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**John J. Xenakis** · 12-28-2018, 11:22 PM

*** 29-Dec-18 World View -- DR Congo in election chaos, as Ebola continues to spread

This morning's key headlines from GenerationalDynamics.com

DR Congo in election chaos, as Ebola continues to spread
DRC anti-government protesters attack Ebola clinic in Beni

****
**** DR Congo in election chaos, as Ebola continues to spread
****

[Image: g181228b.jpg]

WHO Ebola health workers in Democratic Republic of Congo (WHO)

There was supposed to be a presidential election in the Democratic
Republic of Congo (DRC) on Sunday, December 23, but it got postponed.
The current president, Joseph Kabila, was supposed to step down in
December 2016, but he refused to step down and postponed the
presidential election for a year. Then, in December 2017, he refused
again to step down, and postponed the presidential election for a
year, until December 23 of last week.

Kabila himself will not be running, since the constitution limits him
to the two terms he's already served. Instead, he has a hand-picked
successor, Emmanuel Ramazani Shadary. Many people believe that if
Shadary wins, then he will just be a puppet with Kabila as the
puppetmaster.

So Joseph Kabila's election commission (CENI) postponed the December
23 election for a week, until December 30. The reason given is that
there weren't enough voting machines.

This week, there are new tactics. Kabila's election commission said
that the election will still be held on Sunday, but will be delayed
until March in three cities -- Beni, Butembo and Yumbi. The reasons
given for Beni and Butembo are that there are Ebola outbreaks in those
cities, and that voting would be "dangerous." However, voting has not
been delayed in other cities with Ebola outbreaks.

The reason given for Yumbi is that there's violence in Yumbi. Of
course there's violence in many DRC cities.

But what's special about these three cities -- Beni, Butembo and Yumbi
-- is that all three cities are strongholds for anti-Kabila
opposition. Voting will continue as usual in other cities where there
is Ebola or violence. So there are 1.2 million votes in these three
cities, and there are 40 million registered voters in all of DRC. So
Kabila has disenfranchise over a million opposition supporters.

On Friday, Kabila's election commission had some further news. About
20% of the polling stations in the capital city Kinshasa will not be
open because of lack of voting machines. There's no word on whether
those polling stations will all be in opposition strongholds of
Kinshasa. However, the election commission says that voters will be
directed to other polling stations in the city.

Kabila cannot afford to simply step down, thanks to rampant, massive
corruption. Kabila and his family own, either partially or wholly,
more than 80 companies and businesses
in the country and abroad. He and his children own more
than 71,000 hectares (175,444 acres) of farmland. His family owns
diamond mines, a part of the country's largest mobile phone network,
companies that mine mineral deposits, gold and limestone, a luxury
hotel, stakes in an airline, a share of the country's banks, and a
fast-food franchise. With tentacles reaching into so many businesses,
it's not surprising that Kabila is willing to use any method --
massacres, atrocities, jailings, torture -- to stay in power. If he
were out of power, he and his family and friends might well be jailed
or executed.

DRC's foreign ministry has unexpectedly announced the expulsion of
European Union ambassador Bart Ouvry, saying he has 48 hours to leave
in retaliation for the EU's decision to renew sanctions against DRC
officials, including Emmanuel Ramazani Shadary, who is Kabila's
hand-picked successor. As Minister of the Interior and Security,
Shadary was first sanctioned in 2017 for arrests and violent
suppression of Kabila's political opposition. AP and
Al Jazeera and Reuters and Africa News

****
**** DRC anti-government protesters attack Ebola clinic in Beni
****

Protesters angry with the postponement of Sunday's presidential
election in Beni attacked an Ebola clinic in that city on Thursday.
During the attack, shots were fired, some tents were burnt down and
tables and chairs were stolen. About 21 people fled the clinic though
most returned after that attack ended.

This attack is emblematic of the problems that the World Health
Organization (WHO) and its partners are having in the North Kivu and
Ituri provinces of DRC, where the current outbreak of Ebola continues
to spread.

As of December 26, a total of 591 Ebola cases, including 543 confirmed
and 48 probable cases, have been reported in the two neighboring
provinces of North Kivu and Ituri. Of these cases, 54 were healthcare
workers, of which 18 died. Overall, 357 cases have died (case fatality
ratio 60%).

WHO health officials might have already ended the Ebola outbreak, but
they are being prevented from doing their work by the civil war in
progress, and now by the demonstrators protesting the cancellation of
elections in Beni and Butembo.

In particular, the teams in Beni are unable to carry out critical
field work, including vaccinations, contact tracing, and following up
on alerts of potential new cases.

WHO is concerned that if there is a period of prolonged insecurity,
then there will be increased transmission of Ebola. Fortunately, many
people in the local communities, including the local health
authorities, are helping the WHO workers. World Health Organization and BBC and World Health Organization and Reuters

Related Articles

KEYS: Generational Dynamics, Democratic Republic of Congo, DRC,
Joseph Kabila, Emmanuel Ramazani Shadary,
Ebola, World Health Organization, WHO, North Kivu, Ituru,
Beni, Butembo, Yumbi, Kinshasa

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John J. Xenakis
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Phone: 617-864-0010
E-mail: john@GenerationalDynamics.com
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Tim Randal Walker · 12-29-2018, 12:48 PM

I'm sorry about your bleak prospects, John. I will think about it, and see if I can come sip with any ideas.

Tim Randal Walker · 12-29-2018, 12:57 PM

In a twitter post by Peter Zeihan (zeihan.com) it was mentioned that Turkey covets Aegean islands. It seems that there is a broad consensus in Turkey that some of these islands are Turkish territory, and occupied territory.

pbrower2a · 12-29-2018, 03:45 PM

(12-29-2018, 12:57 PM)Tim Randal Walker Wrote: In a twitter post by Peter Zeihan (zeihan.com) it was mentioned that Turkey covets Aegean islands. It seems that there is a broad consensus in Turkey that some of these islands are Turkish territory, and occupied territory.

Most likely candidates are some of the Dodecanese islands off the southwestern coast of the Turkish mainland that Italy took from Turkey after World War I and held until Italy broke with Nazi Germany in 1943. Italian forces aligned with the new, anti-fascist government tried to defend them from Nazi Germany but were defeated. Under Nazi rule the Nazis executed Italian defenders and started deporting every jew that they could get their hands on to Nazi murder camps (Some Jews wisely took refuge in Turkey, where they were safe). The population is largely Greek and Greek Orthodox, and after liberation in 1945 from the Demonic Reich those islands came under British protection and were transferred to Greece in 1947. Some of these islands are so close to the Turkish mainland that they impinge upon the usual maritime limits of Turkey. Surely there have been arrangements for rights of navigation between Greece and Turkey, countries that had been at war intermittently for a century.

Turkey managed to avoid becoming another victim of Axis aggression. The Allies did not want Turkey involved in World War II, but I would suppose that the British and Americans would have given all aid necessary to the Turkish Republic and would have eventually used Turkey as a springboard of liberation of southeastern Europe. The Nazis were so horrible in Greece that even after a century of enmity that has origins in Ottoman conquest of the Byzantine Empire and subsequent oppression of Orthodox Greek populations that the Turks would have been seen as liberators in Greece. Turkish territory looks easy to defend from the east but difficult to attack from the west due to the terrain, which reflects both the failure of the Byzantine Empire to take back areas lost to the Seljuk Turks when the Byzantine Empire was still a significant power and the failure of the Greeks to take over some parts of Asia Minor (including Smyrna) with large Greek populations in the five years following World War I.

Rightful treatment might have been to return those islands with majority-Turkish populations to the Turkish Republic, which could have been established through a plebiscite under UN supervision. A wise course of Italian defenders would have been to cede the Dodecanese Islands to Turkey pending a decision by the United Nations, most likely a plebiscite.

History does not always enforce the wise or just decision and often cannot determine what is the wise or just decision.

**John J. Xenakis** · 12-29-2018, 11:57 PM

*** 30-Dec-18 World View -- Xi Jinping's speech on 'the humiliation of the Chinese nation for centuries'

This morning's key headlines from GenerationalDynamics.com

Xi Jinping's speech on 'the humiliation of the Chinese nation for centuries'
China's history since the May Fourth Movement
Xi Jinping's 'China Dream': revenge for centuries of humiliation

****
**** Xi Jinping's speech on 'the humiliation of the Chinese nation for centuries'
****

[Image: g181229b.jpg]

Xi Jinping gives his speech to the Great Hall of the People on December 18 (AP)

Last week on December 18, China's president Xi Jinping gave a solemn
speech in the Great Hall of the People, marking the 40th anniversary
of Deng Xiaoping’s policy of reform and openness.

In my opinion, the most important part of that speech was his goal of
"wiping out the humiliation of the Chinese nation for centuries."

He made the same allusion in March of this year in a major
speech to the National People's Congress -- a meeting where he
made himself a dictator for life, and modified the consititution
to incorporate "Xi's Thoughts" on "Socialism with China
Characteristics (SWCC)."

In the March speech, he said "China has continuously striven for its
dream of realizing great national rejuvenation for over 170 years,"
alluding to the Opium Wars of the 1840s. This is a theme I've seen
frequently in Chinese statements -- that China would be a great nation
today, if it hadn't been humiliated by the West, particularly Britain
and Japan.

For the past few months, I've been deep into studying China's history,
back to ancient times, but particularly focusing on the time since the
1840s Opium Wars. And there's a big puzzle about China that becomes
starkly apparently when you compare China and Japan in the late 1800s.

Both China and Japan had generational crisis civil wars that climaxed
in the 1860s (Taiping Rebellion and Meiji Restoration, respectively).
Both countries were devastated by those crisis civil wars, and each
had to reconstruct a shattered country. But those reconstructions
proceeded in vastly different directions.

Japan embraced the West, including culture, government and technology,
and by the early 1900s Japan was considered a "developed country" and
even a "Western country," although the people became imbued with a
militaristic attitude that resulted in disaster in World War II.

China did not embrace the West. China rejected the West (or at best
had a love-hate relationship with the West), and even declared war on
the West in the Boxer Rebellion. As a result, China had no idea what
was going on in the world. The Chinese leaders were repeatedly
"conned" by Japan and the West in World War I, and they never seemed
to learn what was going on. "Fool me once, shame on you, fool me
twice, shame on me" is the old saying. But the Chinese were fooled
over and over, and never seemed to learn anything. While Japan's
government was highly competent and driven, China's government was
totally incompetent, and stumbled from one disaster to another.

This created the "New Culture Movement" in the late 1910s, which was a
rejection by young people of all of China's culture under previous
governments, including Confucianism and the classical Chinese
language. This created a vacuum that might have been filled by
Western ideas, except that China was fooled and humiliated once again
by Japan and the West in the Versailles Treaty of Paris, the agreement
that ended World War I. The result was that a large segment of
China's society began adopting anarchism, socialism and communism from
Russia's Bolshevik Revolution, leading to the formation of the Chinese
Communist Party (CCP) in the 1920s.

That triggered the May 4th movement (May 4, 1919), a massive
anti-government protest by millions of students in Tiananmen Square,
that the government brutally put down, but which turned the people
into a driven population seeking revenge against Japan and the West.

(It's no coincidence that the May 4th movement was repeated exactly 70
years later, in May 1989, leading to the Tiananmen Square massacre on
June 4, 1989. It's also going to be a big problem next year for the
Chinese leadership that May 4 and June 4, 2019, will be anniversaries
of the May 4th Movement and the Tiananmen Square massacre.)

The riddle about China is why the Chinese people are so naive
and credulous. For three hundred years, from 1640 to 1912, they were
governed by a small army of foreigners -- the Manchus -- that they
could easily have overthrown at any time, but never bothered to do so.
Then during the 1910s and World War I, their incompetent government
was humiliated time after time by Japan, Britain, Russia and France.
In World War II, the huge Chinese empire would have been defeated by
the small island of Japan if the West, principally the Americans,
hadn't saved China's butt.

After the war, the disasters continued under Mao Zedong, with the
Great Leap Forward and the Cultural Revolution and then, in 1989, the
Tiananmen Square massacre. Even today, under Xi Jinping, China's
government (the CCP) seens like a child lost in the woods, with no
idea how to deal with its own population except through brutality or
how to deal with the other countries of the world, except through
deception and military threats. China Daily and Xinhua and Diplomat (5-May-2015) and RadiiChina

****
**** China's history since the May Fourth Movement
****

Xi Jinping sees the May Fourth Movement as a major turning point in
China's history, and he lists three major outcomes in the last century
of the May Fourth Movement:

The formation of the Chinese Communist Party (CCP) in the
1920s.
The creation of the People's Republic of China by Mao Zedong in
1949.
Deng Xiaoping's "reform and opening-up" in 1978, including the
redefinition and implementation of Socialism with Chinese
Characteristics (SWCC). This is the event whose 40th anniversary was
being celebrated last week.

I believe that we can reasonably assume that Xi would identify the
fourth major outcome of the May 4th Movement as his own anointment as
dictator for life and the incorporation of "Xi's Thoughts" in the
constitution, in March of this year.

In terms of intent, Deng's "Reforms and Opening Up" are comparable to
the kinds of actions that Japan took in the decades following the
Meiji Restoration. So one might say that in 1978, China lagged a
century behind Japan.

However, there is still a big difference. Japan is a democracy, while
nobody would ever call China's government a democracy.

According to the minutes of the "Third Plenary Session of the 11th
Central Committee," meeting from December 18-22, 1978, where the
reforms were presented, China must implement "socialist
modernization":

<QUOTE>"Socialist modernization requires centralized
leadership and strict implementation of various rules and
regulations and observance of labour discipline. Bourgeois
factionalism and anarchism must be firmly opposed. But the correct
concentration of ideas is possible only when there is full
democracy. Since for a period in the past democratic centralism
was not carried out in the true sense, centralism being divorced
from democracy and there being too little democracy, it is
necessary to lay particular emphasis on democracy at present, and
on the dialectical relationship between democracy and centralism,
so as to make the mass line the foundation of the Party's
centralized leadership and the effective direction of the
organizations of production. In ideological and political life
among the ranks of the people, only democracy is permissible and
not suppression or persecution. ... The constitutional rights of
citizens must be resolutely protected and no one has the right to
infringe upon them.

In order to safeguard people's democracy, it is imperative to
strengthen the socialist legal system so that democracy is
systematized and written into law in such a way as to ensure the
stability, continuity and full authority of this democratic system
and these laws; there must be laws for people to follow, these
laws must be observed, their enforcement must be strict and law
breakers must be dealt with. ... Procuratorial and judicial
organizations must maintain their independence as is appropriate;
they must faithfully abide by the laws, rules and regulations,
serve the people's interests, keep to the facts; guarantee the
equality of all people before the people's laws and deny anyone
the privilege of being above the law."<END QUOTE>

There are two important concepts here: "socialist modernization" was
necessary to open China to the world, and "democratic centralism"
meant that the country was centrally controlled, but democratic in the
sense there must be no suppression or persecution. Elsewhere, the
same document says: "The Party members' right to make criticisms
within the Party concerning the leadership at higher levels, up to
Members of the Standing Committee of the Political Bureau of the
Central Committee, must be guaranteed and any practice that does not
conform to the Party's democratic centralism and the principle of
collective leadership should be resolutely corrected."

This is what was meant by Socialism with Chinese Characteristics at
the time of Deng Xiaoping in 1978, but none of this is recognizable in
today's China, where members of the CCP are clearly above the law, and
anyone who criticizes the CCP can be thrown into jail.

When Xi Jinping listed the three major outcomes of the May Fourth
Movement, he is probably leaving out the most important: the June 4,
1989, Tiananmen Square massacre.

In May 1989, exactly 70 years after the May 4th movement, millions of
young Chinese students crowded into Beijing to demand greater
democracy and less repression, exactly what Deng Xiaoping had called
for. On June 4, Chinese troops and security police stormed through
Tiananmen Square, firing indiscriminately into the crowds of
protesters. Thousands of students were killed, and tens of
thousands were arrested.

That wasn't the only thing that happened around that time. On
December 26, 1991, the Soviet Union was collapsed, and all the former
Soviet republics became independent self-governing nations.

Arguably, the collapse of the Soviet Union was more traumatic to the
CCP than even the Tiananmen Square massacre. Suddenly, the leadership
of the CCP were staring death in the face, as they considered the fact
something like that Tiananmen Square protests could force the Chinese
Communist Party to collapse as well. Ever since the Bolshevik
Revolution, Russian communism had always been the role model for
Chinese communism. If Russian communism could collapse, then so could
Chinese communism.

In the 1990s, Socialism with Chinese Characteristics began to take on
a whole new and far darker and more sinister meaning. The CCP
leadership became increasingly paranoid, and began seeing ghosts.
Centralism was still in play, but democratic centralism was gone. The
"right to make criticisms" was gone, and any criticism of the CCP
leadership could lead to torture, rape and jailing.

Religious persecution surged. The Buddhism-based Falun Gong movement
was and is particularly targeted, after millions of people became
practioners of their form of meditation. The CCP has increasingly
cracked down on Christianity and even Daoism, for fear their practice
could lead to overthrow of the CCP. Beijing Review (26-May-2009) and Economist and China Global Television Network and South China Morning Post

****
**** Xi Jinping's 'China Dream': revenge for centuries of humiliation
****

Deng Xiaoping's reforms are almost completely unrecognizable in
today's CCP, led by Xi Jinping. Consider Deng's "24-Character
Strategy" (24 Chinese characters):

<QUOTE>"Observe calmly; secure our position; cope with
affairs calmly; hide our capacities and bide our time; be good at
maintaining a low profile; and never claim
leadership."<END QUOTE>

Xi Jinping is certainly not following Deng's advice. China today is
belligerent, boastful, and military threatening to anyone who does not
do as China demands. It's the opposite of Deng's advice.

The May 4th Movement led immediately to two disastrous Chinese leaders
-- Chiang Kai-Shek and Mao Zedong -- and to China's bloody civil war
(the Communist Revolution) and then to disastrous domestic policies,
including the Great Leap Forward and the Cultural Revolution.

Today, China is led by the CCP and Xi Jinping, and the government is
insanity on steroids, and is completely delusional and out of touch
with reality. There are a couple of examples I like to point to.

One is the fear of Winnie the Pooh, who looks like Xi Jinping. This
is actually a rea. fear, because the deeply paranoid CCP leaders are
actually afraid that Winnie the Pooh can be used as a symbol for an
internal revolt to overthrow the CCP. Can you imagine Donald Trump or
any other national leader being afraid of Winnie the Pooh or some
other cartoon character? But that's the state of insanity of China's
CCP government.

Another example is the policy of locking up a million Muslim Uighurs
in reeducation camps in Xinjiang province. This has got to be the
stupidest policy in the history of any country in the world. One
would have to be insane to believe that this policy would work to
convert the Muslim Uighurs into compliant Han Chinese.

Xi Jinping's own father, Xi Zhongxun, was dragged by Red Guards in
front in front of a mob, and jailed in what might be called a
"reeducation center" during the time of the Cultural Revolution. In
his recent speech, Xi Jinping says that the Cultural Revolution was a
"mistake," but that doesn't stop him from the insane policy of doing
to a million Uighurs what was done to his own father.

Those are domestic policies. Foreign policies are equally delusional,
and are characterized by deception and simple lying. I've studied
China's historic claims to the South China Sea, and they're completely
nonexistent. China's claims are a complete hoax. When Hitler
illegally annexed Sudentenland, he could at least claim that he was
protecting ethnic Germans. But there are no ethnic Chinese in the
South China Sea. China's claims are a hoax.

In 2015, Xi told Barack Obama that China would not militarize the
South China Sea. Today, the South China Sea is bristling with Chinese
military bases and weapons. Xi's statement was a complete lie,
just like Hitler's promise of "peace in our time."

At first, China pitched the Belt and Road Initiative (BRI) as an
exciting new version of the ancient Silk Road that connected China to
Europe. However, it's increasingly seen as a policy of building
infrastructure in other countries for the purpose of allowing China to
exploit each country's natural resources. The Chinese "debt trap
diplomacy" model is to send in thousands of Chinese workers, lend
money to the government and demand that they use the money to pay the
salaries of the Chinese workers, who then use the money to send to
their families back home or to purchase Chinese products within their
enclave. The country cannot afford to pay back the loan, and the
Chinese workers stay there forever.

One can see the elements of revenge in these policies. Xi Jinping and
the Chinese blame the world for "the humiliation of the Chinese nation
for centuries," and now are adopting policies to exploit and humiliate
the other countries of the world.

This brings us back to understanding how incompetent China is to
governing itself. When the Manchus governed China, there was some
sanity. Today, Xi Jinping and the CCP have no clue how to govern
their own country or how to navigate in the world. Today, the meek,
naive, credulous Chinese people are being governed by another
monstrous authoritarian government, led by an incompetent leader Xi
Jinping, who has adopted one insane policy after another, with no idea
what to do next.

The most insane policy of all is its preparation for war. China has
developed one nuclear ballistic weapons system after another with no
purpose except to attack American cities, American bases, and American
aircraft carriers. China has nothing to offer the world except that
it has become an aggressive, imperial, militaristic nation that will
launch a war that it will lose, but not before it's brought
catastrophe to itself and the entire world. Financial Times and American Thinker

Related Articles:

KEYS: Generational Dynamics, China, Xi Jinping, Mao Zedong, Deng Xiaoping,
Reform and openness, Opium Wars, Britain, Japan, France,
Meiji Restoration, Boxer Rebellion,
New Culture Movement, Confucianism, World War I, Versailles Treaty,
March Fourth Movement, Chinese Communist Party, CCP,
Tiananmen Square Massacre, Manchus, Falun Gong,
Socialist modernization, democratic centralism,
Socialism with Chinese Characteristics, SWCC,
Soviet Union, Bolshevik Revolution, Russia,
Buddhism, Christianity, Daoism, Chiang Kai-shek,
Winnie the Pooh, Uighurs, Xinjiang, Xi Zhongxun,
South China Sea, Belt and Road Initiative, BRI

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John J. Xenakis
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Phone: 617-864-0010
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Subscribe to World View: http://generationaldynamics.com/subscribe

pbrower2a · 12-30-2018, 12:14 AM

A reminder: the concept of 'democratic centralism', an oxymoron because the centralization of power in an entrenched political elite can never be democratic, makes democracy impossible except in the Marxist-Leninist concept of the absence of capitalist power or influence in political life. Supposedly the Communist Party is the sole voice of the People, and if one does not like that voice, then tough luck.

**John J. Xenakis** · 12-30-2018, 11:22 AM

(12-29-2018, 12:48 PM)Tim Randal Walker Wrote: > I'm sorry about your bleak prospects, John. I will think about it,
> and see if I can come sip with any ideas.

It looks pretty hopeless. What's needed is for someone to pay
me a regular salary as a journalist, an analyst or a Senior
Software Engineer, and at my age that's apparently not going to
happen.

(12-29-2018, 12:57 PM)Tim Randal Walker Wrote: > In a twitter post by Peter Zeihan (zeihan.com) it was mentioned
> that Turkey covets Aegean islands. It seems that there is a broad
> consensus in Turkey that some of these islands are Turkish
> territory, and occupied territory.

Erdogan has been complaining for a few years about the Lausanne Treaty
that was signed on July 24, 1923. He claims that Turkey was
cheated. Interestingly, his political opponents within Turkey
disagree with him.

** 11-Dec-16 World View -- Erdogan says some Greek islands should really belong to Turkey
** http://www.generationaldynamics.com/pg/x...tm#e161211

** 8-Dec-17 World View -- Turkey's president Erdogan visits Greece with a list of contentious demands
** http://www.generationaldynamics.com/pg/x...tm#e171208

**John J. Xenakis** · 12-30-2018, 11:25 AM

(12-30-2018, 12:14 AM)pbrower2a Wrote: > A reminder: the concept of 'democratic centralism', an oxymoron
> because the centralization of power in an entrenched political
> elite can never be democratic, makes democracy impossible except
> in the Marxist-Leninist concept of the absence of capitalist power
> or influence in political life. Supposedly the Communist Party is
> the sole voice of the People, and if one does not like that voice,
> then tough luck.

That's absolutely right. But for political reasons, China has to
claim that it's a democracy. So if you read the 1978 document, you
can see that they've redefined the word "democracy" to mean that the
government must protect the right to criticize the CCP leaders.
Today, of course, even that definition of "democracy" fails, and that
started happening after the Tiananmen Square massacre and the collapse
of the Soviet Union.

In his speech last week, Xi said that Mao Zedong "after a long bloody
struggle [completed] the new-democratic revolution established
People’s Republic of China, established the basic system of socialism,
successfully achieved the greatest Chinese history’s most profound
social change, provided the fundamental political prerequisite and
institutional basis for all development and progress in contemporary
China."

This suggests that Mao established a new form of "democracy."

Later in his speech, Xi says:

Xi Wrote:> We want to improve democratic institutions, expand democratic
> channels, enrich the forms of democracy, improve the legal
> safeguards to ensure that the people enjoy extensive full
> accordance with the law, real concrete and effective democratic
> rights workable. We should strive to resolve the people’s urgent
> needs required by hope, let the people share the economic,
> political, cultural, social and ecological development
> achievements in various aspects, there are more and more direct
> and really get a sense of well-being, a sense of security,
> continued promote the comprehensive development of common
> prosperity of all people."

I was thinking of quoting this paragraph in my article, but I
don't even know what it means. Everything in this paragraph
is delusional politician double-talk.

Everything about his speech was delusional. This is the most paranoid
and dangerous government in the history of the world, and it's
completely out of touch with reality.

Tim Randal Walker · (This post was last modified: 12-30-2018, 07:26 PM by Tim Randal Walker.)

I would just ignore the double talk.

**John J. Xenakis** · 12-31-2018, 01:20 AM

*** 31-Dec-18 World View -- Burundi's president Nkurunziza says Rwanda is no longer a partner but an enemy

This morning's key headlines from GenerationalDynamics.com

Burundi's president Nkurunziza says Rwanda is no longer a partner but an enemy
Burundi orders the UN to close its human rights office in Burundi
Fears grow of a new Hutu-Tutsi war

****
**** Burundi's president Nkurunziza says Rwanda is no longer a partner but an enemy
****

[Image: g181230b.jpg]

Pierre Nkurunziza and Paul Kagame (AFP)

Centuries of tribal warfare between ethnic Hutus and Tutsis in east
Africa are once again threatening to return, as relations deteriorate
between Burundi, which is led by Hutu president Pierre Nkurunziza, and
Rwanda, which is led by Tutsi president Paul Kagame.

Two weeks ago, Nkurunziza wrote a letter to Uganda's Tutsi president
Yoweri Museveni, listing a series of accusations by Rwanda against
Burundi, and asking for a meeting of the East African Community (EAC):

<QUOTE>"It is, therefore, very urgent for the East African
Community to focus on the real problem that is jeopardizing peace
and security throughout Burundi.

It is Rwanda, a state party to the treaty establishing the East
African Community, which is not at its first attempt to
destabilize its neighbor, Burundi, in violation of the
fundamental principles of the community. ...

In short, Rwanda is the only country in the region that is one of
the main destabilisers of my country and, therefore, I no longer
consider it a partner country, but simply as an enemy
country."<END QUOTE>

Nkurunziza in particular is accusing Kagame of instigating an April
2015 coup attempt against Nkurunziza. The coup attempt was triggered
when Nkurunziza refused to step down after announcing that he would
seek a third term as president, which is not permitted under Burundi's
constitution. His announcement triggered protests, and the police
responded with bullets and teargas, killing ten people in four days of
violence between youthful Tutsi protesters and police. Continued
clashes killed hundreds of people. ( "30-Apr-15 World View -- 20,000 refugees flee violence in Burundi, fearing Hutu-Tutsi war"
)

Museveni is the current president of the EAC, which has six members:
Burundi, Kenya, Rwanda, South Sudan, Tanzania, and Uganda, with its
headquarters in Arusha, Tanzania. It was formed in 2000 to improve
relations among the member nations, and particularly to prevent a
repeat of something like the 1993-94 Hutu-Tutsi genocide in Burundi
and Rwanda.

Museveni selected Tanzania's former president Benjamin Mkapa to
evaluate Nkurunziza's accusations. Mkapa investigated and submitted a
report that rejected Nkurunziza's accusations against Kigali, and
recommended talks between Nkurunziza’s government and dissidents,
including the alleged coup plotters.

Nkurunziza responded with a decree that no outsider should interfere in
his country’s internal matters, and that any such interference "would
be to overthrow this institution elected by the people [of Burundi]."

Museveni then responded to Nkurunziza that he was manipulating the EAC,
and that "you use it when it suits you and discard it when it does
not." The Nation (Kenya, 14-Dec) and News 24 (South Africa) and AP

****
**** Burundi orders the UN to close its human rights office in Burundi
****

A United Nations human rights report in September said that Burundi
officials were committing crimes against humanity in 2017 and 2018.

"These crimes include murder, imprisonment or other severe deprivation
of physical liberty, torture, rape and other forms of sexual violence
of comparable gravity, and persecution on political grounds,"
according to the report. It's believed that the Hutu government of
Pierre Nkurunziza is specifically targeting Tutsis for the crimes.
Tens of thousands of refugees, mostly Tutsis, have fled and are
staying in refugee camps in neighboring countries.

The BBC has confirmed the worst of the accusations in its own
investigations. According to the BBC, Burundi's government was
running secret detention houses to silence dissent. A video, widely
shared on social media, showed blood flowing from the drain of a house
in the capital city Bujumbura. An eyewitness said that the blood was
from beheadings.

Early in December, Burundi ordered the United Nations Human Rights
Council to leave the country. "All international staff must be
redeployed immediately, and the Office has two months to pack its bags
and close its doors permanently," according to the order.

In October 2017, judges of the International Criminal Court (ICC)
authorized an investigation into crimes committed in Burundi since
April 2015. Burundi officials reacted by withdrawing from the ICC.
Burundi was the first ever
country to leave the ICC. Reuters (5-Sep) and "BBC and
AFP (6-Dec) and Human Rights Watch (18-Jan)

****
**** Fears grow of a new Hutu-Tutsi war
****

The event overshadowing many countries in Africa, particularly
in east Africa, is the 1994 Rwanda genocide, when ethnic
Hutus slaughtered close to a million ethnic Tutsis in a period
of about three months. The threat of a new Rwanda genocide
has influenced policy in Nigeria, Central African Republic,
Sudan, and in discussions outside of Africa.

Rwanda's president Paul Kagame said a year ago said that Nkurunziza's
third term as president and his refusal to step down threatened a
repeat of the 1994 genocide. “They should have learned the lesson of
our history,” said Kagame.

Kagame's criticism is laughable because Kagame himself, as well as
Uganda's president Yoweri Museveni, have all refused to step down
after serving the maximum time permitted by the respective
constitutions. This, of course, is similar to what we've seen in
country after country in Africa.

However, from the point of view of Generational Dynamics, it's way too
soon for another full-scale Hutu-Tutsi genocide. There are too many
survivors still alive who remember the incredible horrors of the last
genocide, and they will prevent their children from letting things get
out of hand. However, the resurgence of low-level and sporadic
violence is occurring right on schedule in this generational Awakening
era. Newsweek and Global Security

Related Articles

KEYS: Generational Dynamics, Burundi, Pierre Nkurunziza,
Rwanda, Paul Kagame, Uganda, Yoweri Museveni,
Hutu, Tutsi, Benjamin Mkapa,
East African Community, EAC, Kenya, South Sudan, Tanzania,
International Criminal Court, ICC

Permanent web link to this article
Receive daily World View columns by e-mail
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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

**John J. Xenakis** · 12-31-2018, 10:54 PM

*** 1-Jan-19 World View -- Generational Dynamics 2019 Forecast: The Camel versus the Can

This morning's key headlines from GenerationalDynamics.com

Generational Dynamics 2019 Forecast: The Camel versus the Can
Separatist violence in India's Kashmir and Jammu
The Mideast - increasing ethnic and secular tensions
Russia's existential threats to Ukraine
North Korea continues nuclear weapons development
China continues to prepare for war
Preparations for a global pandemic
Stock market bubble continues
U.S. debt continues to become increasingly unsustainable
The future of Generational Dynamics

****
**** Generational Dynamics 2019 Forecast: The Camel versus the Can
****

[Image: g181231b.jpg]

The straw that broke the camel's back

In forecasting the events of 2019, we're going to use two metaphors.

One is "the straw that breaks the camel's back." This commonly used
metaphor suggests a scenario where someone is piling one straw after
another onto a camel's back. You know with 100% certainty that the
weight will eventually break the camel's back, but it's impossible to
predict when. You won't know which straw breaks the camel's back
until after it happens.

Putting that into analytical terms, if you have a long-term trend that
gets worse and worse, then there's a new saying that applies: "If
something can't go on forever, then it won't." At some point, the
long-term trend ends with a growing or full-scale panic, resulting in
a financial crash or a war.

The other metaphor is "kicking the can down the road," which means
taking some action that postpones a problem, but makes the problem
worse in the long run. If we stretch the camel metaphor a little
farther, we can imagine adding protein to the hay we feed the camel,
in order to strengthen the camel's back while we're piling on straw.
It will take longer for the camel's back to break, but when it does,
the poor camel will be almost destroyed. In analytical terms, this
means that some action is taken to permit the long-term trend to
continue for a while longer, albeit with even worse consequences when
the panic finally occurs.

In each of the forecasts in the following sections, there is trend for
something that's getting worse or more dangerous, because this is a
generational Crisis era, because the survivors of World War II are
almost completely gone. The trend may continue to worsen in 2019 with
no major consequence, or there may be a full-scale panic leading to a
financial crash or a war, or the international community may take
steps to kick the can down the road.

If any one of these leads to a panic, then a panic may be triggered in
the others, leading to a world war.

****
**** Separatist violence in India's Kashmir and Jammu
****

Kashmir and Jammu are the two provinces of colonial India that were
the epicenter of the massive 1947 Partition War between Muslims and
Hindus that followed the partitioning of the Indian subcontinent into
India and Pakistan. Starting in the 1980s, Pakistan-supported
separatist groups have been conducting terrorist attacks in the
Indian-government portion of Kashmir.

The situation on the ground has worsened substantially in the last two
years, in the terrorist attacks have become much more "organic,"
meaning that they're being perpetrated by young Muslims growing up in
Kashmir, rather than by jihadists imported from Pakistan.

This is an archetypical example of how the generational cycle works.
The 1947 Partition War was one of the bloodiest and move horrific wars
of the entire century, and anyone who survived that war, whether
Muslim or Hindu, would have vowed to spend their entire lives making
sure that nothing like that happened again. And the survivors
succeed, but eventually the survivors die off, and younger generations
with such inhibitions come to power, and start a new horrific war,
repeating the cycle.

In Kashmir, the trend line is that there is a growing number of young
Muslims coming of age without the influence of survivors of the 1947
Partition war, and are attracted to the separatist movement. At the
same time, there is a growing number of Hindu members of the Indian
army and police coming of age. The young Muslims are willing to
commit increasingly serious terrorist acts in their separatist cause,
while the young Hindus are are willing to be increasingly violent with
the separatists, in the vain hope of ending the separatist movement
completely.

So there are two trend lines here, with both the young Muslims and the
young Hindus becoming increasingly xenophobic and violent. Indian
security forces try to kick the can down the road with a variety of
techniques, such as spending money on social outreach to Muslims or
such as implementing curfews. But these two trend lines cannot
increase forever, and at some point the situation will spiral out of
control into a larger war. That might happen in 2019.

Related Articles:

****
**** The Mideast - increasing ethnic and secular tensions
****

There are so many trend lines of increasing tension and violence in
the Mideast, that it's almost impossible to count them, in Syria,
between Iran and Saudi Arabia, and between Israelis and Palestinians.
These trend lines were particularly exposed by the 67-day war in 2014
between Israel and Hamas. The increasing hostility behind these trend
lines was further exposed on June 5, 2017, when Saudi Arabia, United
Arab Emirates (UAE), Bahrain and Egypt imposed a land, sea and air
blockade on Qatar.

President Trump's recent announcement of a quick American troop
withdrawal from Syria -- which has recently been modified to a "slow
withdrawal" -- has further hardened these fault lines, as different
factions compete to fill the vacuum in eastern Syria tha the US
withdrawal will leave behind. There are three major sets of alliances
among the Mideast countries:

Iran, Syria, Lebanon's Hezbollah, Iraq Shia militias, Yemen
Houthis
Turkey, Qatar, some Syria opposition factions, Hamas, Muslim
Brotherhood
Saudi Arabia, UAE, Bahrain, Egypt, some Syria opposition factions,
Jordan, Oman, Kuwait, Palestinian Authority. To some extent, Israel
is a part of this alliance.

From the point of view of Generation Dynamics, the Mideast is
particularly difficult to analyze because of multiple generational
timelines. The last crisis war climax for Saudi Arabia occurred in
the 1920s, for Israel and the Palestinians in the late 1940s, for
Syria and Lebanon in the early 1980s, and for Iraq and Iran in the
late 1980s. Each of these timelines and their interactions has to be
analyzed separately to get precise forecasts for the future of the
Mideast.

The general Generational Dynamics forecast is that there will be a
larger regional Mideast war that is coming with 100% certainty,
pitting Arabs vs Jews, Sunnis vs Shias, and various ethnic groups
against each other. This will be part of the Clash of Civilizations
world war, and nothing can be done to prevent it. It might begin in
2019. Jerusalem Post

****
**** Russia's existential threats to Ukraine
****

Russia is not an existential threat to America, but it is an
existential threat to Ukraine.

Ever since Russia invaded Ukraine in 2014, Russia has conducted one
act of war after another against Ukraine, including invading Crimea,
annexing Crimea, building the Kerch Strait bridge and blockading the
Sea of Azov and, most recently, seizing three Ukrainian ships in
international waters, and abducting and torturing the 24 crew members.
Ukraine has retaliated by implementing martial law and prohibiting
Russian men aged 16-60 from entering Ukraine.

A dramatic development occurred late in 2018 when there was a historic
split between the Ukrainian and Russian Orthodox Churches with the
blessing of the Patriarch Bartholomew of Constantinople. This is a
huge loss of prestige to Moscow, and the Russians are furious.

The trend lines are that Russia is perpetrating increasingly
belligerent military actions targeting Ukraine, and Ukraine is
desperately looking for ways to retaliate. Fears are growing that
Russia is planning a new invasion of Ukraine in 2019.

Related Articles:

****
**** North Korea continues nuclear weapons development
****

2018 was a remarkable year of kicking the can down the road by means
of a charm offensive, starting with North Korean participation in the
Seoul Olympics.

But the "North Korea problem" has become objectively much worse than
it was a year ago. The North Koreans have been continuing development
of nuclear weapon and ballistic missile technology, with the one
exception that they haven't been able to publicly test their new
developments.

The charm offensive has also changed the border between North and
South Korea. And the DMZ is being demilitarized, with military posts
and land mines being removed along the border. Those were put there
to prevent or slow an invasion by North Korea of Seoul in South Korea.
North Korea has never repudiated its stated intention of unifying
North and South Korea under military control by the North.

So the North Korean charm offensive has kicked the can down the road
for a whole year, in that there have been no public tests of nuclear
weapons or ballistic missiles. But that could change in 2019, and
North Korea has become considerably more dangerous in the last year.

Related Articles:

****
**** China continues to prepare for war
****

As I recently wrote in "30-Dec-18 World View -- Xi Jinping's speech on 'the humiliation of the Chinese nation for centuries'"
, China's government
blames the world for 200 years of "humiliation of the Chinese nation."
China is becoming increasingly nationalistic, xenophobic, and
militaristic. Whether it's militarizing the South China Sea or
developing and deploying new nuclear missile systems, China is
preparing to launch an attack on the United States at a time of its
choosing. It may choose 2019.

****
**** Preparations for a global pandemic
****

The rapidly spreading Ebola pandemic in eastern Democratic Republic of
Congo (DRC) caught a lot of people by surprise, and it will be
continuing well into 2019.

On average, in one corner of the world or another, a new infectious
disease has emerged every year for the past 30 years: Mers, Nipah,
Hendra, swine flu, bird flu, and many more. Researchers estimate that
birds and mammals harbor anywhere from 631,000 to 827,000 unknown
viruses that could potentially leap into humans.

The international community, led by the World Health Organization
(WHO) or the American Centers for Disease Control (CDC) have defined
protocols and procedures to prevent outbreaks of new diseases from
becoming pandemics. However, wars and mass migrations can defeat
these protocols.

It was exactly a century ago, in 1918, that the Spanish flu pandemic
began (though probably not in Spain). In two years, it killed as many
as 100 million people, 5% of the world's population, and far more than
the number who died in World War I. There could be a new pandemic in
2019. The Atlantic

****
**** Stock market bubble continues
****

[Image: g181231d.gif]

S&P 500 Price/Earnings ratio at 19.60 on December 28, indicating a huge stock market bubble (WSJ)

According to Friday's Wall Street Journal, the S&P 500 Price/Earnings index (stock valuations index)
on Friday morning (December 28) was at an astronomically high 19.60
This is far above the historical average of 14, indicating that the
stock market bubble is still growing, and could burst at any time.

The P/E ratio fell to the range of 5-6 three times in the last
century, in 1919, 1949 and 1982, and it's overdue to do so again.
When that happens, the DJIA will fall to around the 3000 range.

If we use 1929 as an example, there was an initial panic, then a
partial recovery. John Kenneth Galbraith's 1954 book The Great
Crash - 1929 described what happened next:

<QUOTE>"A common feature of all these earlier troubles
[previous panics] was that having happened they were over. The
worst was reasonably recognizable as such. The singular feature
of the great crash of 1929 was that the worst continued to
worsen. What looked one day like the end proved on the next day to
have been only the beginning. Nothing could have been more
ingeniously designed to maximize the suffering, and also to insure
that as few as possible escaped the common misfortune.

The fortunate speculator who had funds to answer the first margin
call presently got another and equally urgent one, and if he met
that there would still be another. In the end all the money he
had was extracted from him and lost. The man with the smart
money, who was safely out of the market when the first crash came,
naturally went back in to pick up bargains. ... The bargains then
suffered a ruinous fall. Even the man who waited out all of
October and all of November, who saw the volume of trading return
to normal and saw Wall Street become as placid as a produce
market, and who then bought common stocks would see their value
drop to a third or fourth of the purchase price in the next
twenty-four months. ... The ruthlessness of [the stock market was]
remarkable." (p. 108-109)<END QUOTE>

Generational Dynamics predicts that the P/E ratio will fall to the 5-6
range or lower, which is where it was as recently as 1982, resulting
in a Dow Jones Industrial Average of 3000 or lower.

I hear more and more analysts express concern about a "20-30%
correction," with the expectation that once the correction reaches
bottom, the stock market will recover to new highs. These analysts
always advise people to "buy into the dips," which is what Galbraith
was describing above.

With the P/E ratio so high, at some point there will be a full-scale
panic, and the process described by Galbraith will happen again. It
might happen in 2019.

Related Articles:

****
**** U.S. debt continues to become increasingly unsustainable
****

I used to worry about U.S. debt, but on this issue I've turned into
Alfred E. Neuman. Does it really matter whether US debt is at $20
trillion, $30 trillion or $50 trillion? It's unsustainable either
way.

The Trump administration is issuing $1.3 trillion in US government
debt this year, more than twice the 2017 amount. This can't go on
forever, and if something can't go on forever, then it won't. When
the bond panic occurs, it will be a massive global financial disaster,
and $20 trillion or $30 trillion won't make much difference. It will
be a disaster either way.

Issuing more and more US debt depends on foreign buyers and investors
willing to buy US debts. But in the last couple of months, demand for
US debt, particularly 30 year Treasury bonds, has fallen to the lowest
level in almost ten years. Will foreigners start buying US debt
again, or could this be the start of a bond panic? What, me worry?
Fiscal Times

****
**** The future of Generational Dynamics
****

The trend line for me is that because of my age I'm unable to get a
job, and since my only income is social security, I'm going to run out
of money in 2019, which will be the end of both me and Generational
Dynamics. Job descriptions in the computer industry often mention
pizza parties and exercise rooms as a way of telling people over 30
not to apply. What I need is for someone to hire me and pay me a
regular salary as a journalist, or as an analyst, or as a Senior
Software Engineer. Help would be appreciated. Dice.com and Resume

KEYS: Generational Dynamics, India, Kashmir, Jammu, Pakistan,
Syria, Saudi Arabia, Iran, Israel, Palestine, Hamas,
Iraq, Egypt, Yemen, Lebanon, Hezbollah, Muslim Brotherhood,
Russia, Ukraine, Kerch Strait, Sea of Azov,
North Korea, South Korea, China, South China Sea, Xi Jinping,
John Kenneth Galbraith, Price/earnings ratio

Permanent web link to this article
Receive daily World View columns by e-mail
Contribute to Generational Dynamics via PayPal

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

pbrower2a · (This post was last modified: 01-01-2019, 11:44 AM by pbrower2a.)

On the 1929-1932 meltdown:

(John Kenneth Galbraith) :

Quote:"A common feature of all these earlier troubles
[previous panics] was that having happened they were over. The
worst was reasonably recognizable as such. The singular feature
of the great crash of 1929 was that the worst continued to
worsen. What looked one day like the end proved on the next day to
have been only the beginning. Nothing could have been more
ingeniously designed to maximize the suffering, and also to insure
that as few as possible escaped the common misfortune.

The fortunate speculator who had funds to answer the first margin
call presently got another and equally urgent one, and if he met
that there would still be another. In the end all the money he
had was extracted from him and lost. The man with the smart
money, who was safely out of the market when the first crash came,
naturally went back in to pick up bargains. ... The bargains then
suffered a ruinous fall. Even the man who waited out all of
October and all of November, who saw the volume of trading return
to normal and saw Wall Street become as placid as a produce
market, and who then bought common stocks would see their value
drop to a third or fourth of the purchase price in the next
twenty-four months. ... The ruthlessness of [the stock market was]
remarkable." (p. 108-109)

I look also at the more recent stock market slide of the fourth quarter of 2007 to the first quarter of 2009, and see the same level of destruction in a year and a half.

Anyone with much of a brain could have seen that the housing bubble of the Double-Zero Decade was already ridden with corruption. Business Week had an article showing how dishonest the rating of mortgaged-backed assets were due to a ratings scandal well underway in 2005. Things peaked in late 2007, did not go down catastrophically for about a year, but suddenly went really bad, really fast. The classic head-and-shoulders warning appeared just before the Crash of 2008, and then came the nearly-vertical drop as in the autumn of 1929.

About a year and a half after the 1929 crash, the stock markets continued their tailspin. A year and a half after the skid of 2007 the market valuations started to rise.

Obama did what was practically mandated: he backed the banks. The bank runs that caused further erosion of the American economy in 1931 and 1932 did not happen. Businesses did not see their balances going to zero, and workers did not see their paychecks bouncing. The banks that survived the year-and-a-half meltdown became profitable again, and business failures became scarce.

By 1932, 'Old Money' had lost all political power behind it. In 2010, 'Old Money' became as powerful as ever. The Presidential elections of Obama and FDR are out of phase with respect to economic downturns by about two years -- but if the meltdown of 1929-1932 created a climate in which Big Business had lost almost all political influence, politics of the 2010s would reassert the power of Big Business.

The big difference between the 1930s and the 2010s is that in the 1930s people saw business shares as a bad investment and were more likely to start new businesses than buy securities. In the 2010s share valuations rose rapidly, and people were less prone to start new small businesses.

We may be seeing another 2007 -- or 1929.. Take you pick. It has never been easier to make money just by owning assets in America.

The failure of retail giant Sears demonstrates that the recovery has been mostly the super-rich bleeding the middle class. When the middle-class assets are gone, the crash will be severe. Consumer purchases will drop. High rentals will be difficult to collect, and this will cause property values to plummet. Should there be a recession, it might morph into a genuine depression. We have the worst President that we could have during a market crash, a headstrong ideologue committed to the idea that prosperity depends upon German productivity on Indian wages. He will offer tax cuts on shrinking income as a salve. He will be more adept at casting blame than at finding solutions. He will probably tighten up on relief and cut Social Security as a solution.

Donald Trump is not a well-read man, and if he ever read anything by Galbraith he did so in prep school and has forgotten it. He may not be a moron, but he is certainly a mediocrity.

**John J. Xenakis** · (This post was last modified: 01-01-2019, 04:04 PM by John J. Xenakis.)

(01-01-2019, 11:43 AM)pbrower2a Wrote: > Obama did what was practically mandated: he backed the banks. The
> bank runs that caused further erosion of the American economy in
> 1931 and 1932 did not happen. Businesses did not see their
> balances going to zero, and workers did not see their paychecks
> bouncing. The banks that survived the year-and-a-half meltdown
> became profitable again, and business failures became
> scarce.

Lol! The reason that there weren't bank runs had nothing to do with
the sainted Obama (who I doubt has even the vaguest clue about the
underlying macroeconomics - this is a guy who admitted he doesn't
understand his daughter's 8th grade math). The reason that the bank
runs didn't occur is because the central banks in the US, UK, EU,
Japan, China, and elsewhere all flooded the world's banking systems
with "printed money" obtained mainly through quantitative easing.
That strategy is no longer viable, which is why the central banks have
"run out of bullets."

Obama did back the banks in the form of massive corruption -- by
accepting billions of dollars in contributions to his campaigns and to
his cronies' projects in return for not pursuing criminal charges
against the criminals who brought about the financial crisis through
massive fraud, knowingly selling trillions of dollars in fraudulent
sub-prime backed synthetic securities. The sainted Obama was the
biggest beneficiary of this criminal fraud. That would make Obama by
far the most corrupt politician in the country's history. But no one
cares because he's a Democrat, and every crime from corruption to
racism to rape to inciting violence is perfectly acceptable, and even
encouraged, as long as the criminal is a Democrat. That's because
when a Democrat does it, it's GOOD corruption and GOOD racisim and
GOOD rape and GOOD violence. That's the way the world works.

pbrower2a · 01-01-2019, 10:24 PM

(01-01-2019, 01:28 PM)John J. Xenakis Wrote:
(01-01-2019, 11:43 AM)pbrower2a Wrote: > Obama did what was practically mandated: he backed the banks. The
> bank runs that caused further erosion of the American economy in
> 1931 and 1932 did not happen. Businesses did not see their
> balances going to zero, and workers did not see their paychecks
> bouncing. The banks that survived the year-and-a-half meltdown
> became profitable again, and business failures became
> scarce.

Lol! The reason that there weren't bank runs had nothing to do with
the sainted Obama (who I doubt has even the vaguest clue about the
underlying macroeconomics - this is a guy who admitted he doesn't
understand his daughter's 8th grade math). The reason that the bank
runs didn't occur is because the central banks in the US, UK, EU,
Japan, China, and elsewhere all flooded the world's banking systems
with "printed money" obtained mainly through quantitative easing.
That strategy is no longer viable, which is why the central banks have
"run out of bullets."

Obama did back the banks in the form of massive corruption -- by
accepting billions of dollars in contributions to his campaigns and to
his cronies' projects in return for not pursuing criminal charges
against the criminals who brought about the financial crisis through
massive fraud, knowingly selling trillions of dollars in fraudulent
sub-prime backed synthetic securities. The sainted Obama was the
biggest beneficiary of this criminal fraud. That would make Obama by
far the most corrupt politician in the country's history. But no one
cares because he's a Democrat, and every crime from corruption to
racism to rape to inciting violence is perfectly acceptable, and even
encouraged, as long as the criminal is a Democrat. That's because
when a Democrat does it, it's GOOD corruption and GOOD racisim and
GOOD rape and GOOD violence. That's the way the world works.

So was the solution setting up a guillotine in front of Congress for dispatching all the crooked figures in banking?

The fraudulent securities were hitting the market while Dubya was President -- almost from the start. Perhaps the solution would have been the break-up of the Big Banks or even their nationalization; of course the first would be disruptive and the second would be socialism.

I think that we can all agree that the situation with real estate and its finance in the Double-Zero decade was a corrupt, and even worse, capital-devouring bubble. Bubbles always go bad; it is always a question of when they will go bad. America would have been better off had Americans invested the capital into plant and equipment in Big Business (which creates well-paying jobs that allow workers to afford better housing) or into small-business formation (but the last few decades have been largely a time of consolidating existing businesses into ever-bigger behemoths.

Bankers were using loans to people who could never pay them off as a back-door means of making money by speculating in real estate. The idea was that some schmuck saved his money for a down-payment on a house that he could never afford, and when he defaulted although prices were rising, the banker foreclosed and got to resell the house for money.

Banking serves the public interest best when it is conservative in lending -- when bankers can say "Hell no!" to highly-leveraged "LSD deals" (as Robert Ringer puts it). When bankers get involved and expect speculative gains instead of normal interest, they facilitate a shyster economy. A good banking system compels people to put up as much collateral as is possible and take the risks of failure as personal ruin. So if you want to operate a business on other people's money, then forget it. Just be an employee who gets low wages and no security.

There was a time when the bankers were the laziest, fullest-witted, least-imaginative executives. They liked wearing nice clothes and never having to break a sweat or get dirty. The old saying about savings-and-loan outfits was "borrow at three, lend at six, and out to the golf course at three", which is not how many other businesses operate.

I could suggest some reforms -- like not giving people full payment of bank balances in the event of a bank failure. 90% perhaps, so that people think twice about putting deposits into a shady institution. (Maybe 2% interest at Safety First Bank is better than 5% at Vegas-style High Roller Bank if one stands to get burned).

We may be headed to another "Bad Bear" -- indeed it may have already started. The policies that led to it have happened with Congressional consent, and for two years we have had a government unified on the idea that there are but two holy entities in America: market share and cash flow. Monopolize and gouge, monopolize and gouge, rinse and repeat. In view of the narcissism and even sociopathy commonplace in Big Business, a 1930s-style depression might be what is necessary to wring out many of the bad habits that our economic system has enshrined as a perverse ideal.

**John J. Xenakis** · 01-01-2019, 11:45 PM

*** 2-Jan-19 World View -- Brexit chaos entangles issue of Iranian migrants crossing English Channel

This morning's key headlines from GenerationalDynamics.com

Brexit chaos continues as Britain heads for March 29 cliff
Big upsurge in migrants crossing English Channel by boat, especially Iranians

****
**** Brexit chaos continues as Britain heads for March 29 cliff
****

[Image: g190101b.jpg]

Migrants from France arriving in Dover, England, this week (SPLASH)

It's hard to overestimate what a political disaster Brexit has been
ever since the referendum passed on June 23, 2016. Britain, and to
some extent the EU, have been almost completely deadlocked for two
years with political lockjaw. And now, the committed date when
Britain will leave the European Union is March 29, 2019.

The problem has always been the border between Northern Ireland (which
is part of the UK) and (Southern) Ireland (which will remain part of
the EU). Ireland and Northern Ireland have an extremely violent
history described as "The Troubles," which were resolved by the Good
Friday agreement in 1998 which, among other things, committed to
remove any physical border between the two, and allow free movement of
goods and people. It's been apparent since the beginning that no
solution exists to meeting the objectives of the "Brexiteers" (the
people who wanted Brexit) and maintaining a barrier-free border. So
that problem has always been insoluble and remains so today.

So there are four possibilities for what will happen on March 29:

"Crashing out of the EU" -- a no-deal Brexit.
Prime minister Theresa May's plan
Killing the whole Brexit thing.
Kicking the can down the road by extending the March 29
date.

There is no UK majority for any of these options, but if there's no
agreement, then the default will be a no-deal Brexit. In my opinion a
way will be found to avoid this, because it will be catastrophic for
the economies of both the UK and EU.

I had thought that the Brexit decision was final, once Britain
submitted its two-year notice on March 29, 2017. However, in the last
few months, an EU court has issued an opinion that Britain can reverse
the Brexit decision, provided that it does so with finality, and not
just to start up a new two-year negotiation. So that's an option.
However, if Britain's government invokes it, it will invoke the howls
of hell from people who say that the government is violating the will
of the people.

Prime minister Theresa May's plan, which I summarized in detail
in October, is a transition plan that
many consider be the worst of all possible worlds. The whole point of
why the Brexiteers wanted Brexit was to get away from the EU
regulations, EU taxes, and the European Court of Justice (ECJ). In
the transition period, all of these will remain, with the additional
restriction that the UK will have to obey all the regulations and pay
all the money, but will have no say in changing them. This plan is
almost Karmic retribution for the idiocy of going ahead with Brexit in
the first place.

However, few people like Theresa May's plan, and many pundits say that
when it comes to a vote in Parliament on January 14, it's unlikely to
pass.

That brings us to the last option -- kicking the can down the road.
It's believed that if the UK requested it, then the EU would agree to
extend the March 29 date. That would give time for more debate.

Some people want to use that time to hold a new Brexit referendum.
The problem with that option is that even among the few people who
want a new referendum, there's no agreement on what the question would
be. Would it be the same two choices as the 2016 referendum? Or
would it be the three choices, something like the first three options
in the list above?

So really, no one knows what's going to happen out of this mess, but
my bet would be that they'll find some way to "fudge," or to kick the
can down the road. Bloomberg (20-Dec) and Independent (Ireland) and Guardian (London, 17-Dec) and UK News (17-Dec)

****
**** Big upsurge in migrants crossing English Channel by boat, especially Iranians
****

A big increase in the number of migrants illegally crossing the
English Channel from Calais, France, to Dover, England, is being
blamed on the chaos surrounding Brexit. There are reports that human
traffickers are telling migrants that crossing from France to Britain
will be much more difficult after March 29 because of Brexit, and
charging the migrants €15,000 or more to cross the Channel in a
cheap dinghy. At the same time, security has been toughened around
ports and the Channel tunnel, and authorities have been cracking down
on migrants in northern France. However, there are still many more
migrants who cross to Britain by stowing away on trucks that travel
through the tunnel.

This is actually a fairly small number of migrants, but it's become a
major political issue in Britain. It's far smaller than the number of
migrants crossing the Mediterranean to Greece, where the EU border
force has been patrolling the waters. But political pressure has
forced Britain's Home Secretary to reassign to British patrol cutters
from the Mediterranean to the English Channel.

Many of the migrants are from Iran. This is believed to be the result
of a policy that Serbia implemented between August and October, 2017,
offering visa-free travel to people from Iran for 30 days. More than
40,000 Iranians visited Serbia, but it's believed as many as 12,000
didn't return home after 30 days, but instead moved through the
Schengen Zone to western Europe and, in particular, to Calais, France,
hoping to reach Britain.

The trip across the English Channel is 21 miles, but cross-currents
can make the trip much longer. The trip can be particularly dangerous
due to high seas and busy shipping lanes. If a British patrol boat
captures the migrants in British waters, then they're required to take
them to Britain; otherwise, the patrol boat can return them to France.
When a migrant reaches Britain, he's evaluated for eligibility for
asylum. Iranians are likely to be granted asylum because of Iran's
human rights record. For that reason, migrants from Iraq or Syria
often claim to be from Iran. Daily Mail and Guardian (London) and Deutsche Welle

Related Articles:

KEYS: Generational Dynamics, Britain, Brexit, Theresa May,
Ireland, Northern Ireland,
Dover, Calais, France, Iran, Serbia

Permanent web link to this article
Receive daily World View columns by e-mail
Contribute to Generational Dynamics via PayPal

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

pbrower2a · 01-02-2019, 07:16 AM

Sometimes the best way to deal with a political desire that the plurality wants but is impossible to implement it is to push it under the rug.

**John J. Xenakis** · 01-02-2019, 10:06 AM

(01-01-2019, 10:24 PM)pbrower2a Wrote: > The fraudulent securities were hitting the market while Dubya was
> President

Nobody even admitted that crimes were being committed until around
2009. I wrote about it in 2010:

** Financial Crisis Inquiry hearings provide 'smoking gun' evidence of widespread criminal fraud
** http://www.generationaldynamics.com/pg/w...100414.htm

After I wrote this article, I was absolutely certain that there would
be criminal prosecutions. It's still shocking to me that these
bankers got away with these massive crimes.

If you're trying to convince me that Republicans are as corrupt as
Democrats, it has nothing to do with party. Peter Schweizer, who used
to be Breitbart senior editor, wrote a book a few years ago about the
massive corruption by both parties in Congress.

It's not about political party. It's about generation. Speaking
generally, Boomers are honest and Gen-Xers are crooks, including
Obama. Even today, all or almost all of the indictments from the
special prosecuter have been Gen-Xers, because Gen-Xers are crooks,
while Trump himself has (so far) escaped this huge tidal wave of
vitriolic attacks of all kinds because he's a Boomer, hence honest.

Here's what I wrote in 2016:

Things started changing around 2000 with the rise of Generation-X,
reacting to the excesses of the Boomer generation that grew up after
the war. While the Boomers passively accepted the values of the
Silent generation, the Gen-Xers, and the Millennials in the generation
that followed were openly contemptuous of those values, and considered
people in the Silent and GI generations to be full of crap.

We've already had one major national disaster: Generation-Xers who
became "financial engineers" in the 1990s, and used their skills to
knowingly create trillions of dollars in phony synthetic securities,
and knowingly defrauded investors, thinking they were screwing their
fathers' generation. People were defrauded of trillions of dollars,
causing millions of people to lose their homes and jobs and savings.
And worse, President Obama and other Gen-Xers don't even seem to care
about this, as not a single one of these criminals has been
prosecuted, leaving them with their fraudulent winnings and able to
defraud other people.

By contrast, President Bush #1 and President Clinton reacted to the
Savings and Loan crisis by prosecuting thousands of bankers.
President Bush #2 reacted to the Enron scandal by prosecuting several
top managers. But President Obama has prosecuted nobody. Things have
changed with the new generation of politicians. That's why, for ten
years, I've been writing about the destructiveness and
self-destructiveness of Generation-X, and the worst is yet to come.

** 7-Mar-16 World View -- EU and Turkey summit in Brussels to discuss refugees, as number of women and children surges
** http://www.generationaldynamics.com/pg/x...tm#e160307

pbrower2a · 01-02-2019, 05:41 PM

(01-02-2019, 10:06 AM)John J. Xenakis Wrote:
(01-01-2019, 10:24 PM)pbrower2a Wrote: > The fraudulent securities were hitting the market while Dubya was
> President

Nobody even admitted that crimes were being committed until around
2009. I wrote about it in 2010:

** Financial Crisis Inquiry hearings provide 'smoking gun' evidence of widespread criminal fraud
** http://www.generationaldynamics.com/pg/w...100414.htm

After I wrote this article, I was absolutely certain that there would
be criminal prosecutions. It's still shocking to me that these
bankers got away with these massive crimes.

Maybe you did not see the article in Businessweek in 2005 (I forget the issue) in which the authors exposed the rating fraud of the collateralized debt obligations (CDO's) that underpinned the real-estate fraud predicated upon predatory lending, but no matter how one packages $#!+, it is still $#!+.

Having known both Boomers and X, I can tell you that both generations have their salt-of-the-Earth types. The extreme narcissists among Boomers are essentially the ones who could get away with it. Sure, I remember some very narcissistic expressions among us as kids, many of us having been extremely conceited. There's nothing like having a job that mandates servility (as in retailing or restaurant work) that inculcates humility. Perhaps that comes with a side of resentment, but most of us learned to put on that theatrical "Happy to serve you!" smile as we sold stuff, accepted money for gasoline and convenience store items, or served "firs with that" as we wondered what we were doing in a place like that, holding onto a job that we thought was fine for high-school drop-outs. When we found our ways into bureaucratic organization we found -people who had a critical three-year head-start due to family connections, rigid and low glass ceilings, and our bosses with those three-year head-starts thinking of us less completely human than they were. They could get away with their narcissistic behavior, but we still had to defer to bosses who treated us like dirt.

X? The bulk had lesser chances plying by the rules. Many chose to not play by the rules. The ones who started small businesses at least became the true heroes of capitalism, the people who create jobs before getting market share or strong cash flow, and fill niches that corporate behemoths ignore. Of course there were the usual skilled tradesmen, degreed professionals, and salespeople who played by the rules and people of modest dreams who lived as Marx said proles would live under capitalism. (It is up to the capitalists, executives, and property owners to decide whether the Marxist stereotype of capitalism is reality or fiction). The worst found ways to succeed in a plutocratic order by finding shady ways to get some gains for themselves while comforting their bosses. Those are shysters. They could turn a bigger, but crooked profit through some hustle. Dubya's "Opportunity Society" gave such people the opportunity of their dreams with the real estate scam. Get someone to put as big a down-payment on a house as possible, and encourage him to buy (with the aid of crooked real-estate agents) a house as expensive as possible in full knowledge that the schmuck would never be able to pay for it. In a market with rising real-estate prices, foreclosure could be more profitable than a mortgage borrower successfully paying off the loan. Interest was of course astronomical, and negative amortization ensured that the owner of the white elephant of a ' home' could never sell it to another potential buyer. In a couple years it would be foreclosed upon for the profit of a shyster.

You can see what is wrong with this. This is obviously not the Bailey Building and Loan Society in It's a Wonderful Life; it isn't the norm of residential lending of the post-WWII era in which the banker arranges credit for the purchase of a small bungalow in the suburbs under rigid underwriting rules (the mortgage borrower should never pay more than 35% of his income for housing expenses or buy a house that costs more than three-and-a-half year's of pay, not including overtime or any possibility of career advancement) or part-time income by the secondary income-earner. Those houses might be three bedrooms and one bath, but they serve everyone involved. The banker gets interest, and the home-owner pays off the loan except if there is an early death that stops the income flow. It was also good for the kids who got some privacy and quiet for doing homework or practicing on a musical instrument.

So far as I know, Jerry Mathers ("Beaver Cleaver") is still around, but he is now old. But we also have the depravity of a 3T during the Double-Zero Decade, just like another slum-of-a-decade, the 1920s, when similar lending occurred, if not on as blatant a scale. that time it was a securities hustle, and we all know how that went.

Remember: the salt-of-the-earth types do real economic good -- milking the cows, changing the oil in cars and doing auto repairs, doing hair, teaching kids in school, keeping the books, delivering the mail, fighting fires, and enforcing the law. You may not like beng pulled over for doing 46 in a 35 zone, but you'd probably call 911 on your cell phone if you saw a blatant drunk.

It's the people who do the real work who make it possible for the heirs of real entrepreneurs to make easy money off dividends and real-estate rentals, for business executives paid very well for treating employees badly, and for the crooked operators to feast upon the gullible who are convinced that they have but one chance at their dreams. Capitalism depends upon easy investing and reliable streams of income. We can do without the shysters and cheats. The system works better when there are few ways to make a crooked buck, and when doing honest work is a more reliable way of making a living than is doing something crooked.

Quote:If you're trying to convince me that Republicans are as corrupt as
Democrats, it has nothing to do with party. Peter Schweizer, who used
to be Breitbart senior editor, wrote a book a few years ago about the
massive corruption by both parties in Congress.

It's not about political party. It's about generation. Speaking
generally, Boomers are honest and Gen-Xers are crooks, including
Obama. Even today, all or almost all of the indictments from the
special prosecuter have been Gen-Xers, because Gen-Xers are crooks,
while Trump himself has (so far) escaped this huge tidal wave of
vitriolic attacks of all kinds because he's a Boomer, hence honest.

I have seen plenty of reports by reputable journalists that Barack Obama operated one of the cleanest Presidencies ever. Even Jimmy Carter had the shady Bert Lance. Obama -- eight years, and no indictments of anyone connected to him. As vindictive as Donald Trump is, you might expect him to have pushed for some prosecution of his predecessor. Manafort, Gates, Flynn, Papadopoulos, Cohen... it just gets worse. Robert Mueller has had to speak of someone as "Individual #1" to avoid mentioning him by name.

Idealist and Reactive leaders can have faults, and certain faults are more likely for Idealists than for Reactives, and vice-versa. Robert Mueller is a conservative Republican, but I must question whether he considers Donald Trump a conservative, ot at least the sort of conservative with which he would be comfortable. I may be on the Left, but I dislike Nocolas Maduro.

.

Quote:Here's what I wrote in 2016:

Things started changing around 2000 with the rise of Generation-X,
reacting to the excesses of the Boomer generation that grew up after
the war. While the Boomers passively accepted the values of the
Silent generation, the Gen-Xers, and the Millennials in the generation
that followed were openly contemptuous of those values, and considered
people in the Silent and GI generations to be full of crap.

We've already had one major national disaster: Generation-Xers who
became "financial engineers" in the 1990s, and used their skills to
knowingly create trillions of dollars in phony synthetic securities,
and knowingly defrauded investors, thinking they were screwing their
fathers' generation. People were defrauded of trillions of dollars,
causing millions of people to lose their homes and jobs and savings.
And worse, President Obama and other Gen-Xers don't even seem to care
about this, as not a single one of these criminals has been
prosecuted, leaving them with their fraudulent winnings and able to
defraud other people.

That is exactly what you get when you have an economic elite utterly amoral and out for itself alone. A Reactive generation at its worst has leaders who exemplify crass materialism and acquisitiveness and a complete disregard for the traditional decencies that make life tolerable for people who lack the advantages in life. Such people exploit people as severely as possible, following the dictum "do unto others... is it "until they do unto you" or "to the extent that you can get away with it"? Boomers were the worst sorts of business executives, people who exploit people badly yet out of their own self-righteousness see themselves as benefactors to those that they exploit. (That isn't only Boomer behavior; I saw accounts of slave-owning planters who thought that they were God's gift to slaves as beneficiaries of their 'loving guidance'.

This sort of guidance:

that is one way to motivate people: fear and pain.

Quote:By contrast, President Bush #1 and President Clinton reacted to the
Savings and Loan crisis by prosecuting thousands of bankers.
President Bush #2 reacted to the Enron scandal by prosecuting several
top managers. But President Obama has prosecuted nobody. Things have
changed with the new generation of politicians. That's why, for ten
years, I've been writing about the destructiveness and
self-destructiveness of Generation-X, and the worst is yet to come.

Reagan and the elder Bush, neither of them Boomers, allowed the courts to hammer the crooked bankers who facilitate the "Savings-and-Loot" crooks in the 1980s. Thus Charles Keating and Don Dixon.

The 2000 stock market crash was largely the dot.com crash and Enron. On Enron, Dubya may have felt a personal betrayal having been duped. Enron crooks were easy targets for prosecutions because they broke the rules and were crooks. Dot.com? The dot.com people had vision of a new order of American commerce that simply didn't pan out. People do not go to prison for a business failure unless they did something corrupt.

The Bad Bear of 2000 was slower to develop and less severe than that of 2007, let alone 1929. The economic meltdown of 2007 was more pervasive, and it as much reflected choices that people were stuck with. Bubbles create paper by devouring capital. Maybe Obama thought that prosecuting huge numbers of business executives would have done more harm than good. Pragmatist that he is, he chose to get the economy going again instead of setting up a Reign of Terror. His choice may have been flawed, but it was one of the best possible. Investors have done well since early 2009 -- well except for December of 2018, perhaps. Economic recovery solves more problems than do prosecutions for technicalities.

**John J. Xenakis** · 01-03-2019, 12:16 AM

*** 3-Jan-19 World View -- China may seize Kenya's Mombasa Port as debt repayments triple

This morning's key headlines from GenerationalDynamics.com

Kenya's debt repayments to China triple in July
Concerns grow that China may take control of Kenya's port at Mombasa

****
**** Kenya's debt repayments to China triple in July
****

[Image: g190102b.jpg]

Kenya's Standard Gauge Railway (SGR), from Mombasa Port to Nairobi, built with funding from China

Starting in July, Kenya's annual debt repayment of loans to China
triples to $900 million.

Kenya has been on a borrowing binge in the last five years, having
borrowed a total of $50 billion. These loans have been used to build
roads, ports and railways, and were to be repaid with the revenue from
this infrastructure, but as with many loans, hopes and promises were
not kept.

Some $2.7 billion in loan repayments will be due to foreign lenders in
2019-20, a third of it to China. In addition, Kenya must pay $780
million for 2014 Eurobond note, including $2 billion in commercial
loans in the first half of 2019. This includes retiring a $787
million loan from Britain's Standard Chartered Bank and another $371
million loan from Trade and Development Bank, formerly PTA Bank.

The reason that payments to China are tripling in 2019 is because a
five-year grace period that China granted to Kenya in 2014 is now
expiring.

All of these loans are denominated in foreign currencies, usually US
dollars. Payments must be made out of the country's foreign reserves,
which are at $9 billion September 2018. Standard Media (Kenya) and The Nation (Kenya) and Tuko TV (Kenya)

****
**** Concerns grow that China may take control of Kenya's port at Mombasa
****

Kenya's government borrowed $4 billion from China to build the
Mombasa-Nairobi Standard Gauge Railway (SGR), a train that would
operate between the Port of Mombasa and the capital city Nairobi. It
was supposed to pay for itself with revenue to the Kenya Ports
Authority (KPA), but revenues have been far below the projections.

China requires that all the deals that China makes with countries
under the umbrella of the Belt and Road Initiative (BRI) be kept top
secret, even within the country making the deal. However, new details
about the SGR deal are now coming to light in a report by Kenya's
Auditor-General Edward Ouko, including a requirement that revenue of
the Kenya Ports Authority would be used to clear the debt of $2.27
billion owed to the Exim Bank of China.

The auditor also notes that the contract specifies that if there's any
disagreement or dispute between Kenya and the bank, then the
disagreement would be referred to arbitration within China, "whose
fairness is resolving the disagreement may not be guaranteed."

According to the auditor, "Exim Bank would become a principal over KPA
if [Kenya] defaults in its obligations and the Chinese bank exercises
power over the escrow account security."

China's foreign ministry spokesman was asked about this a week ago,
and responded as follows:

<QUOTE>"Regarding the issue you mentioned, we have checked
with the relevant Chinese financial institution and found that the
allegation that the Kenyan side used the Mombasa Port as a
collateral in its Mombasa-Nairobi Railway payment agreement with
the Chinese financial institution is not true. The report you just
cited said that the Kenyan side also has made clarifications on
it.

At present, the China-Kenya cooperation on the Mombasa-Nairobi
railway is progressing smoothly. When cooperating with African
countries including Kenya, Chinese companies and financial
institutions will always conduct joint and thorough scientific
study on the feasibility of the projects and then proceed to
determine the construction and funding plans and scales to guard
against causing debt risks and fiscal burdens for
Africa."<END QUOTE>

This is an evasive answer (standard practice from a Chinese official),
because the auditor's report does not claim that the port itself was
used as collateral.

Kenya media is becoming increasingly concerned that China's "Debt Book
Diplomacy" is going to ensnare Kenya in the way that it's forced other
countries to give control of its infrastructure to China.

The poster child for how it works is the Port of Hambantota, a Chinese
infrastructure project in Sri Lanka, funded with a loan from China,
with almost all the labor performed by Chinese workers. Sri Lanka was
unable to repay the loan, and the government was forced to give the
Port to China. So now Sri Lanka has a large seaport owned by China,
and a large Chinese enclave with hundreds of Chinese families, with no
benefit to itself and to its own people.

There are examples in Africa as well.

In 2007, Democratic Republic of Congo (DRC) entered into a $10 billion
resource-financed infrastructure agreement with China, where copper
and cobalt mining licenses would be allocated to a Chinese
consortium. In exchange, the consortium would secure financing of
$6.56 billion worth of infrastructure projects and invest $3 billion
in mining projects. The agreement came to light only when DRC could
not make the debt payments, and China's Exim bank took control of a
portion of the mines.

In 2010, the government of Ghana informally secured $3 billion loan
from China without parliamentary scrutiny and over 15 years Ghana
would supply 750 million barrels (13,000 barrels per day) for
servicing the debt. When oil prices crashed, China's Exim bank
demanded that the amount of oil used to service the debt would
increase from 13,000 to 15,000 barrels per day, and that the agreed
fixed price to be paid would be reduced from $100 to $85 per barrel
According to Ghana’s then Finance minister, that $15 difference would
have seen Ghanaians pay $6.4 billion to repay a $3 billion loan. Ghana
was forced to cancel half of the agreed $3 billion loan.

In all three of these cases, the details of these agreements were kept
secret, per China's demands, until they were revealed because debt
repayments could not be met, and China then enforced repayment by
seizing assets.

It's now feared that the same thing will happen in Kenya, and China
will seize Kenya's Port of Mombasa. The governments of both Kenya and
China insist that there's no problem, but it still remains the case
that the SGR is generating far less revenue than had been assumed when
the original loan agreement was signed in 2014.

China has used "debt trap diplomacy" in several countries. They loan
a country to build infrastructure proects that will strategically
benefit China by helping China to exploit the countries natural
resources, but and only marginally benefit the local population. They
require that the loan money be used to purchase parts and services
from Chinese firms, and that almost all workers must be Chinese. So
instead of benefiting the local factories and workers, the money goes
back to China to benefit factories and people there. And then the
country still has to repay the loan, which means that they're repaying
the loan twice.

In the case of Kenya, China is being accuse of "neo-colonialism,
racism and blatant discrimination" towards Kenya workers. Racism is
rampant, and the Chinese allow Kenyans to perform only menial tasks.
The Chinese are supposed to train the Kenyans, many of whom have
engineering degrees, to do the jobs, but instead blatantly exclude the
Kenyan workers. The Nation (Kenya) and China Foreign Ministry (24-Dec) and African Stand

Related Articles

KEYS: Generational Dynamics, China, Kenya, Mombasa Port,
Standard Gauge Railway, SGR, Exim Bank,
Kenya Ports Authority, KPA, Belt and Road Initiative, BRI,
Edward Ouko, Sri Lanka, Port of Hambantota,
Democratic Republic of Congo, DRC, Ghana

Permanent web link to this article
Receive daily World View columns by e-mail
Contribute to Generational Dynamics via PayPal

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

pbrower2a · 01-03-2019, 05:01 AM

I believe that old Ben (Franklin) had sage advice: neither a lender nor a borrower be.

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