Author: Aylin D. Miller

  • Too Big to Fail Or Too Big to Save?

    Too Big to Fail Or Too Big to Save?

    We now have two economic and political philosophies dominating the agenda in Washington.
    The first chaired by John M Keynes and championed by FDR are now known as Keynesians. Their valid point is that when business falters; the government should step in and create jobs so that the money flows from the poor to the top or wealthy. This can done by primarily taxing the more affluent segment of our society, or redistribution of the wealth. The problem here is that this stimulates tax avoidance schemes that show little improvement to the economy and cuts back on needed revenues over time. The Social Security and Medicare programs are now teetering on insolvency. Instead of refining it, politicians have bastardized it beyond recognition. One politician once remarked to me “If FDR knew what LBJ is doing he would be spinning in his grave.”

    The monetarist headed by Milton Freedman and championed by Ronald Reagan, believe is less government interference, lower taxes and more business freedom. In this case the wealthy eagerly invested their monies and new research begat new inventions. 100 years of inventions and progress has been compressed into 10 years. Products that we enjoy today were not around 10 years ago.
    The main problem here is that we did not appoint any umpires or inspector generals to hold back certain greedy individuals that would create many bubbles that are bursting among us today
    Following the old rules will simply foster the “Too big to Fail” syndrome will rack future havoc on our societies as well as the present.

    Our politicians are eager for as showdown battle. This could be an epic struggle for glory and fame, but as in the clash of all battles – the public loses. As this battle unfolds there will probably be more burst of bubbles.

    Right now everyone in Washington is throwing around trillions of dollars on pet projects and ensuing and assuring reelection at the public expenses. We should have term limits of say 12 years and that would curtail the hedonistic atmosphere that prevails in our Congress today. If a Congressman knew they had term limits they would consider it a badge of honor to serve the public. Members would be able to say “calm down” and not let tings get out of hand. Everyone wins. Term limits could be set up by drawing straws. I believe this would entice greater sense of responsibility among our public representatives.
    Our problem today is that the public is tapped out and so are our governments. This is true of most world economies I believe. Who is going to buy our debt? Why bid on a billion bonds when you know there will be another billion coming down the road at a higher rate?

    I received an answer to this question through my email. At first I thought it was a joke, but I started thinking about it. Our economy is the largest in the world by sheer size. You have to combine the next four largest just to equal ours. Europe and Asia depend upon us. So here was the answer in the email. Take the 100 trillion dollars and instead of bailing out the greedy people, divide the trillion dollars among United States citizens. A 100 trillion divided by our population, approximately 304 million comes out to a little over $328,947.37 for every individual. There would be some provisos. First they would have to promise to pay down their debts. Mortgages and credit cards and only allow debit cards thereafter. Free cash must be deposited in a bank and any purchases would be made for cash. No borrowing. Then they would be expected to pay their fair share of income tax. No Tim Geithner here. Anyone convicted of tax fraud faces 10 years jail term and funds and trust held by the entire family will be confiscated. Only the slimiest individuals would put their kids at risk.

    This would also encourage other governments to spread their wealth around. Taxes would have to be paid and banks would have to invest and they must put a certain portion into the newly issued government bonds. States and local communities could decide where and what projects to invest in. with local banks lending the funds.

    It is much easier to watch a local business spend your tax dollars efficiently that watching the federal government. The simple fact is that there are less people to watch!

    Now after the wealth has been distributed, much business will become solvent and healthy. Others that showed a lack of leadership will probably die on the vine. There will be many more to assume the leadership and lessons so generations will be learned.

    During the Panic of 1907 JP Morgan instructed all the NYC bankers to give him their books by Friday and on Monday morning he would tell the presidents who was solvent, who would merge and who was worthless. The Knickerbocker Trust was deemed worthless. It was at that time the nation’s oldest bank. Everyone did as he said without a peep. That was real power and respect.
    So “Too big to Fail” has no historical precedent along with “Too big to save”. Sometimes the market place does the governments work. Xerox is reported to have turned down the personal computer because it would compete with their copying machine. IBM downgraded their person computer for years because their main frame was the big money earner.

    My point is that if we start bailing out large inefficient corporations then this country could end up wallowing in non performing bureaucratic cesspools.
    We are destined to become the economic and political power of the 21st century, but first we must show the world we are internally strong and can make self sacrifices in order to improve the common good.
    Once all debts paid down then the recipients can figure out how much taxes they owe. Then they are free to spend it what ever way they want. This will provide new orders for varied businesses and really jump start the economy for it will produce honest demand.
    Then the US Government can put out for bid 100 trillion dollars of bonds with varied maturities and the savings banks will be ready buyers in order to pay their depositors. Instead of facing a prospect of bidders wanted we will probably face the welcomed problem of allotted the issues that that there is an equal distribution
    During biblical times the slaves were individuals who could not pay back their debts so they had to work them off. It is better than having illegal usury rates.
    This process would instantly halt deflation, but inflation is farther away since goods will be purchased at the cheapest price.
    Large corporations will have to start making sure that their pipeline is full with orders. Those depending upon large orders might someday find their pipeline is empty because they did not cultivate the smaller growing accounts. A nickel can be a dime; a dime can be a quarter etc,
    One sign of a market top is when financial institutions cater to Wealth Management accounts only. The little guy is the seed that NEEDS TO BE PLANTED.
    In order to create a MORE stable form of government we must not bail out the greedy. Their demise will be tragic lessons for future generations. We must also set up a global reorganization of security laws to protect the investor. Countries that do not endorse these safeguards will have be allowed to our markets. This includes their citizens.
    Countries that renege of corporate contracts will eventually have armed aggression. Countries that trade among each other fairly should have a hard time declaring war on each other since the person public pocket book is involved. One does not want to cut off its family food supply.
    So the redistribution of wealth can be done more easily, honestly, and quickly by Congress authorizing the distribution of a $100,000,000.000 among the US citizens who speak English.
    We should have a public program free of charge or how to protect your wealth from unscrupulous money changers.
    You might laugh at the 100 trillion figure, but if we let our Congress run wild with THEIR pet projects we will be at that figure in just a few years and our currency will be debased and gold will have risen beyond even the most optimistic price,
    If you agree with me email this letter to your Congress person and Senator. I am emailing this also to the Federal Reserve because I know they run a tight ship. A few months ago I emailed about the “Uptick Rule” to the SEC and the Federal Reserve. Within a day I had an answer from the Federal Reserve. I have yet to hear from the SEC.
    Cheerio!!!

    Richard C De Graff
    256 Ashford Road
    Eastford Ct 06242
    860-522-7171 Main Office
    800-821-6665 Watts
    860-315-7413 Home/Office
    [email protected] 1/21/2009 12:22:56 PM

    This report has been prepared from original sources and data which we believe reliable but we make no representation to its accuracy or completeness. Coburn & Meredith Inc. its subsidiaries and or officers may from time to time acquire, hold, sell a position discussed in this publications, and we may act as principal for our own account or as agent for both the buyer and seller.

  • Chief of Poland’s General Staff: “Nagorno Karabakh conflict can be settled only in the framework of the territorial integrity of Azerbaijan”

    Chief of Poland’s General Staff: “Nagorno Karabakh conflict can be settled only in the framework of the territorial integrity of Azerbaijan”

    On January 23 Azerbaijani Defense Minister Safar Abiyev received chief of the General Staff of the armed forces of Poland, general Franchishek Gagor, said the press service for the Defense Ministry of Azerbaijan.

    As is reported, the meeting was attended by Poland’s ambassador to Azerbaijan Kshishtof Krayevski. (more…)

  • Freed by U.S., Saudi Becomes a Qaeda Chief

    Freed by U.S., Saudi Becomes a Qaeda Chief

    Freed by U.S., Saudi Becomes a Qaeda Chief

    Published: January 22, 2009

    BEIRUT, Lebanon — The emergence of a former Guantánamo Bay detainee as the deputy leader of Al Qaeda’s Yemeni branch has underscored the potential complications in carrying out the executive order President Obama signed Thursday that the detention center be shut down within a year.


    Related

    The Guantánamo Docket: Said Ali al-Shihri

    The militant, Said Ali al-Shihri, is suspected of involvement in a deadly bombing of the United States Embassy in Yemen’s capital, Sana, in September. He was released to Saudi Arabia in 2007 and passed through a Saudi rehabilitation program for former jihadists before resurfacing with Al Qaeda in Yemen.

    His status was announced in an Internet statement by the militant group and was confirmed by an American counterterrorism official.

    “They’re one and the same guy,” said the official, who insisted on anonymity because he was discussing an intelligence analysis. “He returned to Saudi Arabia in 2007, but his movements to Yemen remain unclear.”

    The development came as Republican legislators criticized the plan to close the Guantánamo Bay, Cuba, detention camp in the absence of any measures for dealing with current detainees. But it also helps explain why the new administration wants to move cautiously, taking time to work out a plan to cope with the complications.

    Almost half the camp’s remaining detainees are Yemenis, and efforts to repatriate them depend in part on the creation of a Yemeni rehabilitation program — partly financed by the United States — similar to the Saudi one. Saudi Arabia has claimed that no graduate of its program has returned to terrorism.

    “The lesson here is, whoever receives former Guantánamo detainees needs to keep a close eye on them,” the American official said.

    Although the Pentagon has said that dozens of released Guantánamo detainees have “returned to the fight,” its claim is difficult to document, and has been met with skepticism. In any case, few of the former detainees, if any, are thought to have become leaders of a major terrorist organization like Al Qaeda in Yemen, a mostly homegrown group that experts say has been reinforced by foreign fighters.

    Long considered a haven for jihadists, Yemen, a desperately poor country in the southern corner of the Arabian Peninsula, has witnessed a rising number of attacks over the past year. American officials say they suspect that Mr. Shihri may have been involved in the car bombings outside the American Embassy in Sana last September that killed 16 people, including six attackers.

    In the Internet statement, Al Qaeda in Yemen identified its new deputy leader as Abu Sayyaf al-Shihri, saying he returned from Guantánamo to his native Saudi Arabia and then traveled to Yemen “more than 10 months ago.” That corresponds roughly to the return of Mr. Shihri, a Saudi who was released from Guantánamo in November 2007. Abu Sayyaf is a nom de guerre, commonly used by jihadists in place of their real name or first name.

    A Saudi security official, speaking on the condition of anonymity, said Mr. Shihri had disappeared from his home in Saudi Arabia last year after finishing the rehabilitation program.

    A Yemeni journalist who interviewed Al Qaeda’s leaders in Yemen last year, Abdulela Shaya, confirmed Thursday that the deputy leader was indeed Mr. Shihri, the former Guantánamo detainee. Mr. Shaya, in a phone interview, said Mr. Shihri had described to him his journey from Cuba to Yemen and supplied his Guantánamo detention number, 372. That is the correct number, Pentagon documents show.

    “It seems certain from all the sources we have that this is the same individual who was released from Guantánamo in 2007,” said Gregory Johnsen, a terrorism analyst and the editor of a forthcoming book, “Islam and Insurgency in Yemen.”

    Mr. Shihri, 35, trained in urban warfare tactics at a camp north of Kabul, Afghanistan, according to documents released by the Pentagon as part of his Guantánamo dossier. Two weeks after the terrorist attacks of Sept. 11, 2001, he traveled to Afghanistan via Bahrain and Pakistan, and he later told American investigators that his intention was to do relief work, the documents say. He was wounded in an airstrike and spent a month and a half recovering in a hospital in Pakistan.

    The documents state that Mr. Shihri met with a group of “extremists” in Iran and helped them get into Afghanistan. They also say he was accused of trying to arrange the assassination of a writer, in accordance with a fatwa, or religious order, issued by an extremist cleric.

    However, under a heading describing reasons for Mr. Shihri’s possible release from Guantánamo, the documents say he claimed that he traveled to Iran “to purchase carpets for his store” in Saudi Arabia. They also say that he denied knowledge of any terrorists or terrorist activities, and that he “related that if released, he would like to return to Riyadh, Saudi Arabia, wherein he would reunite with his family.”

    “The detainee stated he would attempt to work at his family’s furniture store if it is still in business,” the documents say.

    The Yemeni branch of Al Qaeda has carried out a number of terrorist attacks over the past year, culminating in the assault on the American Embassy in Sana on Sept. 16. In that assault, the attackers disguised themselves as Yemeni policemen and detonated two car bombs. The group has also begun releasing sophisticated Internet material, in what appears to be a bid to gain more recruits.

    Yemen began cooperating with the United States on counterterrorism activities in late 2001. But the partnership has been a troubled one, with American officials accusing Yemen of paroling dangerous terrorists, including some who were wanted in the United States. Some high-level terrorism suspects have also mysteriously escaped from Yemeni jails. The disagreements and security lapses have complicated efforts to repatriate the 100 or so Yemenis remaining in Guantánamo.

    Despite some notable Yemeni successes in fighting terrorist groups, Al Qaeda in Yemen appears to be gaining strength.

    “They are bringing Saudi fighters in, and they want to start to use Yemen as a base for attacks throughout region, including Saudi Arabia and the Horn of Africa,” said Mr. Johnsen, an expert on Al Qaeda in Yemen.

    Eric Schmitt contributed reporting from Washington; Khalid al-Hammadi from Sana, Yemen; and Muhammad al-Milfy from Beirut.

  • LONDON : ‘TURKISH – ARMENIAN RELATIONS’

    LONDON : ‘TURKISH – ARMENIAN RELATIONS’

    You are kindly invited to attend an evening conference entitled

    ‘TURKISH – ARMENIAN RELATIONS’
    Friday, 30th January 2009, 6 pm for 6.45pm*
    Refreshments available from 6 pm in the Senior Dining Room
    (Located in the Old Building, 5th Floor, opposite the East Building)
    New Theatre
    E171 East Building
    London School of Economics
    Houghton Street
    London WC2A 2AE
    GUEST SPEAKERS
    Prof. Jeremy Salt

    The ‘Armenian Question’ 1878-1918: a Counter-Narrative

    ‘Somewhere between three and four million Ottoman civilians are thought to have died during the First World War. The causes of death of both Muslims and Christians – massacre, malnutrition, exposure and disease – were the same for all but while the suffering of Christians, and especially the Armenians, has been firmly embedded in the western historical, political and cultural mainstream, the fate of the Muslims, nearly a century later, remains invisible and unexamined. The need is long overdue for deconstruction and recontextualisation of the ‘Armenian question’. This talk will look at some of the issues involved’.

    The Ottoman archives remain largely unconsulted. When so much is missing from the fundamental source material, no historical narrative can be called complete and no conclusions can be called balanced.” Jeremy Salt

    Sükrü Server Aya
    Globalization of Ethical and Humane Values

    The theme of the speaker is the huge distortion of information distributed by press and TV media, causing misjudgements for many incidents of the past and present. The speaker gives a few examples from the past and present and stresses the importance of a ‘global understanding and agreement of the same humane and ethical values’ for a happier peaceful future!

    “This study may be interpreted as a token for humane values, common to all, such as decency, not lying – cheating – swindling – stealing – slandering etc. and promotes the need for trust, compassion, respect for other humans, disregarding their ethnicity, nationality or faiths, beyond their control or personal preferences!” Sukru S. Aya
    Chaired By
    Prof. Belma Baskett
    The Way Forward
    This conference has been organised in the memory of 34 Turkish diplomats and other innocent victims who were murdered by various Armenian terrorist groups, while serving abroad between 1973 and 1994 and whose only crime was being born ‘Turkish’.
    Most of the perpetrators have never been brought to justice, of the few that were,
    only some were imprisoned and given very light sentences.
    Non – Members Welcome
    Attendance is free but by registration only.  Please register by 28th January at [email protected]
    or telephone 07788 908 803
    *6.00 pm Refreshments (Senior Dining Room, Old Building, 5th Floor, opposite the East Building)
    6.45 pm Conference (New Theatre – E171 East Building)
    Organised by
    THE FEDERATION OF TURKISH ASSOCIATIONS UK
    www.turkishfederationuk.com
    LSE CONFERENCE GUEST SPEAKERS

    Prof Jeremy Salt: Jeremy Salt runs courses on the modern Middle East and media and propaganda in the Department of Political Science at Bilkent University, Ankara.  He has taught at the University of Melbourne, where he took his PhD in Middle Eastern studies, and Boğazici (Bosphorus) University in Istanbul.   His publications include Imperialism, Evangelism and the Ottoman Armenians 1878-1896 (Frank Cass, London, 1993), a study of the involvement of foreign governments and missionary organizations in the development of the ‘Armenian question’ in the late 19th century.   He also writes on the politics of the modern Middle East, with an emphasis on the Palestinian-Israeli conflict. The Unmaking of the Middle East. A History of Western Disorder in Arab LandsHe (University of California Press, July 2008) studies the involvement of the ‘West’ in the Middle East over the past two centuries.  Journals in which his articles have appeared include The Muslim World, Current History, Middle Eastern Studies, Journal of Palestine Studies, Third World Quarterly and the International Journal of Turkish Studies.

    Şükrü Server Aya: Born in 1930, he has been living in Istanbul since 1939. He is a graduate of the reputed Robert College founded in 1863 by Protestant Missionaries, now Bogazici University. After two years in engineering school, he had to quit and work abroad to support his family, he returned after two years of work with a Dutch and Swiss Company, and graduated in 1953 with a BA in Literature instead of Mechanical Engineering. By profession, he was an importer-distributor of engine rebuilding machinery and shop equipment and has been a globetrotter on business and pleasure visiting nearly all industrial countries. He had and has many friends of Armenian ethnicity and after 1985, being a fair history reader, started to read on the Turkish – Armenian history, in which his graduating school was instrumental in the past.  In 2004, after a biased article was published in National Geographic Magazine, he started to put together various excerpts from mainly anti-Turkish English readings. His book “The Genocide of Truth” was presented in Istanbul in April 2008 as a publication of Istanbul Commerce University and has been distributed for free, mostly overseas.  A shortened Turkish version of the same book was just presented in Istanbul in mid January 2009 under the title “Genocide Traders and Truth”.


    Chair: Prof. Belma Ötüş Baskett : Born in Istanbul and educated at Robert College, Istanbul; Faculty of Languages, Ankara University; University of California, Berkeley, has degrees in B.S., Honors Diploma, MA, PhD. Lecturer for 23 years at Middle East Technical University, Ankara; Michigan University(12 years), Visiting Prof. at University of Pittsburgh, Kansai Gakuin University and Kobe College, Japan; Bilkent University, Ankara; University of Surrey at Roehampton for 2 years. She has written and translated many books as well as monographs; Editor of Ufuk magazine and Turkish Area Studies Review, has more than 60 articles published in Turkey, USA, UK, Austria and Spain. President of International Society for Contemporary Literature and Theatre.
  • Gaza op strains financial ties with Turkey

    Gaza op strains financial ties with Turkey

    https://www.ynetnews.com/articles/0,7340,L-3659765,00.html

    Tensions between Jerusalem, Ankara translate into slump in outgoing tourism industry, strenuous industrial relations

    Danny Sadeh

    Published: 01.22.09, 08:10 / Israel Money

    P{margin:0;} UL{margin-bottom:0;margin-top:0;margin-right: 16; padding-right:0;} OL{margin-bottom:0;margin-top:0;margin-right: 32; padding-right:0;} H3.pHeader {margin-bottom:3px;COLOR: #192862;font-size: 16px;font-weight: bold;margin-top:0px;} P.pHeader {margin-bottom:3px;COLOR: #192862;font-size: 16px;font-weight: bold;} The recent tension between Jerusalem and Ankara, brought about by the Israeli offensive in Gaza, is beginning to take a financial toll on what was once a prolific relationship.

    Various travel agencies have reported a 70% drop in the number of vacation packages sold to Turkish destinations. Once one of the Israeli tourist favorite vacations spots, Antalya has now been “left for dead”; although some in the industry prefer to see the situation is a passing winter trend.

    Risky Business
    Fear: Turkey may pull deals with Israel  / Arie Egozi
    Defense establishment says Ankara’s growing vex with Israel’s Gaza offensive may result in canceling ongoing contracts, suspending future negotiations
    Full story

    Tourism industry official said Wednesday that the Israeli tourism to Turkey is likely to hit a slump in the immediate run, but in the long run it is more than likely to pick up. “It things remain quiet, the Israelis will go back to Turkey, it’s a very attractive destination.”

    A Foreign Ministry official gave a more caution projection: “The tourism industry is hard to predict, especially now, at winter time. We don’t know what the spring and summer may bring. Turkish tourism official who have contacted us over the last few day practically begged for the Israelis not to shun Turkey, especially Antalya. They said they did not deserve to be boycotted because of their prime minister’s statements.”

    Turkey’s Recep Tayyip Erdogan recently stated that Israel should be barred for the UN over its Gaza campaign. His remarks sparked rage in the Israeli public; even promoting some Israeli members of Facebook to form a “Ban Turkey” group. More than 1,500 people have joined it so far; and a dozen similar groups have sprouted both in Facebook and in other social networks.

    ‘War tainted relations’

    Israel’s industrial ties with Turkey spanned $3.4 billion in 2008 – a 23% increase from 2007 – with exports to Ankara coming to $1.6 billion and imports to $1.8 billion.

    Israel’s major export to Turkey is chemicals, followed by metals, machinery and electrical equipment; making Turkey Israel’s eight biggest commercial partner.

    Ari Malmud, CEO of Hogla-Kimberly’s Turkish operation told Yedioth Ahronoth that “the company’s customer service department has been getting calls inquiring whether we were a Jewish company or an Israeli firm.”

    Another importer of Turkish consumer goods said that “it seems like the Muslim merchants in Turkey are trying to make things difficult and they’re severing ties with their local Jewish contacts.

    “Everyone is laying low for a while. I hope that at the end of the day, finances can prevail over politics.”

    Advertisement

    Doron Avrahami, Israel’s commercial attaché in Turkey said that “since the ceasefire only recently took effect, it is still too early to assess whether any permanent damage has been done to the commercial relationship between the two countries.

    “We do hope everything will get back to normal, but the Gaza offensive has left a ‘bad taste’ here.”

    Navit Zomer, Udi Ezion, Itamar Eichner, Arie Egozi and Itay Smuskowitz contributed to this report

  • Poor Richard’s Report

    Poor Richard’s Report

    Contact John Mauldin
    Print Version

    Volume 5 – Special Edition
    January 22, 2009

    The Next 100 Years
    By George Friedman

    Much of the world is focused on the next 100 days—what Obama is going to do. That’s important. But today in a special Outside the Box from my good friend George Freidman of Stratfor We will look out a bit further George is just about to release his latest book, The Next 100 Years: A Forecast for the 21st Century. (Even pre-release it’s already at #11 on Amazon’s non-fiction bestseller list!) Here’s my quick summary; and to cut to the chase, it’s just fascinating.

    What reads like a geopolitical thriller gives a thought-provoking glimpse into what the world will look like in the coming century. George’s strength is his ability to take geopolitical patterns and use them to forecast future events, sometimes with startling and counterintuitive results.

    For example, he forecasts:

    By the middle of this century, Poland and Turkey will be major international players
    Russia will be a regional power – after emerging from a second cold war
    Space-based solar power will completely change the global energy dynamic
    The border areas between the US and Mexico are going to be in play again, like 150 years ago
    Shrinking labor pools will cause countries to compete for immigrants rather than fighting to keep them out
    I confess when George first told me about these ideas, I raised an eyebrow. But after reading the book, and going through the analysis, I find myself sometimes nodding in agreement and other times not being sure what I was reading. But like all the analysis reviews I do, I pay as much attention to the methods, the logic, and the arguments as the conclusions. Do that, and what seems hard to believe all of a sudden makes sense.

    Don’t let short-term fears blind you to long term opportunities. George’s company, Stratfor, is my source for this kind of geopolitical analysis on an on-going basis. I’ve included the full introduction to the book below; and I heartily recommend that you click here for a special offer on a Stratfor Membership that includes a copy of George’s upcoming book.

    John Mauldin, Editor
    Outside the Box

    The Next 100 Years

    OVERTURE
    An Introduction to the American Age
    Imagine that you were alive in the summer of 1900, living in London, then the capital of the world. Europe ruled the Eastern Hemisphere. There was hardly a place that, if not ruled directly, was not indirectly controlled from a European capital. Europe was at peace and enjoying unprecedented prosperity. Indeed, European interdependence due to trade and investment was so great that serious people were claiming that war had become impossible—and if not impossible, would end within weeks of beginning—because global financial markets couldn’t withstand the strain. The future seemed fixed: a peaceful, prosperous Europe would rule the world.

    Imagine yourself now in the summer of 1920. Europe had been torn apart by an agonizing war. The continent was in tatters. The Austro-Hungarian, Russian, German, and Ottoman empires were gone and millions had died in a war that lasted for years. The war ended when an American army of a million men intervened—an army that came and then just as quickly left. Communism dominated Russia, but it was not clear that it could survive. Countries that had been on the periphery of European power, like the United States and Japan, suddenly emerged as great powers. But one thing was certain—the peace treaty that had been imposed on Germany guaranteed that it would not soon reemerge.

    Imagine the summer of 1940. Germany had not only reemerged but conquered France and dominated Europe. Communism had survived and the Soviet Union now was allied with Nazi Germany. Great Britain alone stood against Germany, and from the point of view of most reasonable people, the war was over. If there was not to be a thousand-year Reich, then certainly Europe’s fate had been decided for a century. Germany would dominate Europe and inherit its empire.

    Imagine now the summer of 1960. Germany had been crushed in the war, defeated less than five years later. Europe was occupied, split down the middle by the United States and the Soviet Union. The European empires were collapsing, and the United States and Soviet Union were competing over who would be their heir. The United States had the Soviet Union surrounded and, with an overwhelming arsenal of nuclear weapons, could annihilate it in hours. The United States had emerged as the global superpower. It dominated all of the world’s oceans, and with its nuclear force could dictate terms to anyone in the world. Stalemate was the best the Soviets could hope for—unless the Soviets invaded Germany and conquered Europe. That was the war everyone was preparing for. And in the back of everyone’s mind, the Maoist Chinese, seen as fanatical, were the other danger.

    Now imagine the summer of 1980. The United States had been defeated in a seven-year war—not by the Soviet Union, but by communist North Vietnam. The nation was seen, and saw itself, as being in retreat. Expelled from Vietnam, it was then expelled from Iran as well, where the oil fields, which it no longer controlled, seemed about to fall into the hands of the Soviet Union. To contain the Soviet Union, the United States had formed an alliance with Maoist China—the American president and the Chinese chairman holding an amiable meeting in Beijing. Only this alliance seemed able to contain the powerful Soviet Union, which appeared to be surging.

    Imagine now the summer of 2000. The Soviet Union had completely collapsed. China was still communist in name but had become capitalist in practice. NATO had advanced into Eastern Europe and even into the former Soviet Union. The world was prosperous and peaceful. Everyone knew that geopolitical considerations had become secondary to economic considerations, and the only problems were regional ones in basket cases like Haiti or Kosovo.

    Then came September 11, 2001, and the world turned on its head again. At a certain level, when it comes to the future, the only thing one can be sure of is that common sense will be wrong. There is no magic twenty-year cycle; there is no simplistic force governing this pattern. It is simply that the things that appear to be so permanent and dominant at any given moment in history can change with stunning rapidity. Eras come and go. In international relations, the way the world looks right now is not at all how it will look in twenty years . . . or even less. The fall of the Soviet Union was hard to imagine, and that is exactly the point. Conventional political analysis suffers from a profound failure of imagination. It imagines passing clouds to be permanent and is blind to powerful, long- term shifts taking place in full view of the world.

    If we were at the beginning of the twentieth century, it would be impossible to forecast the particular events I’ve just listed. But there are some things that could have been—and, in fact, were—forecast. For example, it was obvious that Germany, having united in 1871, was a major power in an insecure position (trapped between Russia and France) and wanted to redefine the European and global systems. Most of the conflicts in the first half of the twentieth century were about Germany’s status in Europe. While the times and places of wars couldn’t be forecast, the probability that there would be a war could be and was forecast by many Europeans.

    The harder part of this equation would be forecasting that the wars would be so devastating and that after the first and second world wars were over, Europe would lose its empire. But there were those, particularly after the invention of dynamite, who predicted that war would now be catastrophic. If the forecasting on technology had been combined with the forecasting on geopolitics, the shattering of Europe might well have been predicted. Certainly the rise of the United States and Russia was predicted in the nineteenth century. Both Alexis de Tocqueville and Friedrich Nietzsche forecast the preeminence of these two countries. So, standing at the beginning of the twentieth century, it would have been possible to forecast its general outlines, with discipline and some luck.

    The Twenty-First Century
    Standing at the beginning of the twenty-first century, we need to identify the single pivotal event for this century, the equivalent of German unification for the twentieth century. After the debris of the European empire is cleared away, as well as what’s left of the Soviet Union, one power remains standing and overwhelmingly powerful. That power is the United States. Certainly, as is usually the case, the United States currently appears to be making a mess of things around the world. But it’s important not to be confused by the passing chaos. The United States is economically, militarily, and politically the most powerful country in the world, and there is no real challenger to that power. Like the Spanish-American War, a hundred years from now the war between the United States and the radical Islamists will be little remembered regardless of the prevailing sentiment of this time.

    Ever since the Civil War, the United States has been on an extraordinary economic surge. It has turned from a marginal developing nation into an economy bigger than the next four countries combined. Militarily, it has gone from being an insignificant force to dominating the globe. Politically, the United States touches virtually everything, sometimes intentionally and sometimes simply because of its presence. As you read this book, it will seem that it is America- centric, written from an American point of view. That may be true, but the argument I’m making is that the world does, in fact, pivot around the United States.

    This is not only due to American power. It also has to do with a fundamental shift in the way the world works. For the past five hundred years, Europe was the center of the international system, its empires creating a single global system for the first time in human history. The main highway to Europe was the North Atlantic. Whoever controlled the North Atlantic controlled access to Europe—and Europe’s access to the world. The basic geography of global politics was locked into place.

    Then, in the early 1980s, something remarkable happened. For the first time in history, transpacific trade equaled transatlantic trade. With Europe reduced to a collection of secondary powers after World War II, and the shift in trade patterns, the North Atlantic was no longer the single key to anything. Now whatever country controlled both the North Atlantic and the Pacific could control, if it wished, the world’s trading system, and therefore the global economy. In the twenty-first century, any nation located on both oceans has a tremendous advantage.

    Given the cost of building naval power and the huge cost of deploying it around the world, the power native to both oceans became the preeminent actor in the international system for the same reason that Britain dominated the nineteenth century: it lived on the sea it had to control. In this way, North America has replaced Europe as the center of gravity in the world, and whoever dominates North America is virtually assured of being the dominant global power. For the twenty-first century at least, that will be the United States.

    The inherent power of the United States coupled with its geographic position makes the United States the pivotal actor of the twenty-first century. That certainly doesn’t make it loved. On the contrary, its power makes it feared. The history of the twenty-first century, therefore, particularly the first half, will revolve around two opposing struggles. One will be secondary powers forming coalitions to try to contain and control the United States. The second will be the United States acting preemptively to prevent an effective coalition from forming.

    If we view the beginning of the twenty-first century as the dawn of the American Age (superseding the European Age), we see that it began with a group of Muslims seeking to re- create the Caliphate—the great Islamic empire that once ran from the Atlantic to the Pacific. Inevitably, they had to strike at the United States in an attempt to draw the world’s primary power into war, trying to demonstrate its weakness in order to trigger an Islamic uprising. The United States responded by invading the Islamic world. But its goal wasn’t victory. It wasn’t even clear what victory would mean. Its goal was simply to disrupt the Islamic world and set it against itself, so that an Islamic empire could not emerge.

    The United States doesn’t need to win wars. It needs to simply disrupt things so the other side can’t build up sufficient strength to challenge it. On one level, the twenty-first century will see a series of confrontations involving lesser powers trying to build coalitions to control American behavior and the United States’ mounting military operations to disrupt them. The twenty-first century will see even more war than the twentieth century, but the wars will be much less catastrophic, because of both technological changes and the nature of the geopolitical challenge.

    As we’ve seen, the changes that lead to the next era are always shockingly unexpected, and the first twenty years of this new century will be no exception. The U.S.–Islamist war is already ending and the next conflict is in sight. Russia is re-creating its old sphere of influence, and that sphere of influence will inevitably challenge the United States. The Russians will be moving westward on the great northern European plain. As Russia reconstructs its power, it will encounter the U.S.-dominated NATO in the three Baltic countries—Estonia, Latvia, and Lithuania—as well as in Poland. There will be other points of friction in the early twenty-first century, but this new cold war will supply the flash points after the U.S.–Islamist war dies down.

    The Russians can’t avoid trying to reassert power, and the United States can’t avoid trying to resist. But in the end Russia can’t win. Its deep internal problems, massively declining population, and poor infrastructure ultimately make Russia’s long- term survival prospects bleak. And the second cold war, less frightening and much less global than the first, will end as the first did, with the collapse of Russia.

    There are many who predict that China is the next challenger to the United States, not Russia. I don’t agree with that view for three reasons. First, when you look at a map of China closely, you see that it is really a very isolated country physically. With Siberia in the north, the Himalayas and jungles to the south, and most of China’s population in the eastern part of the country, the Chinese aren’t going to easily expand. Second, China has not been a major naval power for centuries, and building a navy requires a long time not only to build ships but to create well-trained and experienced sailors.

    Third, there is a deeper reason for not worrying about China. China is inherently unstable. Whenever it opens its borders to the outside world, the coastal region becomes prosperous, but the vast majority of Chinese in the interior remain impoverished. This leads to tension, conflict, and instability. It also leads to economic decisions made for political reasons, resulting in inefficiency and corruption. This is not the first time that China has opened itself to foreign trade, and it will not be the last time that it becomes unstable as a result. Nor will it be the last time that a figure like Mao emerges to close the country off from the outside, equalize the wealth—or poverty—and begin the cycle anew. There are some who believe that the trends of the last thirty years will continue indefinitely. I believe the Chinese cycle will move to its next and inevitable phase in the coming decade. Far from being a challenger, China is a country the United States will be trying to bolster and hold together as a counterweight to the Russians. Current Chinese economic dynamism does not translate into long-term success.

    In the middle of the century, other powers will emerge, countries that aren’t thought of as great powers today, but that I expect will become more powerful and assertive over the next few decades. Three stand out in particular. The first is Japan. It’s the second- largest economy in the world and the most vulnerable, being highly dependent on the importation of raw materials, since it has almost none of its own. With a history of militarism, Japan will not remain the marginal pacifistic power it has been. It cannot. Its own deep population problems and abhorrence of large- scale immigration will force it to look for new workers in other countries. Japan’s vulnerabilities, which I’ve written about in the past and which the Japanese have managed better than I’ve expected up until this point, in the end will force a shift in policy.

    Then there is Turkey, currently the seventeenth-largest economy in the world. Historically, when a major Islamic empire has emerged, it has been dominated by the Turks. The Ottomans collapsed at the end of World War I, leaving modern Turkey in its wake. But Turkey is a stable platform in the midst of chaos. The Balkans, the Caucasus, and the Arab world to the south are all unstable. As Turkey’s power grows—and its economy and military are already the most powerful in the region—so will Turkish influence.

    Finally there is Poland. Poland hasn’t been a great power since the sixteenth century. But it once was—and, I think, will be again. Two factors make this possible. First will be the decline of Germany. Its economy is large and still growing, but it has lost the dynamism it has had for two centuries. In addition, its population is going to fall dramatically in the next fifty years, further undermining its economic power. Second, as the Russians press on the Poles from the east, the Germans won’t have an appetite for a third war with Russia. The United States, however, will back Poland, providing it with massive economic and technical support. Wars—when your country isn’t destroyed—stimulate economic growth, and Poland will become the leading power in a coalition of states facing the Russians.

    Japan, Turkey, and Poland will each be facing a United States even more confident than it was after the second fall of the Soviet Union. That will be an explosive situation. As we will see during the course of this book, the relationships among these four countries will greatly affect the twenty-first century, leading, ultimately, to the next global war. This war will be fought differently from any in history—with weapons that are today in the realm of science fiction. But as I will try to outline, this mid-twenty-first century conflict will grow out of the dynamic forces born in the early part of the new century.

    Tremendous technical advances will come out of this war, as they did out of World War II, and one of them will be especially critical. All sides will be looking for new forms of energy to substitute for hydrocarbons, for many obvious reasons. Solar power is theoretically the most efficient energy source on earth, but solar power requires massive arrays of receivers. Those receivers take up a lot of space on the earth’s surface and have many negative environmental impacts—not to mention being subject to the disruptive cycles of night and day. During the coming global war, however, concepts developed prior to the war for space- based electrical generation, beamed to earth in the form of microwave radiation, will be rapidly translated from prototype to reality. Getting a free ride on the back of military space launch capability, the new energy source will be underwritten in much the same way as the Internet or the railroads were, by government support. And that will kick off a massive economic boom.

    But underlying all of this will be the single most important fact of the twenty-first century: the end of the population explosion. By 2050, advanced industrial countries will be losing population at a dramatic rate. By 2100, even the most underdeveloped countries will have reached birthrates that will stabilize their populations. The entire global system has been built since 1750 on the expectation of continually expanding populations. More workers, more consumers, more soldiers—this was always the expectation. In the twenty-first century, however, that will cease to be true. The entire system of production will shift. The shift will force the world into a greater dependence on technology—particularly robots that will substitute for human labor, and intensified genetic research (not so much for the purpose of extending life but to make people productive longer).

    What will be the more immediate result of a shrinking world population? Quite simply, in the first half of the century, the population bust will create a major labor shortage in advanced industrial countries. Today, developed countries see the problem as keeping immigrants out. Later in the first half of the twenty-first century, the problem will be persuading them to come. Countries will go so far as to pay people to move there. This will include the United States, which will be competing for increasingly scarce immigrants and will be doing everything it can to induce Mexicans to come to the United States—an ironic but inevitable shift.

    These changes will lead to the final crisis of the twenty-first century. Mexico currently is the fifteenth-largest economy in the world. As the Europeans slip out, the Mexicans, like the Turks, will rise in the rankings until by the late twenty-first century they will be one of the major economic powers in the world. During the great migration north encouraged by the United States, the population balance in the old Mexican Cession (that is, the areas of the United States taken from Mexico in the nineteenth century) will shift dramatically until much of the region is predominantly Mexican.

    The social reality will be viewed by the Mexican government simply as rectification of historical defeats. By 2080 I expect there to be a serious confrontation between the United States and an increasingly powerful and assertive Mexico. That confrontation may well have unforeseen consequences for the United States, and will likely not end by 2100.

    Much of what I’ve said here may seem pretty hard to fathom. The idea that the twenty-first century will culminate in a confrontation between Mexico and the United States is certainly hard to imagine in 2009, as is a powerful Turkey or Poland. But go back to the beginning of this chapter, when I described how the world looked at twenty-year intervals during the twentieth century, and you can see what I’m driving at: common sense is the one thing that will certainly be wrong. Obviously, the more granular the description, the less reliable it gets. It is impossible to forecast precise details of a coming century—apart from the fact that I’ll be long dead by then and won’t know what mistakes I made.

    But it’s my contention that it is indeed possible to see the broad outlines of what is going to happen, and to try to give it some definition, however speculative that definition might be. That’s what this book is about.

    Forecasting a Hundred Years Ahead
    Before I delve into any details of global wars, population trends, or technological shifts, it is important that I address my method—that is, precisely how I can forecast what I do. I don’t intend to be taken seriously on the details of the war in 2050 that I forecast. But I do want to be taken seriously in terms of how wars will be fought then, about the centrality of American power, about the likelihood of other countries challenging that power, and about some of the countries I think will—and won’t—challenge that power.

    And doing that takes some justification. The idea of a U.S.–Mexican confrontation and even war will leave most reasonable people dubious, but I would like to demonstrate why and how these assertions can be made. One point I’ve already made is that reasonable people are incapable of anticipating the future. The old New Left slogan “Be Practical, Demand the Impossible” needs to be changed: “Be Practical, Expect the Impossible.” This idea is at the heart of my method. From another, more substantial perspective, this is called geopolitics.

    Geopolitics is not simply a pretentious way of saying “international relations.” It is a method for thinking about the world and forecasting what will happen down the road. Economists talk about an invisible hand, in which the self-interested, short-term activities of people lead to what Adam Smith called “the wealth of nations.” Geopolitics applies the concept of the invisible hand to the behavior of nations and other international actors. The pursuit of short-term self-interest by nations and by their leaders leads, if not to the wealth of nations, then at least to predictable behavior and, therefore, the ability to forecast the shape of the future international system.

    Geopolitics and economics both assume that the players are rational, at least in the sense of knowing their own short-term self-interest. As rational actors, reality provides them with limited choices. It is assumed that, on the whole, people and nations will pursue their self-interest, if not flawlessly, then at least not randomly. Think of a chess game. On the surface, it appears that each player has twenty potential opening moves. In fact, there are many fewer because most of these moves are so bad that they quickly lead to defeat. The better you are at chess, the more clearly you see your options, and the fewer moves there actually are available. The better the player, the more predictable the moves. The grandmaster plays with absolute predictable precision—until that one brilliant, unexpected stroke.

    Nations behave the same way. The millions or hundreds of millions of people who make up a nation are constrained by reality. They generate leaders who would not become leaders if they were irrational. Climbing to the top of millions of people is not something fools often do. Leaders understand their menu of next moves and execute them, if not flawlessly, then at least pretty well. An occasional master will come along with a stunningly unexpected and successful move, but for the most part, the act of governance is simply executing the necessary and logical next step. When politicians run a country’s foreign policy, they operate the same way. If a leader dies and is replaced, another emerges and more likely than not continues what the first one was doing.

    I am not arguing that political leaders are geniuses, scholars, or even gentlemen and ladies. Simply, political leaders know how to be leaders or they wouldn’t have emerged as such. It is the delight of all societies to belittle their political leaders, and leaders surely do make mistakes. But the mistakes they make, when carefully examined, are rarely stupid. More likely, mistakes are forced on them by circumstance. We would all like to believe that we— or our favorite candidate—would never have acted so stupidly. It is rarely true. Geopolitics therefore does not take the individual leader very seriously, any more than economics takes the individual businessman too seriously. Both are players who know how to manage a process but are not free to break the very rigid rules of their professions.

    Politicians are therefore rarely free actors. Their actions are determined by circumstances, and public policy is a response to reality. Within narrow margins, political decisions can matter. But the most brilliant leader of Iceland will never turn it into a world power, while the stupidest leader of Rome at its height could not undermine Rome’s fundamental power. Geopolitics is not about the right and wrong of things, it is not about the virtues or vices of politicians, and it is not about foreign policy debates. Geopolitics is about broad impersonal forces that constrain nations and human beings and compel them to act in certain ways.

    The key to understanding economics is accepting that there are always unintended consequences. Actions people take for their own good reasons have results they don’t envision or intend. The same is true with geopolitics. It is doubtful that the village of Rome, when it started its expansion in the seventh century BC, had a master plan for conquering the Mediterranean world five hundred years later. But the first action its inhabitants took against neighboring villages set in motion a process that was both constrained by reality and filled with unintended consequences. Rome wasn’t planned, and neither did it just happen.

    Geopolitical forecasting, therefore, doesn’t assume that everything is predetermined. It does mean that what people think they are doing, what they hope to achieve, and what the final outcome is are not the same things. Nations and politicians pursue their immediate ends, as constrained by reality as a grandmaster is constrained by the chessboard, the pieces, and the rules. Sometimes they increase the power of the nation. Sometimes they lead the nation to catastrophe. It is rare that the final outcome will be what they initially intended to achieve.

    Geopolitics assumes two things. First, it assumes that humans organize themselves into units larger than families, and that by doing this, they must engage in politics. It also assumes that humans have a natural loyalty to the things they were born into, the people and the places. Loyalty to a tribe, a city, or a nation is natural to people. In our time, national identity matters a great deal. Geopolitics teaches that the relationship between these nations is a vital dimension of human life, and that means that war is ubiquitous. Second, geopolitics assumes that the character of a nation is determined to a great extent by geography, as is the relationship between nations. We use the term geography broadly. It includes the physical characteristics of a location, but it goes beyond that to look at the effects of a place on individuals and communities. In antiquity, the difference between Sparta and Athens was the difference between a landlocked city and a maritime empire. Athens was wealthy and cosmopolitan, while Sparta was poor, provincial, and very tough. A Spartan was very different from an Athenian in both culture and politics.

    If you understand those assumptions, then it is possible to think about large numbers of human beings, linked together through natural human bonds, constrained by geography, acting in certain ways. The United States is the United States and therefore must behave in a certain way. The same goes for Japan or Turkey or Mexico. When you drill down and see the forces that are shaping nations, you can see that the menu from which they choose is limited.

    The twenty-first century will be like all other centuries. There will be wars, there will be poverty, there will be triumphs and defeats. There will be tragedy and good luck. People will go to work, make money, have children, fall in love, and come to hate. That is the one thing that is not cyclical. It is the permanent human condition. But the twenty-first century will be extraordinary in two senses: it will be the beginning of a new age, and it will see a new global power astride the world. That doesn’t happen very often. We are now in an America-centric age. To understand this age, we must understand the United States, not only because it is so powerful but because its culture will permeate the world and define it. Just as French culture and British culture were definitive during their times of power, so American culture, as young and barbaric as it is, will define the way the world thinks and lives. So studying the twenty-first century means studying the United States.

    If there were only one argument I could make about the twenty-first century, it would be that the European Age has ended and that the North American Age has begun, and that North America will be dominated by the United States for the next hundred years. The events of the twenty-first century will pivot around the United States. That doesn’t guarantee that the United States is necessarily a just or moral regime. It certainly does not mean that America has yet developed a mature civilization. It does mean that in many ways the history of the United States will be the history of the twenty-first century.

    John F. Mauldin
    [email protected]

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