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*** 5-Jul-16 World View -- Italy bank crisis more dangerous to EU than Brexit

This morning's key headlines from GenerationalDynamics.com

• Italy bank crisis more dangerous to EU than Brexit
  
• EU Banking Union rules were a reaction to Greece's financial crisis
  

****
**** Italy bank crisis more dangerous to EU than Brexit
****


The Banco Monte dei Paschi di Siena (MPS), established 1472, the world's oldest operating bank, will face a crisis on July 29

Italy's prime minister Matteo Renzi is considering "unilateral action"
to bail out Italian banks with taxpayer money, in violation of EU
rules. Action is needed because Italy's already fragile banking
system has a staggering $420 billion of bad loans on its books.
Italy's bank crisis and confrontation with the EU has gotten so deep
that some analysts that it threatens the European Union "worse than
Brexit."

Italy's largest bank is Banco Monte dei Paschi di Siena (MPS), founded
in 1472, and the world's oldest operating bank. Its share of bad
loans comes to $55.2 billion. There may be a major crisis on July 29,
when the ECB announces the results of the latest rounds of bank
"stress tests." It's believed that these stress tests will force
major recapitalizations on MSP and other Italian banks.

MPS's stock price has fallen 80% in the last year, and fell 14% on
Monday, following reports that the European Central Bank is going to
issue an "ultimatum" to reduce its bad loans portfolio to $32.2
billion by 2018.

How is MPS going to reduce its bad loans? MPS could call the loans
in, forcing the borrowers to pay or declare bankruptcy, and MPS
estimates that it would only recoup 39% of the face value of the
loans. Or, MPS could sell the bad loans to a third party, in which
case it would only get 20% of the face value. This would reduce the
bad loan portfolio, but it would also require a bank bailout of MPS,
and that's where the confrontation is emerging.

The bailout issue became explosive last year, when Italy arranged for
the bailout of four small regional banks (Banca delle Marche, Banca
Popolare dell'Etruria e del Lazio, Cassa di Risparmio di Ferrara and
Cassa di Risparmio della Provincia di Chieti) which received a $3.8
billion bailout, following strict EU Banking Union rules.

Under the terms of the bailout, ordinary savings deposits were spared,
but people who had purchased bonds and shares issued by the bank would
be wiped out. Some 130,000 shareholders and junior bond holders lost
money in the rescue.

A 68-year-old pensioner, Luigino D'Angelo, hanged himself, after
learning that his $120,000 savings were wiped out by the bank bailout.
The problem is that he didn't have an ordinary savings account.
Instead, he had put his money into the bank's high-risk subordinated
bonds, probably because some over-eager bank salesman told him that
they were high-return, and perfectly safe. He left a suicide note for
his wife of 51 years, saying that he felt humiliated and swindled by
his the bank, the Banca Etruria.

Because of this highly publicized suicide, which many in the public
blame on strict application of EU Banking Union rules, Italy's prime
minister Matteo Renzi is considering "unilateral action" to bail out
Italian banks with taxpayer money. In this case, the bailout would be
paid for by the taxpayer, rather than by bond and share holders.
Retail investors hold roughly a third of total outstanding Italian
bank debt, and forcing them to lose their savings could disrupt
financial stability and undermine depositors' confidence, and even
threaten bank runs.

This pending crisis comes in the midst of plans for Italy to hold a a
constitutional referendum on political reform in October. Renzi has
said that he will step down if the referendum vote fails. This has
added to Italy's political instability, and Citibank has described the
vote as, "probably the single biggest risk on the European political
landscape this year outside the UK [Brexit]." Deutsche Welle and Fitch Ratings and International Business Times (10-Dec-2015)

****
**** EU Banking Union rules were a reaction to Greece's financial crisis
****

The plan by Italy's prime minister Matteo Renzi to bail out Italy's
banks with taxpayer money is a violation of EU Banking Union rules
that were adopted as "lessons learned" from the financial crisis and,
particularly, Greece's financial crisis.

The Banking Union makes the European Central Bank (ECB) the supervisor
of all 6000 banks in the eurozone, applying a single rule book that
applies to all of them. Other EU countries that still use national
currencies have the option of joining.

The purpose of the union is to prevent the following "vicious circle":

• A country's banking system is in trouble because of a large
  number of bad loans.
  
  
• The national government bails the banks out with taxpayer money,
  either by buying the bad debt (transferring it into a national "bad
  bank"), or else recapitalizing the banks by purchasing bank bonds or
  share.
  
  
• This essentially transfers the banks' bad debts to the national
  government, putting the government into greater debt.
  
  
• Investors are afraid to purchase government bonds, so their values
  go down and their yields (interest rates) go up. In Greece's crisis,
  in December 2011, yields on Greece's two-year bonds actually reached 142.3%.
  
  
  
• As bond yields rise, the banking system is in even worse trouble,
  requiring a larger government bailout, and so the cycle
  repeats.

The EU's banking union provides three levels of rules:

• Crisis Prevention: Under ECB supervision, banks are far
  less likely to get into trouble in the first place. This will be
  accomplished in various ways, in particular by requiring banks to pass
  "stress tests" on a regular basis, such as the ones for MSP and other
  Italian banks that will be announced on July 29.
  
  
• Early Intervention. If an institution's situation begins to
  deteriorate (e.g. when a bank is in breach of, or is about to breach,
  regulatory capital requirements), the ECB can force the bank to adopt
  urgent reforms, because the crisis worsens.
  
  
• Crisis Management. If the financial situation of a bank
  deteriorates beyond repair, the ECB can provide a partial bailout from
  a fund to which all EU banks contribute.

In the last case, a "bail-in" process would be used to determine who
is going to lose their money to save the bank. If a bank needs to
resort to bail-in, authorities would first write down all shareholders
and would then follow a pre-determined order in bailing in other
liabilities. Shareholders and other holders of instruments such as
convertible bonds and junior bonds would bear losses first.

Deposits under 100,000 euros would be protected, and taxpayer money
would never be used.

Italy's government followed these rules last year, but 130,000 people
had their savings wiped out, and the suicide of the 68 year old
pensioner whose savings were wiped out has become politically
explosive. These people did not have ordinary savings accounts.
Instead, they were talked into investing in high-risk high-return bank
bonds, and they ended up being wiped out.

The European Union put these banking union rules into place in 2015,
and already they're facing a major confrontation, which may turn into
a major crisis on July 29, when the ECB's stress tests of Italy's
banks will be published. If Italy follows the rules, hundreds of
thousands of additional people will lose their life savings. That's
why prime minister Matteo Renzi has issued his ultimatum that he will
violate EU rules and bail out the banks with taxpayer money. However,
this will only "kick the can down the road," in a familiar process
where one crisis is solved, but a new one emerges a few months later.
Newstalk (Ireland) and Reuters and European Union Banking Union


KEYS: Generational Dynamics, Italy, Matteo Renzi,
Banco Monte dei Paschi di Siena, MPS, Luigino D'Angelo,
European Central Bank, ECB

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John J. Xenakis
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Phone: 617-864-0010
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com
Forum: http://www.gdxforum.com/forum
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*** 6-Jul-16 World View -- Attack on Islam's holy site in Medina caps end-of-Ramadan jihadist carnage

This morning's key headlines from GenerationalDynamics.com

• Attack on Islam's holy site in Medina caps end-of-Ramadan jihadist carnage
  
• Bond yields continue to plummet globally into negative territory after Brexit
  

****
**** Attack on Islam's holy site in Medina caps end-of-Ramadan jihadist carnage
****


The aftermath of the suicide bombing attack on the Prophet's Mosque in Medina, Saudi Arabia (Arab News)

Muslims around the world are horrified and appalled that the grave of
the Prophet Mohammed in Medina was targeted by a suicide bomber on
Monday. Four policemen became suspicious of an individual who was
approaching the Prophet's Mosque, and when they questioned him, he
blew up his explosive belt. Only the four policemen were killed, but
they're actions are being credited with saving the lives of many
others.

Earlier, two suicide bombers blew themselves up outside the Faraj
al-Omran Mosque in Qatif, with no casualties. And a suicide bomber
blew himself up near the US consulate in Jeddah, although some Saudi
authorities say that it was the mosque next door, not the consulate,
that was the target of the attack. Two policemen were lightly wounded
in this attack.

There were no claims of responsibility for the three attacks, but it's
assumed that the so-called Islamic State (IS or ISIS or ISIL or Daesh)
is responsible. It's not even known if the three attacks were
coordinated, or if they were independent attacks, all scheduled for
the last day of Ramadan, in accordance with pre-Ramadan incitement by
ISIS.

Early in June, ISIS spokesman Abu Mohammed al-Adnani told "lone
wolves" and other ISIS supporters:

[indent]<QUOTE>"We will make this month [Ramadan], inshallah, a month
of calamities for the infidels everywhere. This call specifically
goes out to the supporters of [ISIS] in Europe and
America."<END QUOTE>[/indent]

The scale of the carnage inflicted by jihadists extremists over the
past week alone has been staggering. The attacks included more
than 250 killed by a truck bomb in a crowded Baghdad market in Iraq;
44 killed at an airport in Istanbul, Turkey; 23 killed in a siege of a
café in Dhaka, Bangladesh.

And yet, in another sense, the ISIS incitement was not really
fulfilled. The attacks during the month of Ramadan killed over 800
people worldwide, but the only one that really targeted "Europe and
America" was the ISIS-inspired lone wolf who killed 49 people in a gay
bar in Orlando, Florida.

As I've written many times in the past, there is a war being
prosecuted by al-Qaeda and by ISIS, but it's not a war against
Westerners or Christians. The huge mass of casualties from the
jihadists wars are other Muslims, and the number of Westerners is
minuscule by comparison. This is a war by Muslims against Muslims,
whether it's Sunnis versus Shias, Sauds versus Wahhabis, or some other
fault line.

Possibly nothing illustrates this more than the attack on the
Prophet's Mosque in Medina. This was a shocking escalation in ISIS's
war against Muslims. Medina is the second holiest city in Islam,
behind Mecca, and is always crowded with Muslim visitors. ISIS
considers the Saudi government to be infidels in league with the West,
and so perhaps Medina could somehow be a "Western" target. This has
been particularly true since November 20, 1979, when young jihadists
led by terrorist Juhayman al-Oteibi seized the Grand Mosque in Mecca.
By the end, the official death toll was 127 soldiers and 117
militants. Unconfirmed reports indicate that over 1,000 civilians
lost their lives. ( "12-Sep-2015 World View -- Saudi Arabia's Grand Mosque, site of huge construction accident, has links to 9/11"
)

But whatever ISIS's justification for attacking Medina, it's still
Muslims that are being killed, and it's still the second holiest
shrine in Islam. As one Muslim tweeted on Tuesday, "Is there anyone
on earth who still thinks these barbarians HAVE ANYTHING TO DO WITH
ISLAM?" Arab News and The National (UAE) and CNN

****
**** Bond yields continue to plummet globally into negative territory after Brexit
****

Investors worldwide are continuing to seek "safe havens" by investing
in government bonds. The demand for these bonds is forcing prices up
to historical levels, which means that their yields (interest rates)
are falling to historic levels, increasing to negative levels.

Bond yields had already pushed many bond yields lower, thanks to
central banks "printing money" via quantitative easing, and pouring it
into the banking system. This has pushed bond yields on the most
popular bonds in Japan, Germany, Switzerland and much of Western
Europe below zero. A negative yield means that if an investor invests
a million dollars in bonds, then he'll get less than a million dollars
back when the bonds expire.

The Brexit referendum vote, which mandated that Britain leave the
European Union, apparently has accelerated the plunge in bond yields
as an unexpected consequence, because uncertainty about the UK and EU
economies has caused investors to flee to safe havens. ( "25-Jun-16 World View -- Fallout from Brexit: Impact on geopolitics, economics, and stock markets"
)

On Tuesday, ten-year US Treasury bond yields, going into uncharted
territory, fell to 1.367%, down from an already extremely low 1.47% on
Friday.

In Europe, the yield on 10-year UK government bonds ("gilts") fell to
a record low of 0.780%. The Bank of England has already announced
that there will be further quantitative easing during the summer. The
yield on Germany's 10-year bonds ("bunds") fell further into negative
territory to -0.182%. Switzerland's 50-year bond yields became
negative for the first time on Tuesday.

At the same time, massive injections of "printed" money by central
banks is keeping the stock markets at historically high levels,
despite the fact that second quarter earnings are forecast to plunge
about 8%, making the huge stock market bubble even larger, meaning
that it will do more damage than ever when it implodes.

There was a major exception on Tuesday to falling bond yields: Italy,
whose 10-year bond yields rose slightly. As we wrote yesterday, Italy's bank crisis is extremely dangerous,
and may become an EU crisis when bank stress tests are
announced on July 29. AFP and Market Watch and Reuters and Zero Hedge


KEYS: Generational Dynamics, Saudi Arabia, Medina, Prophet's Mosque,
Islamic State / of Iraq and Syria/Sham/the Levant, IS, ISIS, ISIL, Daesh,
Faraj al-Omran Mosque, Qatif, Ramadan, Abu Mohammed al-Adnani,
Juhayman al-Oteibi, Grand Mosque, Mecca,
Japan, Germany, Switzerland, Britain, Brexit, Italy

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John J. Xenakis
100 Memorial Drive Apt 8-13A
Cambridge, MA 02142
Phone: 617-864-0010
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com
Forum: http://www.gdxforum.com/forum
Subscribe to World View: http://generationaldynamics.com/subscribe

*** 7-Jul-16 World View -- South China Sea tension set to escalate after July 12 arbitration ruling

This morning's key headlines from GenerationalDynamics.com

• South China Sea tension set to escalate after July 12 arbitration ruling
  
• Obama flip-flops again on Afghanistan
  

****
**** South China Sea tension set to escalate after July 12 arbitration ruling
****


3,000 boat Chinese fishing fleet on Sept 16, 2013 (Xinhua)

The United Nations Permanent Court of Arbitration in the Hague has
announced that on July 12 it will issue its long-awaited ruling on a
case brought by the Philippines against China on the merits of China's
claims to the entire South China Sea. The case is brought under the
United Nations Convention on the Law of the Sea (UNCLOS), which China
claims does not apply to them.

China has said it will ignore any ruling of the tribunal. It's saying
that because it knows it will lose. Indeed, a BBC investigation of
some of China's evidence has been shown to be delusional, and possibly
a complete fabrication. ( "22-Jun-16 World View -- China's 'ironclad proof' of South China Sea claims revealed as hoax"
)

According to an editorial in the China state media Global Times:

[indent]<QUOTE>"As the result of the international arbitration over
the South China Sea dispute approaches, China is undertaking a
military drill from July 5 to 11 in the waters around the Xisha
Islands. ...

The South China Sea dispute has been greatly complicated after
heavy US intervention. Now an international tribunal has also been
included, posing more threat to the integrity of China's maritime
and territorial sovereignty.

Regardless of the principle that the UN Convention on the Law of
the Sea (UNCLOS) shall not arbitrate on territorial disputes, the
arbitration becomes nothing but a farce. But the US could use it
to impose more pressure on China, causing more tensions in the
South China Sea.

Washington has deployed two carrier battle groups around the South
China Sea, and it wants to send a signal by flexing its muscles:
As the biggest powerhouse in the region, it awaits China's
obedience.

China should speed up building its military capabilities of
strategic deterrence. Even though China cannot keep up with the US
militarily in the short-term, it should be able to let the US pay
a cost it cannot stand if it intervenes in the South China Sea
dispute by force.

China is a peace-loving country and deals with foreign relations
with discretion, but it won't flinch if the US and its small
clique keep encroaching on its interests on its doorstep.

China hopes disputes can be resolved by talks, but it must be
prepared for any military confrontation. This is common sense in
international relations."<END QUOTE>[/indent]

The "heavy US intervention" refers to America's "freedom of
navigation" patrols in the South China Sea. Some $5 trillion in trade
passes through the South China Sea on ships each year, including $1.2
trillion of US trade. China has flip-flopped among various positions
and threats in the past few years, and some statements in the past
have threatened to block international traffic, or at least to require
permission of Chinese authorities to traverse the South China Sea. So
the US has responded with the freedom of navigation patrols.

China is claiming the entire South China Sea, and is using its massive
military force to confiscate regions that have historically belonged
to other nations, especially Vietnam and the Philippines. China is
building artificial islands and converting them to military bases with
advanced missile and radar systems. ( "23-Feb-16 World View -- China's military buildup neutralizes America's aircraft carriers"
)

China's military is in a highly emotional, irrational and
nationalistic state, which makes them very dangerous. They believe
that the US has been weakened by the wars in Iraq and Afghanistan, and
too anxious to risk another war. This is a major historic mistake
that they will regret. They claim to be "peace loving," but the way
the world works is that every leader goes to war by claiming to be
"peace loving," and blaming the other side. The July 12 ruling will
only increase their anxieties.

Some analysts are pointing out that occupying the South China Sea is
an existential need for China and for its neighbors. China, Vietnam
and the Philippines have high population densities and comparatively
low amounts of arable land, further magnifying the importance of food
sources outside traditional crops. Food security is an existential
threat to all of these countries. For China, taking control of all
the fish stocks in the South China Sea is seen as a necessity, and so
China sees the need to control access to the South China Sea by other
nations.

So all the talk about being "peace-loving" is really irrelevant.
China will go to war if that's the only way to prevent Vietnam and the
Philippines from fishing in the South China Sea. Out of desperation,
Vietnam and the Philippines will see China's military actions as an
existential threat, and an attempt to starve their own people. The
July 12 ruling will raise anxieties on all sides, and move the region
closer to war. Global Times (Beijing) and Jamestown and The Diplomat

****
**** Obama flip-flops again on Afghanistan
****

President Barack Obama flip-flopped again on Wednesday. There are
currently 9,800 American troops in Afghanistan, and Obama announced
that 8,400 troops would be left in Afghanistan when he leaves office,
rather than 5,500. The Taliban are gaining control of large areas of
the country, defeating the indigenous Afghan army repeatedly, and
Obama is under pressure to reverse himself again on his withdrawal
plans. The 8,400 figure is apparently a completely meaningless
political number, less than 9,800 so he can claim he's still
withdrawing, but large enough to provide cover until he can leave
office. It's all pretty cynical.

In October of last year, President Obama reversed himself on the Afghanistan troop withdrawal.

Instead of a total withdrawal, he announced that a residual force of
5,500 troops would be left on a continuing basis. This was only one
of several similar reversals. He was forced into this because many
people believe that the Obama's total withdrawal from Iraq squandered
the victory won by President Bush via the 2007 "surge," and because
Obama's own "surge" strategy in Afghanistan has been a failure, as I predicted in 2009 that it would be,

based on a Generational Dynamics comparison of Iraq and Afghanistan.

By coincidence, Obama's announcement comes on the same day that
Britain is releasing the "Chilcot report," a massive condemnation of
the roles of the US and Britain for the Iraq war. Thus, it's
interesting to compare the media attitude towards Bush's apparent lies
in Iraq, and Obama's apparent lies about Afghanistan. The press
reaction was predictable. The Sacramento Bee was typical, in one
editorial on the one hand expressing sympathy for President Obama's
"failed exit strategies," and on the other hand accusing "the
Bush-Cheney administration for ... lies about Iraqi dictator Saddam
Hussein having weapons." Obama's lies deserve sympathy from the
Sacramento Bee, while Bush's deserve the greatest condemnation. Like
the analysts and anchors on CNBC who constantly lie about stock valuations
and don't care that they're
lying, the reporters and editors at the Sacramento Bee and New York
Times don't care that they've become the public relations arms of the
Obama administration. I remember the days when the New York Times
could be called "the newspaper of record," but those days are gone.
Washington Post and BBC and Sacramento Bee


KEYS: Generational Dynamics, China, South China Sea,
Permanent Court of Arbitration, Philippines, Vietnam,
United Nations Convention on the Law of the Sea, UNCLOS,
Afghanistan, Iraq, Chilcot Report

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John J. Xenakis
100 Memorial Drive Apt 8-13A
Cambridge, MA 02142
Phone: 617-864-0010
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com
Forum: http://www.gdxforum.com/forum
Subscribe to World View: http://generationaldynamics.com/subscribe

*** 8-Jul-16 World View -- Hard issues prevent full reconciliation between Turkey and Russia

This morning's key headlines from GenerationalDynamics.com

• Hard issues prevent full reconciliation between Turkey and Russia
  
• Turkey's reconciliation with Egypt appears to be unlikely
  

****
**** Hard issues prevent full reconciliation between Turkey and Russia
****


Erdogan addresses the United Nations General Assembly on Sept 24, 2014

In May, Turkey's Prime Minister Binali Yildirim, who said that Turkey
would "increase the number of friends we have and decrease the number
of enemies." That was the precursor to a flurry of diplomatic
activity in June, where Turkey effected a reconciliation with both
Israel and Russia.

Russia imposed sanctions on Turkey after Turkish warplanes
unexpectedly shot down a Russian warplane near the border with Syria,
after the Russian aircraft had been warned several times that it was
violating Turkish airspace. ( "25-Nov-15 World View -- Turkey shoots down Russian warplane, evoking memories of many Crimean wars"
)

The sanctions have been harsh. Turkey was a major vacation for
Russian tourists, and tourism was cut off, resulting in $3.5 billion
in losses. Russia's exports to Turkey decreased by 43%, and imports
from Turkey decreased by 85%.

Russia's president Vladimir Putin had repeatedly demanded that
Turkey's president Recep Tayyip Erdogan apologize for shooting down
Russia's warplane, and also financially compensate the Russian pilot
who was killed. Erdogan has repeatedly used highly nationalistic
language to refuse to apologize.

On June 27, it was announced that Erdogan had sent a "letter of
apology" to Putin. It turned out that the apology was something of a
finesse -- Erdogan did not apologize for shooting down a Russian
warplane in Turkey's airspace, but he did apologize to the family of
the dead Russian pilot. Separately, Erdogan has also agreed to pay
compensation to the family.

In response, Russia lifted the restrictions on tourists visiting
Turkey, and there's talk of removing the sanctions on trade.
However, economic factors are only a partial explanation for
the reconciliation.

Although the shooting down of the Russian warplane triggered the
fierce split in relations, tensions had been building over the war in
Syria. Turkey was finding Syria's president Bashar al-Assad
increasingly intolerable because of his continuing genocidal massacres
of innocent Sunni civilians in Syria. Russia, on the other hand,
considered al-Assad to be a vital ally. Turkey had helped to fund
some moderate "rebel" opposition groups fighting against al-Assad,
while Russian warplanes targeted and bombed the groups that Turkey
supported, and avoided bombing militias from the so-called Islamic
State (IS or ISIS or ISIL or Daesh).

An even more serious problem is the role of the Kurds. The Kurds in
Turkey have been fighting an insurrection for decades, and Turkey
considers all the Kurds in the region to be working with the terrorist
group Kurdistan Workers’ Party (PKK). Both the United States
and Russia have supported the Kurds in Syria and Iraq in their
roles fighting ISIS.

Turkey has suffered a series of devastating terror attacks in the last
year, the worst of which was the attack on the Ataturk National
Airport in Istanbul on June 28. These attacks were perpetrated by
both ISIS and the PKK, but Turkey has become increasingly isolated
internationally, and has received little sympathy for these terror
attacks.

It was this situation that led to the promise by Turkey's prime
minister to "increase the number of friends we have and decrease the
number of enemies."

As long-time readers are aware, Generational Dynamics predicts that in
the coming Clash of Civilizations world war, Russia, India and Iran
will be allied with the West, while Turkey and the Sunni Arabs will be
allied with the Pakistan and China. ( "15-Jul-2015 World View -- Arab views of Iran nuclear deal"
)

So from the point of view of Generational Dynamics, a complete
reconciliation between Turkey and Russia is very strongly
counter-trend, and so is unlikely to last long. This should not be
surprising in view of the generation crisis wars the two have fought
over the centuries. And it also should not be surprising in view of
the numerous issues that still deeply divide the two countries, in
both Syria and in the Caucasus. Jamestown and Tass (Moscow 27-June) and Hurriyet (Ankara 27-June) and CS Monitor

****
**** Turkey's reconciliation with Egypt appears to be unlikely
****

After reconciling with Russia and Israel, many are suggesting that
Turkey should now reconcile with Egypt, possibly even using Israel as
a mediator. Saudi Arabia, a staunch Turkish ally and a main backer of
Egypt’s President Abdel Fattah al-Sisi, is interested in seeing the
two countries reconcile.

Turkey broke relations with Egypt as a result of the 2013 military
coup led by the current president, Abdel al-Fattah al-Sisi, against
the democratically elected Muslim Brotherhood (MB) government led by
Mohammed Morsi, putting Morsi and thousands of MB members in jail.

Once again, it was Turkey's prime minister Binali Yildirim who set the
tone:

[indent]<QUOTE>"From Russia to Israel, Egypt to Syria, Iraq to Iran,
EU countries to the U.S., we are determined to develop peaceful,
friendly and practical ties with everyone. We will keep doing
this."<END QUOTE>[/indent]

Burhanettin Duran, a Turkish official, announced that a working
group would go to Egypt to discuss a plan to normalize relations.

However, the Muslim Brotherhood has close relations with Turkey's
governing Justice and Development Party (AKP), led by Turkey's
president Recep Tayyip Erdogan. Erdogan suggested earlier this week
that reconciliation with Egypt might not be possible while al-Sisi is
in power:

[indent]<QUOTE>"The problem with Egypt is an issue with its
administration, especially with its ruler. It is not possible for
us to say 'yes' to who tyrannizes the Morsi administration.

The context with Egypt is different from the approaches undertaken
with Russia and Israel. ... Sentences handed down to Morsi and his
friends have been based on fabrications.

We do not approve of these decisions. ... All of these people in
Egypt are our brothers and approving the stance taken against
Morsi and his friends would put us in an awkward position as
Muslims, as humans and as people who believe in
democracy."<END QUOTE>[/indent]

However, AKP deputy leader Saban DiSli said that after the
reconciliation with Israel and Russia, "God willing ties with Egypt
will also ease." Daily Sabah (Ankara) and Egyptian Streets and Al Bawaba (Palestine)


KEYS: Generational Dynamics, Turkey, Russia, Israel, Istanbul,
Ataturk National Airport, Recep Tayyip Erdogan, Binali Yildirim,
Vladimir Putin, Kurds, Kurdistan Workers’ Party, PKK,
Islamic State / of Iraq and Syria/Sham/the Levant, IS, ISIS, ISIL, Daesh,
Saudi Arabia, Egypt, Abdel Fattah al-Sisi,
Muslim Brotherhood, Mohammed Morsi, Burhanettin Duran,
Justice and Development Party, AKP, Saban DiSli

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John J. Xenakis
100 Memorial Drive Apt 8-13A
Cambridge, MA 02142
Phone: 617-864-0010
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com
Forum: http://www.gdxforum.com/forum
Subscribe to World View: http://generationaldynamics.com/subscribe

*** 9-Jul-16 World View -- Nato deploying a 'tripwire' of 4,000 soldiers along Russia's border

This morning's key headlines from GenerationalDynamics.com

• Japan's elections put constitution's pacifism clause into question
  
• Nato deploying a 'tripwire' of 4,000 soldiers along Russia's border
  

****
**** Japan's elections put constitution's pacifism clause into question
****


Shinzo Abe campaigning for Sunday's elections (Kyodo)

On Sunday, Japan will hold parliamentary elections for half the seats
in Japan's upper house. There is a possibility (far from a certainty)
that the Liberal Democratic Party (LDP) will, along with its coalition
partner Komeito, get a two-thirds supermajority in the upper house.
LDP, which is led by prime minister Shinzo Abe, already has a
two-thirds supermajority in the lower house.

Japan's constitution may be amended only by a two-thirds vote of both
houses of the Diet (parliament). So if Abe gets his desired
supermajority in both houses, then his LDP party could amend the
constitution.

And Abe has said repeatedly in the past that what he'd like to change
is the "self-defense" clause of the constitution, that prohibits
Japan's armed forces from being involved in military actions except in
self-defense. Here is the text of the actual clause, as written by an
American team led by Gen. Douglas MacArthur, who had led the American
forces to victory of Japan in World War II:

[indent]<QUOTE>"CHAPTER II - RENUNCIATION OF WAR

Article 9. Aspiring sincerely to an international peace based on
justice and order, the Japanese people forever renounce war as a
sovereign right of the nation and the threat or use of force as
means of settling international disputes.

In order to accomplish the aim of the preceding paragraph, land,
sea, and air forces, as well as other war potential, will never be
maintained. The right of belligerency of the state will not be
recognized."<END QUOTE>[/indent]

The movement to amend the self-defense clause has gathered steam in
the last ten years, primarily motivated by the rise of China and in
particular China's military threats against the Senkaku Islands, which
are governed by Japan.

In 2015, Japan adopted new "collective defense" laws, partially
departing from the pacifism in the constitution. The old self-defense
clause of the constitution has been interpreted to permit military
action only when Japan itself is being attacked, and only on Japanese
soil. The new collective defense laws reinterpret the self-defense
clause to include "collective self-defense," which would permit
military action anywhere in the world under some circumstances when an
ally (such as the United States) is attacked. I discussed the meaning
of "collective self-defense" in detail in 2014 in "5-May-2014 World View -- Japan debates 'collective self-defense' to protect America and Japan"
.

Amending the self-defense clause is extremely controversial in Japan,
so much so that Abe isn't even talking about in his campaigning,
choosing to focus instead on the economy. That may be an even greater
risk, because Japan's economy has not been doing well, and some people
blame the weakness of Abe's "Abenomics" program of massive stimulus
through monetary easing, fiscal stimulus and structural reforms. The
goal was to reach 2% inflation, but instead Japan remains in a
deflationary spiral. Perhaps the only good news for Abe is that
deflation is a worldwide phenomenon, so it can't be blamed
specifically on him. Japan Times and Constitution of Japan and Manila Times and CNBC

****
**** Nato deploying a 'tripwire' of 4,000 soldiers along Russia's border
****

At an annual summit meeting in Warsaw Poland on Friday, Nato announced
that it will deploy four multinational battalions of 1,000 soldiers
each, in each of four countries -- Poland, Lithuania, Latvia and
Estonia. The deployment will take place in six to nine months.

These four countries have been urgently requesting such a deployment
for years, especially since Russia invaded Ukraine and annexed Crimea.
These countries are nervous that Russia's president Vladimir Putin
will order his army to do the same kind of thing to one or all of
them.

The four battalions will come from four different Nato countries: the
United States, Germany, Canada and the United Kingdom.

It will not be possible to defend against an invasion by Russia's
massive army with just 4,000 soldiers. However, this "tripwire" force
will almost certainly deter Russia from invading. In Ukraine,
Russia's forces were able to just walk in and take over, especially in
Crimea, with little or no resistance. But Russia won't be able to do
the same in Poland or the Balkans because it would amount to a
declaration of war against Nato, which even Vladimir Putin would
probably like to avoid. Radio Poland and France 24 and Nato Joint Resolution and CNN

KEYS: Generational Dynamics, Japan, Shinzo Abe, Abenomics,
Liberal Democratic Party, LDP, Komeito, China, Senkaku Islands,
collective self-defense,
Nato, Poland, Lithuania, Latvia, Estonia, tripwire force,
United States, Germany, Canada, United Kingdom,
Russia, Vladimir Putin, Ukraine, Crimea

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Phone: 617-864-0010
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com
Forum: http://www.gdxforum.com/forum
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*** 10-Jul-16 World View -- Violence resurges in Central African Republic's crisis civil war

This morning's key headlines from GenerationalDynamics.com

• Violence resurges in Central African Republic's crisis civil war
  
• In Darfur Sudan, genocidal violence continues after 13 years of civil war
  
• European Union will pay Sudan's militias to block migration to Europe
  

****
**** Violence resurges in Central African Republic's crisis civil war
****


United Nations in Chad registering refugees fleeing from violence in Chad (UNHCR)

More than 6,000 people from the Central African Republic's northwest
Ouham-Pendé province, near the border with Cameroon, have fled into
Cameroon and Chad to escape resurging violence between Muslim Seleka
militias and Christian anti-balaka militias.

Last year, United Nations officials had hoped that a visit by the Pope
in November, and the election of a new president, Faustin-Archange
Touadéra, in December, would bring an end to the violence between
Muslims and Christians in Central African Republic (CAR). Touadéra
has been trying to reconcile Christians and Muslims. He was even seen
celebrating the end of Ramadan with Muslims in the capital city
Bangui.

The hope was that Christians whose villages were burned to the ground
by Muslim militias, and Muslims whose families were raped, murdered
and dismembered by Christian militias, will all put aside any desire
for revenge, thanks to the soothing words of the Pope and the
charismatic hope and change statements of the new president.
Apparently it didn't work.

This year alone, some 25,000-30,000 people have been internally
displaced, forced to flee from their homes. But the flood of refugees
into neighboring countries began on June 12, when clashes erupted
between Muslim livestock herders and Christian farmers north-west town
of Ngaoundaye, in Ouham-Pendé province.

Battles between farmers and herders occur in country after country, as
I've described many times in Central African Republic, Rwanda,
Burundi, Kenya, Sudan, and even America in the 1800s. The farmers
accuse the herders of letting the cattle eat their crops, while the
herders accuse the farmers of planting on land that's meant for
grazing. If the farmers put up fences, then the herders knock them
down.

The CAR sectarian war began in March 2013, when François Bozizé, the
Christian former president of CAR, was ousted in a coup in March 2013
by Michel Djotodia, a Muslim, who became president and served until
January 2014.

After Djotodia's coup took place in March 2013, Muslim Seleka militias
began committing atrocities, particularly targeting the Christian
constituencies of the deposed François Bozizé. In December 2013,
French Foreign Legion peacekeeping troops arrived to disarm the Seleka
militias.

But then the Christian anti-balaka militias "rushed into the vacuum,"
and began committing atrocities in 2014, for revenge against the
Selekas. Since then, both Christians and Muslims have been committing
atrocities, and it's become a full-scale generational crisis war.
Thousands have been killed, and millions have been displaced.

As I've explained in the past, CAR's last generational crisis war was
the 1928-1931 Kongo-Wara Rebellion ("War of the Hoe Handle"), which
was a very long time ago, putting CAR today deep into a generational
Crisis era, where a new crisis civil war has already started.

Many people had been hoping that the UN peacekeeping force, the Pope's
visit, the election of a new president would somehow combine to
tranquilize the fighting and end the civil war. However, the Pope's
visit was to the capital city Bangui, the new president is sitting in
Bangui, with little control over the rest of the country, and the
peacekeeping force is just in Bangui, and has been only partially
successful in keeping the peace there. Bangui is a tiny dot on the
map of an enormous country that's now completely lawless, with two
militias in large populations seeking revenge.

From the point of view of Generational Dynamics, this is a
generational crisis war, and it will not end until a lot of scores get
settled with some kind of massive bloody, genocidal climax that will
be remembered for decades. And CAR is nowhere close to that point
yet. United Nations High Commissioner for Refugees (UNHCR) and Deutsche Welle and VOA

****
**** In Darfur Sudan, genocidal violence continues after 13 years of civil war
****

The huge civil war in Darfur, Sudan, was much in the news ten years
ago. In 2007, just as President Bush was launching the "surge" that
ended the violence in Iraq, Senator Joe Biden called for a complete
withdrawal of all American troops from Iraq, and then use those troops
to launch an invasion into Sudan to put an end to the Darfur war.
"Let's stop the bleeding," Biden said. "I think it's a moral
imperative." (From April 2007: "Senator Joe Biden wants to move troops from Iraq to Darfur civil war"
)

In fact, the Darfur civil war has many things in common with the
CAR civil war.

Low level violence began in the 1970s between two ethnic groups, one
of farmers (the "Africans") and the other of camel herders (the
"Arabs"), in the usual disputes over land and water. The violence
increased from year to year, and in the 1990s, Sudan's government in
Khartoum delegated the responsibility of policing the region to the
Arab Janjaweed militias, formed from certain groups of herders.

Violence continued to increase, and by 2003, it had turned into a
full-scale generational crisis war. (A detailed history can be found
in my 2007 article, "Ban Ki Moon blames Darfur genocide on global warming"
) At that point,
under direction of the new president Omar al-Bashir, the Janjaweed
militias (herders) became extremely violent, with a program of
massacres, mass murders, rapes, genocide and scorched earth.

Today, al-Bashir has renamed the Janjaweed militias as the Rapid
Support Force (RSF), and they are still committing genocide in Darfur,
although that violence isn't in news much anymore, as it was in the
days when Joe Biden took an interest in it. As in the case of CAR,
the war will not end until a lot of scores get settled with some kind
of massive bloody, genocidal climax that will be remembered for
decades. Sudan Tribune and World Policy Institute (30-Mar

****
**** European Union will pay Sudan's militias to block migration to Europe
****

The European Commission has issued a draft proposal to provide €100
million in aid to the militaries of some African countries, who
will be asked to use the money to prevent migration of refugees to
Libya and then on to Europe.

As I like to point out, almost every day something new happens that a
few years ago you would have to have been crazy to believe would ever
happen. Whether it's in America, Europe, Africa, the Mideast or Asia,
things that could never happen are happening all the time.

A particular beneficiary of the EU's aid program will be Sudan's
president Omar al-Bashir, and his government militia, the Rapid
Support Force (RSF), led by a former leader of the Janjaweed militias
general Mohamed Hamdan Hametti. Hametti will send around 1,000 RSF
troops along the border with Libya. Both al-Bashir and Hametti are
considered to be guilty of human rights crimes and genocidal violence
against civilians in the Darfur civil war. EU Observer


KEYS: Generational Dynamics, Central African Republic, CAR, Ouham-Pendé province,
Chad, Cameroon, Muslim Seleka militias, Christian anti-balaka militias,
Faustin-Archange Touadéra, François Bozizé, Michel Djotodia,
Kongo-Wara Rebellion, War of the Hoe Handle, Bangui,
Darfur, Sudan, Joe Biden, Omar al-Bashir, Janjaweed militias,
Rapid Support Force, RSF, Mohamed Hamdan Hametti, Libya,
Rwanda, Burundi, Kenya

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John J. Xenakis
100 Memorial Drive Apt 8-13A
Cambridge, MA 02142
Phone: 617-864-0010
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com
Forum: http://www.gdxforum.com/forum
Subscribe to World View: http://generationaldynamics.com/subscribe

*** 11-Jul-16 World View -- Fears that renewed South Sudan tribal fighting could spiral into larger war

This morning's key headlines from GenerationalDynamics.com

• Fears that renewed South Sudan tribal fighting could spiral into larger war
  
• Generational history of South Sudan and Dinka-Nuer clashes
  

****
**** Fears that renewed South Sudan tribal fighting could spiral into larger war
****


South Sudan army forces stand at attention, April 14, 2016 (AFP)

Fresh clashes have broken out between rival forces from the Dinka and
Nuer tribes in South Sudan in the last few days, killing hundreds of
civilians, and forcing thousands from their homes. Although low-level
violence has been a constant since South Sudan became independent in
2011, there were major clashes that began in December 2013. ( "29-Dec-2013 World View -- Conflicts grow in South Sudan and Central African Republic"
) There
followed 21 months of atrocities, until they were supposedly ended by
a peace treaty that was signed by both sides in August 2015.

New reports indicate that several Nuer armies are now heading towards
the capital city Juba, and there are fears of a wider war. The United
Nations said it was "outraged" at what was happening:

[indent]<QUOTE>"The United Nations Mission in South Sudan (UNMISS) is
outraged at the resumption of violence in Juba today [...], which
is severely impacting on the civilian population."<END QUOTE>[/indent]

According to UNMISS, there is heavy fighting in downtown Juba. Other
reports indicate the use of artillery, warplanes, and helicopter
gunships. The UN Security Council on Saturday passed a resolution
strongly condemning the fighting in Juba.

After the 2011 war that gave South Sudan independence from Sudan, a
Transitional Government of National Unity was formed. The president
is President Salva Kiir, from the Dinka tribe, and the vice president
is Riek Machar, from the Nuer tribe. Both tribes had been united in
facing a common enemy in their fight for independence from Sudan, but
they turned on each other and started an ethnic conflict after the
war.

The clashes in December 2013 were triggered when Dinka president Salva
Kiir fired his cabinet and accused the Nuer vice-president Riek Machar
of planning a coup. Machar fled the country, and the fighting
displaced more than 2.2 million people before the August 2015 peace
agreement was signed.

In April 2016, Machar returned to South Sudan to rejoin the Unity
Government as vice president. However, Machar's spokesman is now
saying the South Sudan is "back to war." Radio Tamazuj (South Sudan) and BBC and
Al Jazeera

****
**** Generational history of South Sudan and Dinka-Nuer clashes
****

When Sudan became independent in 1956, the north was largely Muslim,
Arabic speaking, while the southern population mostly followed tribal
religions. The Khartoum government in the north launched a program to
"Arabize and Islamize the South." This triggered a reaction from
Christian evangelists, mostly from the US, to come to Sudan and
convert the South to Christianity.

There was immediately a north-south war of independence, but there was
also a generational crisis civil war between the Nuer and Dinka
tribes. This was climaxed on November 15, 1991, when the "Bor
Massacre" began. Over the next three months, 2,000 civilians were
killed, thousands more wounded, at least 100,000 people fled the area.
Famine followed the massacre, as looters burnt villages and raided
cattle, resulting in the deaths of 25,000 more from starvation.

The nightmare scenario is that the new clashes will spiral into a
repeat of the 1991 Bor Massacre. But from the point of view of
Generational Dynamics, South Sudan is in a generational Awakening era,
so a historic massacre of this type will not occur.

However, there certainly is a great deal of ethnic hatred between the
Nuers and the Dinkas. Evidently, the level of ethnic hatred exceeds
that of the Hutus and the Tutsis in Rwanda, following their 1994
genocidal ethnic bloodbath. Nonetheless, in this generational
Awakening era, we can expect to see repeated clashes between Nuers and
Dinkas, separated by peace agreements that fall apart in a few weeks
or months. But a full-scale ethnic civil war is not expected at this
time. Radio Tamazuj (South Sudan 23-Dec-2013) and Sudan Tribune (31-Aug-2007) and BBC (28-Sep-2015)
and ECC Platform (2014)


KEYS: Generational Dynamics, Sudan, South Sudan, Juba, Dinka tribe, Nuer tribe,
United Nations Mission in South Sudan, UNMISS,
Transitional Government of National Unity, Salva Kiir, Riek Machar,
Bor Massacre

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Phone: 617-864-0010
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com
Forum: http://www.gdxforum.com/forum
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*** 12-Jul-16 World View -- Japan's election opens the way to repeal 'pacifism' constitution clause

This morning's key headlines from GenerationalDynamics.com

• Increasingly angry China rams Vietnamese boat as tribunal ruling expected
  
• Japan's election opens the way to repeal 'pacifism' constitution clause
  
• US will send 560 more troops to Iraq
  

****
**** Increasingly angry China rams Vietnamese boat as tribunal ruling expected
****


Nguyen Thi Nang (L) sits next to a radio operator, waiting for news from her husband, captain Vo Van Luu, after his boat was reportedly sunk by Chinese vessels in the South China Sea

In what is likely to be increasingly a sign of things to come, Chinese
vessels on Saturday rammed a Vietnamese fishing boat and sank it, and
then prevented another Vietnamese ship from rescuing the crew members,
as they clung to the sinking ship to keep from drowning. The five
crew members were in the waters for over six hours before the Chinese
ships left, permitting another Vietnamese ship to rescue the crew.
The incident took place in waters that have been fished by Vietnam for
centuries.

China's rhetoric has become increasingly panicky, even publicly
releasing 'evidence' that turns out to be delusional. ( "22-Jun-16 World View -- China's 'ironclad proof' of South China Sea claims revealed as hoax"
)

The rhetoric has worsened approaching July 12, when the United Nations
Permanent Court of Arbitration in the Hague will issue its
long-awaited ruling on a case brought by the Philippines against China
on the merits of China's claims to the entire South China Sea. The
case is brought under the United Nations Convention on the Law of the
Sea (UNCLOS), which China claims does not apply to them. ( "7-Jul-16 World View -- South China Sea tension set to escalate after July 12 arbitration ruling"
)

Here's a typical Chinese media news story:

[indent]<QUOTE>"On the South China Sea issue, some Western media have
spared no efforts to make "news", tapping lies to cover the truth
and misguide public opinions thereon, which is considered by
experts and scholars to be unfair and misleading. ...

A quick glimpse of the website of the U.S. magazine The National
Interest shows that there are quite a number of articles
concerning the South China Sea, including ones titled "China's
Reckless South China Sea Strategy Won't Work", and "China's Bogus
South China Sea Consensus", among others

Almost all of these headlines are biased in opinion and
exaggeratedly worded, without uttering the least responsible words
as a magazine in a big media country.

Japan's The Diplomat, America's Business Insider and the
Washington Post have frequently mentioned in their reports that
China intends to turn the South China Sea into its "internal lake"
or "a Chinese lake".

In doing so, they just turned a blind eye to the fact that the
South China Sea islands have been part of the Chinese territory
under international law and since ancient times, and played up
sensational concepts in a bid to wrench the facts and misguide
their readers.

Some media even simply fabricate stories in order to smear China,
attempting to impress their readers that the situation is tense in
the disputed waters."<END QUOTE>[/indent]

There's a real hysterical quality to this situation. Assuming that
the tribunal rules in favor of the Philippines, the tribunal has no
way to enforce any decision it issues, so China can just ignore the
ruling, which it has already said it would do. But having already
rammed Vietnamese boats, manufactured evidence and made fantastical
claims, China is in an extremely emotional and dangerous state, and
this may have consequences. Sky News (Australia) and Tuoi Tre News (Vietnam) and Xinhua

****
**** Japan's election opens the way to repeal 'pacifism' constitution clause
****

Japan prime minister Shinzo Abe's Liberal Democratic Party (LDP) won a
resounding election victory on Sunday that opens the door for Abe to
get Japan's constitution amended to remove the "pacifism" clause,
as I wrote three days ago.

The LDP, along with its coalition partner Komeito, now has a
two-thirds "supermajority" in both the upper and lower houses of the
Diet (parliament). This gives Abe the votes to amend the consitution.

The pacifism clause forbids any military action by the Japanese except
in self-defense on Japanese soil. For Abe, amending this clause is
personal, in that he's following in the path of his grandfather, Kishi
Nobusuke, who served as prime minister of Japan from 1957-60. Kishi
disliked the pacifism clause because it made Japan too dependent on
the United States, and he wanted Japan to be completely self-reliant
in national defense. For Abe, amending this clause would fulfill his
grandfather's wish.

However, even with a super-majority in both houses of the Diet,
removing the pacifism clause will be very difficult because of
widespread opposition to doing so. An exit poll indicates that the
country is deeply divided on this issue, with 36% of the voters
opposing the change and 29.6% supporting it, with 34.4% undecided.

Those who support the change do so because of growing fears about
terrorism, North Korea’s missile and nuclear weapons ambitions and
China’s military assertiveness, while those who oppose it take pride
in the war-renouncing pledge. Japan Today and Japan Times

****
**** US will send 560 more troops to Iraq
****

In yet another flip-flop, the Obama administration announced that it
will send another 560 US troops to Iraq, to fight the so-called
Islamic State (IS or ISIS or ISIL or Daesh) Defense Secretary Ashton
B. Carter made the announcement on Monday during a surprise visit to
Iraq.

This will bring the number of US troops in Iraq to about 6,000,
including those on temporary assignment. This is a reversal for
President Obama, who promised to withdraw all troops from Iraq, and
did so in December 2011. Since then, Iraq's situation has continued
to deteriorate, and Obama has been forced to abandon his campaign
promises and send troops back to Iraq. One month ago, Obama also
further abandoned his campaign promises to withdraw troops from
Afghanistan. ( "11-Jun-16 World View -- In a reversal, Obama allows US troops in Afghanistan in combat roles"
)

The US troops will be part of an effort to recapture Raqqa, ISIS'
self-declared capital, and Mosul from ISIS. ISIS has occupied Mosul
since June 2014.

According to one analyst, retired Marine general Anthony Zinni,

[indent]<QUOTE>"Reading between the lines, I suspect that he has some
major commitments from the Iraqis, Kurds, and Syrian opposition to
go for the gold. ... I also suspect that Carter is convinced that
Mosul and Raqqa are isolated. It sounds like he will use this to
pressure regional allies to step up their
contributions."<END QUOTE>[/indent]

Zinni was commander of all US forces in the region as chief of
U.S. Central Command from 1997 to 2000. Washington Post and Time


KEYS: Generational Dynamics, China, South China Sea,
Permanent Court of Arbitration, Philippines, Vietnam,
United Nations Convention on the Law of the Sea, UNCLOS,
Shinzo Abe, Liberal Democratic Party, LDP, Komeito,
Kishi Nobusuke, North Korea, Iraq, Afghanistan,
Islamic State / of Iraq and Syria/Sham/the Levant, IS, ISIS, ISIL, Daesh,
Mosul, Raqqa, Anthony Zinni

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Phone: 617-864-0010
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Web site: http://www.GenerationalDynamics.com
Forum: http://www.gdxforum.com/forum
Subscribe to World View: http://generationaldynamics.com/subscribe

(07-12-2016, 10:43 AM)X_4AD_84 Wrote: [ -> ]Basically the Chinese are showing their true cards. They never really accepted at a deep level things we consider norms of International Law. They really don't even accept the notion of the UN / ICC / etc (accept when it is in their own favor). They still consider the round eyes to be pale savages and non-Han PoCs to be mere Apes.

So what?  The US has forfeited any moral standing wrt international law.  We do the same shit , so we just need to STFU when China flouts international law.

https://www.washingtonpost.com/world/nat...story.html

(07-12-2016, 10:43 AM)X_4AD_84 Wrote: [ -> ]> Basically the Chinese are showing their true cards. They never
> really accepted at a deep level things we consider norms of
> International Law. They really don't even accept the notion of the
> UN / ICC / etc (accept when it is in their own favor). They still
> consider the round eyes to be pale savages and non-Han PoCs to be
> mere Apes.

(07-12-2016, 06:08 PM)Ragnarök_62 Wrote: [ -> ]> So what? The US has forfeited any moral standing wrt
> international law. We do the same shit , so we just need to STFU
> when China flouts international law.

> https://www.washingtonpost.com/world/nat...story.html

The actions of a criminal are not excused because there exist other
criminals. In this case, the U.S. isn't even involved in the South
China Sea decision, except as an observer.

(07-12-2016, 06:27 PM)John J. Xenakis Wrote: [ -> ]

(07-12-2016, 10:43 AM)X_4AD_84 Wrote: [ -> ]>   Basically the Chinese are showing their true cards. They never
>   really accepted at a deep level things we consider norms of
>   International Law. They really don't even accept the notion of the
>   UN / ICC / etc (accept when it is in their own favor). They still
>   consider the round eyes to be pale savages and non-Han PoCs to be
>   mere Apes.  

(07-12-2016, 06:08 PM)Ragnarök_62 Wrote: [ -> ]>   So what?  The US has forfeited any moral standing wrt
>   international law.  We do the same shit , so we just need to STFU
>   when China flouts international law.

>   https://www.washingtonpost.com/world/nat...story.html

The actions of a criminal are not excused because there exist other
criminals.  In this case, the U.S. isn't even involved in the South
China Sea decision, except as an observer.

That may be the case, but like I said, the US has to STFU because of war crimes we committed in Poland.
Since we have dark prisons where we do torture as per international law, then we have again, no moral authority to say a fucking thing to China. If we do , then it's hypocrisy of the highest order and of course :

(07-12-2016, 06:49 PM)Ragnarök_62 Wrote: [ -> ]

(07-12-2016, 06:27 PM)John J. Xenakis Wrote: [ -> ]

(07-12-2016, 10:43 AM)X_4AD_84 Wrote: [ -> ]>   Basically the Chinese are showing their true cards. They never
>   really accepted at a deep level things we consider norms of
>   International Law. They really don't even accept the notion of the
>   UN / ICC / etc (accept when it is in their own favor). They still
>   consider the round eyes to be pale savages and non-Han PoCs to be
>   mere Apes.  

(07-12-2016, 06:08 PM)Ragnarök_62 Wrote: [ -> ]>   So what?  The US has forfeited any moral standing wrt
>   international law.  We do the same shit , so we just need to STFU
>   when China flouts international law.

>   https://www.washingtonpost.com/world/nat...story.html

The actions of a criminal are not excused because there exist other
criminals.  In this case, the U.S. isn't even involved in the South
China Sea decision, except as an observer.

That may be the case, but like I said, the US has to STFU because of war crimes we committed in Poland.
Since we have dark prisons where we do torture as per international law, then we have again, no moral authority to say a fucking thing to China. If we do , then it's hypocrisy of the highest order and of course :

The United States did not judge. The United States has repeatedly
said that it takes no sides in the court case. The case was brought
by the Philippines against China. There was no US involvement except
as an observer.

Actually, not even that. The United States requested to attend
the hearings as an observer. On page 21 of the 500 page
ruling that was released today, it says:

Quote:> 67. On 23 November 2015, the Tribunal communicated to the Parties
> and the U.S. Embassy that it had decided that “only interested
> States parties to the United Nations Convention on the Law of the
> Sea will be admitted as observers” and thus could not accede to
> the U.S. request. The same day, the Tribunal received a Note
> Verbale from the United Kingdom’s Embassy in the Netherlands
> applying for “neutral observer status” at the Hearing on the
> Merits and explaining that “[a]s a State Party to the
> [Convention], and with a strong interest in the maintenance of
> peace and stability in the South China Sea, underpinned by respect
> for, and adherence to, international law, the United Kingdom has
> been closely following proceedings in the arbitration and has an
> ongoing interest in developments.” The request was forwarded to
> the Parties for their comment, and the Philippines stated it had
> no objection to it.

So the U.S. did not judge, and was not even an observer.

(07-12-2016, 08:02 PM)John J. Xenakis Wrote: [ -> ]<snip>
So the U.S. did not judge, and was not even an observer.

OK, good. It's high time the US realizes its shit stinks just as much as everyone else's.

(07-12-2016, 08:02 PM)John J. Xenakis Wrote: [ -> ]> <snip> So the U.S. did not judge, and was not even an observer.
>

(07-12-2016, 08:14 PM)Ragnarök_62 Wrote: [ -> ]> OK, good. It's high time the US realizes its shit stinks just as
> much as everyone else's.

Hmmmm. You must be pissed off because Sanders threw in the towel.

*** 13-Jul-16 World View -- Philippines humiliates China in harsh Hague Tribunal ruling over South China Sea

This morning's key headlines from GenerationalDynamics.com

• UN Court issues harsh ruling condemning China and affirming the Philippines
  
• Tribunal ruling eviscerates China's 'Nine-Dash Line' claims
  
• China reacts angrily to the Tribunal ruling
  

****
**** UN Court issues harsh ruling condemning China and affirming the Philippines
****


Cheering Filipina girls on Tuesday after hearing the Tribunal announcement (AP)

China was deeply humiliated and infuriated on Tuesday by the
announcement that the hated Philippines had beaten them in a major
court case on the South China Sea. It wasn't a simple "on balance"
victory for the Philippines. It was a ruling by the United Nations
Permanent Court of Arbitration in the Hague where the Philippines had
thoroughly thrashed China. The court found that China's claims to the
Spratly Islands were invalid, that China's activities in the Spratly
Islands were violations of international law and destructive of the
environment, and furthermore that China had repeatedly and willfully
violated the Philippines' own Exclusive Economic Zone (EEZ), putting
the lives of Philippines fishermen in danger.

The Chinese and Filipino people are long-time war enemies who hold
each other in contempt. In this generational Crisis era, the two
countries are both highly nationalistic. There is a great deal of
international concern right now that the Filipino people will gloat
and that China will act like a trapped animal and will use its vast
military power to strike back in some way that will lead to war.

There is now a worldwide diplomatic search for some kind of
face-saving solution. One thing is for sure: The ruling did not
settle the South China Sea issue, and probably made it worse.
South China Morning Post (Hong Kong) and VOA and Guardian (London)

****
**** Tribunal ruling eviscerates China's 'Nine-Dash Line' claims
****

China's famous "Nine-Dash Line" claims -- a Chinese map with line
consisting of nine long dashes that encompasses the entire South China
Sea, including regions historically belonging to other countries --
was completely eviscerated by the ruling.

The following are some excerpts from the "Conclusion" section
of the ruling:

[indent]<QUOTE>"D. CONCLUSION

The Tribunal considers it beyond dispute that both Parties are
obliged to comply with the Convention, including its provisions
regarding the resolution of disputes, and to respect the rights
and freedoms of other States under the Convention. ...

[The Tribunal] DECLARES that, as between the Philippines and
China, China’s claims to historic rights, or other sovereign
rights or jurisdiction, with respect to the maritime areas of the
South China Sea encompassed by the relevant part of the ‘nine-dash
line’ are contrary to the Convention and without lawful effect to
the extent that they exceed the geographic and substantive limits
of China’s maritime entitlements under the Convention.

[The Tribunal] DECLARES that Scarborough Shoal, Gaven Reef
(North), McKennan Reef, Johnson Reef, Cuarteron Reef, and Fiery
Cross Reef, in their natural condition, are rocks that cannot
sustain human habitation or economic life of their own, and
accordingly that [they] generate no entitlement to an exclusive
economic zone or continental shelf.

[The Tribunal] FINDS that none of the high-tide features in the
Spratly Islands, in their natural condition, are capable of
sustaining human habitation or economic life of their own ...;
that none of the high-tide features in the Spratly Islands
generate entitlements to an exclusive economic zone or continental
shelf; and that therefore there is no entitlement to an exclusive
economic zone or continental shelf generated by any feature
claimed by China that would overlap the entitlements of the
Philippines in the area of Mischief Reef and Second Thomas Shoal;
and DECLARES that Mischief Reef and Second Thomas Shoal are within
the exclusive economic zone and continental shelf of the
Philippines.

[The Tribunal] FINDS that, in May 2013, fishermen from Chinese
flagged vessels engaged in fishing within the Philippines’
exclusive economic zone at Mischief Reef and Second Thomas Shoal;
and that China, through the operation of its marine surveillance
vessels, was aware of, tolerated, and failed to exercise due
diligence to prevent such fishing by Chinese flagged vessels; and
that therefore China has failed to exhibit due regard for the
Philippines’ sovereign rights with respect to fisheries in its
exclusive economic zone; and DECLARES that China has breached its
obligations under Article 58(3) of the Convention;

[The Tribunal] FINDS that Scarborough Shoal has been a traditional
fishing ground for fishermen of many nationalities and DECLARES
that China has, through the operation of its official vessels at
Scarborough Shoal from May 2012 onwards, unlawfully prevented
fishermen from the Philippines from engaging in traditional
fishing at Scarborough Shoal.

[The Tribunal] FINDS, with respect to the protection and
preservation of the marine environment in the South China Sea:
that fishermen from Chinese flagged vessels have engaged in the
harvesting of endangered species on a significant scale; that
fishermen from Chinese flagged vessels have engaged in the
harvesting of giant clams in a manner that is severely destructive
of the coral reef ecosystem; and that China was aware of,
tolerated, protected, and failed to prevent the aforementioned
harmful activities.

[The Tribunal] FINDS further that China’s land reclamation and
construction of artificial islands, installations, and structures
at Cuarteron Reef, Fiery Cross Reef, Gaven Reef (North), Johnson
Reef, Hughes Reef, Subi Reef, and Mischief Reef has caused severe,
irreparable harm to the coral reef ecosystem; that China has not
cooperated or coordinated with the other States bordering the
South China Sea concerning the protection and preservation of the
marine environment concerning such activities; and that China has
failed to communicate an assessment of the potential effects of
such activities on the marine environment, within the meaning of
Article 206 of the Convention.

[The Tribunal] DECLARES that China has breached its obligations
... with respect to China’s construction of artificial islands,
installations, and structures at Mischief Reef: FINDS that China
has engaged in the construction of artificial islands,
installations, and structures at Mischief Reef without the
authorization of the Philippines; and DECLARES that China has
breached Articles 60 and 80 of the Convention with respect to the
Philippines’ sovereign rights in its exclusive economic zone and
continental shelf.

[The Tribunal] FINDS, with respect to the operation of Chinese law
enforcement vessels in the vicinity of Scarborough Shoal: that
China’s operation of its law enforcement vessels on 28 April 2012
and 26 May 2012 created serious risk of collision and danger to
Philippine ships and personnel; and DECLARES that China has
breached its obligations under Article 94 of the Convention; and
that, during the time in which these dispute resolution
proceedings were ongoing, China: a. has built a large artificial
island on Mischief Reef, a low-tide elevation located in the
exclusive economic zone of the Philippines; b. has caused—through
its land reclamation and construction of artificial islands,
installations, and structures—severe, irreparable harm to the
coral reef ecosystem ...; and has permanently destroyed—through
its land reclamation and construction of artificial islands,
installations, and structures—evidence of the natural condition of
Mischief Reef, Cuarteron Reef, Fiery Cross Reef, Gaven Reef
(North), Johnson Reef, Hughes Reef, and Subi Reef.<END QUOTE>[/indent]

Part of China's claim to the South China Sea was a kind of
leapfrogging from island to island. China would claim one island
close to the mainland, then claim another island is close to the first
island, and so forth, across the South China Sea.

The Tribunal ruling was that these so-called islands are not islands.
They're simply uninhabited rocks, and so they do not qualify to be
claimed by anyone.

The ruling makes the following points:

• The Spratly Islands are little more than rocks, uninhabited,
  and so do not "generate entitlements to an exclusive economic zone or
  continental shelf."
  
  
• China purposely and illegally permitted its own vessels to fish in
  the Philippines EEZ.
  
  
• China purposely and illegally prevented fishermen from the
  Philippines to fish around Scarborough Shoal, a traditional fishing
  ground for many nationalities. China put Philippines' fishermen's
  lives at risk.
  
  
• China has harvested endangered species "on a significant scale."
  China has been "severely destructive of the coral reef
  ecosystem."
  
  
• China's construction of artificial islands is almost totally
  illegal, because of environmental destruction and because they violate
  "Philippines’ sovereign rights in its exclusive economic zone and
  continental shelf."

Permanent Court of Arbitration ruline
and Russia Today

****
**** China reacts angrily to the Tribunal ruling
****


Chinese media graphic: 'The farce should come to an end'

Here are some excerpts from China's Foreign Ministry statement:

[indent]<QUOTE>"First, the South China Sea arbitration is completely
a political farce staged under legal pretext. ...

Its purpose is clearly not to seek proper settlement of disputes
with China, but to violate China’s territorial sovereignty and
maritime rights and interests and put peace and stability in the
South China Sea in jeopardy.

The arbitration was conducted according to unwarranted procedure
and application of law, and was based on flawed evidence and
facts. Such as it is, it will never be accepted by the Chinese
people. Nor will it be recognized by anyone in the world who
stands on the side of justice. ...

the Ministry of Foreign Affairs of the People's Republic of China
solemnly declares that the award is null and void and has no
binding force. China neither accepts nor recognizes
it."<END QUOTE>[/indent]

China's Global Times contained a bitter, vitriolic editorial:

[indent]<QUOTE>"If the award were to be followed, China would be left
with only a few isolated spots in the Nansha [Spratly] Islands
without entitlement to any EEZ and could even be deprived of
sovereignty of the waters surrounding the islands and islets. The
majority of the Nansha Islands waters would be taken up by the
EEZs claimed by the Philippines and Vietnam. Besides, China could
not continue with its island construction. The existing facilities
might be dismantled by these two countries if they could. With the
related resources being owned by Manila and Hanoi in the future,
China would have to withdraw its business and other activities
from the area.

This not only outrageously denies China's historic rights in the
Nansha area and its legitimate maritime interests, but also
overthrows the state of de facto control in the region including
the Huangyan Island waters. This is ridiculous. The verdict has
brazenly violated China's territorial sovereignty and maritime
rights."<END QUOTE>[/indent]

State television reacted to the ruling by showing a documentary
showcasing China's military might. China's Foreign Ministry and Global Times (Beijing) and China's Foreign Ministry

KEYS: Generational Dynamics, China, Philippines, South China Sea,
Permanent Court of Arbitration, Spratly Islands, Nine-dash line

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John J. Xenakis
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Phone: 617-864-0010
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com
Forum: http://www.gdxforum.com/forum
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*** 14-Jul-16 World View -- Police clashes in India-governed Kashmir kill 36 and leaves thousands injured

This morning's key headlines from GenerationalDynamics.com

• Police clashes in India-governed Kashmir kill 36 and leaves thousands injured
  
• Jammu-Kashmir violence follows a typical generational timeline after civil war
  

****
**** Police clashes in India-governed Kashmir kill 36 and leaves thousands injured
****


Anti-Indian protesters clashing with Indian police in Srinagar in Kashmir

Hospitals in Indian-controlled Kashmir are being overwhelmed with
patients after four days of clashes between police separatist
demonstrators. The protestors are demanding that two provinces,
Kashmir and Jammu, separate from India and become part of Pakistan,
because of the large Muslim population.

The violence was triggered on Friday when activist Burhan Wani, 22,
was killed in a gunfight with the Indian Army. Wani was a division
commander in Hizbul Mujahideen, a separatist organization, and was
very popular with on social media. Hizbul Mujahideen is the largest
activist organization fighting against Indian rule in the contested
Jammu-Kashmir region.

India's army imposed a curfew on Saturday, but that drew out thousands
of angry rock-throwing protesters defying the curfew. Indian army
troops used live ammunition and pellet guns to try and quell the
violence, which has continued for several days. A mob attacked a
police station on Tuesday. Hospitals are being overwhelmed by the
arrival of hundreds of wounded patients. In all, at least 36 people
were killed, including one policemen, and thousands of people were
injured.

With the strict curfew still in place, Kashmir was relatively quiet on
Wednesday, despite the fact that it was the anniversary of "Martyrs'
Day," when Kashmiris were killed by police firing on protesters on
July 13, 1931. Tribune India and AP and Daily Times (Pakistan)

****
**** Jammu-Kashmir violence follows a typical generational timeline after civil war
****

Kashmir was a major battleground for the 1947 Partition war that
followed the partitioning of the Indian subcontinent into India and
Pakistan, one of the bloodiest wars of the last century. The Kashmir
region was a particularly bloody site of the war between Hindus and
Muslims, and it's still disputed, with an internationally recognized
Line of Control (LoC) separating the regions currently governed by
Pakistan from those governed by India.

As I've described in numerous countries that have been through a
generational crisis civil war, there is a consistent pattern that such
countries almost always follow.

About 20 years after the end of an ethnic civil war, a post-war
generation comes of age. They have no personal memory of the war, and
all they know is what they've heard from their parents and friends, so
they have very limited information. The kids in this generation on
each side know nothing of the atrocities their side committed, but
know a lot about the atrocities committed against them by the other
side. So the two sides of this generation come of age knowing two
completely different sets of partial information.

So after 20 years, these young people start to rebel. This can take
the form of anything from peaceful protests to violent riots to
terrorist attacks. The governing authorities, usually from the side
that won the war, fear a renewal of the civil war and react to the
protests in various ways. At first, simple police actions work, at
least for a while. In Thailand, the army is trying to control the
"red shirt" indigenous Thais through coups and a constitutional
referendum. In Burundi, Pierre Nkurunziza is selectively killing,
torturing and jailing Tutsi opponents. In Zimbabwe, Robert Mugabe
conducted wholesale slaughter of the Ndebele opponents. In Syria,
Bashar al-Assad is currently conducting wholesale slaughter of Sunni
opponents. In Bangladesh, "the Sheikh Hasina Government has decimated
the leadership of established Islamist terrorist formations and their
sympathetic institutions," according to one analysis, and arrested
over 3,000 people in a sweep last month.

Jammu-Kashmir has following the same pattern. There were constant
protests and brief conflicts between Indians and Pakistani Muslims,
ending in agreements for peace that lasted weeks or months before
low-level violence began again, with each new round of violence worse
than the last.

The relatively small protests of the Recovery and Awakening eras
became widespread protests and an armed insurgency that began
following a disputed election in 1987, as JK entered its generational
Unraveling era.

In 1989, Hizbul Mujahideen was formed. Although it was funded and
supported by Pakistan's Inter-Services Intelligence (ISI) agency, the
important fact from the point of view of Generational Dynamics is that
it quickly became extremely popular, with thousands of members by the
early 1990s. Hizbul Mujahideen has been riven by splintering and
internal conflicts, but there are today thousands of anti-India
protesters in Indian-governed Kashmir.

There are numerous stories in the press suggesting ways to "solve the
core problems" in Jammu-Kashmir. From the point of view of
Generational Dynamics, no such solutions exist, and there will be
continue to be clashes in the future. These solutions completely miss
the point. They suggest that some politician pursue peace talks or
something similar. That's always the easy suggestion from people who
have no clue what's going on. These protests are not coming from
politicians. They're growing organically from the population, and no
politician can either cause them or stop them. Generational Dynamics
predicts that Muslims and Hindus will have a full-scale war,
re-fighting the 1947 Partition war that followed the partitioning of
the Indian subcontinent into India and Pakistan. The Hindu and Greater Kashmir and SATP (India) and The News (Pakistan)


KEYS: Generational Dynamics, India, Kashmir, Jammu, Pakistan,
Burhan Wani, Hizbul Mujahideen, Inter-Services Intelligence, ISI

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John J. Xenakis
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Phone: 617-864-0010
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Web site: http://www.GenerationalDynamics.com
Forum: http://www.gdxforum.com/forum
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*** 15-Jul-16 World View -- After Brexit, London's real estate bubbles are collapsing

This morning's key headlines from GenerationalDynamics.com

• UK residential real estate market hit hard by Brexit
  
• The UK housing bubble may finally be collapsing
  
• UK commercial real estate market hard hit by 'Brexit clauses'
  

****
**** UK residential real estate market hit hard by Brexit
****


UK house prices, 1991 to present

According to anecdotal evidence collected in a survey by the Royal
Institution of Chartered Surveyors (RICS), indicates that the
residential real estate market in the UK, especially in London, is
crashing.

The findings have to be viewed with caution, since prices increased slightly
in June, albeit more slowly than in the past. Since the Brexit
referendum occurred on June 23, the June prices surveys don't tell us
much.

But the findings that the RCIS announced on Thursday are considerably
more dramatic, because they measure changes in buyer sentiment since
the Brexit referendum:

• New buyer enquiries "declined significantly" in June, with 36%
  more respondents reporting a fall in interest. This is the lowest
  reading since mid-2008 when the financial crisis was in full
  swing.
  
  
• The market saw a further decline in sales with a third successive
  monthly drop in activity. Respondents expect this trend to continue
  with 26% more respondents anticipating a further drop in sales across
  the UK over the next three months. This is the most negative reading
  for near term expectations since 1998.
  
  
• In London, 46% of those surveyed were seeing prices
  slashed.

According to RICS, the South of the UK has been the hardest hit, with
anecdotal evidence suggesting that both the Brexit referendum and tax
changes are having an impact on sentiment.

According to RICS, London remains the only region where respondents
are seeing prices fall, with this largely being concentrated in the
central zones. Near term price expectations are now in negative
territory across the whole of the UK with 27% more respondents across
the UK expecting to see prices fall rather than rise over the next
three months.

RICS points out that only after the initial shock of the Brexit
referendum has passed will we get a clearer picture of how the market
is faring. Royal Institution of Chartered Surveyors (RICS) and Business Insider

****
**** The UK housing bubble may finally be collapsing
****

As the chart at the beginning of this article shows, UK housing prices
are still at bubble levels. As I've written a number of times in the
past, the global housing bubble began in 1996, at the same time as the
"tech bubble," and accelerated in the 2000s, reaching a peak in 2007.

The housing bubble then deflated, causing what we now call "the
financial crisis," but as the above chart illustrates, the global
housing bubble did not fully deflate, and the housing bubble continues
to this day.

According to a UBS report published last year, the global housing
price increase was 130% from 1996 to 2007, but the subsequent price
decline was only 30%. The UBS report blames this on the "gigantic cash
injection" from central banks around the world, through quantitative
easing and, today, negative interest rates. According to the report:

[indent]<QUOTE>"Through quantitative easing, central banks have more
than tripled the global monetary base since 2008. This gigantic
cash injection has lowered real interest rates and slowed the
global housing market corrections that began in 2007. The average
price decline amounted to 30% in real terms. However, this did not
offset the preceding price increase of 130% since the mid-1990s.
The correction was thus milder than in previous cycles, setting
the stage for today’s overheating housing markets.

When inexpensive financing is combined with bullish expectations,
real estate prices eventually uncouple from the real economy. We
have seen this in the current cycle, particularly in the world’s
leading financial centers, where housing prices are now, in many
cases, fundamentally unjustified. The risk of a real estate bubble
in these cities has risen sharply. While it is not always possible
to prove conclusively the existence of a bubble, it remains
essential to identify the signs of one early on."<END QUOTE>[/indent]

According to the report, the world's most expensive real estate market
was London, though Hong Kong is not far behind. Many European cities,
including Geneva and Amsterdam, are overvalued. In the United
States, San Francisco is the most overvalued, with New York, Boston
and Chicago trailing behind.

As I wrote in "25-Jun-16 World View -- Fallout from Brexit: Impact on geopolitics, economics, and stock markets"
, the danger is from a long-term crash because
of a vicious cycle involving forced selling.

It's impossible to predict exactly when the London housing bubble will
collapse, but it's 100% certain that it will collapse at some point,
because every bubble in history has collapsed, usually causing
enormous pain. It's possible that we're seeing the beginning of a
major real estate collapse right now, but it's also possible that
central banks will find a way to pour massive new amounts of liquidity
into the real estate markets to keep the bubble going. After the
"gigantic cash injection" described by the UBS report quoted above,
central banks are not about to stop now. The sky's the limit.

One thing to watch out for is that there is a great deal of resistance
among mainstream economists, politicians, journalists and analysts to
even imagine a collapsing bubble.

We saw this ten years ago, when mainstream financial analysts,
economists and journalists would say, "Housing prices can't go down --
people have to live somewhere!" and "Banks won't foreclose -- it's not
in their interest to do so!" and "These housing construction firms
know what they're doing, and they wouldn't be building houses if it
were just a bubble!" It wasn't until 2009 that mainstream economists
began saying that there had been a housing bubble years earlier. (See
"26-Dec-2015 World View -- 'The Big Short' - an infuriating movie about the financial crisis"
)

So expect the usual slew of excuses from mainstream economists this
time, and don't be surprised if, as usual, they don't have the vaguest
clue what's coming. UBS Global Real Estate Bubble Index (2015-PDF) and Money Week (3-March-2016) and Bloomberg (6-April-2016)

****
**** UK commercial real estate market hard hit by 'Brexit clauses'
****

Since commercial real estate is often used for investments, Britain's
commercial property market is being harder hit than the residential
housing market.

Even before the June 23 referendum, some buyers wrote "Brexit clauses"
into their contracts to purchase commercial real estate in Britain.
These clauses, which are now being invoked, allow buyers to walk away
from deals if the Brexit referendum passed, which it did.

Many commercial real estate investors do not plan to occupy the
properties they acquire, but are purchasing them as investments. This
is particularly true of Chinese property investors, who simply need a
place to park their money.

Because of Brexit, many employees working in London may have their
jobs moved to the continent. This means that there will be empty
offices in London, reducing the value of these buildings to these
Chinese investors.

Until the effects of Brexit are well understood, which may not be for
two or more years, commercial real estate investors are looking for
"safe havens" in other countries. Thus, London's loss could mean
other cities' gain. Realtors in Canada, Australia and the US are
pitching their countries as safe havens, as Chinese buyers view
Britain as too risky. South China Morning Post (Hong Kong) and Reuters


KEYS: Generational Dynamics, Britain, London, Brexit,
Royal Institution of Chartered Surveyors, RICS,
quantitative easing, Hong Kong

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John J. Xenakis
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Phone: 617-864-0010
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Web site: http://www.GenerationalDynamics.com
Forum: http://www.gdxforum.com/forum
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*** 16-Jul-16 World View -- Nice France terror attack provokes desperate search for solutions

This morning's key headlines from GenerationalDynamics.com

• Implications of the attempted coup in Turkey
  
• Protests and violence continue across Indian-governed Kashmir
  
• Nice France terror attack provokes desperate search for solutions
  

****
**** Implications of the attempted coup in Turkey
****


Turkish people take to streets during coup attempt (Anadolu)

As of this writing on Friday evening ET, it's thought that
the coup has been defeated, but it's far from certain.

Several analysts have pointed out that it's United States policy
only to deal with democratically elected governments, and not
with coup governments. This policy was already severely tested
after the 2013 coup in Egypt, where the U.S. continued providing
military aid to the coup government. The issue of military aid
to Turkey would be raised if this coup is successful.

Even if the coup is defeated, the fact that Turkey's military is split
would have implications for the United States. The United States
military is operating out of Incirlik air force base for its
operations in Syria and Iraq. The US military and 1,500 US troops and
personnel, which depend on Turkey's military while in that base, might
potentially be in danger.

Another flash point is the Bosporus, the narrow body of water that
connects the Black Sea and the Mediterranean Sea. Russia's navy has a
substantial Black Sea fleet stationed in Crimea, which Russia invaded
and annexed in 2014, and if a Russian ship comes under some kind of
attack while traveling through the Bosporus, then Russia's military
might enter Turkey and intervene.

As I've written many times during the last ten years or so, based on a
Generational Dynamics analysis, in the coming Clash of Civilizations
world war, China, Pakistan, and the Sunni Muslim countries would be
one side, and India, Iran, the United States and the West would be on
the other side. However the coup turns out, this is direction in
which Turkey is headed. ( "8-Jul-16 World View -- Hard issues prevent full reconciliation between Turkey and Russia"
)

As I'm writing this on Friday night ET, it's not entirely clear who is
governing Turkey, since president Recep Tayyip Erdogan is holding a
news conference in Istanbul while there's still fighting in the
capital city Ankara. This coup attempt has exposed a great deal of
instability within Turkey, and that instability will continue for
weeks and months to come. Anadolu (Ankara) and Hurriyet (Ankara)

****
**** Protests and violence continue across Indian-governed Kashmir
****

Reports indicate that Indian security forces prevented tens of
thousands of people from attending mosques for Friday Prayers,
resulting in anti-India protests and clashes in dozens of places
across India-governed Kashmir.

Violent clashes began a week ago, following the death of Burhan Wani,
22, a commander in the separatist militia Hizbul Mujahideen, as I
described in "14-Jul-16 World View -- Police clashes in India-governed Kashmir kill 36 and leaves thousands injured"
.

India has declared Wani to be a "terrorist," but now Pakistan is
referring to Wani as a "martyr of the independence movement." This is
an allusion to the desires of some groups to have an independent
Kashmir, but most anti-India groups want Kashmir to be part of
Pakistan. At any rate, the "martyr" designation is inflaming the
violence in Kashmir.

Pakistan and India, including disputed Kashmir and Jammu, are in a
generational Crisis era, 69 years past the massive 1947 genocidal war
between Hindus and Sikhs versus Muslims that followed Partition, the
partitioning of the Indian subcontinent into India and Pakistan.
Being in a generational Crisis era means that the survivors of the
last genocidal crisis war are all gone, and the generations in control
today have no personal memory of the horrors of that war. This opens
the way for a new genocidal war to begin, and it's possible that the
current situation will spiral out of control into that situation.
Al Jazeera

****
**** Nice France terror attack provokes desperate search for solutions
****

The number of terror attacks has been growing. In just the past
month, there was a deadly July 7 shooting in Dallas, a massive terror
attack Dhaka on July 1, the Istanbul airport attack on June 28, and
the mass shooting in Orlando on June 12.

The natural reaction by politicians to the situation is to look for
ways to increase their own political power or get money, no matter
what the effect on others. This is evident in moronic ideological
"solutions to terrorism" that are being proposed. Here are some
examples:

• Gun control. On Friday, the morning after the Nice
  attack, Smith & Wesson stock went higher, as it always does after a
  terror attack, because gun owners know that President Obama is going
  to give another speech making the ridiculous call for gun control.
  Calls for gun control increase gun sales, as well as development of
  techniques for home-made guns, including 3D-printed guns. No proposed
  gun control law would have prevented any of the recent terror attacks.
  France has strong gun control laws, and yet the terrorist possessed
  guns and explosives. Also the attack in Nice was with a truck, and
  I'm waiting for someone to propose truck control.
  
  
• Ban all Muslims or interrogate all Muslims. This would
  create an enormous backlash domestically. It would be a farce, since
  it would entrap only ordinary Muslims, and real jihadists would learn
  to lie and evade any tests. The perpetrator in Nice was stopped by
  the police before the attack, and was asked why he was driving his
  truck in that area. He said that he was delivering ice cream for the
  celebrations, and the police left him alone. If he could so easily
  fool the French police, then any jihadist could learn to do the
  same.
  
  
• Solve the "core problems." People who make this proposal
  usually blame the U.S. for Muslim hostility, and claim that if we were
  nicer to Muslims, the attacks would stop. This farcical proposal is
  contradicted by almost eight years of President Obama's apology tours
  to Muslim countries. Another analyst made the equally idiotic claim
  blaming the terror attacks on the rise of the far-right in Europe.
  Last year, I explained in detail in "12-Sep-15 World View -- Saudi Arabia's Grand Mosque, site of huge construction accident, has links to 9/11"
  that the modern
  rise of al-Qaeda, the 9/11 attacks, and the increasing jihadist
  attacks since then were traced back to three major events that took
  place in 1979: the Soviet invasion of Afghanistan, Iran's Great
  Islamic Revolution, and a huge Salafist attack on Mecca's Grand
  Mosque. The United States had absolutely nothing to do with the rise
  of jihadism, and it's extreme nationalist arrogance to even believe
  so. It would be nice if some of these self-styled "experts" who blame
  the US for everything would learn a little about what's going on in
  the world.
  
  
• Bomb Raqqa. I heard one military analyst say that we should
  "get serious" and wipe out ISIS by bombing and flattening Raqqa, their
  headquarters, even though hundreds of thousands of civilians would be
  killed. This is laughable beyond belief. ISIS would move its
  headquarters out of Raqqa. The huge civilian massacre would create an
  enormous international backlash. And it wouldn't even do any good.
  There are thousands of people killed in terrorist attacks every month
  -- in Syria, in Iraq, in Afghanistan, in Pakistan, in India, in
  Bangladesh, and other countries, and none of that would be even
  touched by bombing Raqqa. There's a huge war being waged by Muslims
  against Muslims, with the number of Westerners killed being minuscule
  by comparison. This war is growing, and so the spillover with terror
  attacks in the West is going to grow as well, and flattening Raqqa
  would only make things worse.
  
  
• Dissolve the EU or civil war in the EU. I heard a couple of
  analysts say that the Nice attack should encourage other countries to
  leave the EU, suggesting that this would prevent jihadists from
  crossing borders. That doesn't make sense. If anything, the Nice
  attack will unify the EU, since they need each other to fight
  terrorism. The most that would happen is some additional border
  closings, or modification of the Schengen zone. But even so, that
  would not have prevented the Nice attack, where the perpetrators was a
  permanent resident and a "lone wolf" who didn't cross any
  borders.

The attack in Nice France makes a mockery of all "solutions." It was
perpetrated by a permanent resident of France, who lived in Nice with
a job as a delivery driver. He was known to the police as a petty
thief, but not as a terrorist. No one has claimed credit for the
attack, so it may have been perpetrated entirely locally. He has an
ex-wife and three kids, so that the attack might have been a way of
getting revenge against his ex-wife. He comes from a well-to-do
family in Tunisia, where his father was speaking to the press. He
expressed shock that his son had perpetrated this act. He said that
his son was mentally unstable, and that when he was off his meds he
would become extremely angry and break things. So the Nice France
attack might simply have been perpetrated by a madman.

From the point of Generational Dynamics, there is no solution to the
terrorism problem. The rise of terrorism is organic, coming from
young generations with limited, distorted views of the world. None of
the above solutions would reach them. With the worldwide Muslim
versus Muslim war growing, there's going to be more and more
"spillover" into the West, and so the number of terrorist will
continue to increase. All of the "solutions" listed above only make
things worse. AFP and CNN


KEYS: Generational Dynamics, Turkey, Recep Tayyip Erdogan,
Islamic State / of Iraq and Syria/Sham/the Levant, IS, ISIS, ISIL, Daesh,
India, Kashmir, Jammu, Pakistan, Burhan Wani, Hizbul Mujahideen,
Nice, France, Raqqa

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John J. Xenakis
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Phone: 617-864-0010
E-mail: john@GenerationalDynamics.com
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Subscribe to World View: http://generationaldynamics.com/subscribe

*** 17-Jul-16 World View -- Attempted army coup in Turkey collapses within hours

This morning's key headlines from GenerationalDynamics.com

• Attempted army coup in Turkey collapses within hours
  
• Extradition of Fethullah Gulen may be linked to reopening Incirlik air base
  

****
**** Attempted army coup in Turkey collapses within hours
****


Fethullah Gulen at his home in Saylorsburg, Pennsylvania, on Saturday. Erdogan accuses Gulen of organizing the coup attempt (Reuters)

A botched army coup on Friday attempting to overthrow Turkey's
president Recep Tayyip Erdogan and his governing Justice and
Development Party (AKP) collapsed within a few hours overnight.

Reports indicate that the army leadership was not involved, and that a
group within the army attempted to overthrow the army leadership as
well as the government.

On Saturday, 3,000 soldiers and 2,000 judges were arrested.

Erdogan is accusing Fethullah Gulen, a 76-year-old Turkish Muslim
cleric, living in self-imposed exile in America since splitting with
Erdogan, of orchestrating the coup from his desk in Saylorsburg,
Pennsylvania.

Erdogan has been in power since 2007, so it's not surprising that he's
made a lot of enemies. There are many reasons why some people might
wish to see Erdogan removed from office:

• Erdogan has become increasingly autocratic, and many accuse
  him of destroying Turkey's democracy. In recent times, he's shut down
  an opposition newspaper and jailed reporters for printing news that he
  didn't like. ( "6-Mar-16 World View -- Turkey's 'shameful day for free press' as government seizes Zaman media"
  ) Each time there's a terror attack or other
  crisis, Erdogan finds a way to amass more power to himself. Some
  people fear that he will turn the coup crisis into an opportunity to
  become a dictator.
  
  
• Erdogan has been changing Turkey's character from a secular state
  to a conservative Islamist state, making him a hero to millions of
  pious Turks who felt ignored by the old secular elites. This all came
  to a head in 2007 over the issue of women wearing headscarves. ( "(May 2007) More than a million of secularists rally in Turkey"
  ) However, Ataturk, the revered
  founder of Turkey after the collapse of the Ottoman Empire, declared
  that Turkey would be a secular state, with freedom of worship for
  people of all religions, including Jews and Christians. Ataturk asked
  the army to be the preserver of the secular state, and many in the
  army today see it as their job to stop Erdogan's changes.
  
  
• In 2010, 30 army officers were arrested after evidence has been
  found that in 2003 they had attempted a coup called "Operation
  Sledgehammer." ( "26-Feb-2010 News - Turkey debates Islam versus secularism"
  ) This caused a
  major confrontation between Erdogan's Islamist AKP party and the army
  that is far from being healed.

There are many reasons for opposition to Erdogan, and many of them
have coalesced under the spiritual leadership of Fethullah Gulen,
whether or not that means that Gulen had a more direct responsibility
for the coup attempt.

Turkey was deeply divided prior to the coup, and those divisions are
probably even deeper now. Millions of Turks say that Erdogan is
authoritarian, anti-secular and Islamist. It's unlikely that Erdogan
will be able to heal these divisions anytime soon.

As one analyst put it, Erdogan has recently gone to great lengths to
reconcile differences externally -- with Russia and Israel -- but what
he really needs to do is reconcile differences internally, within
Turkey itself. Hurriyet (Ankara) and BBC and AP and Daily Mail (London)

****
**** Extradition of Fethullah Gulen may be linked to reopening Incirlik air base
****

Turkey has a half million man army, the second largest in Nato, and
Turkey occupies the central region in the Mideast, literally bridging
Europe and Asia. Turkey is considered vital to the West for many
reasons:

• The EU-Turkey refugee deal has slowed the tsunami of Syrian
  refugees flooding into Europe down to a trickle.
  
  
• Turkey is the lynchpin of the Obama administration's strategy in
  Syria and Iraq.
  
  
• Turkey's control of its border with Syria is needed to slow the
  flow of trade between the so-called Islamic State (IS or ISIS or ISIL
  or Daesh) and the rest of the world.
  
  
• The US military depends on Turkey's Incirlik airbase. The US
  military and 1,500 US troops and personnel stationed there, and the US
  air force uses it as a base from which to launch air strikes against
  ISIS in Syria and Iraq.

For all of these reasons, there is great concern internationally that
the government of Turkey is going to be increasingly unstable in the
next few months.

Incirlik airbase is currently closed since the coup attempt, and the
Obama administration would like it to be reopened.

Turkey apparently wishes for the Obama administration to extradite
Fethullah Gulen back to Turkey.

Analysts have suggested that Turkey will use the Incirlik closure as
leverage to gain the extradition of Gulen.

Gulen lives in Saylorsburg, Pennsylvania, on a 26-acre compound called
the Golden Generation Worship and Retreat Center. He has denied that
he was involved in the coup, and the Obama administration position is
that Turkey will have to supply some proof if he is to be extradited.

As long time readers are aware, Generational Dynamics predicts that in
the coming Clash of Civilizations world war, China, Pakistan, and the
Sunni Muslim countries will be one side, and India, Iran, the United
States and the West will be on the other side.

Ten years ago, this trend prediction seemed bizarre, but it's already
been astonishing to see Iran and the West move closer together,
especially through the nuclear deal, while Saudi Arabia and other Arab
countries have become increasingly alienated and distrustful of the
United States under the Obama administration. This is all in the
direction of the trend prediction that I posted years ago.

As I've said before, the reconciliation between Turkey and Russia is
strongly anti-trend, so is not expected to last. ( "8-Jul-16 World View -- Hard issues prevent full reconciliation between Turkey and Russia"
) If the
coup brings further instability, it will move in the direction of the
above trend, and that will have big effects on the Turkey policies of
Russia, Iran, the U.S., and the West. Anadolu (Ankara) and CNN and AP and BBC (27-Jan-2014)


KEYS: Generational Dynamics, Turkey, Recep Tayyip Erdogan,
Justice and Development Party, AKP, Ataturk, Russia, Israel,
Fethullah Gulen, Saylorsburg Pennsylvania,
Islamic State / of Iraq and Syria/Sham/the Levant, IS, ISIS, ISIL, Daesh,
Syria, Iraq, Incirlik airbase, Iran

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John J. Xenakis
100 Memorial Drive Apt 8-13A
Cambridge, MA 02142
Phone: 617-864-0010
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com
Forum: http://www.gdxforum.com/forum
Subscribe to World View: http://generationaldynamics.com/subscribe

*** 18-Jul-16 World View -- Turkey's Erdogan gives four-finger 'R4BIA' salute, in signal to Egypt's Muslim Brotherhood

This morning's key headlines from GenerationalDynamics.com

• Turkey's Erdogan gives four-finger 'R4BIA' salute, in signal to Egypt's Muslim Brotherhood
  
• Bahrain tensions rise as Sunni government cracks down on Shias
  
• Bahrain accuses another top Shia cleric for money laundering
  

****
**** Turkey's Erdogan gives four-finger 'R4BIA' salute, in signal to Egypt's Muslim Brotherhood
****


Screen grab from video of Erdogan's speech on Saturday in which he gives the four-finger R4BIA salute

Following Egypt's 2013 army coup that ousted the democratically
elected Mohammed Morsi and his Muslim Brotherhood (MB) government,
there were massive protests and sit-ins in Cairo and clashes between
MB supporters and the army, resulting in nearly 1,000 deaths. Most of
the clashes occurred in Cairo's Rabaa Square. In Arabic, the word
"Rabaa" or "Rabia" means "fourth," and so MB supporters adopted the
name "R4BIA" for the new four-fingered salute, which consists of
raising for fingers, and folding you thumb over your palm. ( "24-Aug-13 World View -- Turkey's Erdogan adopts Muslim Brotherhood's four-fingered salute"
)

In the middle of his first major speech on Saturday following the coup
attempt in Turkey, president Recep Tayyip Erdogan flashed the R4BIA
four-fingered salute, as shown in the above screen grab, as a signal
that he still supports the Muslim Brotherhood in Egypt. ( "17-Jul-16 World View -- Attempted army coup in Turkey collapses within hours"
)

The significance of this is that it's a new indication that Erdogan
has no intention of reconciling with Egypt. Erdogan has reconciled
with both Israel and Russia in recent weeks, and some analysts had
speculated that Egypt would be next. However, Erdogan's four-fingered
salute on Saturday is one of several indications that no such
reconciliation is possible at this time.

On several occasions, Erdogan has said that his differences are with
Egypt's president Abdel Fattah al-Sisi, who masterminded the 2013
coup, and not with the Egyptian people. Al Monitor and Washington Post and YouTube - Erdogan - watch 16:30-17:00 and The Conservative Treehouse

****
**** Bahrain tensions rise as Sunni government cracks down on Shias
****

The Sunni-ruled government of Bahrain on Sunday ordered the
dissolution of the country's main opposition group, the Shia
organization Al Wefaq National Islamic Society, despite enormous
international criticism from Western countries and human rights
organizations. Al-Wefaq was closed by court order last month.
Bahrain's population is 2/3 Shia Muslim, but the country is led by an
oppressive Sunni government closely allied with Saudi Arabia.

In May, Bahrain's courts found the Al-Wefaq leader Sheikh Ali Salman
guilty of charges relating to "publicly inciting hatred, an act which
disturbed public peace, inciting non-compliance with the law and
insulting public institutions." Salman's Al Wefaq National Islamic
Society issued a statement calling the decision "an alarming
politically-motivated verdict [that] only deepens the political and
constitutional crisis in Bahrain."

On Sunday, a court in Bahrain ordered the dissolution of Al-Wefaq,
accusing it of harboring terrorism, inciting violence and encouraging
demonstrations and sit-ins which threaten to spark "sectarian strife,"
and ordered the seizure of all of the organization's assets.

Iran has not yet commented on the dissolution of Al-Wefaq, but last
month when it was closed, Iran issued a statement:

[indent]<QUOTE>"The oppressed Muslim nation of Bahrain had been under
the cruel, biased, unfair, and illegitimate regime of Al-Khalifa
for long years. Despite furious acts which included unashamedly
racist discrimination, arrest of their religious leaders,
imprisoning and torturing women and children, stripping
citizenship, violation of their rights without any qualms and
several other crimes, this patient people have exercised patience;
tightening the pressures has never distracted Bahraini people of
their non-violent approach."<END QUOTE>[/indent]

It's hard not to laugh at this, given that Iran regularly massacres
peaceful protesters, leaving blood running in the streets, and jails
political opponents for years. In 2011, Bahrain massacred peaceful
protesters, leaving blood running in the streets. When these two
countries whine about each other, they sound pathetic. AFP and Al-Jazeera

****
**** Bahrain accuses another top Shia cleric for money laundering
****

Bahrain will try the kingdom's most prominent Shia cleric, Sheikh Isa
Ahmed Qasim, accusing him on Saturday of illegal fund-raising and
money-laundering.

In addition, Bahrain is threatening to strip the entire Shia cleric
community of its sources of income, by taking over collection of a
Shia tax, known as the fifth or "khums," because it taxes up 20%
(one-fifth) of all excess wealth that has accumulated in the accounts
of the faithful for more than a year.

Last month, Bahrain revoked the citizenship of Qasim, accusing him of
promoting "sectarianism and violence."( "21-Jun-16 World View -- Iran threatens coup, after Bahrain revokes citizenship of Shia cleric"
)

According to a Bahrain government official:

[indent]<QUOTE>"Investigations have confirmed that Qasim harnessed
the money of poor Shias to finance terror activities in Bahrain
and that he sent some of those findings to Iran.

We [the authorities] will be collecting the khums in a transparent
way although [I admit that] the process will take
time."<END QUOTE>[/indent]

Last month, after Qasim's citizenship was revoked, tens of thousands
of his supporters to take to the streets. As Bahrain's minority Sunni
government continues harsher and harsher crackdowns on the majority
Shia population, it's feared that there will be a repeat of the
massive protests that occurred in 2011.

According to Rashed al-Rashed, a leading opposition figure in Bahrain,
"Nobody can foresee what would happen, but too much blood will be shed
in case of Sheikh Qasim’s arrest." Middle East Eye and Tasnim News (Tehran)


KEYS: Generational Dynamics, Turkey, Recep Tayyip Erdogan, R4BIA,
Russia, Israel, Egypt, Muslim Brotherhood, Mohammed Morsi,
Bahrain, Sheikh Ali Salman, Al Wefaq National Islamic Society,
Sheikh Isa Ahmed Qasim, Iran, Rashed al-Rashed, khums

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John J. Xenakis
100 Memorial Drive Apt 8-13A
Cambridge, MA 02142
Phone: 617-864-0010
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com
Forum: http://www.gdxforum.com/forum
Subscribe to World View: http://generationaldynamics.com/subscribe