on trial, there were news stories indicating that he was convinced that the people would save him.

Like Gaddafi and Hitler, Saddam never felt any remorse for the atrocities that he committed.

By the way, Gaddafi's name is spelled in many different ways in different media: Gaddafi, Kadafi, Qaddafi, Khadafi, and so forth. For now, I'm using the spelling that al-Jazeera uses.

Al-Jazeera's anchors and commentators were very critical and contemptuous of the United States for not intervening militarily to stop the Libya massacre. I guess they temporarily forgot how critical and contemptuous of the United States they've been for intervening militarily in Iraq and Afghanistan.

(Comments: For reader comments, questions and discussion, see the 23-Feb-11 News -- Libya's Muammar Gaddafi gives a psychopathic speech to his people thread of the Generational Dynamics forum. Comments may be posted anonymously.) (23-Feb-2011) Permanent Link
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22-Feb-11 News -- Libya's Gaddafi shoots to kill protesters with massive firepower

Banks told to stress-test for 11% jobless rate

Libya's Gaddafi shoots to kill protesters with massive firepower

Libya, showing the three historic divisions: Tripolitania, Fezzan and Cyrenaica
Libya, showing the three historic divisions: Tripolitania, Fezzan and Cyrenaica

Two Libyan air force pilots landed their jets in the island of Malta on Monday, according to Al-Jazeera. They were defecting, after refusing to follow orders to attack civilian protesters in Benghazi.

It now appears that Gaddafi has completely lost control of the eastern portion of Libya. News reports indicate that most of the fighting has stopped.

Protesters in Tripoli aren't so lucky, however. Air force jets targeted demonstrators, and bombed entire residential neighborhoods, according to the Guardian. People are afraid of staying in their homes for fear of being bombed, and they're afraid to leave their homes, for fear of being shot by snipers or by helicopter gunships.

Estimates are that about 250 people were killed in Tripoli on Monday alone. Many hundreds more were killed in other cities during the five days of the Libyan uprising.

Libyans are reluctant to shoot and kill other Libyans, and so the snipers are apparently foreign mercenaries hired and paid by Khamis Gaddafi, another son of leader Muammar Gaddafi. International Business Times (S. Africa) reports that the exact country of origin of the mercenaries is not known, but Chad is suspected.

The Arab League has scheduled an emergency meeting for Tuesday to discuss the situation in Libya.

Additional links

Illegal immigration from North Africa has become an increasingly difficult issue for Europe. The government of Libya is now threatening to suspend its cooperation with the European Union in stopping illegal immigration if the EU continues to encourage pro-democracy protests in Libya. Reuters

In Tunisia last week, military helicopters and security forces were called in to protect brothels in the capital city of Tunis from a mob of zealots. After the Tunisian revolution, Islamists are demanding that the government abandon its liberal social policies and adopt strict Islamic law. NY Times

The Federal Reserve is requiring banks undergoing mandated "stress tests" of their survivability to conduct new stress tests, this time assuming a recession scenario in which the unemployment rate rises to 11%. Market Watch

The number of investors fearing a catastrophic stock market crash is rising. CNBC

China plans to launch a Mars-exploration space probe in November of this year. Chosun

Russia's police defused three powerful bombs found in a car in Kabardino-Balkaria, one of Russia's southern provinces (in the North Caucasus). Kabardino-Balkaria is particularly important in relation to the seaside resort of Sochi, where Russia is to host the 2014 winter Olympics. (See "30-Oct-10 News -- Caucasus terrorism / politics becomes embroiled in 2014 Olympics".) Terrorism in the North Caucasus has been increasing dramatically in the last year, despite the claims of Prime Minister Vladimir Putin that it has been brought under control. Reuters

The Japanese are still furious over the visits by Russian officials to the Kuril islands, which are held by the Russians, but claimed by the Japanese, since the Russians annexed the islands after World War II. On Saturday, Japan's chief cabinet secrety flew over the Kuril Islands, " hammering home Tokyo's unwavering attitude toward the disputed Kurils." Global Times

Already battered by multiple sex scandals, Italy's Prime Minister Silvio Berlusconi is being criticized by opposition lawmakers for failing to condemn violence in Libya, saying that he did not want to "disturb" Libyan leader Muammar Gaddafi during the Libyan uprising. Reuters

(Comments: For reader comments, questions and discussion, see the 22-Feb-11 News -- Libya's Gaddafi shoots to kill protesters with massive firepower thread of the Generational Dynamics forum. Comments may be posted anonymously.) (22-Feb-2011) Permanent Link
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21-Feb-11 News -- Libya's bloodbath spreads to Tripoli as tribal leaders turn against government

Son of Libya's leader Gaddafi gives a harsh, rambling speech on television.

Libya's bloodbath spreads to Tripoli as tribal leaders turn against government

On Saturday, Libya's armed forced pursued a violent crackdown on unarmed demonstrators in eastern portion of Libya, especially in Benghazi, Bayda and Tobruk. Long convoys of military vehicles fired on demonstrators with high powered weapons.

Saif al-Islam Qaddafi, speaking to Libya on Sunday
Saif al-Islam Qaddafi, speaking to Libya on Sunday

Al-Jazeera reports: "Further reports suggest the 500,000-strong Tuareg tribe in south Libya has heeded the call from the million-strong Warfala tribe to join the uprising. Protesters in Ghat and Ubary, home to Libyan Tuareg clans are reportedly attacking government buildings and police stations."

On Sunday, the bloodbath spread to the capital city, Tripoli, where the army fired on thousands of anti-government protesters. However, another report indicates that fighting has stopped in the east in Benghazi, because the Tripoli army has been driven back by the Benghazi army.

Generational Dynamics predicts that there will be a new Mideast war, refighting the war between Arabs and Jews that followed the 1948 partitioning of Palestine and the creation of the state of Israel. None of the uprisings we've seen so far -- in Tunisia, Egypt, Yemen, Bahrain -- have seemed likely to trigger a regional war, but the Libya uprising appears to be the most dangerous so far, and threatens to pit the eastern "Egyptian" portion of Libya versus the western "African" portion of Libya, which means that it could spread to neighboring countries.

Saif El Islam Gaddafi, the son of Libya's leader Muammar Gaddafi, gave a 30 minute televised speech to Libyans. His speech was rambling and harsh, and was widely ridiculed by commentators, although there's no way of knowing whether some "silent majority" were pleased with it.

The following are translated snippets from the Al-Jazeera live blog:

"Citizens tried to attack the army and they were in a situation that was difficult. The army was not used to dealing with riots."

"Libyan citizens died and this was a tragedy."

"There is a plot against Libya. People want to create a government in Benghazi and others want to have an Islamic emirate in Bayda. All these [people] have their own plots. Of course Arab media hyped this. The fault of the Libyan media is that it did not cover this.

Libya is not like Egypt, it is tribes and clans, it is not a society with parties. Everyone knows their duties and this may cause civil wars.

Libya is not Tunisia and Egypt. Libya has oil - that has united the whole of Libya.

"I have to be honest with you. We are all armed, even the thugs and the unemployed. At this moment in time, tanks are driven about with civilians. In Bayda you have machine huns right in the middle of the city. Many arms have been stolen.

"No one will come to Libya or do any business with Libya.

"We will call for new media laws, civil rights, lift the stupid punishments, we will have a constitution... We will tomorrow create a new Libya. We can agree on a new national anthem, new flag, new Libya. Or be prepared for civil war. Forget about oil.

"The country will be divided like North and South Korea, we will see each other through a fence. You will wait in line for months for a visa.

"The Libyans who live in Europe and USA, their children go to school and they want you to fight. They are comfortable. They then want to come and rule us and Libya. They want us to kill each other then come, like in Iraq."

During the course of the speech, which I heard live on al-Jazeera, he blamed the BBC, Al-Jazeera, the US, the Europeans, the Arab League, and even drug dealers. He repeatedly said that Libya was not like Tunisia or Egypt. He threatened civil war and starvation. He said that tribal wars may bring Libya back to "the civil war of 1937." I cannot find any reference to this war. It's possible that there was a translation error, or it may be that 38 year old Gaddafi is like many people and has no idea of any history prior to his birth.

Libya, showing the three historic divisions: Tripolitania, Fezzan and Cyrenaica
Libya, showing the three historic divisions: Tripolitania, Fezzan and Cyrenaica

His logic was that the country's well-being depended on oil income. He said that the oil was not in the east or the west, but in the middle, and the unrest will cause the oil exports to be cut off, causing people in the east and the west to starve.

There may be some truth to this. Reuters reports that the leader of the Al-Zuwayya tribe in eastern Libya, Shaikh Faraj al Zuway, threatened to cut oil exports to Western countries within 24 hours unless authorities stopped what he called the "oppression of protesters."

Commentators are predicting further massacres in the next couple of days in Libya, and the continued export of Libyan oil is in question.

An analysis of the Libyan situation requires additional information about the tribal dynamics of the country, something about which I have limited information. If you're familiar with the situation in Libya, and particularly if you've lived in Libya, then I would welcome your comments, directed to me in private comments or in the public forum on my web site.

Finally, here's a neat Reuters graphic:

Major Arab state hotspots
Major Arab state hotspots

This shows all the Arab countries that experienced uprisings and unrest since the beginning of the year.

(Comments: For reader comments, questions and discussion, see the 21-Feb-11 News -- Libya's bloodbath spreads to Tripoli as tribal leaders turn against government thread of the Generational Dynamics forum. Comments may be posted anonymously.) (21-Feb-2011) Permanent Link
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20-Feb-11 News -- Bloodbath in Libya, while Bahrain's government backs down

Saudi Arabia surrounded by riots in Yemen, Jordan, Iran, Bahrain and more

Bloodbath in Libya, while Bahrain's government backs down

Libya <font size=-2>(Source: CIA Fact Book)</font>
Libya (Source: CIA Fact Book)

Government armed forced pursued a violent crackdown on unarmed demonstrators in eastern portion of Libya on Saturday, especially in Benghazi, Bayda and Tobruk. According to the Arab Monitor, long convoys of military vehicles went into eastern regions and fired on demonstrators with high powered weapons. The death toll may be well over 100, although exact numbers cannot be confirmed.

Bahrain's royal family bowed to international pressure on Saturday and pulled its tanks out of Pearl Square in Manama, the capital city, allowing the protesters to continue their peaceful demonstrations.

Riots and demonstrations have been spreading throughout the Mideast. A country-by-country summary by CNN summarizes protests in the following countries: Libya, Yemen, Iran, Egypt, Jordan, Iraq, Kuwait, Djibouti, Algeria, Sudan, Syria, Tunisia, and Palestinian territories.

There have been no major riots in Saudi Arabia, mainly because of the country's vast oil wealth, according to the NY Times. However, the Saudis are feeling increasingly isolated and concerned, according to the article, and fear that the United States may no longer be a reliable backer.

I heard something of a joke on the BBC on Saturday, interviewing an analyst talking about all the demonstrations in the Mideast:

ANALYST: You know, I really wonder what George Bush thinks about everything that's going on.

INTERVIEWER: Well, he probably would say that this is exactly what he wanted -- to start from the war in Iraq, and see democracy spread throughout the Middle East.

ANALYST: Then he simply should have raised food prices.

Good point. It's somewhat romantic to claim that all of this unrest comes from a desire for liberty and freedom beating in the hearts of the oppressed masses, but it's much more likely that it comes from a desire to feed their families, as food prices continue at historically high levels. This is consistent with the claim that there are no riots in Saudi Arabia because of the nation's wealth. (Paragraph updated - 20-Feb)]]

(Comments: For reader comments, questions and discussion, see the 20-Feb-11 News -- Bloodbath in Libya, while Bahrain's government backs down thread of the Generational Dynamics forum. Comments may be posted anonymously.) (20-Feb-2011) Permanent Link
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19-Feb-11 News -- IBM's Watson supercomputer bests human champions on Jeopardy!

US vetoes UN resolution declaring Israeli settlements illegal

IBM's Watson supercomputer bests human champions on Jeopardy!

Ken Jennings, Watson's avatar, and Brad Rutter prepare to play Jeopardy!
Ken Jennings, Watson's avatar, and Brad Rutter prepare to play Jeopardy!

IBM's Watson supercomputer performed spectacularly well on the Jeopardy! television programs aired earlier this week. Watson played against two former champions, and won $77,147 versus their winnings of $24,000 and $21,600, respectively.

Watson was by no means omniscient, as the NY Times pointed out. In one case, the clue was: “Its largest airport is named for a World War II hero; its second largest for a World War II battle," within the category of "U.S. Cities." Watson guessed "What is Toronto," drawing laughter. (The designer explained that Watson understood that the response had to be related to a US city, but didn't relate that to actually be a US city.)

Those moments were in the minority. In question after question, Watson was able to parse through layers of meanings and double meanings to come up with the correct response.

People who pooh-pooh this accomplishment because it's just a robot that can solve problems in one particular game are completely missing the point. This is version one of a very powerful capability. It's quite reasonable to assume that ten years from now, you'll be carrying an iPhone-like device which will answer any question you ask it.

Between now and then, there'll be all sorts of special-purpose applications developed. Within a couple of years, expect to see everything from online technical support web sites to Home Depot kiosks answering your questions.

As I wrote last year in "27-Dec-10 News -- IBM vs Jeopardy! brings robotic warfare and the Singularity closer," this accomplishment is a highly significant event.

The Singularity is the point in time when computers will be more intelligent and more creative than humans. At that point there will be a sharp bend in the technology curve, since super-intelligent computers will be able to develop new technologies exponentially faster than humans, including technologies to make themselves faster. After that, they will essentially be running the world.

As I wrote in that article, based on algorithms that I've developed, I estimate that the Singularity will occur around 2030. But the Jeopardy! accomplishment calls that date into question, and makes an earlier date more likely, in my opinion.

Comedian Conan O'Brien invited "Watson" to appear on his program as a guest announcer, but "Watson" got into a big fight with the human announcer, Andy Richter. Here's the video:

Additional links

On Friday evening, the U.S. vetoed a proposed United Nations Security Council resolution, drafted by the Palestinian Authority, that would have condemned Israeli settlements in the West Bank and declared them illegal. The other 14 Security Council members, including Britain, France and Germany, all voted in favor of the resolution. CNN

Iranian authorities appear to have softened their demands for opposition leaders Mir-Hossein Mousavi and Mehdi Karroubi to be executed. However, they're still under house arrest. Mousavi and Karroubi have called for new anti-government demonstrations on Sunday. LA Times

The opposition Green movement in Iran is split along generational lines. The elder leaders -- Mousavi, Mehdi Karrubi and former president Mohammad Khatami -- want reforms but no regime change, while the radical, youth wing is openly advocating the end of rule by Islamic law in Iran. Asia Times

Israel to world: don’t be so fast to push democracy on Mideast Media Line

It recently was revealed that Somali pirates have been holding the crew of a North Korean cargo ship hostage, ever since the ship was captured last year in March. However, after South Korea's recent success in recapturing one of their own ships captured by Somali pirates (see "22-Jan-11 News -- Korean Navy regains confidence by recapturing hijacked ship from pirates"), there is the possibility of a kind of détente, a joint military action by North and South Korea to recapture the captured North Korean ship. World Politics Review

For years, South Korean activists have been illegally releasing balloons with propaganda leaflets targeting the North Korean regime into North Korea. However, the South Korean government did not approve of this activity. But now the atmosphere has changed, after last year's North Korean sinking of the South Korean warship Cheonan, and shelling of Yeonpyeong Island. The South Korean government is now copperating with the balloon launching, in one more sign of hardening positions on both sides. CS Monitor

Five reasons why Georgia lost the 2008 war versus Russia Eurasia Review

The British government plans to overhaul the country's welfare system, with the objective of changing a culture in which welfare recipients risk losing income if they find jobs. NY Times

For middle-aged women: Six reasons why you're not married. Huffington Post

(Comments: For reader comments, questions and discussion, see the 18-Feb-11 News -- IBM's Watson supercomputer bests human champions on Jeopardy! thread of the Generational Dynamics forum. Comments may be posted anonymously.) (19-Feb-2011) Permanent Link
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18-Feb-11 News -- Bahrain's government chooses the massacre scenario

Britain may require elderly to pay for medical care

Bahrain's government chooses the massacre scenario

World officials are shocked at the violent response of the Bahrain government to peaceful protesters, including women and children, in Manama, the capital city. At dawn on Thursday, police smashed into demonstrators with guns, clubs and teargas, killing at least four people, according to Al-Jazeera.

The following video is pretty bloody, but shows what's happening:

Both Tunisia and Egypt have chosen a non-massacre scenario, and both of those governments have been overthrown. The Bahrain government decided to learn that lesson, and follow the path of Thailand and Iran.

And like both of the latter countries, Bahrain is in a generational Awakening era. This means that the riots and demonstrations will only continue, with increasing violence over a period of years.

And this puts into question of the U.S. Navy's Fifth Fleet, which is headquartered in Manama, with responsibility for the area stretching from the Red Sea to the Indian Ocean, including the Arabian Sea and the entire Persian Gulf.

Bahrain is just a group of 33 small islands. For millennia, Bahrain has alternated between Arab rulers and Persian rulers. For almost two centuries, it's had a government of Sunni tribal leaders, although the population is 2/3 Shia.

Thus, unlike Tunisia and Egypt, Bahrain has a substantial ethnic fault line between the monarchy and the majority population. (See "14-Feb-11 News -- Reader question about the Egypt and the Muslim Brotherhood.")

Persian Gulf region. Bahrain's 33 small islands are a tiny dot in this map
Persian Gulf region. Bahrain's 33 small islands are a tiny dot in this map

This is the difference that motivated Bahrain's government to take the massacre route. Furthermore, unrest in Bahrain could easily spread to its neighbors, especially Saudi Arabia.

The Arab News reports that the Gulf Cooperation Council (GCC) foreign ministers met in Manama on Thursday, and took a unified stand to counter any threat to the bloc's member countries. According to Bahrain's foreign minister, "The GCC ministerial council declared its total support to Bahrain because GCC's security and stability is indivisible."

Additional links

Britain is adopting policies that may force its elderly to pay for their own medical care. Telegraph

Thanks to a feverish recovery effort, Iran's Natanz nuclear facility has recovered more quickly than expected from the cyberattack by the Stuxnet virus. Washington Post

Because of growing xenophobia between ethnic Russians and Caucasus Muslims, and because of the recent terrorist attack on Moscow's airport, Russian policy are considering a policy of requiring mandatory fingerprinting and DNA registration of all migrants who seek work in the country. AFP

Like the US, Russian analysts are concerned about the capabilities of China's recently announced J-20 stealth fighter. But unlike the US, they're keeping quiet about their concerns, following a policy of not discussing any China threat in public. This isbased on an old Russian saying about not calling the bear out of the woods. Jamestown

According to a study by the Catholic League, the religions that gaining the most in membership are the ones that hold conservative views on abortion and gay marriage, while many of the religions that have liberal views have declined in membership. Of the major religions, the ones gaining in membership are: the Catholic Church, the Church of Jesus Christ of Latter-day Saints, the Assemblies of God, the Jehovah's Witnesses and the Seventh-Day Adventist Church. Those witnessing a decline include: the Presbyterian Church (U.S.A.), the Episcopal Church, the United Church of Christ. the United Methodist Church, the Evangelical Lutheran Church, the Lutheran Church-Missouri Synod and the American Baptist Churches U.S.A. Catholic League

In case you unexpectedly get lucky, New York City is launching a new iPhone/Android app that will tell you the nearest place giving out free condoms. Reuters

(Comments: For reader comments, questions and discussion, see the 18-Feb-11 News -- Bahrain's government chooses the massacre scenario thread of the Generational Dynamics forum. Comments may be posted anonymously.) (18-Feb-2011) Permanent Link
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17-Feb-11 News -- Thailand vs Cambodia border clash damages ancient Hindu temple

Both Thailand and Cambodia claim the Preah Vihear Hindu temple

Thailand vs Cambodia border clash damages ancient Hindu temple

Nationalist feelings in both Cambodia and Thailand have resulted in border clashes, thanks to a disagreements about the ownership of the ancient Preah Vihear Hindu temple, on what is today the border between the two countries, according to CNN.

Preah Vihear temple, Cambodia, Thailand
Preah Vihear temple, Cambodia, Thailand

Historically, the temple was built by the Khmer (Cambodians) in the 11th century. In 1907, French surveyors determined the border between Siam (Thailand) and Cambodia, but "bent" the border in order to put the temple on the Cambodian side. However, the temple is on a cliff on the Cambordian side, so the only way to access the temple easily is from the Thai side.

Thailand's army took control of the temple in 1954, causing Cambodia to appeal to the United Nations. The International Court of Justice ruled that the temple was in Cambodian territory, which infuriated the Thai.

The two countries' last generational crisis war was the bloody Cambodian "killing fields" civil war, followed by the Vietnamese invasion of Cambodia, in the late 1970s.

Map of Preah Vihear temple, Cambodia, Thailand
Map of Preah Vihear temple, Cambodia, Thailand

This war split Thailand along its traditional fault line: The fair-skinned Thai-Chinese, market-dominant minority living mostly in Bangkok and to the south; and the vast majority, the poor dark-skinned laborers, mainly from farms in Thailand's northeast.

A bloody massacre on October 6, 1976, led students and other leftists to join Communist party forces in the northeast. Refugees from the war in Cambodia fled into Thailand, only to be treated violently and forced to return.

The fault line between the classes has turned into the now-famous rallies between the "yellow shirt" élites and the "red shirt" laborer class. In particular, this led to the bloody massacre of red shirts in Bangkok last May, leaving behind an enormously bitter class division. (See "24-May-10 News -- Les Miserables of Thailand at a turning point.")

Border clashes between Thailand and Cambodia began in 2008, when Unesco agreed with a request by Cambodia, and declared that the Preah Vihear temple was a "world heritage site," once again infuriating the Thais. There are now thousands of troops on each side of the border, according to Bernama (Myanmar). VOA reports that in border clashes earlier this month, seven people were killed, and the temple itself was damaged.

The deep ethnic and class divisions from the last crisis war are plainly apparent in Bangkok today, according to VOA. Thousands of protesters on both sides have been demonstrating in Bangkok. Some 15,000 "Red Shirts" from the laborer class staged mass anti-government protests, demanding the release of their jailed movement leaders.

Nearby, the "Yellow Shirts" from the élite class were demonstrating and making nationalistic demands for the resignation of the prime minister over his wimpy handling of the dispute with Cambodia over the border and the temple.

In other words, the political situation today in Thailand is totally chaotic.

From the point of view of Generational Dynamics, this is very typical of a generational Awakening era. Readers who were around during America's last Awakening era in the 1960s will recall that the politics then were equally chaotic, with civil rights marches, the Vietnam war, political assassinations, student protests, and bombings by the Weather Underground.

With both Cambodia and Thailand in a generational Awakening era, there is no chance today of a major war between the two countries, or for a new civil war in either country. There may be brief conflicts, and it's even possible that the there will be further damage to the temple, but the clashes will fizzle fairly soon.

Thai schoolgirl uniforms
Thai schoolgirl uniforms

A poll conducted by a Japanese news web site found that college girls in Thailand wear the sexiest uniforms in the world, according to Asia Sentinel.

Now, Dear Reader, you may be wondering why I mention this in a story about a border war. Am I just looking for an excuse to add a picture of sexy college girls to my report?

Well, believe it or not, Dear Reader, this is quite relevant. Once again, recall America's last Awakening era in the 1960s. Those of you who were around then will recall the introduction of miniskirts, hot pants, and bra-burning during that period. It was the age of "women's lib," when young girls rebelled against the austere rules laid down by their war-survivor parents.

This is the kind of thing that happens in Awakening eras. Iran is also in an Awakening era. After Mahmoud Ahmadinejad was elected president, he began to crack down on young women who didn't entirely cover their hair. (See my 2007 report, "Iranian police swoop down on women with loose headscarves.") This has been one of the funniest stories to come out of Iran in recent years.

This is in contrast to America today, in a generational Crisis era. Women today are moving in the opposite direction, and becoming increasingly modest, while both men and women are increasingly adopting their stereotypical roles that they supposedly abandoned after the 1960s. It will be interesting the watch the fallout from the horrible sexual assault of CBS reporter Lara Logan in Egypt on Friday (Associated Press) My expectation is that it will lead to widespread questioning about whether beautiful women should be present in crisis-torn regions of the world as American reporters.

As for Thailand and Cambodia, their fate is sealed on a highly predictable course. The border clashes will increase in severity as the years go by, and the violence between the classes in both countries will also increase over the years. This is the manner in which one genocidal crisis war eventually leads to the next one, decades later.

(Comments: For reader comments, questions and discussion, see the 17-Feb-11 News -- Thailand vs Cambodia border clash damages ancient Hindu temple thread of the Generational Dynamics forum. Comments may be posted anonymously.) (17-Feb-2011) Permanent Link
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16-Feb-11 News -- Tunisian refugees flood into Italy

Commodity and import price increases signal lower corporate earnings

Tunisian refugees flood into Italy

Lampedusa Island
Lampedusa Island

Since the uprising began in Tunisia in mid-January, thousands of French-speaking Tunisians have taken advantage of the chaos to migrate to Italy through the Mediterranean island of Lampedusa, mostly for economic reasons, according to VOA. Lampedusa Island is part of Italy.

However, some of them may be seeking asylum, for having been part of the regime of Tunisia's former president Zine El Abidine Ben Ali, who was forced to flee the country after the uprising began.

Smugglers are making huge profits, charging Tunisians about $1,800 to get to Italy, according to the article. Migrants are packed into small boats for the trip from Tunisia to Lampedusa. There have been several drownings.

Once they reach Lampedusa, they're packed into overcrowded refugee camps. Then, under international law, Italy is obligated to fly migrants from Lampedusa to the Italian mainland as quickly as possible, according to the BBC.

Thus, the Italians are saying that the sudden wave of migrants is an EU problem, not just an Italy problem. Deutsche-Welle reports that the EU has offered to fast-track funds for Italy to help deal with the problem. "Emergency financial envelopes" from existing EU funds will be given to refugees. However, the German government has rejected a proposal that Tunisian refugees in Italy be automatically apportioned to other countries in the EU.

The increasing flow of Tunisian refugees is only part of the problem, according to Spiegel. Refugees are beginning to arrive from Egypt, and it's feared that with unrest spreading to other Mideast countries from Algeria to Bahrain, there will be a flood of tens of thousands of refugees attempting to reach Europe to find a job and a better life.

Commodity and import price increases signal lower corporate earnings

The Dept. of Labor announced on Wednesday that the cost of imported goods rose almost twice as much as expected, according to Bloomberg. Import prices increased 1.5% during the month of January, compared to December, while economists had expected only a 0.8% increase.

The biggest contributors to the price increases were imported commodities, including oil, food and building materials.

[[Update: A web site reader cleared up some confusion by posting in the Generational Dynamics forum an explanation of why we're importing building materials: "We import huge quantities of concrete from Mexico, much of our lumber comes from Canada, China is sending literally boat loads of plywood,sheetrock, steel etc.........not to mention wiring and other electrical components as well as plumbing components." (Paragraph added - 16-Feb)]]

According to the article, the jobless rate of 9% will mean that US companies will have limited ability to pass along the higher costs to consumers.

Higher commodity prices have already had significant effects on fourth quarter earnings, according to the Wall Street Journal (Access).

With limited ability to pass along price increases, many companies are being forced to report lower operating margins, with consequent effects on their stock prices. The article quotes a Citibank expert as saying, "I think this quarter was a wake-up call. We're seeing these stocks get hit on margins and sell off dramatically. It's definitely picking up steam and becoming much more on the tops of investors' minds, and it's only going to continue as we move through 2011."

According to the article, many analysts are not taking these lower margins into account, and they're overestimating future profits. This shouldn't be a surprise to anyone, since financial analysts almost always overestimate future earnings, in order to justify the fees and commissions that companies pay them.

As we've been saying repeatedly, most recently in "14-Feb-11 News -- Bangladesh stock market continues free fall, while Cairo's remains closed," the stock market is overpriced by a factor of almost 200%, and has been in a bubble that could explode in panic at any time.

Dhaka stock market, 15-Feb-11
Dhaka stock market, 15-Feb-11

By the way, the Dhaka stock market index rose 6% on Tuesday, after the Bangladesh government announced that four state-controlled commercial banks would provide support for the stock market by investing several hundred million dollars.

The Dhaka stock exchange is in the midst of a full scale stock market crash, after stock prices almost doubled last year, bring 3.5 investors into the market. It remains to be seen whether the government can stop the market from crashing further.

(Comments: For reader comments, questions and discussion, see the 16-Feb-11 News -- Tunisian refugees flood into Italy thread of the Generational Dynamics forum. Comments may be posted anonymously.) (16-Feb-2011) Permanent Link
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15-Feb-11 News -- Tens of thousands in Iran demonstrate against government and face violence

Clinton: Iran's government shows 'hypocrisy' after applauding Egypt's demonstrations

Tens of thousands in Iran demonstrate against government and face violence

US Secretary of State Hillary Clinton criticized the "hypocrisy" of Iran's government on Monday, as the government used violent police tactics to suppress anti-government rallies in Tehran and other cities in Iran, according to VOA:

"What we see happening in Iran today is a testament to the courage of the Iranian people and an indictment of the hypocrisy of the Iranian regime - a regime, which over the last three weeks has constantly hailed what went on in Egypt. And now, when given the opportunity to afford their people the same rights as they called for on behalf of the Egyptian people, [Iran's leaders] once again illustrate their true nature."

Tens of thousands of anti-government protesters, calling for solidarity with the demonstrations in Egypt, clashed with police in central Tehran on Monday. Police fired tear gas and paintballs at protesters, according to AFP.

This was the first mass anti-government protest since 2009. The protests began following the reelection of president Mahmoud Ahmadinejad in an election which many people believed was fraudulent. (See "Iran: Violent street demonstrations follow Ahmadinejad's landslide election victory.")

When the protests first erupted, almost all analysts predicted that the protests would soon end once and for all, comparing the situation in Iran to the Tiananmen Square massacre in China in 1989.

However, Tiananmen Square is the wrong comparison, since that occurred in China's generational Unraveling era, while Iran today is in a generational Awakening era. The correct historical analogy for Iran is to America's 1967 Summer of Love, and the 1968 riots and demonstrations throughout the year, including the famous demonstrations in Chicago at the Democratic Party convention. Those protests continued off and on for years, only climaxing in 1974 with the resignation of President Richard Nixon.

Every society and country goes through this experience, starting around 20-25 years after the end of the previous crisis wars. The war survivors wil have imposed austere institutions and rules supposedly to prevent a new crisis war from occurring, and this is the point when the first post-war generation comes of age, and rebels against the austerity of their parents. (See "A generational explanation of Iran's political crisis.")

Expect the anti-government protests to continue for years until they reach a climax -- probably some kind of "velvet revolution" replacing the hardline government.

(Comments: For reader comments, questions and discussion, see the 15-Feb-11 News -- Tens of thousands in Iran demonstrate against government and face violence thread of the Generational Dynamics forum. Comments may be posted anonymously.) (15-Feb-2011) Permanent Link
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14-Feb-11 News -- Bangladesh stock market continues free fall, while Cairo's remains closed

Reader question about the Egypt and the Muslim Brotherhood

IBM Watson supercomputer will be on Jeopardy! on M-W, Feb 14-16

Be sure to watch Jeopardy! on television this week. On Monday-Wednesday, February 14-16, when one of the contestants will be the IBM Watson supercomputer. It should be a lot of fun. See "27-Dec-10 News -- IBM vs Jeopardy! brings robotic warfare and the Singularity closer" for more information.

Bangladesh stock market continues free fall, while Cairo's remains closed

For the third time, Egyptian officials have postponed the reopening of the Cairo stock exchange. It was closed on January 27 after having fallen 20% in a few days. It's now scheduled to reopen on Wednesday.

Cairo / Dhaka stock markets
Cairo / Dhaka stock markets

The Dhaka stock exchange was in a huge bubble last year, but now is in a full scale stock market crash. It has fallen over 30% in the last few weeks, including an additional 7.27% dive on Sunday, Feb 13.

I'd like to quote some excerpts from the Reuters article describing Sunday's dive:

"DHAKA (Reuters) - Hundreds of Bangladeshi small investors, angry at a new plunge in share prices, set fire to tires and pelted police with bricks on Sunday outside the stock exchange and demanded the resignation of the finance minister.

Police with batons dispersed the protesters in pitched battles that snarled traffic for hours.

The country's main Dhaka Stock Exchange General Index dived by more than 474.77 points or 7.27 percent to 6052.41 on Sunday, the steepest one-day fall since January 20.

"Who is to blame for the continuing fall of share prices? Why haven't they been found and punished?" shouted Shafiqur Rahman, a small investor.

Demonstrators called for the resignation of Finance Minister Abul Maal Abdul Muhith.

"He assured us that the market will see an uptrend this week," said investor Rakibul Haq. "It makes me so frustrated and angry that this has not happened."

Prime Minister Sheikh Hasina last week asked the relevant authorities to take immediate steps to stabilize markets, with about 3.3 million people, mostly small-time investors new to stock trading, relying on it to supplement meager incomes.

Share prices nearly doubled in 2010, encouraging new investors into the market. ...

Hasina and her rival Begum Khaleda Zia, a former prime minister and contender in parliamentary elections due by the end of 2013, accuse each other of prompting the price declines.

"They (Khaleda and her allies) are fuelling the unrest in the stock market, trying to cause greater anarchy and make gains out of it," Hasina told parliament last week.

Khaleda said at the weekend that the slide in the bourses was further proof that the government was incapable of managing anything."

What I think is absolutely incredible about this story is that nobody seems to have the vaguest idea what's going on, even though it's completely obvious. Stock prices doubled last year, so of course it was a bubble, and of course it's in a full-fledged crash, and yet none of these people, including the supposed experts at Reuters, seem to grasp that simple concept. They keep talking ridiculous nonsense about politicians doing this or that, as if politicians could ever prevent a stock market crash.

The same insane mood is prevalent on Wall Street today. Those who follow my Dow Jones historical page are aware that the DJIA is just shy of 200% of the long-term trend value, meaning that, for the first time since 2008, stocks are overpriced by a factor of 2. Furthermore, stocks have been overpriced since 1995, so by the Law of Mean Reversion, stock prices are going to fall to Dow 3000 or below, and stay there for many years. People on Wall Street are as oblivious to all this, just like officials in Dhaka.

Here's a graph of the S&P 500 price/earnings index from 1871 to 2010:

S&P 500 Price/Earnings Ratio (P/E1) 1871 to August 2010
S&P 500 Price/Earnings Ratio (P/E1) 1871 to August 2010

Anyone who can't see a stock market bubble since 1995 is blind. By the Law of Mean Reversion, P/E ratios (also called "valuations") will fall to lower than the 5-6 range to which they've fallen three times in the last century, most recently in 1982.

Perhaps the thing that shocks and infuriates me the most is to see managers from investment firms go on to CNBC or Bloomberg TV and simply lie about valuations. I won't name names here, but I have in the past, ( here and here). And I'm 99% certain that these people, or their PR departments, have seen these reports, but I've never heard from anyone to explain why I'm wrong, and ask me to post a correction. They undoubtedly earn 7-digit salaries. Are they crooks or just incompetent? I report, you decide.

During the 2005 to early 2007 period, I was writing about a credit bubble, a real estate bubble, and a stock market bubble, and about lying and fraud that was going on. I was called a psychopath, but today the credit and real estate bubbles are finally acknowledged, as is the massive generational fraud. The stock market also took a dive, but now it's going way up into bubble territory again, and the people on Wall Street are the same kinds of dim-witted crooks that are selling stocks to gullible investors in Dhaka.

When I was growing up in the 1950s, my parents and teachers would tell me how "experts" in the 1930s kept predicting that the stock market would go up again. I didn't understand then, but I certainly understand now. The criminal activity going on in Washington and on Wall Street was the same in the 1930s decade as it has been in the 2000s decade, and the results will be just as devastating, if not more so.

Reader questions about the Egypt and the Muslim Brotherhood

I've received a number of questions about Egypt and the Muslim Brotherhood.

Muslim Brotherhood logo
Muslim Brotherhood logo

Here's one that arrived today:

"I subscribe to your RSS feed and happen to find your analysis interesting. However, I am curious how you can so confidently apply your methodology to vastly different cultures and peoples?

I live in Israel, and I happen to find your analysis of Egypt comforting, but my understanding of Arab and Muslim culture leads me to different conclusions. ...

Anyway, we'll see. Egypt is a good case. If you're right, you will prove MANY people wrong who think that the Arab idea of democracy is to vote one time for an Islamic state. So far, that has been the case every time a predominantly Muslim state has had a free election."

That's an interesting way of looking at it, although perhaps Iraq can be considered an exception these days. Also, non-Arab Muslim states such as Turkey, Pakistan, Bangladesh and Indonesia appear to be exceptions, at least so far.

However, it's not entirely clear that Egypt is headed for a democracy. The army has just dissolved the parliament, suspended the constitution, and promised elections in six months, though there's no way to predict whether the elections will happen. And a massacre scenario is still a possibility.

What I've said is that there are very significant generational reasons why there won't be an Islamic state like Iran, and that it's very unlikely that Egypt will abrogate its peace treaty with Israel. News events in the last few days have supported those predictions so far.

I need to write something that's going to generate hate mail, but it's a point I need to make, so I ask those of you who insist on writing to me to at least limit yourselves to just 1-2 epithets per person. Sunday is the 66th anniversary of the Allied bombing of Dresden, according to the AFP, and some people consider that to be an act of genocide. Also, a web site reader has called my attention to the 1946 Zionist bombing of the King David Hotel, which some people claim is an act of terrorism.

So the point I need to make is that, while I have absolutely no love for the Muslim Brotherhood, they have renounced their past violence like others have. However, that's not enough. What's most important is the generational point: With the vast majority of the population of Egypt under age 30, most Egyptians, including Egyptians that support the Brotherhood, have never known a violent Brotherhood.

It's a basic principle of Generational Dynamics that even in a dictatorship, major policies are determined by masses of people, entire generations of people, and not by politicians. The generational trends in Egypt are clearly away from an Islamic state. Even if the Brotherhood gained power, and some of the old geezers in the top level of the Brotherhood wanted to relive their glory days of fighting the Jews, the vast majority of Brotherhood supporters would oppose terrorism or abrogating the treaty.

Finally, the other reasons I've mentioned before are that there's no jihadist constituency in Egypt, there's no ethnic division that would affect the government, there's no fault line between the monarchy and the clergy, as there is in Iran and Saudi Arabia, and there's no popular charismatic leader like Iran's Ayatollah Ruhollah Khomeini.

These are very powerful generational reasons for the conclusions I've reached, as I've been describing in this series of reports.

Quite honestly, my expectation increasingly is that questions like parliamentary elections in Egypt will be determined by events outside of Egypt, because of the increasing instability of the entire region, exacerbated by surging global food prices.

I've written in the last couple of days about the instability of Saudi Arabia and about Egyptian police clashes with Bedouins in northern Sinai. In addition, the news today is that there are Sunni-Shia clashes in Bahrain, and that the entire Palestinian cabinet plans to resign on Monday.

As I've written many times, the Mideast is headed for a new war, refighting the 1948 war between Arabs and Jews. This will be one component of the "Clash of Civilizations" world war, pitting the "axis" of China, Pakistan and the Sunni nations against the "allies" of US, India, Russia and Iran, Israel, among others. The current instability in the Mideast is very worrisome in view of that prediction.

The REALLY INTERESTING question, which I haven't yet attempted to address, is the following: When forced to choose one side or the other, will the Egyptians side with the "axis" or the "allies"?

On the one hand, Egypt fought against the Israelis in three wars, making it more likely that they will again.

On the other hand, the generational reasons described above make it more likely that Egypt will side with Israel. In fact, I've seen little mutual xenophobia between Israelis and Egyptians, while I've seen lots of mutual xenophobia between Israelis and Palestinians. That gives a clue as to how things will line up.

On balance, I'm somewhat surprised to find myself leaning towards the second scenario. The generational trends are just too powerful. We'll see.

Additional links

Opposition leaders in Iran have called for nationwide marches against the government on Monday, in solidarity with the protests in Egypt and Tunisia. Iran's government has promised brutal crackdowns on demonstrators. Al-Jazeera

Cairo's cats choke on teargas during demonstrations. Time

In the wake of the Egypt demonstrations, governments of Syria, Sudan, and other Mideast countries have ramped up their own use of social media sites like Facebook. Fierce Government IT

The cyberweapon that could take down the internet. New Scientist

For Valentine's Day: Geekiest marriage proposals of all time. Network World

10 Thrifty Ways To Deliver Big On Valentine's Day. Consumerist

(Comments: For reader comments, questions and discussion, see the 14-Feb-11 News -- Bangladesh stock market continues free fall, while Cairo's remains closed thread of the Generational Dynamics forum. Comments may be posted anonymously.) (14-Feb-2011) Permanent Link
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13-Feb-11 News -- Lead Palestinian negotiator Saed Erekat resigns over the 'Palestine Papers'

'Contagion' riots spread to Algeria and Yemen

Lead Palestinian negotiator Saed Erekat resigns over the 'Palestine Papers'

Al-Jazeera scored a big victory on Saturday in its bitter conflict with the Palestinian Authority, when the chief Palestinian negotiator Saed Erekat was forced to resign because of the "Palestine Papers."

Ten years' worth of previously secret documents, 1600 in all, on the Mideast peace process from the Palestinian Authority (PA) and Fatah were leaked to Al-Jazeera, who released them to the public during the week of January 23. (See "27-Jan-11 News -- 'Palestine Papers' reveal major splits between Arab and Palestinian factions.")

I watched quite a bit of al-Jazeera's news coverage of the release. As I wrote at the time, I wasn't surprised by al-Jazeera'a open hostility to Israel and America, nor was I surprised by their release of papers themselves, which any news organization would have done if given the opportunity.

What DID surprise me was the unwavering hostility by all commentators to the Palestinian Authority (PA), and to its president Mahmoud Abbas, as well as to Erekat, with not a single negative word about Hamas. It was perfectly clear that al-Jazeera was acting as the public relations arm of Hamas.

Erekat resigned on Saturday, after an investigation showed that the leaked documents had come from someone in Erekat's own office, according to al-Jazeera. A senior Hamas official welcomed the resignation, saying that Erekat's negotiations were not "in the national interest." He added that, "There is clearly a feeling here on the ground that the peace process has broken down, that there is no more point in negotiating unless the Israelis are willing to bring more to the table."

Palestinian election announced for September

The Palestinian leadership in the West Bank announced plans to hold elections by September, according to AFP.

The elections would replace Mahmoud Abbas as president, and would also elect a new parliament.

Hamas has rejected the announcement, and said that they will not participate in the election.

'Contagion' riots spread to Algeria and Yemen

Thousands of demonstraters filled the streets of Algiers, the capital city of Algeria, on Saturday, inspired by the events in Egypt. But the protests were blocked by riot police, and ended after about three hours, according to the Gulf Times.

Algeria's last crisis war was the extremely bloody civil war for Algeria's independence, that climaxed in 1962, and so Algeria is in a generational Unraveling era. It's therefore not possible for a new civil war to break out at this time.

In Sanaa, the capital city of Yemen, clashes erupted between hundreds of pro-government and anti-government demonstrators, who staged rival rallies. Thousands of anti-government demonstrators marched in other parts of the city.

Here's a brief action-packed Euronews video of the clashes in Sanaa:

(Comments: For reader comments, questions and discussion, see the 13-Feb-11 News -- Lead Palestinian negotiator Saed Erekat resigns over the 'Palestine Papers' thread of the Generational Dynamics forum. Comments may be posted anonymously.) (13-Feb-2011) Permanent Link
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12-Feb-11 News -- As Egypt's president Mubarak resigns, tension grows in the Sinai

Updating the Conflict Risk Graphic for the Mideast

As Egypt's president Mubarak resigns, tension grows in the Sinai

Egypt has been thrown into completely unknown territory by the decision of Hosni Mubarak to resign as President.

Somber Omar Suleiman, vice-president of Egypt, delivering Mubarak's resignation announcement
Somber Omar Suleiman, vice-president of Egypt, delivering Mubarak's resignation announcement

Vice president Omar Suleiman delivered the following extremely dramatic address, according to the NY Times:

"In the name of God the merciful, the compassionate, citizens, during these very difficult circumstances Egypt is going through, President Hosni Mubarak has decided to step down from the office of president of the republic and has charged the high council of the armed forces to administer the affairs of the country. May God help everybody."

The resignation bypasses the parliament and constitutional processes and puts the country in the control of the "high council of the armed forces." Whether this military committee can govern the country, especially when the young protesters discover that the disappearance of Mubarak will not make any real difference in their lives, remains to be seen.

News organizations around the world have been laser-focused on Cairo's Tahrir (Freedom) Square, squealing with delight in practically every sentence. Meanwhile, many important developments have been occurring in other countries.

In yesterday's report, I described how the events in Egypt could destabilize Saudi Arabia. There have been conflicting reports over the last couple of days over whether the 87 year old Saudi King Abdullah has died. What is known is that Abdullah was furious about President Obama's handling of the Egypt situation. Some sources, like the Islam Times, are claiming that Abdullah was so infuriated that he suffered a sudden heart attack and died. But nothing has been confirmed.

Sinai (WSJ)
Sinai (WSJ)

Another area of increasing instability is the North Sinai region of Egypt that borders both Gaza and Israel. The unrest in Egypt has forced the Egyptian police to withdraw from most of the region. Last weekend, a natural gas pipeline that supplies Egyptian gas to Israel, Jordan and Syria was bombed. The perpetrators have not been identified, but both Hamas and Bedouins are suspected.

There are hundreds of thousands of people from the nomadic Bedouin ethnic group living in the northern Sinai region of Egypt, where they have long felt mistreated by Egyptian authorities, complaining about heavy-handed treatment by the police, according to WSJ (Access).

Because of the unrest, police have lost control of this region, and the Bedouins are now preparing to take control themselves, with the help of operatives from Hamas. There have already been firefights between the Bedouins and Egyptian security forces.

For Israel, these events open up an whole new southern front for Israel. In 30 years of peace along this border, Israel has completely dismantled its defensive apparatus, according to the Debka subscriber-only newsletter, forwarded to me by a subscriber:

"The Egyptian army and its security forces lost control of the Sinai Peninsula, excepting only the Sharm el Sheikh pocket. Much of the territory was seized by Hamas gangs, the Army of Islam which takes orders from Al Qaeda in Iraq, and Bedouin militias. The last group established a form of local government calling itself 'The Bedouin Force for Socialist Reform.'"

The report adds that Israel's Defense Forces (IDF) are stretched too thin to adequately defend this border, while also defending against threatened attacks by Hamas, Hizbollah, Syria and Iran.

Updating the Conflict Risk Graphic for the Mideast

The examples of instability that we've discussed in Saudi Arabia and Sinai are not unique. The 'contagion' from Egypt is also spreading to Bahrain, Gaza, the West Bank and Jordan, resulting in renewed instability in the entire region.

Because of this regional instability, I'm raising the Conflict Risk Level for this region from 2 (medium risk) to 3 (high risk).

On January 1, the conflict risk graphic was changed to the following:

Conflict Risk Graphic, January 1, 2011
Conflict Risk Graphic, January 1, 2011

I designed this graphic in 2004 as a way of depicting my view of the chances of a crisis within 6-12 months in each of six regions, as well as in the area of global finance and disease. The six regions were chosen because a regional conflict in any of those areas had a high probability of spiraling into a world war.

On January 1, there were only two areas with high risk of major crisis:

Thanks to the growing instability of the Mideast, we're raising the conflict risk level for the Mideast to 3 (high risk). The revised graphic, which appears on the home page of my web site, is as follows:

Conflict Risk Graphic, February 12, 2011
Conflict Risk Graphic, February 12, 2011

I realize that many people are concerned about the events in the Mideast, and are not happy about some of the predictions that come out of the Generational Dynamics methodology. Very often I don't like them either, but there they are.

So far, my analyses of the situation in Egypt have been spot on. My expectation is that this will continue to be the case, but as always, we'll see what happens.

Over the years, I've now analyzed numerous crises -- Lebanon, Sri Lanka, Thailand, Iraq, Iran, and many others. In all cases, the Generational Dynamics predictions turned out to be correct, while almost every other analyst was rarely correct more than half the time. (I always like to say that it's easy to get a million predictions right; just make two million predictions.)

Perhaps now would be a good time to renew a challenge that I issued five or six years ago, which has never been answered: If there is any web site, analyst, journalist, politician or blogger with anything remotely close to the predictive success of the Generational Dynamics web site, then I'd like to know who it is. After all these years, I'm pretty sure that no such person or web site exists.

Already starving, North Korea admits to foot-and-mouth disease

North Korea's official Korean Central News Agency has admitted, for the first time, to an outbreak of foot-and-mouth disease, according to Global Post. More than 10,000 oxen, cattle and pigs have been infected.

According to the article, farmers are particularly dependent on oxen to plow fields and haul harvests. An expert is quoted:

"Oxen are so important in North Korea’s agricultural industry that the government owns them all. During the rice planting season you can see more oxen than tractors in the country.

It is no doubt that the outbreak will have a negative impact on North Korea's food shortages. It is likely to worsen the nutritional imbalance of North Koreans, whose consumption of animal protein already falls far below the recommended levels."

North Korea has reported the outbreak to the UN Food and Agriculture Organization (FAO), according to the Financial Times (Access). According to the article,

"South Korean media reported that the UN agency will dispatch a team next week to evaluate the situation and help the North contain the disease.

It was unclear whether the disease had spread from the South to the North. South Korea has been battling a severe outbreak of the disease since November, described as Asia’s worst in half a century by Juan Lubroth, chief veterinary officer of the FAO.

It has culled 3 [million] animals, prompting a UN warning that all Asian nations should tighten import controls and begin vaccinations to prevent the disease from spreading to the whole continent."

As we reported yesterday, for the last two months, North Korea has been frantically begging for food around the world, and this comes at a time when their best friend forever China is having major food problems because of a severe drought. According to an official quoted by the New Zealand Herald, "This year, all 40 North Korean embassies have been ordered by Pyongyang to ask Governments for food. They have each been given a quota."

The events in Egypt and Tunisia have shown everyone how quickly things can change. With North Korea deep into a generational Crisis era, and with much of the population facing malnutrition and starvation, the Korean peninsula remains, along with the Mideast, the most dangerous place in the world today.

(Comments: For reader comments, questions and discussion, see the 12-Feb-11 News -- As Egypt's president Mubarak resigns, tension grows in the Sinai thread of the Generational Dynamics forum. Comments may be posted anonymously.) (12-Feb-2011) Permanent Link
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11-Feb-11 News -- Egypt 'contagion' threatens stability of Saudi Arabia

Iran's opposition leader under house arrest

Egypt 'contagion' threatens stability of Saudi Arabia

Egypt is in chaos today, after Egyptian officials first signaled president Hosni Mubarak's intention to "meet all the protesters' demands" (i.e., step down), but then did not step down. In his speech, he said he'd stay on until the September elections, but would transfer (unspecified) powers to the vice president, Omar Suleiman. It was only clarified several hours later by the Egyptian ambassador to the U.S., that Mubarak had transferred all presidential powers to Suleiman.

The clarification only seemed to increase the fury of the protesters, and there is a real possibility of violence on Friday after midday prayers, when millions of worshippers will pour out into the streets.

Many commentators have expressed the concern that Egypt is going to undergo a revolution similar to Iran's 1979 Great Islamic Revolution. I've written in the past (see "4-Feb-11 News -- The lull before the storm in Egypt as 'Friday of Departure' approaches") that this appears to be impossible, because Egypt is lacking two indispensable things that were present in 1979 Iran: A historic fault line between monarchy and clerics, and a charismatic clerical leader like Iran's Ayatollah Ruhollah Khomeini. In particular, Egypt lacks any strong jihadist presence, and the Muslim Brotherhood in Egypt has long ago renounced violence.

However, while those indispensables are not present in Egypt, they ARE present in Saudi Arabia, along with its neighbor, Yemen.

Saudi Arabia has had numerous civil wars, including the crisis civil war that ended with the Ibn Saud conquest in 1925, leaving the al-Saud dynasty in control of Arabia.

Naser Al-Wahishi (Yemen Times)
Naser Al-Wahishi (Yemen Times)

Today, those ethnic divisions have morphed into a clear fault line between the Saudi monarchy, which wants to continue the country's modernization program, and the hardline Wahhabi community, currently led by Al-Qaeda on the Arabian Peninsula (AQAP), which is headquartered in Yemen.

And AQAP has a charismatic leader, Naser Al-Wahishi, who may have been injured in December, but is still very much alive, according to the Yemen Times.

Add to that, the fact that Saudi Arabia's King Abdullah is 87 years old, unemployment is high and food prices are high, and you have the right mix for a possible Sunni Islamic Revolution in Saudi Arabia.

That's why this week's revelations of concerns about Saudi Arabia's instability are significant.

According to the Jerusalem Post, King Abdullah has spoken with President Obama, and told him not to humiliate Egyptian president Mubarak. Abdullah also promised that if the U.S. cuts financial aid to Egypt, then the Saudis will provide the same aid.

Other sources indicate that the disagreement between the Abdullah and Obama is more serious. One Saudi analyst told the Financial Times (Access) that Abdullah was alarmed that the US, a long-time supporter of Mubarak, would throw him under the bus so quickly. The fear is that the US would do the same to Abdullah just as quickly.

According to Debka, drawing on intelligence sources in London, Thursday's conversation between Abdullah and Obama was "the most acerbic the US president has ever had with an Arab ruler." Debka, which is a generally reliable news source, but has occasionally predicted imminent wars that never occurred, says that the rift places in jeopardy the entire American policy in the Mideast.

From the point of view of Generational Dynamics, these developments would support the trend that I've discussed many times. (See, for example, "China 'betrays' Iran, as internal problems in both countries mount" from 2008.)

The world is headed for a "Clash of Civilizations" world war, pitting China, Pakistan, and Sunni Muslim nations against the US, India, Russia and of course Israel.

Iran, which has a hardline anti-American government, but a large pro-American population, will side with the West when forced to choose one side or the other.

A Great Sunni Islamic Revolution on the Arabian Peninsula, led by jihadist Naser Al-Wahishi, is one possible outcome that would support this trend, and lead to certain regional war in the Mideast.

Additional links

An Iranian opposition leader, Mehdi Karroubi, was placed under house arrest on Thursday, because he called for a rally in support of the uprisings in Egypt and Tunisia. AP

France's president Nicolas Sarkozy declared that multiculturalism has failed, joining with British prime minister David Cameron's speech last week. ( "6-Feb-11 News -- UK Prime Minister David Cameron attacks 'Multiculturalism' in Britain".) He said, "We have been too concerned about the identity of the person who was arriving and not enough about the identity of the country that was receiving him." Telegraph

(Comments: For reader comments, questions and discussion, see the 11-Feb-11 News -- Egypt 'contagion' threatens stability of Saudi Arabia thread of the Generational Dynamics forum. Comments may be posted anonymously.) (11-Feb-2011) Permanent Link
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10-Feb-11 News -- From Korea to Egypt, high food prices are driving policies

27% of US homes are 'under water,' up sharply from previous quarter

From Korea to Egypt, high food prices are driving policies

For the last two months, North Korea has been frantically begging for food around the world, according to South Korea's JoongAng Daily. The request has extended to dozens of countries, including China, the U.S., EU, and countries in southeast Asia.

The North Koreans' desperate need for food is apparently responsible for initiating the silly charade that went on the last few days. The North Koreans have a history of wanting to "talk" only when they can use the talks to extort aid, especially food aid. Still, the Norks have been so insistent for the last few weeks, that finally the South agreed to "talk." For the last few days, we've had bubbly stories on the BBC and elsewhere about how things have finally turned around, and a new era of sunshine was opening on the Korean Peninsula.

The talks collapsed in two days, when the Norks stormed out of the meeting, after the South wanted to discuss last year's sinking of the South Korean warship Cheonan, and the shelling of Yeonpyeong Island, killing about 50 South Koreans, according to the Korea Times. The South's demands for an apology reflect a significant hardening of policy since previous talks.

Nor are the North Koreans likely to get much food aid from China, which is deep into its own problems, according to Xinhua. China is suffering the worst drought in 60 years, crippling the country's major agricultural regions, leaving many of them parched.

Striking museum workers in Cairo on Wednesday (AP)
Striking museum workers in Cairo on Wednesday (AP)

China is the world's largest wheat producer, according to the NY Times, and if they're forced to import large amounts of wheat, it could send shock waves through the world's grain markets. "They can buy whatever they need to buy, and they can outbid anyone," according to one expert, which means that they can bid prices up as high as they want.

Wheat prices are also playing a role in the Egyptian revolution, as wildcat strikes are spreading around the country, and are threatening closure of the Suez Canal. Closure of the canal would be a crisis for Europe, according to EurActive, because Europe depends on oil supplies shipped through the canal. It would also be a crisis for Egypt, not only because of the loss of canal revenue, but also because Egypt depends on wheat imports from other countries.

Suez Canal workers have, in fact, gone on strike, according to Bloomberg, but so far the canal is operating normally.

FAO Food Price Index -  1991 - January 2011
FAO Food Price Index - 1991 - January 2011

Food prices are only going to go higher. Food prices were already at historic highs in December, and then they rose an additional 3.4% in January, according to the U.N. Food and Agriculture Organization.

And now, on Wednesday, the US Dept. of Agriculture (USDA) announced that supplies of corn and wheat this year will be well below previous forecasts, according to Reuters, thanks to increased demand for cattle feed and ethanol production.

David Dawe of the FAO explained what has happened in an interview on Bloomberg TV (my transcription):

"Food prices got really low of around 2000. That is about when they hit their trough, and a lot of that was due to investment in technology through agricultural research.

[For example,] governments building roads to move extra production to markets. But certainly a big factor was much higher yields for rice. that was the culmination of a lot of research.

The research funding has fallen off in recent years, especially for some of the cereals and that gradually lead to high prices. We saw prices go from 2000 to about 2007, more or less steadily."

Professor Art Barnaby of Kansas State University provided some additional reasons:

"What's driving the [prices] are the corn numbers. When you look at the supply demand numbers, we are now putting two Iowa corn crops in the gas tanks.

And if you look at the history going back to 2002, the ethanol number is growing every year, and that's what's really driven the whole market. Now the question becomes, if you change government policy, and reduce some of the tax incentives that are built into this ethanol climate, what will that do to the demand for ethanol in this corn complex. And I'm sure that it will back off the demand. I'm not sure we're going to back to where we were in 2002, but on the other hand we've discovered we can produce a lot more corn. It's those corn numbers though, that are dragging acres out of wheat and soybeans, and maintaining those prices.

Even cotton now has some really strong prices. Again corn is out there bidding more acres into production."

And so, since the year 2000, research funding on food production has been cut off, and huge amounts of existing food production have been diverted to ethanol.

If anybody ever had difficulty understanding the significance and importance of generational factors in the flow of history, then surely this example will resolve those difficulties.

It is truly mind-boggling that, since the year 2000, food production has been taken for granted by world officials, It's like Mad Magazine's Alfred E Neuman saying, "What, me worry?"

The survivors of World War II (GI and Silent generations) saw how destructive famines can be, and they set up the Green Revolution and the FAO to make sure that everyone would be fed. But no sooner did the Silents retire in the 1990s, then officials abandoned food research and diverted the remaining food production. It's truly amazing.

I like to compare high food prices to high blood pressure in an individual -- a kind of silent killer, until it's no longer silent.

A great famine in 1788 led to the French Revolution. The Tunisia and Egypt revolutions began as food riots. When a man can't feed himself and his family, he will not sit quietly.

From Korea to Egypt, and around the rest of the world, the greatest threat to world stability today is the continual surge in food prices. Unless food prices fall this year, which nobody is predicting as far as I know, the world could be a different place by the end of the year.

Additional links

27% of US homes are "under water," with home values less than the amount due on their mortgages, as of the fourth quarter. This is a substantial increase over the previous quarter, when the figure was 23.2%. The reason for the substantial increase in the number of homes underwater is because home values fell 2.6% during the fourth quarter. Home values declined all year, but declines have accelerated during the last half of 2010, once the government's home buyer tax credit ended in mid-year. The number of homes sold at a loss also accelerated during the last half of the year. These trends are expected to continue in 2011.

India's army is undertaking its first strategic transformation in more than two decades. The goal is to provide enough capacity to fight a war on "two and one half fronts" -- meaning simultaneous wars with Pakistan and China, at the same time as managing an internal counter-insurgency effort. The Diplomat

Wikileaks revelations make awkward reading for Iran because they reveal how hostile the neighboring countries are to Iran, and how determined they are to prevent Iran from acquiring a nuclear weapon. The Diplomat

Iran's Awakening era demonstrations are far from over. As we reported recently, Ayatollah Seyyed Ali Khamenei, has been bragging that the Tunisia Revolution and Egypt uprising are the result of Iran's 1979 Great Islamic Revolution. Opposition leader Mehdi Karroubi is taking advantage of that declaration to plan a demonstration in Tehran next week, in solidarity with the protest movements in Egypt and Tunisia. NY Times

David Cameron's recent speech attacking multiculturalism reflects growing xenophobic policies and behaviors in Eurpoe. In east London, local campaigners are arguing that an Islamic group should be barred from getting an extension of the land-use permit for their mosque because, the campaigners allege, the group doesn't let women worship, and because its teachings have inspired terrorists, and it preaches isolation from the wider community. Wall Street Journal (Access)

According to Debka, US naval, marine and air forces are arriving in the Suez Canal's Great Bitter Lake, to protect the Suez Canal in case of a military coup in Egypt. Debka

The Belgorod region of Russia is banning Valentine's day festivities and promtions, because it promotes promiscuity rather than love. According to a government spokesman, "It’s designed to swell the emotions, and you know what kind of teenage liaisons happen then." Bloomberg

Russian President Dmitry Medvedev has scolded Japan for unrealistic claims to the South Kuril islands, which are claimed by both Russia and Japan. At the same time, Medvedev ordered the deployment of sufficient weaponry to secure the islands. Xinhua

In Russia's Kabardino-Balkaria province, in the North Caucasus, militant activity has increased four to five times over the past year. Jamestown

For techies: Your guide to the seven types of malicious hackers InfoWorld

Study suggests that people who drink diet soda have higher risk of stroke. AP

(Comments: For reader comments, questions and discussion, see the 10-Feb-11 News -- From Korea to Egypt, high food prices are driving policies thread of the Generational Dynamics forum. Comments may be posted anonymously.) (10-Feb-2011) Permanent Link
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9-Feb-11 News -- Chechnya terrorist Doku Umarov takes credit for Moscow airport bombing

Putin's popularity is threatened by Umarov and by Egypt's revolution

Chechnya terrorist Doku Umarov takes credit for Moscow airport bombing

Doku Umarov, a terrorist from Chechnya, claimed responsibility the Moscow airport bombing on January 24. (See "25-Jan-11 News -- Suicide bomber kills 35 people in Moscow airport.")

According to the Moscow Times, the claim appears in a Russian language video posted on Caucasus rebel web sites, though some investigators cast doubt on the claim.

Umarov is a veteran of the Chechen wars fought in the 1990s and early 2000s by rebels wishing to separate Chechnya from Russia, and make it a separate state. Umarov has been on Russia's most wanted criminal list for various terrorist attacks and assassinations.

But in the video, Umarov referred to foreign occupations of Iraq and Afghanistan, indicating that he's "promoting" himself from being a nationalist rebel to being a jihadist rebel.

Tuesday's video was the second Umarov video in a week. The Moscow Times reports that Umarov posted a video on Friday, in which he said, "We will make this the year of blood and tears. I won't say there are hundreds of us, but some five to six dozen can be found, and special operations will be carried out monthly and weekly."

Putin's popularity threatened by terrorism and by Egypt's revolution

Prime Minister Vladimir Putin rose to popularity by leading Russia in the second war against Chechnya separatist rebels. Putin has repeatedly promised to end terrorism from the mostly Muslim North Caucasus (Russia's southern provinces) once and for all.

The January 24 airport explosion shows that attacks on Moscow are going to continue, whether by Umarov or others, according to Reuters, and these will make Putin look bad.

But that's not Putin's only problem. Ironically, the revolution in Cairo Egypt's Tahrir (Freedom) Square is also bad news for Putin, according to Jamestown.

The revolutions in Tunisia and Egypt are being freely and widely reported in Russia (unlike China), and it's becoming clear to many Russians that the same conditions of governmental corruption and autocracy that caused the revolutions in the Mideast are also prevalent in Russia.

In the past, Putin has responded to nascent rebellions by killing or corrupting their leaders. But the revolutions in Tunisia and Egypt are an uprising of the lower-middle class population, with no leader. The Kremlin would be powerless to stop a similar revolution, if it occurred in Moscow, according to the article.

(Comments: For reader comments, questions and discussion, see the 9-Feb-11 News -- Chechnya terrorist Doku Umarov takes credit for Moscow airport bombing thread of the Generational Dynamics forum. Comments may be posted anonymously.) (9-Feb-2011) Permanent Link
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8-Feb-11 News -- Bangladesh riots over stock market crash and food inflation

Japan furious over Russian president Medvedev's visit to disputed islands

Bangladesh riots over stock market crash and food inflation

Dhaka Stock Exchange - to January 26 and February 7, 2011
Dhaka Stock Exchange - to January 26 and February 7, 2011

The headline in the Daily Star (Dhaka) reads: "Stock investors go berserk again."

The headline alludes to the previous time when investors went "berserk" -- see "21-Jan-11 News -- Bangladesh stock market crashes 9% in 5 minutes."

According to the story:

"A steep fall in share prices sent hundreds of investors out on the street in Motijheel to protest the plunge yesterday, with many taking to vandalism for the second day. They vowed to continue their demonstration until the market bounces back.

The General Index (DGEN) of Dhaka Stock Exchange came down to 6,394 points, registering a 324 points or 4.8 percent fall at the end of a four-hour trading session yesterday.

With yesterday's fall, the market remained in the red for a third trading session, marking a cumulative drop of 915 points. ...

Although the investors started gathering in front of the premier bourse from the opening bell of the trading session, the demonstration began at around 1:30pm after the DGEN plunged over 300 points.

The aggrieved investors set fire to paper and wood, burnt an effigy of the finance minister, and chanted slogans demanding resignations of the finance minister, central bank governor, market regulator's chairman and presidents of two bourses.

They also smashed up a bus and a pickup van in the area and broke windowpanes of some buildings adjacent to the DSE by throwing brickbats.

"My portfolio has been wiped out by 75 percent. I have invested Tk 20 lakh, but now the value is Tk 5 lakh only," said Mizanur Rahman, a shocked investor who was in tears. "I am losing everything. I don't know what to do.”

Many others were expressing their feelings the same way, most of whose money was lost to the recent slump in share prices.

Stockbrokers said share prices kept declining without any let-up. "Frightened investors started offloading the shares from the opening bell. Sliding confidence of investors prompted huge sell pressure and buyers were inactive in fear of further debacle," a leading stockbroker said in its regular analysis."

The stock market bubble is crashing at exactly the same time that global food prices are skyrocketing. Food prices in Bangladesh have increase 11% in just the 5 weeks since the year began, and they were already at historically high levels.

The stock exchange riots coincided with a nationwide strike called by the main opposition political party, the Bangladesh Nationalist Party (BNP), according to VOA.

BNP has called for nationwide demonstrations again on Wednesday, according to the Daily Star.

Cairo stock exchange remains closed as banks reopen in Egypt

Cairo Stock Exchange - to January 27, 2011
Cairo Stock Exchange - to January 27, 2011

The headline in the the Cairo paper Ahram reads, "Egypt pound hits 6-year low, but market stable."

The headline was referring to the Egyptian companies that are listed on the London stock exchange. It certainly wasn't referring to the Cairo stock exchange, because the Cairo stock exchange was closed after it crashed on January 27. It was supposed to reopen two days ago (on Sunday), but the reopening was postponed until next Sunday -- presumably because officials asked around and couldn't find any investors who wanted to buy stocks.

Banks reopened on a limited basis on Sunday, but some ran out of cash when long lines of depositors withdrew their savings.

'Emerging markets' losing their popularity

The "experts" have really changed their views, haven't they.

Last year, all the experts were saying that emerging markets were "hot," the best place to invest, because American and European markets weren't growing enough. Quantitative easing money poured into emerging markets, creating the stock market bubbles that are now crashing.

Investors are now fleeing emerging markets, according to USA Today.

This means that investors are pulling money out of emerging markets, and putting it -- where? Probably Wall Street stocks, expanding the huge Wall Street bubble even larger.

The Wall Street bubble has grown to truly alarming levels again. The same kind of crash that occurred in Dhaka and Cairo will surely be coming to Wall Street.

Additional links

The Japanese are furious that Russia's President Dmitry Medvedev visited one of the four Russian-held Kuril Islands, which Japan claims are Japanese territory. Russia seized the islands at the end of World War II, and the territorial dispute has prevented the two countries from signing a postwar peace treaty. Japanese Prime Minister Naoto Kan called Medvedev's visit in November an "unforgivable outrage," and Russian Foreign Minister Sergei Lavrov criticized Kan's outburst as "not diplomatic." Mainichi

Crop production in China has fallen sharply, as the worst drought in six decades shows no sign of letting up. Xinhua

The fastest growing demographic at US divinity schools are Boomers. Time

Thai schoolgirl uniforms
Thai schoolgirl uniforms

A poll conducted by a Japanese news web site finds that college girls in Thailand wear the sexiest uniforms in the world. This has resulted in outrage in Thailand, which has the largest organized sex industry in the world. One Thai columnist calls for greater moral teaching to stem the rise of eroticism. "The most practical solution could be to educate and make students appreciate the value of wisdom and good deeds, instead of external beauty, stardom and fame." Asia Sentinel

(Comments: For reader comments, questions and discussion, see the 8-Feb-11 News -- Bangladesh riots over stock market crash and food inflation thread of the Generational Dynamics forum. Comments may be posted anonymously.) (8-Feb-2011) Permanent Link
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7-Feb-11 News -- Cameron's attack on 'Multiculturalism' advances the theory of suicide bombers

Why do some cultures celebrate terrorism, and others don't?

Cameron's attack on 'Multiculturalism' advances the theory of suicide bombers

Yesterday, I described the speech by British Prime Minister David Cameron attacking 'multiculturalism' as being the most well thought out description of the Islamist terrorism issue that I've seen. I added that I can't recall the last time I was so impressed by a speech by a politician. (See "6-Feb-11 News -- UK Prime Minister David Cameron attacks 'Multiculturalism' in Britain.")

Unfortunately, the policies that Cameron recommended could not be implemented at this late date, and even if they could, they would have no effect.

However, the following statement by Cameron is particularly insightful: "[S]ome young men find it hard to identify with the traditional Islam practiced at home by their parents, whose customs can seem staid when transplanted to modern Western countries. But these young men also find it hard to identify with Britain too, because we have allowed the weakening of our collective identity."

This statement is consistent with research on suicide bombers performed by University of Chicago professor Robert A. Pape, published in his 2004 book, Dying to Win : The Strategic Logic of Suicide Terrorism.

As I described in 2005 in "Robert Pape's 'Dying to Win' sheds light on suicide bombers," the form of suicide practiced by suicide bombers is "altruistic suicide," suicide performed by someone who willingly accepts a voluntary death because society supports and honors the act. A person commits suicide terrorism in order to become a hero within a social organization at odds with the target society.

Putting Cameron's remarks together with Pape's conclusions, we see that the London subway bombers were totally disoriented kids, under the influence of al-Qaeda "instructors" in Pakistan and London, who did what they did because they wanted to be a hero to their neighbors and parents.

But of course, as it later turned out, they weren't heroes to their parents and neighbors. Their parents were first and second generation immigrants from Pakistan who were as shocked as everyone was, and their neighbors had to ask their kids whether they were planning anything similar.

Pape asks the question, "Why do suicide attacks receive mass support in some societies and not others?" This is the wrong question, because it overlooks the fact that societies will support suicide attacks in some generational eras and not others.

In fact, Pape acknowledges that there's an important time component from his own data -- after all, he says that there were no suicide terrorists between 1945 and 1980, and his data shows that their incidences have been growing steadily (perhaps exponentially) since then.

He says that he can't explain why "the overwhelming majority of societies -- even those experiencing political violence -- exhibit no suicide terrorism but a handful of societies have experienced dozens of attacks each."

On the time scale, he writes, "[W]hile the supply of suicidal individuals may vary somewhat over time, psychological expanations cannot account for why over 95 percent of all suicide terrorist attacks occur in organized campaigns that are concentrated in time."

An analysis from generational theory answers all of these questions. (I wrote to Pape in 2005 to tell him, but he never responded.)

Pape's database of suicide bomber attacks reveals an startling fact about their nationalities: They come from 11 different countries, but that they overwhelmingly come from just two countries: Saudi Arabia and Morocco.

What makes this fact startling is that these are precisely the two countries that have gone the longest time since their last generational crisis wars. Saudi Arabia's last crisis war was the Ibn Saud conquest, ending in 1925, and Morocco's was the Rif War, ending in 1927.

Musical intermission: Gordon MacRae sings The Riff Song from the play Desert Song. Enjoy! End of intermission.

I've developed a "violence profile" that should apply to any society or nation at any time. This has not been rigorously proven -- that will be someone's Ph.D. thesis some day -- but it's consistent with Pape's research, and it's consistent with dozens of examples that I've posted on my web site over the years. (See, for example, my recent discussions of the lack of suicide bombers with Iraqi or Afghan nationalities in "6-Jan-11 News -- Pakistan melts down as US/Nato forces struggle in Afghanistan.")

This answers Pape's questions about why some nationalities have more suicide bombers than others.

For Pape's other question, "Why do suicide attacks receive mass support in some societies and not others?" the reasoning is similar. In generational Recovery and Awakening eras, suicide bombings receive little or no support. In Unraveling and Crisis eras, the level of support increases.

David Cameron's speech brings these concepts full circle. As Cameron tries to formulate new policies for the Muslim community in Britain, and the Europeans try to do the same, they should take into account the nationalities involved, and their generational eras.

(Comments: For reader comments, questions and discussion, see the 7-Feb-11 News -- Cameron's attack on 'Multiculturalism' advances the theory of suicide bombers thread of the Generational Dynamics forum. Comments may be posted anonymously.) (7-Feb-2011) Permanent Link
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6-Feb-11 News -- UK Prime Minister David Cameron attacks 'Multiculturalism' in Britain

Cameron criticizes 'muddled thinking' about Islamist extremism on the left and right

UK Prime Minister David Cameron attacks 'Multiculturalism' in Britain

After the London subway bombings on 7/7/2005, the subsequent investigation found that the bombings had been perpetrated by British citizens, young Muslims who had been influenced by radical Islamist terrorists in Pakistan.

As shocking as that event was, in one sense no one was more shocked than the parents and neighbors of the young men, who generally had no idea what the young men were planning.

Britain has never been able to come to terms with the inherent public policy contradictions illuminated by those events, but now Prime Minister David Cameron is attempting to do so by a major speech on Saturday attacking "multiculturalism."

There are many policies in different countries for deal with immigrants, but in the West, there are two general philosophies, integration versus multiculturalism.

Integration has been followed by France, where public policy treats immigrants as Frenchmen first, who are expected to learn the French language and adopt the French culture, allowing cultural differences only when they don't differ too sharply from mainstream culture. Thus, France has banned the burka in some public places.

Multiculturalism has been followed by Britain, where immigrants must still follow the law, but it's acceptable for immigrant groups to speak their own languages with one another and follow their own unique cultural practices.

David Cameron in Munich (AP)
David Cameron in Munich (AP)

It's worth pointing out that neither policy as been entirely successful. France's policies have led to large suburban Muslim communities and large youth riots in 2005. (See "France's Nicolas Sarkozy says 'Let them eat cake!'")

In Cameron's speech on Saturday, delivered in Munich, he began by sharply distinguishing between the religion of Islam and the ideology of Islamist extremism:

"But the biggest threat that we face comes from terrorist attacks, some of which are, sadly, carried out by our own citizens. It is important to stress that terrorism is not linked exclusively to any one religion or ethnic group. My country, the United Kingdom , still faces threats from dissident republicans in Northern Ireland . Anarchist attacks have occurred recently in Greece and in Italy , and of course, yourselves in Germany were long scarred by terrorism from the Red Army Faction. Nevertheless, we should acknowledge that this threat comes in Europe overwhelmingly from young men who follow a completely perverse, warped interpretation of Islam, and who are prepared to blow themselves up and kill their fellow citizens. ... We will not defeat terrorism simply by the action we take outside our borders. Europe needs to wake up to what is happening in our own countries. Of course, that means strengthening, as Angela has said, the security aspects of our response, on tracing plots, on stopping them, on counter-surveillance and intelligence gathering.

But this is just part of the answer. We have got to get to the root of the problem, and we need to be absolutely clear on where the origins of where these terrorist attacks lie. That is the existence of an ideology, Islamist extremism. We should be equally clear what we mean by this term, and we must distinguish it from Islam. Islam is a religion observed peacefully and devoutly by over a billion people. Islamist extremism is a political ideology supported by a minority. At the furthest end are those who back terrorism to promote their ultimate goal: an entire Islamist realm, governed by an interpretation of Sharia. Move along the spectrum, and you find people who may reject violence, but who accept various parts of the extremist worldview, including real hostility towards Western democracy and liberal values. It is vital that we make this distinction between religion on the one hand, and political ideology on the other. Time and again, people equate the two. They think whether someone is an extremist is dependent on how much they observe their religion. So, they talk about moderate Muslims as if all devout Muslims must be extremist. This is profoundly wrong. Someone can be a devout Muslim and not be an extremist. We need to be clear: Islamist extremism and Islam are not the same thing.

This highlights, I think, a significant problem when discussing the terrorist threat that we face. There is so much muddled thinking about this whole issue. On the one hand, those on the hard right ignore this distinction between Islam and Islamist extremism, and just say that Islam and the West are irreconcilable – that there is a clash of civilizations. So, it follows: we should cut ourselves off from this religion, whether that is through forced repatriation, favoured by some fascists, or the banning of new mosques, as is suggested in some parts of Europe . These people fuel Islamophobia, and I completely reject their argument. If they want an example of how Western values and Islam can be entirely compatible, they should look at what’s happened in the past few weeks on the streets of Tunis and Cairo : hundreds of thousands of people demanding the universal right to free elections and democracy.

The point is this: the ideology of extremism is the problem; Islam emphatically is not. Picking a fight with the latter will do nothing to help us to confront the former.

On the other hand, there are those on the soft left who also ignore this distinction. They lump all Muslims together, compiling a list of grievances, and argue that if only governments addressed these grievances, the terrorism would stop. So, they point to the poverty that so many Muslims live in and say, ‘Get rid of this injustice and the terrorism will end.’ But this ignores the fact that many of those found guilty of terrorist offences in the UK and elsewhere have been graduates and often middle class. They point to grievances about Western foreign policy and say, ‘Stop riding roughshod over Muslim countries and the terrorism will end.’ But there are many people, Muslim and non-Muslim alike, who are angry about Western foreign policy, but who don’t resort to acts of terrorism. They also point to the profusion of unelected leaders across the Middle East and say, ‘Stop propping these people up and you will stop creating the conditions for extremism to flourish.’ But this raises the question: if it’s the lack of democracy that is the problem, why are there so many extremists in free and open societies?

Now, I’m not saying that these issues of poverty and grievance about foreign policy are not important. Yes, of course we must tackle them. ... But let us not fool ourselves. These are just contributory factors. Even if we sorted out all of the problems that I have mentioned, there would still be this terrorism. I believe the root lies in the existence of this extremist ideology. I would argue an important reason so many young Muslims are drawn to it comes down to a question of identity."

This is probably the most well thought out description of the Islamist terrorism issue that I've seen. I can't recall the last time I was so impressed by a speech by a politician.

Cameron then went on to specifically criticize multiculturalism policies in Britain:

"What I am about to say is drawn from the British experience, but I believe there are general lessons for us all. In the UK , some young men find it hard to identify with the traditional Islam practiced at home by their parents, whose customs can seem staid when transplanted to modern Western countries. But these young men also find it hard to identify with Britain too, because we have allowed the weakening of our collective identity. Under the doctrine of state multiculturalism, we have encouraged different cultures to live separate lives, apart from each other and apart from the mainstream. We’ve failed to provide a vision of society to which they feel they want to belong. We’ve even tolerated these segregated communities behaving in ways that run completely counter to our values.

So, when a white person holds objectionable views, racist views for instance, we rightly condemn them. But when equally unacceptable views or practices come from someone who isn’t white, we’ve been too cautious frankly – frankly, even fearful – to stand up to them. The failure, for instance, of some to confront the horrors of forced marriage, the practice where some young girls are bullied and sometimes taken abroad to marry someone when they don’t want to, is a case in point. This hands-off tolerance has only served to reinforce the sense that not enough is shared. And this all leaves some young Muslims feeling rootless. And the search for something to belong to and something to believe in can lead them to this extremist ideology. Now for sure, they don’t turn into terrorists overnight, but what we see – and what we see in so many European countries – is a process of radicalisation.

Internet chatrooms are virtual meeting places where attitudes are shared, strengthened and validated. In some mosques, preachers of hate can sow misinformation about the plight of Muslims elsewhere. In our communities, groups and organisations led by young, dynamic leaders promote separatism by encouraging Muslims to define themselves solely in terms of their religion. All these interactions can engender a sense of community, a substitute for what the wider society has failed to supply. Now, you might say, as long as they’re not hurting anyone, what is the problem with all this?

Well, I’ll tell you why. As evidence emerges about the backgrounds of those convicted of terrorist offences, it is clear that many of them were initially influenced by what some have called ‘non-violent extremists’, and they then took those radical beliefs to the next level by embracing violence. And I say this is an indictment of our approach to these issues in the past. And if we are to defeat this threat, I believe it is time to turn the page on the failed policies of the past. So first, instead of ignoring this extremist ideology, we – as governments and as societies – have got to confront it, in all its forms. And second, instead of encouraging people to live apart, we need a clear sense of shared national identity that is open to everyone."

Cameron goes on to discuss public policy options. He's particularly critical of showering Muslim organizations with money, "despite doing little to combat extremism. As others have observed, this is like turning to a right-wing fascist party to fight a violent white supremacist movement." He urges evaluating the actions and objectives of organizations that receive public money to determine whether they promote British values.

He says that this must be done within Islam as well. "So let us give voice to those followers of Islam in our own countries – the vast, often unheard majority – who despise the extremists and their worldview."

Other policies that he advances are:

The speech is critical of "muddled thinking" on both the left and right. It's worthwhile for everyone to read it in its entirety.

(Comments: For reader comments, questions and discussion, see the 6-Feb-11 News -- UK Prime Minister David Cameron attack 'Multiculturalism' in Britain thread of the Generational Dynamics forum. Comments may be posted anonymously.) (6-Feb-2011) Permanent Link
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5-Feb-11 News -- Food prices surge +3.4% in January to fresh historic highs

Iran's Supreme Leader takes credit for 'Islamic Awakening' in Egypt and Tunisia

Iran's Supreme Leader takes credit for 'Islamic Awakening' in Egypt and Tunisia

Iran's current supreme leader of the Islamic Revolution, Ayatollah Seyyed Ali Khamenei, says that the Tunisia revolution and the Egypt uprising are a result of Iran's 1979 Great Islamic Revolution, according to state run Press Tv. Khamanei said the following during Friday prayers:

"Today, developments in North Africa, [including] Egypt, Tunisia and some other countries have a special meaning for the Iranian nation.

This is what was always referred to as the Islamic awakening created by the victory of the great Revolution of the Iranian nation. ...

In Tunisia, which is a Muslim nation with a long Islamic history with great Muslim scholars coming from Tunisia; people had to carry a special card to go to mosques under Ben Ali's rule, a card that the government did not give to everyone. ...

As soon as this traitor (Ben Ali) fled, female students went to university wearing hijab. ...

[Egyptian President Hosni Mubarak is the] lackey of the Zionist regime [Israel]."

According to the article, he added that Egyptian president Hosni Mubarak was a tool in the hands of the US, and that the US and Israel have become helpless in the face of freedom-seeking Egyptians. He said that defeat awaits the US and Israel in Tunisia and Egypt.

There's a lot of dark humor associated with this story, after Khamenei's government massacred Iranian protesters last year.

It never ceases to astonish me that the Iranian leadership, including Khamenei and president Mahmoud Ahmadinejad, actually believe that the Sunni Arab states are going to allow Iran to be their leader, just as the Caliphate in Istanbul in Ottoman Turkey used to be their leader.

This policy is particularly outlandish in the case of supplying money and weapons to Hamas. Hamas will, of course, happily take their free money and weapons. (If Iran offered me free money, I'd take it too.)

But Sunni Muslim Gazans will never side with Iran against their fellow Arabs. The only country that the Sunni Arabs hate more than Israel is Iran.

Food prices surge +3.4% in January to fresh historic highs

World food prices surged to a new historic peak in January, for the seventh consecutive month, according to the U.N. Food and Agriculture Organization.

FAO Food Price Index -  1991 - January 2011
FAO Food Price Index - 1991 - January 2011

Food prices were already at historic highs in December. Many politicians were predicting that food prices would start to fall again by now, as the result of new rice and wheat crops. Instead, food prices surged by 3.4% in one month, with almost all categories showing increases.

According to FAO economist Abdolreza Abbassian, moderation in food prices is nowhere to be seen:

"The new figures clearly show that the upward pressure on world food prices is not abating. These high prices are likely to persist in the months to come. High food prices are of major concern especially for low-income food deficit countries that may face problems in financing food imports and for poor households which spend a large share of their income on food.

The only encouraging factor so far stems from a number of countries, where - due to good harvests - domestic prices of some of the food staples remain low compared to world prices."

The last sentence is very weird, and it just goes to show how screwed up these politicians are. He's saying that it's good news that food prices in some countries are lower than average world prices. Good news, right?

But that means that food prices in some other countries must be HIGHER than average world prices.

Well, despite the spin, high and surging food prices are the most destabilizing factor in the world today.

If you search the news, you can find that there are news stories about how almost every country in the world is adversely affected. Just to take one example, Reuters reports that Bangladesh's food inflation rate was 11.01% in December, which they blame on hoarding, speculating and panic buying. So Bangladesh is going to do some panic buying itself, and purchasing 100,000 tonnes of wheat, rather than the previously planned 50,000 tonnes, putting the excess into storage. This kind of panic buying will push prices even higher.

Prices of vegetables and fruits have almost doubled in Saudi Arabia, because most of those products are imported from Egypt, which is in chaos, according to the Arab News. Problems have been made even worse because some city warehouses in south Jeddah were flooded last week.

As I've written many times, most recently in "10-Jan-11 News -- Governments around the world struggle with increasing food prices," food prices have been rising steadily since 2002, with no end in sight.

From the point of view of Generational Dynamics, what we're seeing is what I call the "Malthus effect," a continuing increase in the price of food as the population grows faster than the supply of food, especially during a generational Crisis era.

Additional links

In answering questions from reporters this week, Fed Chairman Ben Bernanke said that the Fed was not to blame for food price inflation. CS Monitor

Anti-government protesters in Cairo, Egypt, were jubilant on Friday, even though they didn't achieve their primary objective of forcing president Hosni Mubarak to step down. The pro-government protesters, with whom they had fought in previous days, had disappeared, and the army protected the anti-government protesters. They sang protest songs, changed anti-Mubarak slogans, and promised to remain in Tahrir Square until Mubarak leaves. VOA

The PKK terrorist group in Turkey was thought to have been subdued, but 2010 was a very "successful" year for them, with 90 Turkish soldiers and dozens of civilians killed in terrorist attacks. ISN

There's an interesting story about how tribal elders in the Sangin district in Afghanistan, who are supposedly Taliban sympathizers, have turned against the Taliban (presumably Pakistani Taliban, though that's not mentioned). This is consistent with the fact that Afghanistan is in a generational Recovery era, with no desire for war. (See "6-Jan-11 News -- Pakistan melts down as US/Nato forces struggle in Afghanistan.") Independent

The Cambodian "Killing Fields" civil war of the 1970s was a generational crisis war for both Cambodia and Thailand. Now, as both countries are in generational Awakening eras, some border violence is flaring up again. Xinhua

As European officials continue to meet and try to figure out how to head off the next major crisis, a lot of resentment is growing against German Chancellor Angela Merkel because "the solution seems to be relatively simple: for the eurozone to thrive in its second decade, Spain, Greece, Italy and all the rest need to turn into Germany.." Guardian

Tens of thousands of people in Yemen held street protests for Thursday's "Day of Rage." There were both anti- and pro-government protesters. Reuters

Home prices in China, already at bubble levels, rose another 1% in January, the biggest one month gain in six months. Bloomberg

(Comments: For reader comments, questions and discussion, see the 5-Feb-11 News -- Food prices surge +3.4% in January to fresh historic highs thread of the Generational Dynamics forum. Comments may be posted anonymously.) (5-Feb-2011) Permanent Link
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4-Feb-11 News -- The lull before the storm in Egypt as 'Friday of Departure' approaches

Comments from readers on the Muslim Brotherhood

The lull before the storm in Egypt as 'Friday of Departure' approaches

There was bloodshed in Egypt again on Thursday, as pro- and anti-Mubarak fought each other in Cairo and Alexandria. Still, the streets were quieter on Thursday than they had been for the preceding couple of days.

Cairo (AP)
Cairo (AP)

It may have been the lull before the storm. The protesters have declared this to be "Friday of Departure," the day when Mubarak must step down if massive demonstrations are to be avoided. The demonstrations are scheduled to begin after Friday Muslim prayers and Christian services, at a time when huge numbers of people pour out of mosques and churches into the streets.

On Thursday, president Hosni Mubarak was informally interviewed by Christiane Amanpour at ABC News. According to Amanpour:

"He told me he felt strong and that he was relieved he had made his decision and that speech on Monday to step down. I asked him afterwards whether I could report our conversation. He said yes.

He told me that he is fed up with being president and would like to leave office now, but cannot, he says, for fear that the country would sink into chaos.

When I asked him what he thought seeing the people shouting insults about him and wanting him gone, he said, "I don't care what people say about me. Right now I care about my country, I care about Egypt." ...

And he pledged his loyalty to Egypt. "I would never run away," he said, "I will die on this soil." He also defended his legacy, recounting the many years he has spent leading his country."

My previous articles (see "3-Feb-11 News -- Violence between protester factions kills three in Egypt" and "31-Jan-11 News -- Millions riot in Egypt as the West fears a Muslim Brotherhood victory.") on Egypt and the Muslim Brotherhood generated a variety of opinions expressed in comments by readers. Those opinions were similar to opinions being expressed by the public as a whole.

In those articles, I reached the following conclusions, using Generational Dynamics analysis: The violence most likely will fizzle in a few days, or at most a few weeks; and a Muslim Brotherhood political victory will not cause more than cosmetic changes to the peace treaty with Israel.

I would be forced to reexamine and possibly change some of my conclusions if either of the following two things happened: The young protesters suddenly started shouting "Death to Israel" en masse; or there was evidence that the pro- and anti-Mubarak protesters were split along ethnic or religious lines.

Some web site readers rejected the whole argument:"

"I'm NOT buying what is being sold here. Let's see --Al Qaeda and Muslim Brotherhood are bitter enemies. OK-- I hope they ALL send each other to their reward of 72 virgins.---But just because they don't get along gives me NO reason to hold ANY affection for either of these towel head groups. MB remain at peace with Israel???? OH PLEASE!"

"The Brotherhood? seriously? A peaceful religion, are you serious? The world is watching the dreams of all these radicals come true. Peaceful my foot, the world is letting them sneak into their governments, and neighborhoods without much a fight. It will too late if it isn't already. This can be stopped if we only a leader of the free to step up . Obama is not that leader, way to America. Perhaps we should be paying more attention to what our own candidats are really saying and then hold them accountable when they do not. The Tea Party can't do it all."

"I have no doubt that the Muslim Brotherhood will soon get their hands on what is left of the money we have given to Mubarak and use it to buy arms to kill Americans with,you could not make this up"

"'Thus, I don’t see any particular danger from the political ascendency of the Muslim Brotherhood in Egypt' - This is so stunningly clueless, I'm speechless."

"Expecting the Muslim Brotherhood and their current "partner" for head of government El Baradei to come to the table demanding anything but regime change and more "freedom" would be assuming they had suddenly gone stupid, and were reversing their openly declared program of the last few decades. Expecting them not to reveal their true program once they are in power . . ."

"Islam exists to enslave its' followers and to kill the infidel. Any surprise here? I hope Jews come together and remember their history so they can unite against a common foe."

"This whole crisis is media generated. The military controls Egypt. Mubarak came out of the military and was elected as a frontman. The military will replace Mubarak with another straw man and the ball will keep rolling. The Muslim Brotherhood does not have the ability to take power away from Egypt's military."

A few comments were more positive:

"I am praying that your assessment is correct and holds, Mr. Xenakis. I am praying for a solution with a very low body count.."

"As always your analysis is spot on. I've been sharing your insights with my influence group to give a great perspective. When you understand generational theory, you understand a lot! The food prices in Egypt must have skyrocketed."

"I believe you are right on with this assessment Mr. Xenakis. Egypt is a little different than say Syria, or Iran. There is a vast majority of blood-thirsty throwbacks, no denying, but there is the Ancient Egyptian culture that gives some of the people a better sense of overall history and pride not just the death-cult lunacy which Islam provides. Sharia will be coming to Cairo however, I'm bullish on the burka market."

Many commentators are comparing what's happening in Egypt to what happened in Iran in 1979:

"I AM hearing death to Israel and death to America. I am hearing from rioters that Mubarak is a stooge for the Israelis and the Americans and needs to go because of that. Like the Palestinians, these people have been raised to hate Israel and America and this is instinctive. This IS another Iran. And that is the good news. This Might be the start of the Caliphate and a new dark ages for mankind. That is the bad news."

The narrative for the comparison is that in both cases there was a popular uprising against the American-supported leader (the Shah and Mubarak, respectively). In Iran, the opposition was a group of Shia Muslim clerics led by Ayatollah Ruhollah Khomeini, and the opposition only showed its true colors after they had gained power.

The analogy would be that the Muslim Brotherhood would take control of Egypt, and only then would reveal their Islamist intentions, leading to the Great Islamic Revolution.

However, the comparison fails because there are significant differences:

Unless a charismatic Muslim Brotherhood leader emerges, then there's really no chance of an Iran-style revolution in Egypt today.

"I've found a voice of reason in a sea of madness... 'No evidence to support claims that having the MB in some postion of power transitionally or permanently would result in chaos for the region.' Cautious, but optimistic, willing to stake a position without the fear-mongering.

I disagree that the protests will fizzle out inconclusively within a short time, but we'll see. ...

I'm curious about how your position might change if, not due to any change along ethnic or generational lines, the violence escalates to a higher level. That is, there were no immediate end in sight yet there was a sharp increase in casualties for instance, where would you see a "line" crossed and a need for a different course to be taken, if any, and what might that entail?"

If you're talking about a Tiananmen Square style massacre, recall that the massacre did not lead to civil war, and kept the Chinese Communist Party in power, crushing the opposition.

So the analogy in Egypt today would be a massacre by the Mubarak administration, keeping it in power, and crushing the opposition, including the Brotherhood.

That outcome would not contradict any of the conclusions I've reached, but it seems unlikely anyway. Mubarak has not stepped down, but he has taken several conciliatory measures, and is under enormous international pressure to continue to be conciliatory. Furthermore, even if he changes his mind and orders the army to massacre the protesters, it's far from clear that they would obey those orders -- in fact, they've announced several times that they will not shoot at peaceful Egyptian protesters. Despite all that, a massacre scenario is still a possibility.

"I just wanted to understand why, one day (16th) you wrote that Tunisia movement could create a civil war in Egypt, and then "suddenly" (without transition, without explanation) you jumped into Egypt saying that there were no risk of civil war."

The short answer is that the conclusions changed as the facts about Egypt's demonstrations became clearer.

Generational Dynamics forecasting is not a set of formulas. It's a process and a collection of tools that match news events to long-term trends, to produce a short-term forecast. (See "Generational Dynamics forecasting methodology.")

One way to understand certain kinds of forecasts is by means of the quote from Sherlock Holmes: "Once you eliminate the impossible, whatever remains, no matter how improbable, must be the truth."

Sometimes Generational Dynamics cannot tell you what WILL happen, but can tell you what WON'T happen. Once you've eliminated the impossible, you can conclude that what remains will happen. I've used this technique frequently in Lebanon, for example, where a civil war at this time is impossible, since Lebanon is in a generational Awakening era.

It's not that simple in the case of Egypt today, because Egypt is in a generational Crisis era, so it's impossible to eliminate a civil war, and that's what I had in mind at the time I was writing about the effect of the Tunisia uprising in Egypt.

At that time, there were a number of dangerous possibilities. It might have been possible that the Egypt riots pitted a large, organized Muslim Brotherhood organization against the government. Or it might have been possible that the Coptic Christians might be fighting the Muslims.

As it became clear that those possibilities were impossibilities, one could reach the current conclusions.

As usual, this analysis can only be improved with additional information. If you're familiar with the situation in Egypt, and particularly if you've lived in Egypt, then I would welcome your comments, either privately or in the public forum.

(Comments: For reader comments, questions and discussion, see the 4-Feb-11 News -- The lull before the storm in Egypt as 'Friday of Departure' approaches thread of the Generational Dynamics forum. Comments may be posted anonymously.) (4-Feb-2011) Permanent Link
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3-Feb-11 News -- Violence between protester factions kills three in Egypt

Russia building its navy for a challenge to China

Violence between protester factions kills three in Egypt

As we described yesterday, no sooner had Egypt's president Hosni Mubarak finished his speech on Tuesday evening vowing to step down in September, then pro-Mubarak and anti-Mubarak protesters started throwing sticks and rocks at each other.

The factional violence increased substantially through the day on Wednesday, according to LA Times. Rocks, sticks and Molotov cocktails were used, as well as occasional gunfire. At one point, pro-Mubarak protesters joined the fray riding atop camels from the tourist attractions at the Pyramids of Giza. By the end of the day, three people had been killed.

Where did the pro-Mubarak protesters come from?

Reporters from CNN questioned a number of pro-Mubarak protesters and found that many of them had been paid or ordered by the Mubarak government to go out and oppose the anti-Mubarak protesters.

On the other hand, there are many civil servants whose jobs depend on a continuing Mubarak government, and they also participated in the confrontations with the anti-Mubarak protesters.

From the point of view of Generational Dynamics, what's important here is that there is no sign that the pro- and anti-Mubarak protesters are split along some ethnic or religious fault line.

Without that kind of fault line fueling the violence, it appears that it's a political disagreement that got out of control, and I would expect the violence to fizzle within a couple of weeks.

The situation is far more dangerous in countries which do have ethnic and religous fault lines, as the youth rebellion "contagion" spreads. In war-torn Yemen, President Ali Abdullah Saleh was forced to announce that he would step down, according to VOA. After weeks of street protests in Jordan, King Abdullah II was forced to sack his cabinet and call for a new government, although the King himself remains popular, according to CS Monitor. And in Gaza, Hamas leaders are concerned that young Palestinians will turn against Hamas, just as young Egyptians have turned against Mubarak, according to Haaretz.

In my report two days ago, "31-Jan-11 News -- Millions riot in Egypt as the West fears a Muslim Brotherhood victory," I explained in detail why it appears likely that a Muslim Brotherhood political victory in Egypt would not result in more than cosmetic changes to the Israeli peace treaty and relations with America.

Several web site readers wrote to me to point out that the Muslim Brotherhood web site says different things on the Arabic and English language pages (and there's also a BigPeace article on this subject).

However, the argument that I made has nothing to do with Brotherhood's stated policies. It was based on Egypt's own self-interest, and the attitudes and behavior of the young generation. From what I've seen, all of these factors indicate the conclusion that a Brotherhood involvement in Egypt's politics will not mean a change in policies towards Israel.

A special commentary by Jamestown Foundation puts the question very succintly: "If the MB were to join a democratically elected government, which Brotherhood would appear: the moderate organization of recent times or the extremist movement of the past?"

These are all very serious concerns. However, I would say that people should not underestimate the importance of the generational factor, which is highly significant in this case.

The vast majority of Egyptians are under age 30. That means that the vast majority of Egyptians have known only an Egypt that was at peace with Israel, and have known only a Muslim Brotherhood that was non-violent. There is absolutely nothing, in my opinion, that could convince the young protesters, whether pro- or anti-Mubarak, to suddenly abrogate the peace treaty with Israel, or support a violent Muslim Brotherhood.

Going back to the Muslim Brotherhood web site, it's true that the web page in Arabic is much more bellicose towards Israel than the English language page. The implication is that the Arabic page is the "true" policy, while the English page is the "deceptive" page, because it targets a Western audience.

First, I would point out that there's no such distinction in al-Qaeda's web sites. Everything coming from al-Qaeda, whether in Arabic or English, reads "Death to America." Nor is there any such distinction made by the administration in Iran.

So my response to the Brotherhood situation is that the evidence on the ground in Egypt supports the conclusion that it's the Brotherhood's English page that represents the "true" policy, while the Arabic page, targeted to a broad anti-American Arabian audience, is the one that's deceptive.

I'm guided by what I'm hearing from the kids who are rioting in Egypt. If suddenly they change direction and start saying "Death to America," then I would have to change my conclusion. But right now, the evidence supports my conclusion that the Brotherhood would remain at peace with Israel.

The Jamestown Foundation article referenced above points out the following:

"The Brotherhood and al-Qaeda are political enemies. Al-Qaeda has not been a factor in any of the MB’s actions during the recent days of anger across the Egyptian landscape. Ayman al-Zawahiri wrote a bitter book covering 60 years of history of the MB, entitled The Bitter Harvest, containing over 200 pages of vitriolic attack on the Brotherhood. The Brotherhood regularly publishes anti-al-Qaeda articles on its official website. The MB General Guide signed a statement after 9/11 that condemned “in the strongest terms and sorrow, these events, which are against all human and Islamic values” (Quds al-Arabi, London, September 14, 2001, in Arabic). The Arabic word translated as “events” in the statement is very weak and the MB placed its signature among many. Nevertheless, the organization went on the record against attacks on innocents. One of the characteristics of the Brotherhood in Egypt that most infuriates al-Qaeda is its willingness to participate in the democratic process. In a slight nod toward political reform by President Mubarak, 2005 marked the first time Egyptians could vote for more than one candidate. In the election for parliament, MB members running as independents captured approximately one-fifth of the seats (88 out of 444). Banned as a political party, the Brotherhood was the only opposition party to be organized in every region of Egypt."

So anyone who uses the Brotherhood web site as evidence of something should also consider that the Brotherhood web site is harshly critical of al-Qaeda, and particularly condemns attacks on innocent victims.

I would be forced to reexamine and possibly change some of my conclusions if either of the following two things happened: The young protesters suddenly started shouting "Death to Israel"; or there was evidence that the pro- and anti-Mubarak protesters were split along ethnic or religious lines.

As things stand today, my conclusions remain the same: The violence most likely will fizzle in a few days, or at most a few weeks; and a Muslim Brotherhood political victory will not cause more than cosmetic changes to the peace treaty with Israel.

Additional links

Russia is increasing its naval forces, and is reorienting its naval priorities to the Asia-Pacific Region, with a new emphasis on meeting the challenge posed by China’s naval buildup. Jamestown Foundation

South Asia's biggest air show will be held in India next week. About 350 official and trade delegations from 30 countries including Australia, Britain, France, Germany, Russia, Germany and the United States will participate in the five-day event. However, China, Pakistan and Iran have not been invited. AFP

Can a computer do your job? Many experts make the simple complicated, because they fear that they could be replaced by a computer. Falkenblog

Al Gore blames cold weather and snow on "man-made global warming." The Hill

Women consider men who eat meat to be more manly, according to research at University of British Columbia. Vegetarian men are seen as wimps and less macho than meat-eaters, even by vegetarian women. Daily Mail

(Comments: For reader comments, questions and discussion, see the 3-Feb-11 News -- Violence between protester factions kills three in Egypt thread of the Generational Dynamics forum. Comments may be posted anonymously.) (3-Feb-2011) Permanent Link
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2-Feb-11 News -- Disastrous health care law struck down by Florida judge

Mubarak vows to step down, to die on the soil of Egypt

Disastrous health care law struck down by Florida judge

I'd be willing to be that there are a bunch of Democrats in the White House and Congress who are quietly thanking Florida federal judge Roger Vinson under their breath. He found the disastrous "ObamaCare" health care bill unconstitutional, according to the NY Times. The full opinion can be found in this PDF.

The entire process was melting down anyway. The Administration had granted an additional 500 waivers to the law's provisions, according to The Hill, bringing the total to 722. The waivers heavily favor labor unions and state governments.

This is exactly the kind of mess that sank President Nixon's wage-price controls. When you have some politician in Washington deciding which people in Kansas are going to be exempt from a law and which are going to have to follow the law, then the number of complaints increases exponentially.

As I've written several times, most recently in "1-Oct-10 News -- McDonald's threatens end to worker health benefits," until last year, by far the dumbest and most destructive economic policy enacted in Washington in my lifetime was the imposition, by President Richard Nixon's administration, of wage-price controls, to counter the national "emergency" represented by an inflation rate of about 4.5%. The controls program was an utter disaster. The inflation rate spiked up during the period of wage-price controls. It caused numerous shortages and mini-calamities, and did enormous damage until it was ended three years later.

The health care bill, which was wage-price controls for doctors, hospitals and health services, was in the process of doing even greater damage to the American economy. I've heard one commentator after another complain that businesses, especially small businesses, don't understand the health care bill, don't know how to comply with it, are afraid to hire people because it might obligate to enormous health care costs. Many commentators have pointed out that it was to the benefit of many small businesses to drop health care coverage altogether, and pay a fine of $2000 per employee, rather than pay the ill-defined cost of health care.

Unfortunately, the decision does not yet mean that the health care bill is dead. There will be appeals, and eventually the Supreme Court will decide. It's possible that the Supreme Court will side with the Administration, in which case the disaster will continue.

The part of the law that was struck down was the "individual mandate," that requires Americans to purchase health insurance. Proponents of the law had argued that requiring people to buy health insurance was no different than requiring them to purchase automobile insurance. However, the judge found that purchasing car insurance was related to obtaining the privilege to drive a car, while buying health insurance was not linked to any similar privilege.

Another judge had also struck down the individual mandate, but Vinson went farther. He pointed out that the Administration had argued that the individual mandate was tightly integrated into the entire law, and that many other parts of the law could not be implemented without the individual mandate. Vinson said that he could not sort out which provisions of the law could be implemented without the individual mandate, and which could not. And so he struck down the entire law.

There are many popular reforms in the health care law. The best thing for the country right now would be for Congress to start from scratch and create a replacement law. This is favored by Republicans, and opposed by Democrats, and so there's little chance that it will be done. And so the nihilism, the harm to the nation in a time of crisis will continue.

Mubarak vows to step down, to die on the soil of Egypt

Egypt's president Hosni Mubarak vowed not to run for reelection in September, and promised to institute electoral reforms that would allow more frequent elections, according to the Telegraph:

"My first responsibility is to restore the stability of the country and to ensure a peaceful transition of power. I have no intent to stand for those elections because I have spent enough time serving Egypt."

Hosni Mubarak giving speech on Tuesday (Telegraph)
Hosni Mubarak giving speech on Tuesday (Telegraph)

However, it's far from clear that this promise will satisfy the young anti-Mubarak protesters. They want to see Mubarak gone as quickly as possible, although they have no idea what will come after that.

Mubarak also said:

"I take take pride in the long years I spent in the service of Egypt and its people. This beloved homeland is my homeland, as it is the homeland of all Egyptians. I defended its soil and sovereignty, and I will die on the soil of Egypt, and I will be judged by history for my merits and demerits."

This was a significant declaration. Its intention was to contrast himself against Tunisia's former president Zine El Abidine Ben Ali, who fled from Tunisia in disgrace and humiliation.

Mubarak alluded to his status as war hero, and appeared to indicate not only that he wouldn't flee, but that he would fight and die, if necessary and forced to do so.

After Mubarak's speech, Al-Jazeera was showing scenes of violence between anti-Mubarak and pro-Mubarak protesters -- sticks and rock-throwing. Since Egypt is in a generational Crisis era, it's possible that this could escalate.

The fluid situation in Egypt could go in several different directions now, especially since there's no clear path for Egypt is Mubarak is forced to step down immediately. However, it's still my expectation that the situation in Egypt will not spiral out of control, that it will stabilize and generally continue its existing policies with Israel and the West, with some adjustments for appearances.

Additional links

The Palestinian Authority was having trouble justifying its existence anyway, but after the release of the "Palestine Papers" by al-Jazeera, making it clear that the "Mideast Peace Process" is completely dead, the Palestinians are at a crossroad that could give control of the West Bank to Hamas. The National (UAE)

Hamas leaders are concerned that young Palestinians will turn against Hamas, just as young Egyptians have turned against Mubarak. Haaretz

The people of Taiwan are shocked by a new book, "2012 Taiwan Disaster," written by Yuan Hongbing, who has been exiled by China and lives in Australia. The book reveals a secret Beijing document from 2008 that plans for an invasion of Taiwan in 2012. The deadline of 2012 was set by revered former leader Deng Xiaoping (now deceased), who said that solving the Taiwan problem as quickly as possible was "an issue of life and death for the Communist Party and for the Socialist system in China." His fear was that an independent Taiwan, with its democratic political system, would "infect" the mainland, and cause mainlanders to demand the right to pick their own leaders. Ironically, the thaw in relations that allows thousands of mainlanders to visit Taiwan and experience freedom for themselves actually increases the chance of an invasion, rather than making it more unlikely. Asia Sentinel

South Korea's "Sunshine Policy" towards North Korea is over. Under that policy, aid was extended to the North, and South Korean civilians could visit their families in the North. After last year's sinking of the Cheonan warship and shelling of Yeonpyeong Island. The Sunshine Policy was supposed to lead to reunification, but it failed. The new policy is much more harsh, and its objective is to force the North Koreans to consider reunification. Asia Sentinel

North Korean leader Kim Jong-il recently selected his younger son, Kim Jong-un, to succeed him upon his death. Now, the oldest son, Kim Jong-nam, is denouncing officials in the government who are too "hawkish." The denunciation signals a split and possible battle for succession. Chosun

A survey of North Korean defectors indicates that anti-government dissent is growing in North Korea. AFP

With China's help, Pakistan has increased its nuclear arsenal beyond 100 deployed weapons, pushing them ahead of India, which is thought to have 60-100 weapons. Pakistan becomes the fifth largest nuclear power, behind the U.S., Russia, China, and Israel (with 200 weapons). Washington Post

A region in Kazakhstan the size of Israel is littered with plutonium and other nuclear waste left behind by the detonation of 500 nuclear bombs in tests by the former Soviet Union. The American defense department is patrolling this no-man's land with drones, watching for any possible terrorists who might be gathering this material for use in a dirty bomb. Spiegel

Russia's President Dmitry Medvedev appears to be getting increasingly invisible and irrelevant, as the 2012 presidential election approaches, and Vladimir Putin appears to be winning. Jamestown

Enormous numbers of young Russians are avoiding the military service, indicating that the draft has become so unpopular that Moscow can save the situation only by employing ever more repressive measures or providing a massive infusion of new funds for the armed services. Window on Eurasia

Booksellers in Moscow report that demand is growing substantially among their young educated customers for Marxist and neo-Marxist literature, indicating that Russia is moving to the left. Window on Eurasia

Venezuela's president Hugo Chavez is telling homeless people to take over the homes of wealthy people and become squatters. Guardian

(Comments: For reader comments, questions and discussion, see the 2-Feb-11 News -- Disastrous health care law struck down by Florida judge thread of the Generational Dynamics forum. Comments may be posted anonymously.) (2-Feb-2011) Permanent Link
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1-Feb-11 News -- Russia claims to have identified the Moscow airport bomber

All international airports are vulnerable to the same kind of attack

I'm having a lot of internet problems, apparently because of the snowstorms, so posting may be spotty for a couple of days.

Russia claims to have identified the Moscow airport bomber

Russian investigators say that the suicide bomber responsible for killing 35 people last week at Moscow's Domodedovo international airport has been identified. (See "25-Jan-11 News -- Suicide bomber kills 35 people in Moscow airport.")

The suicide bomber has been identified as a 20-year-old from the North Caucasus (Russis's mostly Muslim southern provinces). However, the terrorist’s name has not been released while the investigation and the hunt for the masterminds continues, according to the article.

The suicide attack exposed a weakness existing at every international airport in the world, according to Voice of Russia.

At most airports, there's a long line of people waiting to go through the airport metal detectors. That's the crowd of people that were targeted by the January 24 attack in Moscow, and the same crowd of people could be targeted anywhere in the world.

(Comments: For reader comments, questions and discussion, see the 1-Feb-11 News -- Russia claims to have identified the Moscow airport bomber thread of the Generational Dynamics forum. Comments may be posted anonymously.) (1-Feb-2011) Permanent Link
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