Gefira is committed to
keeping you informed on the most important trends in geopolitics and finance.
The global economy is
running out of its most valuable resource
The current state of the financial markets
and the global economy depends on one single resource that nobody, even such
renowned economists as Paul Krugman or Robert J. Shiller and dissenters like
Max Keiser and Jim Rickards, dares to talk about. In private discussions
central bank managers told us that they were aware that none of the existing
economic theories and models fit this new situation. Yet, they do not broach it
in their public speeches and lectures, preferring to deal with such topics as
balance sheets and business cycles. All of which reminds one of a family
visiting a terminally sick relative: everybody knows that he will never
recover, and nobody whispers as much as a word about it.
- Trump’s pivot shifts to
Asia while the Europe Union disintegration continuous
- Saudi Vision 2030: The
Saudis have given up on their own nation
- North Korea presents a
tremendous investment opportunity
- Lithium and fuel cells –
investing in the future of the automotive industry
All productive nations whether in East Asia
or the West, have reached the peak of their 250-year-long development. Even the
most devastating wars could not prevent their populations from growing in the
long run. It is only now, during the many decades of peace and affluence, that
the numbers of the inhabitants of the developed countries have been decreasing
and the trend continues. The phenomenon has not been brought about by any famine
or natural disaster but by the sheer fact that people do not want to have
children.
Japan is an economic bellwether. The country
refrained from mass migration and during the 2006-2016 period its population
shrank by 0,5%, oil consumption dropped by 21,8%, car sales by 7% and GDP by 4%

Japan is the first country to cope with the
new reality and investors need to change their mindset to understand what this
new reality stands for. In the past, every business cycle, recession or
recovery, ended with a higher GDP and larger economy than before. In the future
we will see the opposite: every business cycle will conclude with a lower
GDP and a smaller economy than the previous one.
A shrinking population entails economic
consequences. Oil consumption will decline, car sales will go down, and national
GDP will be lower and lower. The paradox of it all is that the total economy
may be shrinking, and yet people in the US, Europe and Japan will be doing
better than before. Why? Because a less crowded country means less dependence
on (foreign) oil, lower pollution and CO2 emissions, fewer traffic jams, more
space and food abundance.
It is the financial sector that will be
afflicted by the new reality, not the people. Without the support of central
banks the Western financial industry will not survive a continued depopulation,
a situation in which people save and spend less and less money. A buoyant
economy invests in win-win deals, a stable economy is a zero-sum game, and in a
depressed economy all investors lose. That is why central bankers are considering
the imposition of negative interest rates. These are flashing warning signals.
Confronted with this reality, the American
and European leaderships have opted for re-population. If the pace of this
process remains the same, before this century is over, 50% of the Western
states will be replaced with people from the Third World.

The Washington establishment began with the
acceptance of unprecedented numbers of migrants from Latin America while the
enlargement of the European Union made up for the lack of people, at least for
the time being. As under the banner of the free movement of labour, Germany,
the UK and the Netherlands got a fair share of migrants from Central Europe,
this part of the continent has been deprived of its youth. For example the
Polish generation in the age bracket 15-20 is 30% smaller. Now it is Ukraine's
turn to hand over its youth to Western Europe. After the 2014 revolt in Kiev
the European Union was in a desperate hurry to grant Ukrainian
"patriots" the right of visa-free travel, so that they could leave
their allegedly beloved home country.
Demographics is quite precise, and those in
power saw the coming "disaster" in advance. Peter Sutherland, a
former Goldman Sachs banker, became an advocate of mass migration. In 2008 he
said: "Rich countries should not try to restrict migration from poor
countries, even during the economic slowdown." Alas, migration is not
about helping the poor – there are just too many of them – migration is about
re-populating Europe. Migration is also about economics and finance.
All theories, all models that we know about
the economy, finance and markets were developed when the European populations
grew. The global economy is dependent on the industrialized world. Without
Europe, the Sheikhs of Dubai would relapse into the life in tents, Africa's
population would be about 90 million instead of 1.2 billion, and today's US
would be a sparsely populated country with very few nomad tribes.
Prestigious consultancy firms have told their
corporate clients that all societies are in essence the same and well on the
way to becoming like Western economies. The Africans only need to change the
law, and they will be as productive, diligent and efficient as people in
Europe. Those pundits believe that if car sales stall in Europe, China will be
the next market; if the Chinese market is flooded, we have still India, and
then – probably around 2040 – the Africans will be the new customers.
We believe that the world's economy is
concentrated in East Asia and in the West, with all other economies being but
satellites, and it is not going to change, at least in the foreseeable future.
If the West together with Eastern Asia collapse, the rest of the world will
follow suit. If the West and Eastern Asia stop being interested in African
resources, the Black Continent will crumble. We remind the reader that all
African countries are dependent on food imports which they finance with the
exports of commodities.
Africa cannot sustain its current population let
alone the doubling of it within 25 years. 50% of the African youth is younger
than 25. The consultancies of Ernst and Young call these youngsters
"demographic dividend", a treasure trove for the global companies to
reap. If they cannot capitalize on them in Africa, they have to bring them to
Europe, as we see it happening now. The current migration process which goes by
the name of crisis is engineered and promoted by an influential lobby.
The Gefira financial
bulletin is a monthly periodical that the Gefira team releases ten times a
year. We give a clear projection of the future of energy and politics.From
Trump's election to the steep incline in oil price and the value of bitcoin, it
was all in the Gefira before it happened.
According to
the Gefira team, the next systemic crisis will happen around 2020 as the oil
price is back at 100 dollar and German mass retirement begin. There is a high
risk of war on the Old Continent. However, it is not Russia but Turkey that is
the most prominent threat.
It is not the emerging
markets, nor public or private debt that should be of interest to investors but
instead the shrinking populations in the developed world. Japan is the first
country that experiences a declining people, and for that reason, it pursued
extraordinary monetary and fiscal policies. The decrease in the
European and US population will have dire economic consequence, and after 2025
China will join the club of dying nations.
Apart from China and
Russia, economic growth in Africa, the Middle East and South Asia is dependent
on the developed countries which see a dramatic decline in their populations.
In the Gefira bulletin
we provide investment suggestions and give a coherent vision of the time ahead
from a macroeconomic perspective.
On our Website, we have
articles from our research team whereas in the Gefira Financial Bulletin we
give a comprehensive explanation of the coming world. We focus primarily on
economic, investment and strategic subjects. We focus on 2020 as the financial
breaking point.
or
From the perspective of investors and financial
planners we focus on such issues as:
- Geopolitical risks
- Demographics
- Private and public debt
- Assets bubbles
- Cryptocurrencies
- Energy security
The Gefira Financial Bulletin is a confidential
briefing paper on the current economic events for investors and generally the
business community. It is accompanied by our website, where you will find
articles on social issues. The Gefira research team is the only one that is
acutely aware of the importance of the current unprecedented demographic
changes not seen before in all of history.
The Gefira research
team elaborates its anticipation, drawing on:
- an extensive knowledge
of finance and banking;
- a comprehensive
understanding of geopolitics and history;
- detailed data analyses
of millions of records;
- computer-aided
simulations.
With best regards
T.Dankers, Editor-in-chief
editor@gefira.org