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 21 
 on: February 26, 2015, 12:56:03 PM 
Started by Crafty_Dog - Last post by objectivist1
Crafty,

To repeat - I haven't researched Brien Lundin's credentials.  Under your definition, anything reported by any third party (news source) could be considered hearsay.

 22 
 on: February 26, 2015, 12:28:03 PM 
Started by Crafty_Dog - Last post by Crafty_Dog
 An Arms Deal for Ukraine Serves to Warn Russia
Geopolitical Diary
February 25, 2015 | 21:58 GMT
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A day after Tuesday's announcement of an arms deal between Ukraine and the United Arab Emirates, the dust is beginning to settle and the details are starting to become clear. Much attention has been given to the potential for U.S. involvement in this deal and the possibility that the agreement is a way to indirectly transfer U.S. weapons Ukraine, a move that would cross a red line for Russia. However, UAE weapons cooperation with Ukraine is not likely to be that incendiary. For now, the deal serves the political purpose of signaling to Moscow that there are consequences for its actions — not only in Ukraine, but also in Iran and the rest of the world.

Stratfor sources have indicated that UAE military supplies to Ukraine are likely restricted to lower-profile items such as armored vehicles rather than "game-changing" technology. Using the United Arab Emirates simply as a conduit for U.S.-produced arms makes little sense because of the permission required from Washington to transfer critical U.S.-produced systems to a third party. Such a move would not give the United States any more political cover than a direct delivery to Ukraine would.

What is a Geopolitical Diary? George Friedman Explains.

Defense deals between Abu Dhabi and Kiev are not new. Even during the conflict in eastern Ukraine, the United Arab Emirates delivered armored vehicles to the Ukrainian military that have been used in active operations. The United Arab Emirates has developed a modest defense industry, and securing export deals for these armored vehicles is a normal practice.

But the timing of Ukrainian President Petro Poroshenko's claim that the countries signed a contract worth tens of millions of dollars on Tuesday is critical. In recent weeks, the United States has issued a deluge of statements about retaining the option to provide lethal weapons to Ukraine, and Russia has responded with a deluge of warnings. Abu Dhabi is not seeking to antagonize Moscow, but right now, defense-related cooperation with Ukraine at any level inadvertently affects relations with Russia. Poroshenko's invitation to the IDEX 2015 defense industry convention in the United Arab Emirates is certain to have caught Russia's eye. The invitation follows a recent visit to Iran by Russian Defense Minister Sergei Shoigu that put the delivery of Russian air defense systems to Iran back on the table. The delivery of the S-300 air defense system has been a source of diplomatic controversy for some time and would exacerbate Abu Dhabi's concerns about Iran's military capabilities and nuclear program. In this context, displaying some degree of defense cooperation with Ukraine would serve as a reminder to Moscow that the United Arab Emirates can deliver weapon systems to places sensitive to Russian interests.

However, any weapon in and of itself will not reverse Ukraine's fortunes in the war. A weapon system has a capability, but that capability can only be used for a certain set of specific tasks on any given battlefield, whether they be offensive or defensive — a distinction the Russians will not make about any weapons sold or transferred to Ukraine. A weapon can have a massive impact on the battlefield if its capabilities neutralize or destroy the enemy's strength or exploit a weakness, if it is present in enough numbers and if the troops wielding it have been properly trained. All of this requires money — something the Ukrainians do not have much of, leaving them largely dependent on third-party largesse and a geopolitical context that rises above just fighting separatists in eastern Ukraine.

This explains the level of noise surrounding any potential weapons transfers to Ukraine. The separatists, with heavy Russian support, have had much success on the battlefield against a fairly weak Ukrainian military, predominantly by using armor and artillery. But the United States and its allies possess some weapons systems that could impose painful costs if they are fielded in large enough numbers and the Ukrainian military is trained in their use. The Javelin anti-tank guided missile is an oft-cited example of such a system. It may not win the war, but it could result in a higher attrition rate for Russian tanks, and that is why Russia has warned it would respond if significant weapons deliveries occur.

There is a context and timing to all of this noise as well. It grew louder when the separatists and their Russian backers looked like they could seriously expand their territorial holdings in eastern Ukraine. The threat of weapons deliveries from the United States was meant to deter such thinking. In other words, the United States has been telling Russia that the conflict in eastern Ukraine will get much more painful if Moscow continues using the combat situation as leverage in negotiations with Kiev. This strategy seems to have worked, to a point; a cease-fire has been implemented, albeit slowly and painfully.

A deterrent like the threat of arms deliveries does not go away. The combination of U.S. threats and the secretive UAE deal with Ukraine has opened up all levels of speculation. This deal seems to be more about low-level transfers and subtle messaging for now, but many options remain open as the conflict continues. All sides are likely to continue discussing and speculating about negotiations as well as any future arms deals with Ukraine as long as the status of eastern Ukraine remains in doubt.

 23 
 on: February 26, 2015, 12:26:44 PM 
Started by Crafty_Dog - Last post by Crafty_Dog
The Consumer Price Index Declined 0.7% in January To view this article, Click Here
Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 2/26/2015

The Consumer Price Index (CPI) declined 0.7% in January, coming in slightly below consensus expectations of -0.6%. The CPI is down 0.1% versus a year ago.
“Cash” inflation (which excludes the government’s estimate of what homeowners would charge themselves for rent) declined 1.0% in January, and is down 1.0% in the past year.
The drop in the CPI in January was all due to energy, which fell 9.7%. Food prices were unchanged. The “core” CPI, which excludes food and energy, increased 0.2% in January versus a consensus expected gain of 0.1%. Core prices are up 1.6% versus a year ago.
Real average hourly earnings – the cash earnings of all workers, adjusted for inflation – rose 1.2% in January and are up 2.4% in the past year. Real weekly earnings are up 3.0% in the past year.
Implications: With the exception of the Panic in late 2008, consumer prices fell in January at the fastest pace since 1949. As a result, the CPI is now lower than it was a year ago. Some analysts are going to use these data to warn about “Deflation” and say the Federal Reserve should hold off on raising rates. But the details of the report show we are not in the grips of deflation and the Fed should stay on track to start raising rates in June. True deflation – of the kind we ought to be concerned about – is caused by overly tight monetary policy and price declines that are widespread, not isolated to one sector of the economy. Think of the Great Depression. But we are not experiencing widespread declines in prices. The drop in consumer prices in January was all due to energy. Excluding energy, prices rose 0.1% in January and are up 1.9% from a year ago, very close to the Fed’s 2% inflation target. “Core” prices, which exclude food and energy, increased 0.2% in January and are up 1.6% from a year ago. Moreover, energy prices have turned higher in February, so this sector will soon be pushing the CPI up rather than holding it down. And, there are sectors where prices are rising faster. Food prices have risen 3.2% in the past 12 months, so if you only use the supermarket to gauge inflation, we understand thinking the headline reports are too low and that “true” inflation is higher. If you love eating steak, you’ve been out of luck, with prices up almost 15% from a year ago. In addition, housing costs are going up. Owners’ equivalent rent, which makes up about ¼ of the CPI, rose 0.2% in January, is up 2.6% in the past year, and will be a key source of higher inflation in the year ahead. The best pieces of news in today’s report was that “real” (inflation-adjusted) average hourly earnings rose 1.2% in January, the fourth consecutive month of gains and the largest monthly rise since 2008. These earnings are up 2.4% from a year ago and up at a faster 4.9% annualized rate over the past six months, signaling that consumer purchasing power continues to grow.

 24 
 on: February 26, 2015, 12:22:56 PM 
Started by Crafty_Dog - Last post by Crafty_Dog
Interalia, hearsay is taking someone else's word for what someone said.

 25 
 on: February 26, 2015, 12:21:32 PM 
Started by Crafty_Dog - Last post by Crafty_Dog


http://www.dickmorris.com/jebs-biggest-problem-w-dick-morris-tv-lunch-alert/?utm_source=dmreports&utm_medium=dmreports&utm_campaign=dmreports

 26 
 on: February 26, 2015, 11:38:08 AM 
Started by Crafty_Dog - Last post by objectivist1
I suppose it depends on your definition of "hearsay."  Brien Lundin is the source.  I am honestly not familiar with his credentials.

 27 
 on: February 26, 2015, 10:50:15 AM 
Started by Crafty_Dog - Last post by Crafty_Dog


This is the fifth Decade Forecast published by Stratfor. Every five years since 1996 (1996, 2000, 2005, 2010 and now, 2015) Stratfor has produced a rolling forecast. Overall, we are proud of our efforts. We predicted the inability of Europe to survive economic crises, China's decline and the course of the U.S.-jihadist war. We also made some errors. We did not anticipate 9/11, and more important, we did not anticipate the scope of the American response. But in 2005 we did forecast the difficulty the United States would face and the need for the United States to withdraw from its military engagements in the Islamic world. We predicted China's weakness too early, but we saw that weakness when others were seeing the emergence of an economy larger than that of the United States. Above all, we have consistently forecast the enduring power of the United States. This is not a forecast rooted in patriotism or jingoism. It derives from our model that continues to view the United States as the pre-eminent power.

We do not forecast everything. We focus on the major trends and tendencies in the world. Thus, we see below some predictions from our 2010 Decade Forecast:

    We see the U.S.-jihadist war subsiding. This does not mean that Islamist militancy will be eliminated. Attempts at attacks will continue, and some will succeed. However, the two major wars in the region will have dramatically subsided if not concluded by 2020. We also see the Iranian situation having been brought under control. Whether this will be by military action and isolation of Iran or by a political arrangement with the current or a successor regime is unclear but irrelevant to the broader geopolitical issue. Iran will be contained, as it simply does not have the underlying power to be a major player in the region beyond its immediate horizons.

    The diversity of systems and demographics that is Europe will put the European Union's institutions under severe strain. We suspect the institutions will survive. We doubt that they will work very effectively. The main political tendency will be away from multinational solutions to a greater nationalism driven by divergent and diverging economic, social and cultural forces. The elites that have crafted the European Union will find themselves under increasing pressure from the broader population. The tension between economic interests and cultural stability will define Europe. Consequently, inter-European relations will be increasingly unpredictable and unstable.

    Russia will spend the 2010s seeking to secure itself before the demographic decline really hits. It will do this by trying to move from raw commodity exports to process commodity exports, moving up the value chain to fortify its economy while its demographics still allow it. Russia will also seek to reintegrate the former Soviet republics into some coherent entity in order to delay its demographic problems, expand its market and above all reabsorb some territorial buffers. Russia sees itself as under the gun, and therefore is in a hurry. This will cause it to appear more aggressive and dangerous than it is in the long run. However, in the 2010s, Russia's actions will cause substantial anxiety in its neighbors, both in terms of national security and its rapidly shifting economic policies.

    The states most concerned — and affected — will be the former satellite states of Central Europe. Russia's primary concern remains the North European Plain, the traditional invasion route into Russia. This focus will magnify as Europe becomes more unpredictable politically. Russian pressure on Central Europe will not be overwhelming military pressure, but Central European psyches are finely tuned to threats. We believe this constant and growing pressure will stimulate Central European economic, social and military development.

    China's economy, like the economies of Japan and other East Asian states before it, will reduce its rate of growth dramatically in order to calibrate growth with the rate of return on capital and to bring its financial system into balance. To do this, it will have to deal with the resulting social and political tensions.

    From the American point of view, the 2010s will continue the long-term increase in economic and military power that began more than a century ago. The United States remains the overwhelming — but not omnipotent — military power in the world, and produces 25 percent of the world's wealth each year.

The Decade Ahead

The world has been restructuring itself since 2008, when Russia invaded Georgia and the subprime financial crisis struck. Three patterns have emerged. First, the European Union entered a crisis that it could not solve and that has increased in intensity. We predict that the European Union will never return to its previous unity, and if it survives it will operate in a more limited and fragmented way in the next decade. We do not expect the free trade zone to continue to operate without increasing protectionism. We expect Germany to suffer severe economic reversals in the next decade and Poland to increase its regional power as a result.

The current confrontation with Russia over Ukraine will remain a centerpiece of the international system over the next few years, but we do not think the Russian Federation can exist in its current form for the entire decade. Its overwhelming dependence on energy exports and the unreliability of expectations on pricing make it impossible for Moscow to sustain its institutional relations across the wide swathe of the Russian Federation. We expect Moscow's authority to weaken substantially, leading to the formal and informal fragmentation of Russia. The security of Russia's nuclear arsenal will become a prime concern as this process accelerates later in the decade.

We have entered a period in which the decline of the nation-states created by Europe in North Africa and the Middle East is accelerating. Power is no longer held by the state in many countries, having devolved to armed factions that can neither defeat others nor be defeated. This has initiated a period of intense internal fighting. The United States is prepared to mitigate the situation with air power and limited forces on the ground but will not be able or willing to impose a settlement. Turkey, whose southern border is made vulnerable by this fighting, will be slowly drawn into the fighting. By the end of this decade, Turkey will emerge as the major regional power, and Turkish-Iranian competition will increase as a result.

China has completed its cycle as a high-growth, low-wage country and has entered a new phase that is the new normal. This phase includes much slower growth and an increasingly powerful dictatorship to contain the divergent forces created by slow growth. China will continue to be a major economic force but will not be the dynamic engine of global growth it once was. That role will be taken by a new group of highly dispersed countries we call the Post-China 16, which includes much of Southeast Asia, East Africa and parts of Latin America. China will not be an aggressive military force either. Japan remains the most likely contender for the dominant position in East Asia, both because of its geography and because of its needs as a massive importer.

The United States will continue to be the major economic, political and military power in the world but will be less engaged than in the past. Its low rate of exports, its increasing energy self-reliance and its experiences over the last decade will cause it to be increasingly cautious about economic and military involvement in the world. It has learned what happens to heavy exporters when customers cannot or will not buy their products. It has learned the limits of power in trying to pacify hostile countries. It has learned that North America is an arena in which it can prosper with selective engagements elsewhere. It will face major strategic threats with proportional power, but it will not serve the role of first responder as it has in recent years.

It will be a disorderly world, with a changing of the guard in many regions. The one constant will be the continued and maturing power of the United States — a power that will be much less visible and that will be utilized far less in the next decade.
Europe

The European Union will be unable to solve its fundamental problem, which is not the eurozone, but the free trade zone. Germany is the center of gravity of the European Union; it exports more than 50 percent of its GDP, and half of that goes to other EU countries. Germany has created a productive capability that vastly outstrips its ability to consume, even if the domestic economy were stimulated. It depends on these exports to maintain economic growth, full employment and social stability. The European Union's structures — including the pricing of the euro and many European regulations — are designed to facilitate this export dependency.

This has already fragmented Europe into at least two parts. Mediterranean Europe and countries such as Germany and Austria have completely different behavioral patterns and needs. No single policy can suit all of Europe. This has been the core problem from the beginning, but it has now reached an extreme point. What benefits one part of Europe harms another.

Nationalism has already risen significantly. Compounding this is the Ukrainian crisis and Eastern European countries' focus on the perceived threat from Russia. Eastern Europe's concern about Russia creates yet another Europe — four, total, if we separate the United Kingdom and Scandinavia from the rest of Europe. Considered with the rise of Euroskeptic parties on the right and left, the growing delegitimation of mainstream parties and the surging popularity of separatist parties within European countries, the fragmentation and nationalism that we forecast in 2005, and before, is clearly evident.

These trends will continue. The European Union might survive in some sense, but European economic, political and military relations will be governed primarily by bilateral or limited multilateral relationships that will be small in scope and not binding. Some states might maintain a residual membership in a highly modified European Union, but this will not define Europe.

What will define Europe in the next decade is the re-emergence of the nation-state as the primary political vehicle of the continent. Indeed the number of nation-states will likely increase as various movements favoring secession, or the dissolution of states into constituent parts, increase their power. This will be particularly noticeable during the next few years, as economic and political pressures intensify amid Europe's crisis.

Germany has emerged from this mass of nation-states as the most economically and politically influential. Yet Germany is also extremely vulnerable. It is the world's fourth-largest economic power, but it has achieved that status by depending on exports. Export powers have a built-in vulnerability: They depend on their customers' desire and ability to buy their products. In other words, Germany's economy is hostage to the economic well-being and competitive environment in which it operates.

There are multiple forces working against Germany in this regard. First, Europe's increasing nationalism will lead to protectionist capital and labor markets. Weaker countries are likely to adopt various sorts of capital controls, while stronger countries will limit the movement of foreigners — including the citizens of other EU countries — across their borders. We forecast that existing protectionist policies inside the European Union, particularly on agriculture, will be supplemented in coming years by trade barriers created by the weaker Southern European economies that need to rebuild their economic base after the current depression. On a global basis, we can expect European exports to face increased competition and highly variable demand in the uncertain environment. Therefore, our forecast is that Germany will begin an extended economic decline that will lead to a domestic social and political crisis and that will reduce Germany's influence in Europe during the next 10 years.

At the center of economic growth and increasing political influence will be Poland. Poland has maintained one of the most impressive growth profiles outside of Germany and Austria. In addition, though its population is likely to contract, the contraction will most probably be far less than in other European countries. As Germany undergoes wrenching shifts in economy and population, Poland will diversify its own trade relationships to emerge as the dominant power on the strategic Northern European Plain. Moreover, we expect Poland to be the leader of an anti-Russia coalition that would, significantly, include Romania during the first half of this decade. In the second half of the decade, this alliance will play a major role in reshaping the Russian borderlands and retrieving lost territories through informal and formal means. Eventually as Moscow weakens, this alliance will become the dominant influence not only in Belarus and Ukraine, but also farther east. This will further enhance Poland's and its allies' economic and political position.

Poland will benefit from having a strategic partnership with the United States. Whenever a leading global power enters into a relationship with a strategic partner, it is in the global power's interest to make the partner as economically vigorous as possible, both to stabilize its society and to make it capable of building a military force. Poland will be in that position with the United States, as will Romania. Washington has made its interest in the region obvious.
Russia

It is unlikely that the Russian Federation will survive in its current form. Russia's failure to transform its energy revenue into a self-sustaining economy makes it vulnerable to price fluctuations. It has no defense against these market forces. Given the organization of the federation, with revenue flowing to Moscow before being distributed directly or via regional governments, the flow of resources will also vary dramatically. This will lead to a repeat of the Soviet Union's experience in the 1980s and Russia's in the 1990s, in which Moscow's ability to support the national infrastructure declined. In this case, it will cause regions to fend for themselves by forming informal and formal autonomous entities. The economic ties binding the Russian periphery to Moscow will fray.

Historically, the Russians solved such problems via the secret police — the KGB and its successor, the Federal Security Services (FSB). But just as in the 1980s, the secret police will not be able to contain the centrifugal forces pulling regions away from Moscow this decade. In this case, the FSB's power is weakened by its leadership's involvement in the national economy. As the economy falters, so does the FSB's strength. Without the FSB inspiring genuine terror, the fragmentation of the Russian Federation will not be preventable.

To Russia's west, Poland, Hungary and Romania will seek to recover regions lost to the Russians at various points. They will work to bring Belarus and Ukraine into this fold. In the south, the Russians' ability to continue controlling the North Caucasus will evaporate, and Central Asia will destabilize. In the northwest, the Karelian region will seek to rejoin Finland. In the Far East, the maritime regions more closely linked to China, Japan and the United States than to Moscow will move independently. Other areas outside of Moscow will not necessarily seek autonomy but will have it thrust upon them. This is the point: There will not be an uprising against Moscow, but Moscow's withering ability to support and control the Russian Federation will leave a vacuum. What will exist in this vacuum will be the individual fragments of the Russian Federation.

This will create the greatest crisis of the next decade. Russia is the site of a massive nuclear strike force distributed throughout the hinterlands. The decline of Moscow's power will open the question of who controls those missiles and how their non-use can be guaranteed. This will be a major test for the United States. Washington is the only power able to address the issue, but it will not be able to seize control of the vast numbers of sites militarily and guarantee that no missile is fired in the process. The United States will either have to invent a military solution that is difficult to conceive of now, accept the threat of rogue launches, or try to create a stable and economically viable government in the regions involved to neutralize the missiles over time. It is difficult to imagine how this problem will play out. However, given our forecast on the fragmentation of Russia, it follows that this issue will have to be addressed, likely in the next decade.

The issue in the first half of the decade will be how far the alliance stretching between the Baltic and Black seas will extend. Logically, it should reach Azerbaijan and the Caspian Sea. Whether it does depends on what we have forecast for the Middle East and Turkey.
The Middle East and North Africa

The Middle East — particularly the area between the Levant and Iran, along with North Africa — is experiencing national breakdowns. By this we mean that the nation-states established by European powers in the 19th and 20th centuries are collapsing into their constituent factions defined by kinship, religion or shifting economic interests. In countries like Libya, Syria and Iraq, we have seen the devolution of the nation-state into factions that war on each other and that cross the increasingly obsolete borders of countries.

This process follows the model of Lebanon in the 1970s and 1980s, when the central government ceased to function and power devolved to warring factions. The key factions could not defeat the others, nor could they themselves be defeated. They were manipulated and supported from the outside, as well as self-supporting. The struggle among these factions erupted into a civil war — one that has quieted but not ended. As power vacuums persist throughout the region, jihadist groups will find space to operate but will be contained in the end by their internal divisions.

This situation cannot be suppressed by outside forces. The amount of force required and the length of deployment would outstrip the capacity of the United States, even if dramatically expanded. Given the situation in other parts of the world, particularly in Russia, the United States can no longer focus exclusively on this region.

At the same time, this evolution, particularly in the Arab states south of Turkey, represents a threat to regional stability. The United States will act to mitigate the threat of particular factions, which will change over time, through the use of limited force. But the United States will not deploy multidivisional forces to the region. At this point, most countries in the area still expect the United States to act as the decisive force even though they witnessed the United States fail in this role in the past decade. Nevertheless, expectations shift more slowly than reality.

As the reality sinks in, it will emerge that, because of its location, only one country has an overriding interest in stabilizing Syria and Iraq, is able to act broadly — again because of its location — and has the means to at least achieve limited success in the region. That country is Turkey. At this point, Turkey is surrounded by conflicts in the Arab world, in the Caucasus and in the Black Sea Basin. But Turkey has avoided taking risks so far.

Turkey will continue to need U.S. involvement for political and military reasons. The United States will oblige, but there will be a price: participation in the containment of Russia. The United States does not expect Turkey to assume a war-fighting role and does not intend one for itself. It does, however, want a degree of cooperation in managing the Black Sea. Turkey will not be ready for a completely independent policy in the Middle East and will pay the price for a U.S. relationship. That price will open the path to extending the containment line to Georgia and Azerbaijan.

We expect the instability in the Arab world to continue through the decade. We also expect Turkey to be drawn in to the south, inasmuch as its fears of fighting so close to its border — and the political outcomes of that fighting — will compel it to get involved. It will intervene as little as possible and as slowly as possible, but it will intervene, and its intervention will eventually increase in size and breadth. Whatever its reluctance, Turkey cannot withstand years of chaos across its border, and there will be no other country to carry the burden. Iran is not in a position geographically or militarily to perform this function, nor is Saudi Arabia. Turkey is likely to try to build shifting coalitions ultimately reaching into North Africa to stabilize the situation. Turkish-Iranian competition will grow with time, but Turkey will keep its options open to work with both Iran and Saudi Arabia as needed. Whatever the dynamic, Turkey will be at the center of it.

This will not be the only region drawing Turkey's attention. As Russia weakens, European influence will begin inching eastward into areas where Turkey has historical interests, such as the northern shore of the Black Sea. We can foresee Turkey projecting its power northward certainly commercially and politically but also potentially in some measured military way. Moreover, as the European Union fragments and individual economies weaken or some nations become oriented toward the East, Turkey will increase its presence in the Balkans as the only remaining power able to do so.

Before this can happen, Turkey must find a domestic political balance. It is both a secular and Muslim country. The current government has attempted to bridge the gap, but in many ways it has tilted away from the secularists, of whom there are many. A new government will certainly emerge over the coming years. This is a permanent fault line in contemporary Turkey. Like many countries, its power will expand in the midst of political uncertainty. Alongside this internal political conflict, the military, intelligence and diplomatic service will need to evolve in size and function during the coming decade. That said, we expect to see an acceleration of Turkey's emergence as a major regional power in the next 10 years.
East Asia

China has ceased to be a high-growth, low-wage economy. As China's economy slows, the process of creating and organizing an economic infrastructure to employ low-wage workers will be incremental. What can be done quickly in a port city takes much longer in the interior. Therefore, China has normalized its economy, as Japan did before it, and as Taiwan and South Korea did in 1997. All massive expansions climax, and the operations of the economies shift.

The problem for China in the next decade are the political and social consequences of that shift. The coastal region has been built on high growth rates and close ties with European and American consumers. As these decline, political and social challenges emerge. At the same time, the expectation that the interior — beyond parts of the more urbanized Yangtze River Delta — will grow as rapidly as the coast is being dashed. The problem for the next decade will be containing these difficulties.

Beijing's growing dictatorial tendencies and an anti-corruption campaign, which is actually Beijing's assertion of its power over all of China, provide an outline of what China would like to see in the next decade. China is following a hybrid path that will centralize political and economic powers, assert Party primacy over the military, and consolidate previously fragmented industries like coal and steel amid the gradual and tepid implementation of market-oriented reforms in state-owned enterprises and in the banking sector. It is highly likely that a dictatorial state coupled with more modest economic expectations will result. However, there is a less likely but still conceivable outcome in which political interests along the coast rebel against Beijing's policy of transferring wealth to the interior to contain political unrest. This is not an unknown pattern in China, and, though we do not see this as the most likely course, it should be kept in mind. Our forecast is the imposition of a communist dictatorship, a high degree of economic and political centralization and increased nationalism.

China cannot easily turn nationalism into active aggression. China's geography makes such actions on land difficult, if not impossible. The only exception might be an attempt to take control of Russia's maritime interests if we are correct and Russia fragments. Here, Japan likely would challenge China. China is building a large number of ships but has little experience in naval warfare and lacks the experienced fleet commanders needed to challenge more experienced navies, including the U.S. Navy.

Japan has the resources to build a significantly larger navy and a more substantial naval tradition. In addition, Japan is heavily dependent on imports of raw materials from Southeast Asia and the Persian Gulf. Right now it depends on the United States to guarantee access. But given that we are forecasting more cautious U.S. involvement in foreign ventures and that the United States is not dependent on imports, the reliability of the United States is in question. Therefore, the Japanese will increase their naval power in the coming years.

Fighting over the minor islands producing low-cost and unprofitable energy will not be the primary issue in the region. Rather, an old three-player game will emerge. Russia, the declining power, will increasingly lose the ability to protect its maritime interests. The Chinese and the Japanese will both be interested in acquiring these and in preventing each other from having them. We forecast this as the central, unsettled issue in the region as Russia declines and Sino-Japanese competition increases.
Post-China Manufacturing Hubs

International capitalism requires a low-wage, high-growth region for high rewards on risk capital. In the 1880s it was the United States, for example. China was the most recent region, replacing Japan. No one country can replace China, but we have noted 16 countries with a total population of about 1.15 billion people where entry-level manufacturing has gone after leaving China.

To identify these countries, we looked at three industries. The first was garment manufacturing, particularly low-end and of garment parts like coat linings. Second was the manufacturing of footwear. Third, we looked at cellphone assembly. These industries require low capital investment, and manufacturers move their facilities around rapidly to take advantage of low wages. Industries of this sort, such as inexpensive toys in Japan, served as a foundation for manufacturing sectors to evolve into broader low-wage products in high demand. The workforce, frequently women at first, expanded dramatically as new low-wage industries moved in. The wages were low on a global scale but very attractive on the local scale.

Like China during its takeoff in the late 1970s, these countries tend to be politically unstable, with uncertain rule of law, poor infrastructure and all of the risks advanced industrial businesses try to avoid. But companies from other countries excel in these environments and have built business models around this.

The map of these countries shows that they are concentrated in the Indian Ocean Basin. Another way to look at it is that these are the less developed countries (or regions) in Asia, East Africa and Latin America. Our forecast is that in this next decade, many of these countries — and perhaps some not identified — will collectively take on the role that China had in the 1980s. This would mean that by the end of the decade, they would be entering an intensifying period of growth in a much wider array of products. Mexico, whose economy exhibits potential in both low-end manufacturing and higher-end industry in a cost-competitive environment, stands to benefit substantially from its northern neighbor's investment and healthy level of consumption.
The United States

The United States continues to make up more than 22 percent of the world's economy. It continues to dominate the world's oceans and has the only significant intercontinental military force. Since 1880, it has been on an uninterrupted expansion of economy and power. Even the Great Depression, in retrospect, is a minor blip. This expansion of power is at the center of the international system, and our forecast is that it will continue unabated.

The greatest advantage the United States has is its insularity. It exports only 9 percent of its GDP, and about 40 percent of that goes to Canada and Mexico. Only about 5 percent of its GDP is exposed to the vagaries of global consumption. Thus, as the uncertainties of Europe, Russia and China mount, even if the United States lost half its exports — an extraordinary amount — it would not be an unmanageable problem.

The United States is also insulated from import constraints. Unlike in 1973, when the Arab oil embargo massively disrupted the U.S. economy, the United States has emerged as a significant energy producer. Although it must import some minerals from outside NAFTA, and it prefers to import some industrial products, it can readily manage without these. This is particularly true as industrial production is increasing in the United States and in Mexico in response to the increasing costs in China and elsewhere.

The Americans also have benefited from global crises. The United States is a haven for global capital, and as capital flight has taken hold of China, Europe and Russia, that money has flowed into the United States, reducing interest rates and buoying equity markets. Therefore, though there is exposure to the banking crisis in Europe, it is nowhere near as substantial as it might have been a decade ago, and capital inflows counterbalance that exposure. As for the perennial fear that China will withdraw its money from American markets, that will happen slowly anyway as China's growth slows and internal investment increases. But a sudden withdrawal is impossible. There is nowhere else to invest money. Certainly the next decade will see fluctuations in U.S. economic growth and markets, but the United Stares remains the stable heart of the international system.

At the same time, the Americans have become less dependent on that system and have encountered many difficulties in managing — and particularly, in pacifying — that system. The United States will become more selective in assuming responsibilities politically in the next decade, and even more selective in military interventions.

For a century, the United States has been concerned about the emergence of a hegemon in Europe, and in particular of either an accommodation between Germany and Russia or a conquest of one by the other. That combination, more than any other, might be able to muster a force — between German capital and technology and Russian resources and manpower — capable of threatening American interests. Therefore, in World War I, World War II and the Cold War, the United States was instrumental in preventing this from occurring.

In the world wars, the United States came in late, and though it absorbed fewer casualties than other countries, it nevertheless suffered more than was comfortable for it. In the Cold War, the United States intervened early and, at least in Europe, had no casualties. Based on this, the United States has a core policy imperative that is almost automatic: When a potential European hegemon arises, the United States will act early, as in the Cold War, in building alliances and deploying sufficient force in primarily defensive positions.

This is happening now against Russia. Though we forecast the decline of Russia, Russia poses danger in the short term, particularly with its back against the wall economically. Moreover, whatever we forecast, the United States cannot be certain that Russia will decline and indeed, if it launches a successful expansionary policy (politically, economically or militarily), it may not decline. Therefore, the United States will take measures according to its imperative. It will try to build an alliance system outside of NATO, from the Baltics to Bulgaria, encompassing as many nations as possible. It will try to involve Turkey in the alliance and have it reach to Azerbaijan. It will deploy forces, proportional to the threat, in those countries.

This will be the primary focus in the early part of the decade. In the second part, Washington will focus on trying to assure that Russia's decline does not result in nuclear disaster. The United States will not become involved in trying to solve Europe's problems, it will not have a war with China, and its involvement in the Middle East will be minimal. It will conduct global counterterrorism operations but will do so with the full knowledge that those operations will be only partially effective at best.

The Americans will have an emerging problem. The United States has 50-year cycles that end with significant economic or social problems. One cycle began in 1932 with the election of Franklin Roosevelt and ended with the presidency of Jimmy Carter. It began with a need to rebuild demand for products from idle factories and ended in vast overconsumption, underinvestment and with double-digit inflation and unemployment. Ronald Reagan's presidency laid the groundwork for restructuring American industry through a change in the tax code and by shifting the focus from the urban industrial worker to the suburban professional and entrepreneur.

We are now about 15 years from the end of this cycle, and the next crisis will make itself felt in the second half of the next decade. It is already visible. It is the crisis of the middle class. The problem is not inequality; the problem is the ability of the middle class to live a middle class life. Currently, the median household income in the United States is about $50,000. Depending on the state you live in, this is actually about $40,000. That allows the literal middle to buy a modest home and live frugally outside major metropolitan areas. For the lower middle class, the 25th percentile, this is almost impossible.

There are two causes. One is the rise of the single-parent household. Having two households is twice as expensive. The other problem is that the same incentives that led to the badly needed re-engineering of the American corporation and vastly improved productivity also limited job security and income for the middle class. This is not a political crisis yet. It will become one toward the end of the next decade, but it will not be addressed until the elections of 2028 and 2032. It is a normal, cyclical crisis, but painful nonetheless.
In Context

There is no decade without pain, and even in the most perfect of times, there is suffering. The crises that we expect in the next decade are far from the worst seen in the past century, and they are no worse than those we will see in the next. There is always the expectation that what we know now as reality will define the future. There is also the belief that our pain now is the most extraordinary anguish that has ever been. This is simply narcissism. What we have now will always change — usually sooner than we believe possible. The pains we are having now are merely the normal pains of being human. This is not a comfort, but a reality, and it is in this context that this decade forecast should be read.

 28 
 on: February 26, 2015, 10:45:57 AM 
Started by Crafty_Dog - Last post by Crafty_Dog
http://www.forbes.com/sites/arleneweintraub/2015/02/24/brain-altering-devices-may-supplant-drugs-and-pharma-is-ok-with-that/

 29 
 on: February 26, 2015, 10:38:11 AM 
Started by Crafty_Dog - Last post by objectivist1
Hilarious - if it weren't so sad:

www.jihadwatch.org/2015/02/fbi-ny-jihadis-violated-the-true-tenants-of-their-faith

 30 
 on: February 26, 2015, 10:36:58 AM 
Started by Crafty_Dog - Last post by Crafty_Dog
If I'm reading correctly, this is hearsay.  Yes?

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