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SD Reports 2011 - 2015

The Office of Information Analysis of the State Department of the Federated Micronations issues Reports on Foreign Policy.

As other nations have found that internal reports of their diplomatic services tend to leak into the public, the Federated Micronations have decided on a different approach, publishing all but the most critical reports online. As the number of states recognized by the Federated Micronations is currently limited, we do not fear any diplomatic repercussions due to these reports.

Suggestions on the European Immigration Crisis - 2015.08.15

The breakdown and the poverty of countries in the regions south of the European Union has led to a rising flood of refugees. As most Southern European nations have switched to a "pass-through" mode, the refugees end up in Northern European countries like the United Kingdom and Germany (both not recognized by the F.M.).

The indigenous population of these countries is blaming those refugees for their social and economic problems which were created by their own greed, stupidity and lack of discipline. Examples for this are joblessness caused by buying cheap products made in overseas, ugly and dirty cities caused by voting for politicians promising to lower taxes, and loss of culture caused by commercial entertainment replacing active cultural involvement.

Of course an uncontrolled and unmanaged immigration will enhance these problems, as immigrants tend to migrate to successful and economically active regions, not to regions loosing population. On the other hand, it is obvious that even if it were possible to block immigration to the EU for the time being, both the low birthrate within the EU and the population increase in Africa and the Arab countries will make it impossible to "man the walls" in the second half of the 21st century.

Modern arms technology may create the illusion that it would be possible to create impermeable borders, but technology is a two-sided sword and can be used to overcome borders, too. GPS and smartphones are used by illegal immigrants on their voyage today.

A reasonable policy would, in our view, be to accept immigration as a reality, and steer it in a way to optimize the results for both the indigenous population and the immigrants. One goal would be to settle immigrants in regions loosing population. Of course, the local population in those regions often is vehemently anti-immigration. The solution would be to create new settlement towns in unsettled or almost-unsettled regions which are large enough to sustain themselves after a certain time.

Historically, such a settlement scheme is nothing new - the Romans used it to control conquered areas, most cities east of the Elbe river were founded as settlements with special laws, and some cities in Southern Europe were settled by non-indigenous groups even in historic times, like Alghero in Sardinia.

In our times, such settlements would have to be maintained very carefully, with strict rules for building to avoid slums, with flexible rules regarding work laws and economy to create local growth, with high levels of investment regarding education, and again with strict rules and enforcement regarding discipline and order. An excellent example of such a town is Singapore, which became independent in 1965 with a diverse, multi-religious population and with many immigrants and refugees. A combination of discipline and openness has made it one of the most successful societies on earth.

The advantage of such settlements is that the daily conflicts between indigenous people and immigrants and the pressure on the existing metropolitan areas will be reduced. The rural regions will gain population. It is very important that the surrounding rural villages are connected economically to the settlement town, e.g. as suppliers or by offering jobs. Residence rights of the settlers need to be bound to their respective settlement town, making it illegal to move to another place within the country, but of course allowing to move to any other country.

Another very important aspect of the settlements is that they need to be constructed towards an ethnic and cultural equilibrium, both as a whole and within, to avoid ethnic ghettos or enclaves. This is also to be supported by official language rules (English and the local language, e.g. German) within the settlement towns.

The legal framework of such settlements will have to be separate from the laws of the country. We suggest that a master framework would be prepared on an European level, adapted to local conditions as necessary. The framework would be designed to be temporary, but we envision it to migrate not to the country's law framework but to a new European framework after a predefined "founding" period.

We know that such a settlement scheme is very difficult to implement because of opposition of the local population. It is not designed as a 100% solution to this difficult issue. But the alternative, doing nothing, will create vast empty spaces within most larger European countries before the end of this century, where infrastructure cannot be maintained any more. And empty spaces with good soil and sufficient water historically never remained empty for long. It is in the best interest of the European countries to lead and control this process, instead of being controlled and conquered by it.

The Four Horsemen - 2014.08.28, updated 2015.02.10

Although the SDFM is religiously neutral, we chose a religious reference for this report, which looks at the current situation and on the predictions made in the "Clouds mounting on the Horizon" (CmH) report. The reason for this is, of course, the current situation, which is disastrous in several directions.

The time window set in the CmH report was from Q4/2013 until end of 2014. Four months before the end of this period, some predictions of the CmH have come true, but there have been some bad surprises, too, which have changed the general outlook to the worse.

War Situations

Mideast

As predicted, the Syrian war situation has escalated further. An U.S. intervention was stopped in the last minute in 2013 as the Syrian government agreed to give up their chemical weapons. This process has now been completed, which is almost a miracle. Strangely, we think that many U.S. military analysts now would be glad if the Syrian army still had chemical weapons available to them, as the meteoric rise of the Islamic State has moved the whole situation into a regional war, encompassing Syria, Iraq and partly Lebanon, and threatening Saudi Arabia, Jordan and possibly Turkey. The methods employed by IS are extremely distasteful, un-islamic, and unluckily, for the time being effective. Sunnites are driven into submission and integrated into the IS, Shiites and non-muslims are expelled or killed. The high mobility and good equipment (thanks to the Iraqui army) of IS makes them highly dangerous for the whole region. We expect the U.S. and other regional powers to attack IS by air in the next few months, but we are not sure if this attack will be successful.

Kurdistan is positioning itself for independence as soon as the IS situation has cleared up. They are receiving arms from Western countries and are believed to have the tacit support of Turkey for their independence. This means Iraq will break up, with either IS or a tribal oriented Sunni state as buffer between Kurdistan and the Shiite, Iran-dominated south.

The three way war between Sunnites, Shiites and Israel has in a way also come true in the form of a prolonged Israel-Gaza war, but due to the complicated pattern of de-facto alliances in the region, Israel cannot currently attack Iran to stop them from developing nuclear arms. Iran seems to comply with the suggested rules on their nuclear technology, but there is no final agreement, and we believe that they know this is the best point in time to press on with the development of nuclear arms. Looking at the fate of Ukraine (see below), we unluckily feel they are right, as not only Israel owns nuclear arms, but also Saudi Arabia, although only indirectly through their alliance with Pakistan.

The Libyan situation has deteriorated into a split and civil war, and it is only a question of time when Egypt, Syria and other states will send troops. The situation has become even more complicated by the conflict between Quatar, helping the fundamentalists, and the other Gulf states, supporting the secular forces. The UAR, supported by Egypt, have already attacked Libyan fundamentalists with their Air Force.

Ukraine

The developments in Ukraine have not been predicted in the CmH report. We saw in a general way that secessionist movements would create dangerous situations, but did not expect that a successful revolution in Ukraine would be followed by a "secession movement", created artificially by Russia, first in Crimea, then in the Donbas area, and finally by a full blown war between Ukraine and Russia. The term "secession" is incorrect in this case, as the goal of the "secessionists" is to merge with Russia. Historically, the term "irredentists" would be used here.

To predict the further development of this conflict, one must look at the goals of Russia. With Crimea, it was integration, not "independence" like for Abkhasia, Transnistria and South Ossetia, unrecognized countries which serve to destabilize and block Moldova and Georgia on their way to integration into the Western sphere. With Donbas, the goal might have been similar to the latter, but as the war effort to keep the region under control expands, this goal might move towards full integration due to internal political pressures.

That will make any detente between Russia and the West impossible. A new Cold War situation in Europe will be the consequence. We expect a strong integration push of the western countries - Finland and Sweden will probably join NATO in 2015, and there will be NATO bases in the Baltics and Romania. The reaction of Hungary and possibly Bulgaria to this will be negative, though. Hungary is on its way to a totalitarian state, and also trying to incite irredentist movements in Romania, therefore they might try to leave NATO and ally themselves to Russia.

The war in Ukraine will probably escalate for some time, but coming to a standstill in winter, leading to an armistice with the Donbas and the whole coast of the Sea of Azov under Russian control. Ukraine will receive weapons from the West, but too little, too late. We expect the Ukraininan politics to become strongly Nationalist, but possibly also strongly reformist, using the dire situation to turn Ukraine around. If both points come true, we also expect Ukraine to start developing nuclear arms, as the Budapest agreement has been broken by both Russia and the West. At this point, the West must either offer Ukraine inclusion into the Western alliance or accept a nuclear armed and angry Ukraine.

Worldwide

Currently, one war is giving cover to another, and another, and another. Some local wars are not even reported any more. There are several possible Black Swan situations, like in Korea, the South China Sea, and around India. In Europe, we expect limited armed conflict in Spain due to Catalonian Independence, possibly in Q1 2015. We do not expect a World War III, even if the situation escalates, more like a "World Wars" situation, with several local conflicts out of control. The escalation will come in another area.

The Economic Crisis

Looking at the economic situation of the world, on first glance not much has changed. A slight improvement on economic health can be seen in the U.S. and in Europe, but at the same time, the new Greek government has started a game of brinkmanship, blackmailing the European Union to gain support for easing the austerity program. The outcome will be fatal either way - if the E.U. gives in, both Italy and Spain will follow Greece and demand more support, which will lead to a political counter-reaction in Northern Europe, and if the E.U. and especially the ECB remain strict, Greece will have to leave the Euro area. The necessary capital controls introduced in Greece might lead to a bank run in other Euro countries, same as the Greek capital flight is a consequence of the capital control regime in Cyprus.

The Greek and Cypriot situation has political consequences, too, as both countries turn to Russia for support. The news that Cyprus plans to offer Russia an Air Base is a first sign of this.

In the rest of the world, the economic situation will probably explode when the U.S. Federal Reserve Bank starts rising the main interest rates. In this case, both the Chinese and Japanese houses-of-cards might fall, in Japan with a hyperinflation, and in China with a massive debt crisis.

Clouds mounting on the Horizon - 2013.07.05

Almost exactly two years after the "Safety of Nations" report by the SDFM, we decided to publish a new report, with analysts agreeing that time is running out to solve the multiple crises before they spin out of control.

The current situation is characterized by four main streams of action - the wordwide and European economic crisis, the threatening war situations in Mideast and Asia, the state surveillance and whistleblower crises we call the "Lifting of the Veil", and finally the local people's rebellions and separatist situations which currently move from the worldwide periphery to the core.

The Economic Crisis

As predicted in the SoN Report, the economic and trade imbalances have led to an escalation of the Economic Crisis. In Europe, two formal state defaults have taken place, first Greece in March 2012, and then - less well known - Cyprus in June 2013. The Cyprus default itself was relatively mild, but preceded by a massive sequestration of bank customer funds. The rules of this sequestration - funds above 100'000 Euro were hit - are now semi-official rules for further bank breakdowns in the EU, which lays the ground for a major bank run in the next crisis. The level of joblessnes in parts of Europe approaches 1929 Depression heights, without any relief in sight within the Euro framework.

A similar situation is found in the U.S., where inflation, "suppressed" by faked official numbers, bears heavily on the Middle Classes. Japan also finds no way out, being the first country to consciously push the inflation rate up. In China, the growth rate slows, which in combination with a huge dark banking sector might lead to instability.

The Federated Micronations have taken measures to prepare against currency deprecation, but have not been isolated from the crisis, hit by the Greek default and the Gold value changes (the Common Wallaroo being linked to Gold at a rate of 1250 CW to 1 Ounce). Gold value has fallen to about the top tier mining costs, which means a turnaround is to be expected in 2013. This turnaround could induce even more instability in the currency systems as stabilizing reserves have been depleted and moved to Asia.

Currently, the Economic crisis has been backshelved by the major countries, partly in preparation of elections in Germany. In Europe, it is expected to come back with a vengeance before the end of 2013, but on a worldwide basis, the trigger for final escalation migth be the combination with other crisis complexes.

Threathening War Situations

After publication of the SoN Report, the Syrian crisis has escalated to just below a regional war. About 100'000 people have been killed. Inofficial and semi-official forces of neighbouring countries (Iran, Lebanon, possibly Iraq/Kurdistan and Turkey) are fighting in the Civil War on a level reminding us of the Spanish Civil War. An active U.S. involvement is expected in autumn 2013, while arms shipments to all parties have risen. In parallel, the Israel-Iran nuclear weapons crisis has not been resolved. The timeline of this crisis points to 2014 as a year where Israel has the only options to act or to accept a nuclear armed Iran.

An full outbreak of the Mideast crisis might lead to a three way war between Sunnites, Shiites and Israel. The rest of the world would be hit immediately by a breakdown of the oil supply, and enormous war costs for the U.S. which in combination are expected to be the last straw for the U.S. economy and existence as a superpower. The situation between China and its neighbours also has not improved. Similarly, the Korean conflict has escalated, with the closure of the last special economic zone linking North and South Korea, and with provocative actions on both sides. But most situations in the region seem to be well below the war threshold as of now, since the trade repercussions would ruin all participants.

The Lifting of the Veil

The Federal and State Security Agencies of the F.M. have always expected everyone to be under surveillance by U.S. and other Security Agencies. But that was a rumour, not a Known Fact as it is after the revelations of Edward Snowden (former U.S. security services technician and F.M. Freedom Medal holder). Other, anonymous, whistleblowers have exposed the worldwide network of offshore banking and tax evation. Modern technology makes both the surveillance and the exposure relatively easy and basically unpreventable. The lifting of the veil of secrecy for everyone is, in our view, temporary at least in regards to communication, since the technology to encrypt and anonymize exists and will become ubiquitous in its time. Organisations also will start to introduce measures to prevent any copying of information. But their task is more difficult, and therefore in the midterm run, whistleblowers will have a major influence breaking up old structures.

Local Rebellions and Separatism

At the time of the SoN report, the rebellions in the Arab world had been well in progress. Now, more or less instable governments rule the countries in which these rebellions happened, but in general, the situation is peaceful, with the obvious exception of Syria. New rebellions have risen, surprising everyone, in Chile, Turkey and Brazil. Also to everyone's surprise, in southern Europe, any existing rebellions have quiesced and no new ones come up. But around the world, governments start to fear surprise outbreaks facilitated by electronic means of communication. Those rebellions might topple governments, but in general are not expected to change the situation much since they are not led by efficient and ideologically committed leaders. Ideologies are currently out of fashion, a good example being Egypt where Islamism has been rejected after a failed one year stint at governing by the Muslim Brothers. In Europe, Mideast, and North America (at a later point of time), we expect another development which is more threatening for the Status Quo. In the last 10-20 years, large stable separatist movements have grown in some parts of Europe, especially Catalunya and Basque Country vs. Spain, Scotland vs. the UK, Flanders vs. Belgium, but also, less well known, Veneto and South Tyrol vs. Italy. Most of them have triggers in 2014, like referendums or Federal elections, which may lead to unilateral secessions similar to Kosovo.

Of course, the F.M. support these movements as long as they represent the will of their people and refrain from any form of terrorism. But in 2014, events might quickly become dangerous. Especially for Catalunya, we expect a situation similar to Slovenia in 1991, i.e. a short war of independence since Spain seems to be willing to use military means to suppress Catalunya. A similar situation can develop in Northern Italy as the current Italian government does not seem able to pull the country out of the crisis, and the Cinque Stelle movement as an Italy-wide reform movement has been stopped in its tracks by the arrogance of its leader. Finally, in Germany, both Bavaria and Baden-Württemberg, the two strong Southern states, seem to test the waters, in Bavaria by a retired prominent politician, Wilfried Scharnagl, and in Baden-Württemberg by a self-confident Green government instilling a sense of patriotism and specialness into the citizens of Baden-Württemberg.

The F.M. are committed to support the respective separatist movements, especially in raising popular awareness and support in the large E.U. countries (mainly Germany) to avoid the E.U. backing the Spanish and Italian governments from crushing the separatists with military means. We call on the movements to give more support to each other and to refrain from any racism - "united we stand, divided we break". If any movement gains independence on the back of others, it will be tainted from the beginning. Separatist initiatives in the Mideast, especially Kurdistan, will rise or fall with the general situation there. We hope for their best.

In the U.S. and Canada, the situation seems stable at the moment, with Quebec being the only separatist movement with any hope of success. But U.S. patriotism might be squandered by the U.S. Deep State, controlled by the security services and large corporation. The U.S. infrastructure continues to break down, the financial situation spins out of control, and the energy glut due to unconventional oil and gas will be short. One signal to watch is any regional alliance of states. The pressure against the Federal Government currently comes mainly from right-wing obstructists, but there will be a point in time where liberal voters will see value in extracting their state (e.g. New York or California) from the grip of a paranoid and over-indebted Federal Government.

Conclusion

In this report, we summarized the current political and economic situation and found that several developments point to a culmination of the worldwide situation in the time window between Q4/2013 and the end of 2014. This is an uncanny reminder of 1914, the year in which a stable world moved into an instable and bloody phase lasting more than 50 years before moving into a slow detente in the 1970s and the revolutions of 1990. We expect some, but not all of the situations below to be resolved peacefully. But in case this fails, preparations must be made, both practical as well as theoretical. New political and economical paradigms must be developed and spread, possibly based on the writings of Leopold Kohr and others, favouring small structures over large superstructures both for states as well as for corporations. But that is not sufficient in itself - communication, information and financial structures need to be hardened and made autonomous, and legal and taxation structures need to become independent of local and worldwide elites. The Federated Micronations are determined to support such work as best as they can.

Imminent Threats to the Safety of Nations - 2011.07.06

The S.D. of the F.M. is observing several trends both in technology as well as economic affairs which point to a worldwide crisis during the current decade.

On the economic side, the following developments may prove critical:

• Unchanged trade imbalance both between the major trading blocks as well as within these (EU, NAFTA, ASEAN)
• Mounting distrust against the two major reserve currencies, USD and EUR
• Move of equity trade away from public and manual processes towards hidden and automated processes
• Rise of oil and other energy prices as reserves are being exhausted
• Rise of food prices as demand rises and supply is constrained due to climate changes
• Growth of dark economy (mafia, illegal trading, corruption) faster than official economy due to inherent independence from regulation, using globalized infrastructures

Several industries moving to a Singularity situation (negligeable unit costs for manufactured goods) due to advances in production technology on the one side and to low wages in 3rd world countries on the other side Economic crises alone may lead to warfare as autocratic or semi-democratic governments try to distract their citizens from the economic problems and their political causes, in the usually false hope to prolong their power. But the current situation is being complicated by a change in military means and infrastructure technology which is taking place on all sides:

• Large powers are rapidly developing autonomous or remote-controlled weapons systems which on first glance seem to reduce the cost in human lives on the deployer's side
• Asymmetric warfare methods make it difficult for a large power to pacify occupied countries permanently

• Electronic warfare methods are developed on all sides, and spread easily around the world
• Worldwide alliances of hackers move from a more or less benign position to a rather agressive one due to intensive persecution

Modern communication technology enables manufacture of remotely controlled semi-autonomous attack systems by individuals and small groups

These developments are threatening the existence of both recognized nations and Micronations. Most worrisome is that in the family of recognized nations, no leadership is found any more to confront and control the situation - the United States have moved to a position nearing civil war as its citizens are in their majority unwilling to support a nonideological policy. Following the discussion within the U.S., one starts to think that the analysis by a Russian observer that the U.S. will break up in this decade might not be unrealistic. But the European Union as a whole is paralyzed too by populism and economic problems, and China is far from a position of world leadership, resembling a barrel filled with gunpowder, with several fuses.

The most probable scenarios are:

• Surprise default of a small country or mid-sized bank leading to a new shockwave and final breakdown of trust into paper money. This may be caused due to an inept populist government
• Distraction war breaking out in the Near East or Asian theaters, most probably in Syria, Iran, Saudi Arabia or China, leading to major economic disruption (oil, trading routes, manufactured goods)
• Fast-spreading breakdown of virtualized IT infrastructures cripples major companies, leading to an economic breakdown

Micronations are advised to prepare economic countermeasures and build up reserves to ensure survival when the above situation spins out of control.

Seven Pillars of Decline - 2011.06.25

The Decline of Great Powers and the degrading state of Culture have been a major point of historic research by famous Musogradians like M. Chulubeg or Adm. W. Uchtar. The two-volume historic analysis "Atmesti Vakaru" by Oswaldas Spengleris has made a huge impact in the late 80's of the last century, influencing both academics and politicians of the various Musogradian factions.

Now a new academic has raised his voice, Konrad Kustos, a citizen of Balangrad City, with his book "Seven Pillars of Decline", written in Balanda and not yet available in Musogradian or English. The eponymous seven pillars may be summarized as:

• fatal belief in omniscient science
• detrimental rule of big money
• unstoppable deformation of cultural organizations
• threatening destruction of community values
• erroneous belief in the primacy of the individuum and in free will
• lack of spiritual clarity caused by lacking structures of thought
• missing engagement to fight against undesirable developments

The book is regarded as a valuable component in the currently ongoing debate on necessary changes and the fight against the decline of culture. It needs to be mentioned, though, that there are several points where Musogradian academics in their majority disagree with the author - some feel the author is sometimes using language of the anti-islamic "PC"-community to his detriment.

Nevertheless, the book may be regarded as a major step forward by Balanda cultural criticism literature and will be thouroughly discussed by the cultural elite of the Federated Micronations.

_Addendum - 2021.03.20_ Due to an escalation of discussions, the SDFM has withdrawn any recommendation and support of the book mentioned here.