RETIREMENT PLAN - THE SPREADSHEET YOU NEED TO MAKE YOUR LIFE EASY

27 January 2023

PUT IN TO TAKE OUT

What is the one number you'd really like to know for a happy retirement? Yup, it is how much should I tuck away each month - not percentages or formulae, just the number please?

THIS NOTE IS ABOUT

Financial planning is boring but unavoidable. So start here. 

Plus, a note on how to build a neat and tidy spreadsheet.

GOAL

people typically aim for somewhere between half and two-thirds of their final salary as their retirement income. 

NEEDS

By the time they retire, many people have paid off their mortgage, and their children are financially independent, so their expenses are lower. 

RESOURCES

The state pension should also cover at least a portion of needs, while the same level of gross income goes further because you are no longer making National Insurance and pension contributions. 

POT SIZE OBJECTIVE

First, work out how much you need after the state pension. You could multiply your planned expenditure in retirement by 25, which should give you the size of pot you need to be able to safely withdraw 4 per cent a year. 

For example, if you estimate you will spend £25,000 a year on top of the state pension, you will require a retirement fund of £625,000. 

 (Not included here is your investment strategy, ie how you make best use of your resources to achieve your goal...wow, is that complicated! 

 But at least, make a start by knowing where you are today, where you want to be, and how much to "pay yourself" each month to get there.)

Unless your investments perform poorly or you live to a very old age, following this 4% rule should enable you to leave some of your pension pot to your children.

FORMULAE

A good way to amass a sizeable pension pot is to contribute half your age as a percentage of your earnings every year when you start making contributions – 10 per cent of your gross salary when you are 20, increasing to 15 per cent when you are 30 and so on, including employer contributions.

People who leave retirement saving until later in life may need to work for longer or to release equity from their homes.

 ("Downsizing" is where you sell up and move to a smaller property. This releases equity which can be used, as we get older, for medical care.)

BUILD YOUR SPREADSHEET

Where are you today with your savings plan and where do you need to be? Use compound interest. Here are the basic steps (spreadsheet columns) and inputs for the calculations. Then compound up, year by year, from now to retirement. Et voilà, you've made your plan!

1. Needs - eg 2/3 thirds of final salary

2. Resources - state pension

3. Size of pot required

4. Spreadsheet scenarios - annual savings, number of years, rate of growth.

 

Four key adjustments to keep in mind when you build your spreadsheet.

5. Returns - on long-term average, the stock market has returned 7% a year. The future is less rosy, count 4%, with dividends re-invested, from your investment strategy.

6. Inflation – your withdrawals will need to increase in line with inflation to maintain the same living standards through retirement. 

7. Income tax - tax applies to your retirement income, so work out both the gross and net annual income you want to aim for.

8. Fees - remember to account for fees :   investment, platform and drawdown fees will eat into your returns.

(NOTE ON HOW TO BUILD A SPREADSHEET THAT WORKS

A well designed spreadsheet has three parts : header, detail, working storage.

Header - a very few rows to setup and summarise the results. The title of the sheet, the input parameters and their starting values, summary results.

Detail - the columns work left to right across the process, from beginning to end, each column doing rolling calculations - the rows are runs of the process eg one line for each year.

Working storage (optional) - maybe you need to do intermediate calculations for a step, but they'd clutter the detail line ... so put these sub-steps off the page to the right.)

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GEORGIO

Georgio is seeking the voice of the island, ie the voice of the people of Cyprus. He finds what is dear to them

Family
Traditions
Sea
Nature
Religion

Food

Costume

And in his own way and style, he expresses this. He is a conduit.

His paintings are more naive than childish. He is not a trained artist, he is self-taught. He is honest, he expresses what he sees, for you to see through his eyes.

EXHIBITION BLURB:

The George Pol. Georghiou - Timeless Cyprus exhibition has been organised on the occasion of the 50th anniversary of the artist's death. The title, suggested by Georghiou's family, reflects the essence of Georghiou's body of work, almost completely immersed in Cyprus, its people and its history. Far from reducing his work to simplistic representations of mores or folklorist references, Georghiou opted to traverse the island's historical and cultural pathways to gain insight into the present. He sought to trace, understand, deepen, interpret and assert what he considered to be the indigenous voice of the island. In his work, he employed piercing clarity and knowledge in order to elicit time-resistant spiritual values and ways of life, as well as meaningful symbols semantically interwoven with certain fixed coordinates of his country's character.

Georghiou lived and produced the largest volume of his oeuvre on an island colonised by a Western country during a period when peoples across the world were awakening to claims of independence and freedom. The overall ideological climate infused his art. Through his work, he sought to assert an identity based on the local element. The choice he made is a token of love for his homeland, a place with a long, active past that set the scene for a dignified present.

Georghiou's creative dialogue with international artistic heritage, in tandem with the ecumenical values that permeate his art, render his work simultaneously indigenous and global.

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BYZANTIUM

On Byzantium

https://youtu.be/2JHCfe86A8U

Fascinating. Right from the beginning where Paul Cooper tells us how the Mediterranean Sea was created (offset Part I, 8 minutes).

To his explanation of how the Eastern wing survived for  another thousand years after the fall of Rome.

And America has managed 80 years and looks to be on its way out, having learnt nothing of the power of diplomacy from the rulers of Byzantium.

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MODERN LOVERS

https://youtu.be/VXMTG8prP7s

why are relationships seemingly so hard for so many people when it's the thing we need the most to feel alive to feel happy and feel connected?

Love and work are the two pillars of our lives.

The simple feeling of loving and feeling loved is actually a very complex thing just as nature is very complex, so too is human nature very complex. I'm a boomer and in my life I have seen Human Nature change at its fastest pace ever recorded. Human relationships today are certainly more complex and often more painful than in the past we should try and understand why this is what has happened?

We should start to find an answer by comparing relationships in our modern developed advanced economy with the way people live in more traditional societies.

In more traditional societies, relationships are clearly codified, there are clear rules, there are roles and roles have obligations. There's a tight structure that you can't get out of, that tells you clearly your place "at table", who you are where you belong, where you are rooted and what's expected of you and you don't have too ask too many questions about eg whose career matters more? who's going to wake up to feed the baby? who has a right to demand sex? 

Everybody - every husband -  knows exactly what they can ask and expect from their wife .

And the wife knows exactly what she should not tell her husband!

And the children know their place at table and their sibling rank.

And same for interactions between adults.

Life was highly codified and regulated for people. You knew exactly what you'd be doing - on for example a Sunday, you would have a family meal together, you would visit the grandparents, you would go to church, or maybe it's the mosque on a Friday.

 Furthermore, everyone knew this and it didn't need to be explained, it's just what people did, they didn't ask any questions, they just did it, "that's the way we do things here round here", that is just what happened.

And why do we do it that way? That's because we've always done it that way and what would the neighbours say if we didn't? So it's a community of narrow streets and close habitations where everyone watches over everyone else and there is what is called high social control and conformity. 

In my university days, I lived in a village like that, Great Tay, with its church, its pub, its post office, its round about ... maybe a bit more than this..  and there was also the just-built "new estate" for commuters, the "blow-ins", but you get the general idea. 

 My life, my love life, was spent in a traditional village where everyone knew everyone and no one was alone; while my working life was a world away at the university where only the common cause of of education and the student bar saved us from a terrible sense of anomie.

Today, we live pretty anonymous lives, we don't know what's going on in the neighbour's house and we may not even know that our best friends are breaking up and a couple is falling apart. And why?

SHEENA

I lived there in the village, a tight-knit community, with my first girlfriend, Sheena, who was admired for her outrageous non-conformity, but who was also as a consequence an outcast. And in fact Sheena went on to have Nathan, a black baby, shocking the whole village....you can imagine! And she went on further to be a single mother and advocate for womens' rights. 

She was what today we would recognise as a little bit of a narcissist, but at the time she would entertain and shock us all with her imaginative humour and stories, her desinvolte as regards sexual matters, her disordered life. And we wouldn't worry too much about how little she cared about any of this disaporoval, ostracism and chaos, or what people thought of her  She showed little interest in the lives of people not from the village, leaving me puzzled though not dismayed, indifferent rather than saddened. I was from the university and it didn't matter much to me as I was part of many bigger groups of friends. That is what it means to be young.

I was living a life in the village where everyone knew what was going on in each other's houses and no one was alone, where noone had reason to question who they were or what they should be doing. This society of tight knots contrasted with a life of loose ends and frayed university networks, with people from all over the country, from varied social backgrounds and classes, thrown together; where meetings could be fleeting, commitments transactional; where you might experience the loss of someone for whom you had intense feelings albethey shallow feelings of youth, from one day to the next, without warning or explanation: none given, none expected.

MY PARENTS

My parents were from the Greatest Generation, they understood little and said less. They were born during The Roaring Twenties, boom time, came of age during the Great Depression, bust, and participated as as young adults in World War II, which kicked off the American Order and digital technologies. 

So for them, econonic, political, social and technological upheavals, not to mention Hollywood and comic books, jazz and swing, and visits by the new messiah, Superman. Most formative in my father's life, though he has never spoken a word of it, was the war and the rationing that followed. "Money was tight", he would say. My mother was an air raid warden during the blitz. People from this generation supposedly got through the hardships of the Great Depression with an ability to know how to survive and to make do on shortages and solve problems that the welfare state had not yet been born to take over. 

These experiences made for a conservative, responsible people, trustful of the government that had coordinated them into winning the world war. My father was reasonably proficient on the portable computer.

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CYPRIOT SALAD

18 January 2023

I like the salad and tahini very much.

 Cucumber, tomato, olives, cos lettuce, feta cheese, red onion, red peppers, dressing (olive oil and lemon juice), herbs.

https://youtu.be/0N6h_m5uD78

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ELEFTHERIA SQUARE, NICOSIA

18 January 2023

Nicosia is "the last divided capital in Europe". It is a city with 16th century city walls and a moat and a new park in the dry moat.

Amongst the many modern buildings of Nicosia today, there is Eleftheria square, known as Freedom Park. Freedom meaning freedom from invaders, notably the Turks, and the possibility for the Greek Cypriot population to live an independent life. But also, freedom in the sense of one unified island where Greek and Turkish Cypriots live togethet under one integrated, autonomous Cypriot government.  

This park was designed by famous Iraqi architect Zaha Hadid on the site of a previous park. The purpose of the park is to celebrate the theme of unity, as described above. 

The new square is a sinewy concrete landscape of six mini waterways that draw together to create strange points of "intensity" where seating and flower-beds and sculptures are found. These lines come together under a canopy of motorway-type arches that support a pedestrian walkway above. This bridge joins the medieval city* to the barrio of outer districts. There are two sleek and swish cafés.There are stairs up giving access to the bus station.

There is also a giant cypress cone sculpture ornament, displaying its scales alternately in corten and galvanised steel, telling us the two peoples can live together in peace as they did before. This sculpture, interestingly, is the work of a student of computational design. (The Gherkin too?)

Invaded like Byzantium, and for the same reason: protection against an Ottoman Turk invasion and Cyprus suffered the same fate as Constantinople: defeat.

Nicosia was in divided in 1974 when Turks invaded again, now "to protect their own" (today, we think of Russia invading Ukraine).

The architect's idea is to make a beautiful park that reveals clearly and makes stand out the city walls, an important part of Nicosia's true identity; and to mix this with a futuristic vision that can re-unite the two halves of the city, and its two peoples The hope is that more areas of the moat will follow and be made into green space, and that all these parks will join up to encircle the city, replacing the UN green line through the middle of Nicosia, with a green all-embracing band, sharing health and nature, thereby reuniting the city under a banner of common humanity.

NOTES

* The medieval city was extended during the 20th century beyond its circular Venetian walls and the old town within them was then rebuilt.

....at least, that is how I read it.

That is the vision!

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SHOULD I BUY A GROWTH TRUST?

The discussion of private equity, what motivates the salespple. The joke. 

SMT. Scottish Mortgage Trust.

 There is a piece today on the high-conviction strategy of SMT where the managers admit to certain mistakes in 2921/22 going after exceptional growth companies like Amazon, Tesla and Tencent:

 thinking some covid-behaviour would persist more after the pandemic

 slow in recognising the significance of the deterioration in US-China relations.

But they believe in the returns from high-tech companies and think these are not about the availability or non-availability of cheap money.

 The fund's managers also talked about historian Adam Tooze’s "poly crisis" that describes where we are on endlessly-evolving supply-chain delays, the Ukraine war, US-Sino tensions and climate change. So the collapse in SMT's share price, not just inflation and the Fed's strong response.

So they hang in on the long term prospects of disruptive technologies and discount the presumably-short-term stagflationary pressures on growth companies.

Nearly half of SMT's assets are in quoted companies with net cash and of these:

 48% are profitable

 21% in net debt

 22% are unprofitable. 

Of the unprofitable, 8% generated positive free cash flow which I guess means 92% of unprofitable companies were sunk by debt expenses.

But these stats didn't include the 30% of the trust invested in unquoted companies - the long tail of private equity positions that go some way to explain why SMT shares have fallen to a 9% discount below NAV net asset value.

The Trust can have up to 30% in unlisted. They say they revalue but they also say that unlisted companies won't accept these revaluations!

Of the listed, valuations have fallen in some cases back to 2008 levels, from 7 x to 5 x sales, and prospective earnings by 10% (seems too low). They are saying: how can the shares get any cheaper? And: reflect not on current valuations but future prospects (which is a nonsense argument).

Anyway, I sold DLG, taking a big big hit, putting some into DLG, some into SMT. And it has proven profitable...fingers crossed.

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ORIGINS OF WAR IN UKRAINE

One of Rishi's ideas that is purely political is to send two tanks to Ukraine. Two!   There's little discussion on military channels of its impact on the war because it will have none.

The whole war dates back to 1996 and NATO's (America's) decision to renege on promises given to the Russian's to respect a security buffer in Eastern Europe. Expansion started in 1999.

Russia had hope for a new joint security architecture for Europe. If you add to this possible alliance, the trade opportunities (commodities and energy for technology and finished products) especially with Germany, it is easy to understand America's apprehension, as the "world hegemon".

That is how the conflict began. Other key dates: 2008 promise in invite Ukraine and Georgia to join NATO; 2014 America begins to arm Ukraine; 2021 Russia's last offer of a settlement; 2022 March Zelensky ready to accept a peace deal but Johnson, on behalf of US, tells Zelensky to reject peace and fight on.

Sad for the peoples of Europe (where 80% of Russians live).

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US CHINA CONFLAGRATION

 The States doesn't seem able to stock up Ukraine with equipment and supplies, what chance the capacity for a serious war?

This simulation tells us that

a) Strategic Ambiguity is dead - just as Ukraine is effectively in NATO, so Taiwan is in The Western Alliance, in the first island chain and

b) the American military-industrial needs to ramp up preparations for World Wars 3 & 4. 

If I know America, their elite will have a first-strike go at China. Why not take Russsia and invade China from the North? That would roll WW3 into WW4. Let's do it.                   

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Les États-Unis « subiraient de lourdes pertes dans la guerre de Taiwan, mais la Chine risque la défaite »

La marine de Pékin serait en "pagaille", Washington perdant plus de 3 000 soldats, selon une simulation de groupe de réflexion

ParNick Allen À WASHINGTON9 janvier 2023 • 18h12

Une hypothétique invasion chinoise de Taïwan en 2026 échouerait mais les États-Unis perdraient deux porte-avions qui la défendent, selon la dernière simulation.

La marine chinoise serait laissée en "pagaille" tandis que Taïwan et le Japon subiraient également des pertes importantes , selon un jeu de guerre joué par un groupe de réflexion de premier plan à Washington.

The Center for Strategic and International Studies (CSIS) conducted one of the most complex war games yet, called The First Battle of the Next War.

It showed about 10,000 Chinese troops would be killed, with tens of thousands more becoming prisoners of war.

China would also be expected to lose about 138 ships and 155 aircraft, according to the simulation.

The US and Japan would also lose dozens of ships and hundreds of aircraft, which would "damage the US global position for many years".

It showed about 3,200 US troops would be killed in a three-week fight. The simulation was run 24 times to see who was most likely to win.

While the US would emerge victorious, in most cases the US Navy lost two aircraft carriers.

War 'not inevitable'

Taiwan would see its military "severely degraded" with all its destroyers and frigates sunk, while Japan would lose more than 100 aircraft and 26 ships, according to the report.

The report concluded a war over Taiwan was not "inevitable".

It said: “The Chinese leadership might adopt a strategy of diplomatic isolation, grey zone pressure, or economic coercion against Taiwan."

Mark Cancian, a senior adviser at CSIS, told CNN: “There’s no unclassified war game out there looking at the US-China conflict. Of the games that are unclassified, they’re usually only done once or twice."

In a large-scale war game in 2020, the Pentagon reportedly found the US risked being defeated by having its information systems knocked out.

However, in a later war game, the US Air Force secured victory.

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WHY THE WEST IS BEST

The top race, according to average achievements/capita, must surely be the Je*s.

Then come the European whites, Anglo-Saxons on top. Why?

1. We doubled life expectancy by introducing antibiotics insecticides and vaccines to the world. Nine out of 10 Indonesians would not be here today if it hadn't been for that !

2. Holland did not get rich by pillaging Indonesia, or maybe it did, but Holland was already rich and powerful, which is how it was able to colonise Indy.

And in so doing, Holland gave value to the spices they could grow there, that the people who lived there would have passed over !!

3. Stupidly you might say, we opened our Society to the whole world and people wherever they are can more or less come and go freely in our country - you imagine being given a passport to live in Saudi Arabia or China (not that you would want to). So successful has the West been that everyone wants to come and live in our system and no one, not even "the boat people", want to live in Indonesia, as you explained to me !!!

4. It seems that the West is still able to dominate the world due to its Greek and Roman inheritance (pre-dates Islam, but influenced Islam, so we have some common roots), its Christian values, and its rationality.

I mean reason over feeling, rationality over mysticism !!!!

5. We have energy, we are dynamic and innovative, we have (had) successful economies) and that energy and wealth is turned into military force, albeit far too aggresively in America's case. America dominates the world. America dominates Europe !!!!!

6. We are independent, responsible, innovative. We make and follow good rules and institutions. We have or had capitalism, not communism, we separate religion from government !!!!!!

Finish, ok :-)

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AMERICA APPRECIATES FULL WELL WHAT IT IS DOING

9 January 2023

I would love that people appreciate the real cause of this war.

As a patriotic Englishman, I care and I want the best for my country and for Europe as a whole (which incidentally includes that part of Russia where 80% of Russians live).

https://youtube.com/shorts/r8vvbOxAwKI?feature=share

https://youtube.com/shorts/r8vvbOxAwKI?feature=share

It was made plain to America as long ago as 1997

https://m.youtube.com/watch?v=huL4mTx55Kw&feature=youtu.be

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THE GOALS AND STRATEGIES OF AMERICA, RUSSIA AND CHINA

4 January 2023

America

American policy as explained by Mearsheimer is to remain regional hegemon in The West; with no hegemons in other regions. This is the brutal and ruthless truth, but an ideological soapy cover story is provided by America's liberal democracy rhetoric.

Reality is America will tolerate neither Russia nor Germany in Europe; nor China in Asia. The goals of these latter are national independence and full sovereignty, therefore since America wants to dominate and since Russia and China will resist, ultimately negotiation is impossible and outcomes can only be decided by fighting.

Russia

Russia is attempting to balance the power of America / NATO. Russia is attempting to hold together and protect Russian minorities. It isn't bent on recreating Soviet or Czarist Russia, only survival of its nation, culture and people: the fatherland.

Military power rests on economic. Economic on wealth and population size.

While Russia is not a serious threat

https://youtu.be/PLBc2KWTrck

China

Nor really is China. China has the former (growing wealth) because America gave it priviledged access to its middle class, but the population of China is in free fall.

Nothing to worry about then, according to Peter Zeihan

https://youtu.be/7Me2G6FJZMI

But then there's Taiwan

https://youtu.be/PLBc2KWTrck

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THE DESTRUCTION OF OUR BEAUTIFUL BLUE PLANET

4 January 2023

America and NATO have been provoking Russia for decades. The EU - Merkel, Hollande - have weakly, blindly, allowed America to bully them.

America's paranoid leadership sees a weakened Europe (esp. Russia & Germany) as in its interests - take out potential peer competitors - but The West's real collective best interests are currently in trade deals and an alliance with Russia, countering the threat from China, promoting security and prosperity.

I'd imagine America is trying to break up Russia, move in to that country and contain China from the North.

That will never work, it's more American insecurity. This war against Russia will be yet another American disaster and its biggest, possibly its last, disaster yet.

The irony is, we want the American Order, but without America's crazy foreign policy elite. Instead, the world is moving to two Orders and perpetual war, until life on this planet is exhausted, wrecked, destroyed.

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THE VIRUS: THE CHINESE HAVE BEEN PANICKED INTO RUNNING THE EXPERIMENT THE WEST REJECTED

2 January 2023

https://www.ft.com/content/fb879510-c2bb-4a04-8e36-182078ae15ec?sharetype=blocked

https://www.ibtimes.com/new-covid-model-predicts-over-1-million-deaths-china-through-2023-3648316

      Opening up was delayed pending Xi's reelection. China's zero-COVID policy may have been effective at keeping earlier variants of the virus at bay, but the high transmissibility of Omicron variants made it impossible to sustain. Public protests were decisive in getting the leadership to understand this.

You've got to ask what was the point of three years of lockdowns? The lack of preparedness makes opening up seem like a panicked response to growing civil unrest.

Why were the Chinese unable to develop an effective vaccine? mRNA technology has been around in the West for 30 years. And if they couldn't build, however humiliating, for the sake of their people, they should really have bought production lines.

What is interesting is that China is running the experiment the West rejected: herd immunity through natural selection. But even here, the West's plan was nuanced: it was to manage the process by openings followed by shutdowns when the infection rate became too intense, thus slowing adaption. The Chinese seem to have thrown caution to the wind.

We know what to do now: shield the vulnerable, vaccinate using chromosome re-engineering, keep the economy open at almost all costs, prevent politicians from seizing more powers and the wealthy, wealth.  

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END GAMES IN UKRAINE

1 January 2023

The Wagner has taken on the mission of destroying the Ukrainian army in Bakmut (spelling). The purpose is to demilitarise Ukraine* - looks like this will mean wrecking the whole country (energy, comms), whilst the popn flees to Russia or Europe (Poland).

*Denazify, no NATO, autonomy for Russian East - was built by Catherine the Great late 18C.

Most likely scenario

Then Ukraine will fall to Poland in the West, back to Russia in the East (Novorossiya: to Odessa and round to Southern Transnistria is possible).

Leaving a landlocked rump that will fall under Russian influence.

Fine mess the Americans got us into.

Other scenarios

Stalemate and perpetual war. With strains on EU and NATO risking their breakup.

Ukraine starts defeating Russia and Russia responds with nuclear in Ukraine only. NATO America would almost certainly not respond, fearing MAD.

NATO America enters Ukraine. Here, could get MAD.

As I say, fine mess the Americans got us into

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PENAL UNITS

1 January 2023

         https://www.telegraph.co.uk/world-news/2023/01/01/russian-police-hunt-armed-convicts-who-fled-mercenary-training/

An interesting bit of gossip, this article, using criminals not without precedent in Russia nor closer to home, common practise throughout history....other examples

The Fr foreign legion was originally a fighting force made up of criminals and other undesirables. Its purpose being to remove disruptive elements from society and put them to use fighting the enemies of France.

Strafbattalions in Nazi Germany were created from prisoners.

WW2 amnesty was offered for 10 missions as the rear Il-2 gunner (unprotected, 8x death rate compared with Il-2 pilots),

Also for 10 mine field clearing missions.

The general area of interest is "penal units". Were sent to the most dangerous of front lines.

Then there's Australia...and colonial administrators generally.             

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UKRAINE: YOUR THOUGHTS (NOT ON A POSTCARD PLEASE) ARE REQUESTED

1 January 2023

Ukraine runs sorties deep into Russia daily, but if it starts with American weapons or NATO troops, that would provoke a third world war.

For the moment, it is "only" a proxy war. Ukraine is losing its army, pretty soon if this continues it will be dismembered, whether you agree or not.

How much better would be peace. If you have Russia as a neighbour, it's like being in bed with an elephant: better take care! (That's just a fact, whether you like it or not.)

The Americans are on to another disaster here, quite possibly their biggest and their last. And they've dragged down Europe with them.

What we are seeing is Russia looking East, a bipolar world, two reserve currencies, perpetual war.

How much better off we'd all be if we could winkle America out of Europe (I know, I know....) and sew up a trade deal with Moscow.

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 Try Alexander Mercouris for daily news

https://youtu.be/vpgpsEEgu_o

Or John Mearsheimer for deep understanding eg

https://youtu.be/m-2Oy3MVyyA             

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