This morning's key headlines from GenerationalDynamics.com

• State Dept. orders evacuations of Americans out of Tunisia and Sudan
• Libyan officials say that the Benghazi attack was very well planned
• Huge Anti-Japan protests spread across China, turn violent
• Japanese do not believe that U.S. will support them over Senkaku islands
• China's non-Communist parties condemn Japan's Senkaku/Diaoyu policy
• New Fed quantitative easing program unlikely to affect anything

State Dept. orders evacuations of Americans out of Tunisia and Sudan

Libyans hold signs on Friday to express sympathy for Americans killed (AP)

The State Department on Saturday ordered the departure of all family members and non-essential U.S. government personnel from its embassies in Sudan and Tunisia and warned U.S. citizens against any travel to the two countries due to security concerns over rising anti-American violence. Saturday is the fifth day of anti-American protests in some 20 countries in the Mideast and beyond. AP and State Dept. (re Tunisia) and State Dept. (re Sudan)

Libyan officials say that the Benghazi attack was very well planned

Libyan officials believe that Tuesday's attack on the US consulate in Benghazi, killing US ambassador Chris Stevens, was planned, "meticulously executed" and may have involved foreign elements. According to Libya's General National Congress president Mohammed al-Megaryef:

"There was planning. It was not a peaceful protest which degenerated into an armed attack or aggression. That's how it was planned.

[The attack] was prepared, especially since it coincided with the date of September 11.

There are non-Libyan elements on Libyan soil and they plan to carry out their own agendas on our territory.

The attack itself and the manner in which the attack occurred... confirms that this was planned and programmed to achieve a purpose.

I do not exclude discovering things that will link Al Qaeda and the US consulate attack."

US military and intelligence agencies have launched an elaborate manhunt in Libya against the militants suspected of staging the most serious assault on an American diplomatic mission in decades.

Early indications are that the attack was carried out not by the main al-Qaida terror group but "al-Qaida sympathizers." A leading suspect is the Libyan-based Islamic militant group Ansar al-Shariah, led by former Guantanamo detainee Sufyan bin Qumu. Australian Broadcasting and AP

Huge Anti-Japan protests spread across China, turn violent

Chinese paramilitary police try to prevent demonstrators from breaking through a fence set up outside the Japanese Embassy in Beijing (AP)

In the largest anti-Japan protests since China and Japan normalized diplomatic ties in 1972, more than 70,000 Chinese staged rallies Saturday in at least 28 cities to demand that Japan surrender the Senkaku/Diaoyu islands to China. The largest demonstration, in Qingdao, Shandong Province, attracted as many as 30,000 people and evolved into rioting as protestors torched as many as 10 Japanese enterprises, including a Panasonic factory. In Beijing, police deployed more than 100 officers as well as 100 vehicles around the Japanese Embassy to prevent protesters from taking violent action. But clashes ensued as an estimated 1,000 protestors busted barricades, blocked traffic and hurled plastic bottles and eggs onto the embassy grounds. Carrying Chinese flags, they chanted "Protect the Diaoyu Islands" and "Slap economic sanctions on Japan." When there are protests against China's government, the Chinese security forces clamp down hard, but these rallies appeared to have the tacit approval of Chinese authorities. Japan Times

Japanese do not believe that U.S. will support them over Senkaku islands

Although the United States is nominally committed to supporting Japan in a confrontation over the Senkaku/Diaoyu islands, according to the terms of a 1960 defense treaty, many Japanese do not believe that America will honor that commitment. According to one Japanese analyst:

"There is a perception in Japan that the U.S. commitment is ambiguous. If China thinks Japan will hesitate to respond or that America will hesitate, that will embolden the Chinese. It’s better that America sends a clear, explicit message now than have to respond to something worse later.

If Japan loses the islands and the U.S. doesn’t come to aid Japan, the credibility of not only the U.S. alliance with Japan but of all U.S. alliances globally would be severely harmed."

This last sentence is extremely significant. The U.S. has defense treaties with Japan, South Korea, Taiwan, Australia and New Zealand (ANZUS treaty), Israel, Europe, Iceland, and others. All of these countries have cut back on their own military in the last 65 years because they've counted on U.S. protection. If the U.S. repudiated its treaty commitment to Japan, then every one of these other countries would go into total panic, with disastrous geopolitical consequences. Time

China's non-Communist parties condemn Japan's Senkaku/Diaoyu policy

China's non-Communist parties on Saturday released a joint statement expressing strong indignation over, and condemnation of, Japan's "purchase" of the Senkaku/Diaoyu Islands. What fascinated me about this story is that I thought all non-Communist parties in China were against the law, so imagine my surprise that here's a bunch of them issuing a statement. The statement was issued by the central committees of:

• The Revolutionary Committee of the Chinese Kuomintang
• Chinese Democratic League
• China National Democratic Construction Association
• China Association for Promoting Democracy
• Chinese Peasants and Workers Democratic Party
• China Zhi Gong Party
• Jiu San Society
• Taiwan Democratic Self-Government League.

According to the statement:

"China's non-Communist parties voice strong indignation over and rigorously condemn the move.

Most non-Communist parties were born during the time of war against Japan's invasion (in the 1930s and '40s). Having had fought for the Chinese nation's independence and liberation, these parties, traditionally being patriotic and peace-loving, are staunch guards of the nation's territorial sovereignty," the statement added.

The Chinese nation is peace-loving, so are its people. China has no intention to impinge on other countries' territorial sovereignty, but will not tolerate any infringement on its own sovereignty by other countries. Long gone is the time when the Chinese nation was bullied by others.

If the Japanese government underestimates Chinese people's determination, courage or strength, it would be a miscalculation and they are doomed to fail."

Xinhua

New Fed quantitative easing program unlikely to affect anything

The massive new quantitative easing program (QE3) announced by Fed chairman Ben Bernanke is unlikely to have any effect whatsoever, based on the result of a survey of nearly 1,500 CFOs from a broad range of public and private companies. The survey was conducted jointly by CFO Magazine (where I used to be the Technology Editor) and Duke University. The QE3 program is supposed to make it easier for banks to lend money to businesses at lower interest rates, so that businesses will use the money ton invest and create jobs. The main finding is this:

"U.S. finance chiefs say that interest rate reductions of 1 or 2 percentage points would not alter their capital spending plans, indicating that potential monetary policy actions by the Federal Reserve are unlikely to spur the corporate sector to action."

The report showed that 91% of the 1,500 CFOs polled wouldn’t bolster their spending plans even if the Fed’s programs successfully lowered interest rates by one percentage point. And 84% said a two-point reduction in rates wouldn’t change their spending plans either. According to a finance professor at Duke, "The survey paints a stark picture. In current circumstances, lower interest rates will not spur investment. The potential QE3 is doomed."

The irony is that Ben Bernanke made his reputation based on his research that "proved" that the 1930s Great Depression could have been avoided if the Fed at that time had lowered interest rates by a small amount. This finding has now been totally disproved, as Generational Dynamics predicted years ago, and now Bernanke is in a state of total panic, hoping against hope for a miracle. Fox Business and CFO Survey Press Release (PDF)


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