The Next Ten Years – Part I: There will be blood - Eric Janszen

[touchring]

Re: The Next Ten Years – Part I: There will be blood - Eric Janszen

cold war shadow boxing along with hot proxy and peripheral wars are a likely means for allocating those scarce resources. that does not solve the long-term problem of limited resources, agreed. otoh, it gives time for, first, strong resource conservation measures to stretch out the adjustment, and second the development of alternative sources of energy, and alternative goods.

China consumes 1 million more barrel of oil every year. Can a cold war solve this problem? How much oil does the Soviet Union consume at the height of the last Cold War?

There are only 2 possibilities:

1. The US becomes third world.
2. WWIII.

[c1ue]

Re: The Next Ten Years – Part I: There will be blood - Eric Janszen

While I've always been one of the more gloomy participants in iTulip - I have to say that I disagree with the thesis of a World War III.

In my mind, a world war results from a sudden clash due to accumulated tensions between 2 or more extra-national groupings.

WW I was triggered by the assassination of an Arch Duke, but the alliances among and tensions between the 2 sides (Austro-Hungarian Empire + Germany vs. England and France) had long since predicated some outbreak of violence.

Equally WW II was triggered by rising tensions between resurgent fascist Germany and Italy vs. cultural and ideological opposites in England and Russia, while in the Pacific a resurgent Japan was equally opposed by the US.

Today we do not have these types of tensions. Europe has many problems but neither internal militarism nor the WWI/WWII types of tension exists.

Ditto in Asia - there is grave concern by Japan, South Korea, and Taiwan over China, but at least part of this tension is due to US posturing.

There is plenty of economic tension over energy, but it isn't focused by specific blocs. Equally it is impossible for the vast quantities of oil or whatever to be extracted and transported without at least some minimal lack of interference from the local population. Barring a return to Mongol style pacification, of course (kill everyone there).

You can say there is some possibility for warfare due to tension between China and the US - but neither nation can either afford or be able to prosecute a conflict to a successful conclusion (i.e. pacification of the other). At best the result would be a mutual annihilation - not nuclear but economic. I very much doubt even the most moronic and jingoistic military leader in either nation has any illusions about this.

However, I think what EJ perhaps actually envisions is more along the lines of the Revolutions of 1848. The Revolutions of 1848 were a spontaneous but near universal eruption of revolutionary zeal in practically every nation in Europe.

The Revolutions of 2013 won't be due to technological progress in communications, urban worker vs. farmer, guild vs. industry, nobility vs. absolute monarch, etc etc type of tensions. In fact, it is unclear if it will even be a "revolution" in the normal political sense - i.e. an attempt to change the political system. More likely it will be simply an eruption of anger.

"Revolution" in the US will be due to economic tensions: the blue collar worker feeling (and rightly so) betrayed by the white collar management. The technical white collar workers feeling betrayed by the white collar banksters. The general populace feeling betrayed by its regulatory captured politicians. The heavily indebted and unemployed youth feeling betrayed by the entire system. etc etc.

"Revolution" in other nations will be closer to the 1848 model: greater communication, economic divide, access to power, etc etc. What we are seeing in the Middle East and North Africa is a good example: the collapse of autarkic regimes can be directly traced to the end of the Cold War.

Note: 2013 isn't some calculated date, merely a placeholder.

In timing I fully agree with EJ's conclusions.

[touchring]

Re: The Next Ten Years – Part I: There will be blood - Eric Janszen

While I've always been one of the more gloomy participants in iTulip - I have to say that I disagree with the thesis of a World War III.

Of course, I'm not talking about WWIII in the near future.

I know once the Chinese go on the capitalist route, how it will all end. You just have to look at South East Asia, where Chinese are less than 10% of the population but control all of their economies. In time to come, the same will happen to Africa and possibly some Western economies. It may take 30 years or even 40 years, but it is only a matter of time.

[gnk]

Re: The Next Ten Years – Part I: There will be blood - Eric Janszen

China consumes 1 million more barrel of oil every year. Can a cold war solve this problem? How much oil does the Soviet Union consume at the height of the last Cold War?

There are only 2 possibilities:

1. The US becomes third world.
2. WWIII.

The US has less than 5% of the world's population, yet consumes over 20% of the energy. That is ending, and with it, everything else that comes with that kind of consumption - it's mind boggling to try to comprehend how every facet of life is affected with a certain level of energy consumption. No war can maintain that lifestyle. War can only speed up the simplification of a civilization... the speed of the unraveling.

I live in Greece now, and when friends discuss the current crisis, I just tell them it's irrelevant. Bigger changes are coming that will make today's problems look tame by comparison. I'm actually working on starting my farm now. I may be years early, but this is not the kind of event you want to be late preparing for.

[Sutter Cane]

Re: The Next Ten Years – Part I: There will be blood - Eric Janszen

There are only 2 possibilities:

1. The US becomes third world.
2. WWIII.

These possibilities are not mutually exclusive. Worst case scenario is both. I tend to think #1 is happening regardless, but maybe we can avoid #2 along the way. If not, WWIII would definitely speed possibility #1 along.

[touchring]

Re: The Next Ten Years – Part I: There will be blood - Eric Janszen

These possibilities are not mutually exclusive. Worst case scenario is both. I tend to think #1 is happening regardless, but maybe we can avoid #2 along the way. If not, WWIII would definitely speed possibility #1 along.

Provided technological advances are quick enough to solve the limited energy problem. And it's not just China, but also India, and other rapidly developing countries. Everyone wants to live the Western lifestyle. I've always said that this is zero sum game.

But even if the energy factor is solved, there's still the Israel problem. Friendly diplomatic and trading ties between China and Persia dates back to even before they became Muslims. If China rises, Persia will probably rise along. That will be to the detriment of Israel, and unless the Jews are willing to move to Texas or some Israel like land the US can provide, and also ship over the holy monuments, there will be trouble to come within the next couple of decades.

I live in Greece now, and when friends discuss the current crisis, I just tell them it's irrelevant. Bigger changes are coming that will make today's problems look tame by comparison. I'm actually working on starting my farm now. I may be years early, but this is not the kind of event you want to be late preparing for.

I agree, I thought as well that the greatest problem is not economic but famine. The weather has gone nuts, either no rain or too much rain. Harvests throughout the world are failing. Poor countries face the threat of famine. All the coal burning, release of toxins into the seas and pollution is scrweing up the weather.

America does have the advantage here, having a huge food surplus.

[Sharky]

Re: The Next Ten Years – Part I: There will be blood - Eric Janszen

WW I was triggered by the assassination of an Arch Duke, but the alliances among and tensions between the 2 sides (Austro-Hungarian Empire + Germany vs. England and France) had long since predicated some outbreak of violence.

Equally WW II was triggered by rising tensions between resurgent fascist Germany and Italy vs. cultural and ideological opposites in England and Russia, while in the Pacific a resurgent Japan was equally opposed by the US.

Today we do not have these types of tensions. Europe has many problems but neither internal militarism nor the WWI/WWII types of tension exists.

What about Israel? Or North Korea? Or India vs. Pakistan? All of which are now nuclear armed. What will happen when Iran has nukes?

If China ever makes a move militarily, Taiwan seems like a possible target/goal -- perhaps preceded by some other territorial issue. Historically, China has made it clear that it does not accept Taiwan as a separate, independent entity.

The issue of the Islamic occupation of Europe is also interesting. If there's a big flare-up in the Mideast, the consequences in Europe would likely be significant.

Food is another area of possible conflict. A large-scale famine by a nuclear armed country could easily provoke desperate measures. Nuclear blackmail only works when there's enough resources to go around.

[bart]

Re: The Next Ten Years – Part I: There will be blood - Eric Janszen

...
Proposed emergency policies included buying long dated government bonds to “shape the yield curve,” known as government bond price fixing in less polite circles.
...

I submit that government bond price fixing has been going on for years, although it has grown substantially since about 2007, via the Fed's Securities Lending Operation ( http://www.ny.frb.org/markets/seclend/sec_lendop.cfm ).


Something of mine from 2007: Securities Lending, tinfoil hat mode




The portion applying to the 10 year Treasury, last 10 months:

[Alvaro Spain]

Re: The Next Ten Years – Part I: There will be blood - Eric Janszen

So the military-industrial complex would be one of the "investment sectors"? Welcome back Daddy Warbucks -- if you ever indeed left.....

Certainly if we see any serious mobilization, we are on the cusp. I can not recall a situation when there has been a mass mobilization and those forces have *not* been used.

THE sector to invest if there is a major war, in my opinion, is anti-depressants.

[c1ue]

Re: The Next Ten Years – Part I: There will be blood - Eric Janszen

What about Israel? Or North Korea? Or India vs. Pakistan? All of which are now nuclear armed. What will happen when Iran has nukes?

Israel and North Korea are far too small to generate a World War.

While you might say Israel has the US behind it - who is behind Israel's opponents? Where is the opposing industrial might? Can Israel in turn conquer even more territory in the ME?

North Korea: no friends. China uses NK but NK can't rely on anyone except ironically its own partitioned off southern portion.

Pakistan and India: more credible - but again who is helping who? Where are the alliances by which Pakistan and India will draw the rest of the world into a greater conflict? And how can a greater conflict occur with nuclear weapons available to all participants - thus threatening force projection such as an outsider like the US (carrier fleets) or China (Himalayan logistics/traverse routes)?

As for Iran: again where are the other participants? Do you think Iran can conquer the ex-Soviet Central Asian States given Russia's re-extension of influence there? Can Iran attack Iraq or Saudi Arabia again without explicit permission from other powers? Can Iran successful invade Afghanistan or march on through to Pakistan despite historical ethnic and cultural differences?

The reality is that while there are plenty of places where ethnic tensions exist - there aren't any places where gigantic opposing forces are engaged in a tug of war as could be seen pre WW I or WW II.

The primary aggressor today is the United States. Barring an invasion of Mexico or Canada - neither of which is economically useful, only 3rd world nations can be safely attacked.

Hardly the recipe for massive world wide conflict.

Unless, of course, the US is able to re-institute the draft.

If China ever makes a move militarily, Taiwan seems like a possible target/goal -- perhaps preceded by some other territorial issue. Historically, China has made it clear that it does not accept Taiwan as a separate, independent entity.

China has no interest whatsoever in invading Taiwan. Taiwan is a red flag issue to distract its youth; China is already reaping most of the benefits of Taiwanese capital and technology.

The issue of the Islamic occupation of Europe is also interesting. If there's a big flare-up in the Mideast, the consequences in Europe would likely be significant.

This is more amusing fantasy. The entire Middle East and North Africa has less than the population of the EU, and this population is far poorer and poorly armed. This ignores the impossibility of combining Saudi Arabia, Iran, Iraq, Egypt, Sudan, Turkey, Syria, etc into a single political entity: a mixture of fantastically different ethnicities, cultures, politics, and even religious sects.

Food is another area of possible conflict. A large-scale famine by a nuclear armed country could easily provoke desperate measures. Nuclear blackmail only works when there's enough resources to go around.

Right - so how exactly does a nation fight a ground war and acquire lands on which it is able to grow lots of food?

If pipelines are vulnerable, how much more vulnerable are fields of wheat, silos, feed lots, etc?

Unless you can demonstrate that some nation - any nation - is willing and able to exterminate the entire population of a large region, the idea of fighting a war for food is ridiculous.

Wars are fought for many reasons - I cannot offhand recall a single instance where one was fought for food. Why didn't the Irish attack England during the potato famine? Why didn't China successfully invade Vietnam during its 1958-1961 famine? (The Sino-Vietnamese war wasn't until 1979)

Wars can bring famine, but not the other way around.

[Jay]

Re: The Next Ten Years – Part I: There will be blood - Eric Janszen

I submit that government bond price fixing has been going on for years, although it has grown substantially since about 2007, via the Fed's Securities Lending Operation ( http://www.ny.frb.org/markets/seclend/sec_lendop.cfm ).


Something of mine from 2007: Securities Lending, tinfoil hat mode




The portion applying to the 10 year Treasury, last 10 months:

Bart, fantastic chart and apropos!! Then again, what else should we expect?

EJ, I must confess, it has secretly annoyed me that you weren't a "three" years ago, but I always ascribed that to public face necessities (and the fact that I felt that you are a bit more optimistic than me) and gave you a pass because your stuff is so damn original and solid. This article is finally a bit more realistic. In fact, now that you are "here", I wonder if it is a contrarian signal and that we are going to get a bump for the next few years!

I still feel that your statement that the US middle class will look a lot like the Mexican middle class is very accurate. I just read, Murder City, which is about drug murders and what is left of civil life in Juarez, Mexico, and I hope to god you are wrong on the fate of the American middle class, because Juarez is a "one" on the doomer scale. That book drips with blood and feels like it will light on fire at times (in fact, I recommend no one read it, even as well as it is written. It is like reading Treblinka before WWII in some ways, yikes!) Unfortunately, I bought that sentiment then, and I buy it just as much now. I wonder if I made a mistake not focusing on moving to New Zealand instead of staying put with my family in the US.

Lastly, I will just say that building a war machine is a tremendous inflation sink. Think about it.

Thanks for the article as always.

[flintlock]

Re: The Next Ten Years – Part I: There will be blood - Eric Janszen

Such low expectations!

I think it can traced to three articles by EJ. His first one about the 2008 election, in which he pointed out every candidate but two (Ron Paul and Dennis Kucinich) were FIREmen.....A short time later, he shocked the world and 'endorsed' Obama....And when Scott Brown won in January 2010 he thought that it was a sign of a political awakening. Here we are some 16 months later and how can you come to any other conclusion than that we're fucked?

Yes, give any wise man enough time, he'll see it. The biggest obstacle for most , smart or not, is having a mind open to the possibilities. Some refuse to let their minds go down that path. Like my Dad for instance, he seems to think that if nothing of the sort has happened so far in his lifetime, that it probably won't. 78 years is a lot of life experience, sure, but it pales when compared to history in general. Nothing wrong with being optimistic, but the writing is on the wall. The real question now is just how fucked we are. And how soon.

[flintlock]

Re: The Next Ten Years – Part I: There will be blood - Eric Janszen

I'm not necessarily in the WWIII camp either. At least not in the traditional sense. But the proxy wars will heat up for sure, something we are already seeing. But way down the line, sure, it could happen.

[bart]

Re: The Next Ten Years – Part I: There will be blood - Eric Janszen

Bart, fantastic chart and apropos

Thanks Jay, much appreciated.

I forgot to add in my post that EJ's work is indeed truly epic - probably in the top 3 of all time on iTulip, serious stones enabled too.

I very generally agree with it all, although my guesstimate involves a shorter time line and a few nuances.

THE sector to invest if there is a major war, in my opinion, is anti-depressants.

[touchring]

Re: The Next Ten Years – Part I: There will be blood - Eric Janszen

I'm not necessarily in the WWIII camp either. At least not in the traditional sense. But the proxy wars will heat up for sure, something we are already seeing. But way down the line, sure, it could happen.

WWIII can be avoided this century if China becomes a democracy. This will ensure that the interest of the people and the government are fully aligned.

Although democracy didn't help post-Meiji rising Japan avoid war, China doesn't have a warrior or veteran culture, no one wants to be a soldier, everyone wants to be a millionaire businessman.