The price of oil is steadily going up. Since 2016, the year we launched the Gefira bulletin, we have advised our subscribers to invest in oil-related stocks because we believe oil will reach 100 dollars by 2020, and when it does, the next crisis will be just around the corner. Investors should begin considering the liquidation of their portfolios in around 2019. A market crash is the best moment to buy shares in companies that will survive. In this Gefira we look at how the globe is shifting to the heartland i.e. the world’s largest island. It will not be Africa or India that develops, but Central Asia, especially by China and Russia. We look at the so called “pivot area” and why this area still has a lot of potential for economic growth. We also discuss the end of the economic dream. There is still economic growth in the US, because its population is still growing and GDP = population multiplied by productivity. The American middle class has a rather bleak future and the American dream is disappearing into thin air. In the recommendations we talk about Africa, Turkey and… cacao.
2020-2030 The world will shift to the East
In Gefira #23 we forecast a global systemic crisis in around 2020. The ECB and FED will continue or restart their asset-buying programs known as Quantitative Easing or, better put, money printing, and negative interest rates will be on the table once again. Currently, the official inflation rate in Europe is 1.3, and for that reason the ECB does not increase its interest rates. At present European citizens have to pay 8% more for their daily shopping when compared to last year. Seniors who reach retirement age need some interest on their savings. They are in for an unpleasant surprise. European and American governments have already begun with wealth confiscation in the form of property tax (true, in the US the interest rate is going up a little, but that will not be for long), which will especially hit retirees in that their savings will be systematically lessened. In the Netherlands, the tax on bank savings is much higher than the interest on them. The Dutch authorities have also levied extra taxation on house owners. The new fee is primarily intended to tax pensioners who are mortgage free, and comes on top of local property tax. French economist Thomas Piketty posits that governments have to tax wealth instead of labour, which has made him immensely popular among socialist civil servants. The public at large may believe that this tax is meant to tax the so-called 1% of the richest, but that is not the case. Wealth taxation always adversely affects the middle class, or bourgeoisie as Karl Marx would have called them – the socalled backbone of society.