When Nixon renounced the gold parity of the dollar, the debt of the world economy in terms of world GDP was about 90%. Since then, central banks began massive printing of money out of thin air, so that in 2018 debt rose to 300% of GDP. The crises like the one of 2007 were rooted in this debt mountain. A similarly dangerous situation was brewing in 2019, and then suddenly came the redemptive Corona crisis, thanks to which central banks were allowed to print even more money and pump it into circulation. In the 18 months since the pandemic began, central banks increased the amount of assets held by 60%! Previously, to print that much, it took a decade. This huge amount of money in the economies naturally led to the inflation we are suffering from now (which is in every textbook on economics and which every economist should have foreseen). So it is not Putin who is responsible for this inflation, but our monetary guardians, the central banks, who hand in hand with politicos imposed lockdowns to plug the resulting deficits by flooding the economy with money. In 2020, inflation was not yet so evident as consumers, spooked by the media, sat at home and spent little. As they gradually relaxed by easing lockdowns, they began to buy more. This accelerated money circulation in the economy accelerated inflation. Not only did supermarket prices rise, but asset prices and risky assets like cryptocurrencies also rose. Now central banks started to raise interest rates to stop this rally. So these biggest buyers of the risky assets are getting off the racing train, so this year will not necessarily be happy for the owners of the stocks and cryptocurrencies. Already in 2022, the markets anticipated the coming decisions of the bankers. The year brought huge losses in both stocks and bonds, which Gefira warned about early on. So in 2023, position yourself on the assets that will be immune to inflation.

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There is a rule: a prominent politician in a country, a former prime minister or head of the central bank is suddenly selected and promoted to the IMF, the president of the Council of Europe or some other highest office for which everyone in the world has respect. These are often amazing careers and one wonders if people actually have competencies for this.

That’s what happened with Donald Tusk. He did not block the construction of the Northern Stream under Merkel, which would have been in line with the Polish raison d’être at the time. The favorite child of the Mutti-Merkel in Poland became the president of the European Council. A price for the services rendered to Germany and Gazprom Bank. Now Tusk’s arch-enemies have been ruling Poland for more than 8 years, and Kaczynski’s favorite child, the former head of the state television station Jacek Kurski, suddenly got a job at the World Bank. His competences? None. But somehow the pharmaceutical lobbyists and the financial elites had to show their gratitude to him for being a right-wing politician in the Corona pandemic, resisting the “right-wing” and “conspiracy-theory” temptation to question the sense of vaccinations by his critical journalists, and for scaring all citizens hand in hand with left-liberal media in the pandemic every day.

Equally controversial was the election of Louis de Guindos, Spain’s former economy minister, to the ECB board. De Guindos was a banker at Lehmann Brothers, and after the fall of the U.S. bank at Pricewaters Coopers. Similarly, President Macron and Polish Prime Minister Morawiecki rose from the banks to government circles. The high offices are a price for faithful service to bankers, not for service to the people of the given country.

In the fall of 2014, Jose Manuel Barroso resigned as president of the European Commission after 10 years in office. He then waited the legally required 18 months before accepting a job offer from Goldman Sachs. If Barroso cared in the least about the situation of the people of Europe, he would not have taken a job at a bank that helped Greece hide its debt just before it joined the eurozone. However, it is difficult to expect a man who began his political career in communist groups to care about ordinary people.

Goldman Sachs is unrivaled in this regard. The institution effectively pushes its employees into positions in the structures of various countries and then takes them over at the end of their tenure. Sometimes the order is reversed. This is true, for example, of Mario Draghi, who was Italian Finance Minister, then CEO of Goldman Sachs, and is now President of the European Central Bank.

There are many more well-known politicians with ties to Goldman Sachs. Before Mario Monti was appointed to head the Italian government (replacing the democratically elected Silvio Berlusconi), he worked as a senior advisor at Goldman Sachs.

When Greece manipulated its debt just before joining the Eurozone, the head of the National Bank of Greece was Petros Christodoulou, who began his career at Goldman.

Until 2015, Peter Sutherland held the position of Managing Director of Goldman Sachs International. In the 1980s, Sutherland was Attorney General in Ireland. He was later appointed EU Commissioner for Competition. He was also Ireland’s key representative in the negotiations over the nationalization of the banks and the terms of the country’s bailout package.

This shows how elites are strongly connected to the financial world and that it is not politicians who run the world, but those who pull the strings on Wall Street and in the City of London.

Titbit

In the biggest circus for elites – Davos, so hated by anti-globalists – the course is set for our future. In 2023, as always, the annual meeting was attended by the heads of Goldman Sachs and the world’s largest wealth fund, the equally notorious Black Rock. The former – Solomon – and the latter – Fink, together with other billionaires, have already written the history for the destroyed country. And do you know, dear friends from Ukraine, what awaits you in the future? According to Fink’s statements in Davos, the country can become “a beacon of hope.” You mean beacon of hope for Ukrainians? Not at all: For Western investors, because they would “flood the country with money” – according to Fink. Fink and his colleague, the powerful banker calculated the country’s construction costs at $750 billion. Goldman Sachs had already sent its own people to Kiev as advisors a few months ago, and Fink agreed with Zelenskyy at the end of the year that Black Rock would support and advise Ukraine on investments after the end of the war. So the new colony has already been bought, the future flood of money will make Ukrainians entirely dependent on the West. A model for successful takeover of a country tested several times in history. Now a small obstacle stands in the way: the war must be won.

Beast
The West is handing over weapons to Ukraine on a scale reminiscent only of similar sponsorship of the Allies by the U.S. in World War II. The result? The Ukrainian army is better equipped than the armies of Germany, France and Italy combined.

Weapons	Ukraine	Germany	France	Italy	Great Britain
Tanks	2596	266	406	200	227
Armored vehicles	12 303	9217	6558	6908	5015
Self-propelled artillery	1067	121	109	54	89
Towed artillery	2040	0	105	108	126
Mobile missile systems	490	38	12	21	44
Soldiers	500 000	200 000	240 000	190 000	231000

Comparison of armed forces in Europe. (Source: IISS, The Military Balance 2022)

One day the war will end and the weapons will remain in Ukraine. The far-right movements in Ukraine are gaining ground. The nationalist-minded mercenaries, provided with state-of-the-art Western weapons by Ukrainian oligarchs, are responsible for many successes on the front lines. It is the mercenaries from Azov, Kraken and other troops who are considered as the new elite. They will come to power in the new post-war Ukraine.

And now remember the biggest operation of the CIA from the 1980s (Operation Cyclone), when the USA supported mujaheddin with billions of dollars and supplied them with weapons. In this way, the Americans played the Islamists against Moscow. Now, in this way, they created a new Frankenstein – the Taliban, who emerged from the radicalized Afghan tribes of the mujaheddin. The Taliban later required thousands of Americans and other NATO soldiers to fight against them for decades, only to lose the battle ignominiously in 2021 under Joe Biden. Is this not a warning from recent world history?

“You know how to interpret the appearance of earth and sky, but why do you not know how to interpret the present time?”1

If one knows much about the rules of a game, and if one looks at a given moment of that game, it is not at all difficult to predict with a high degree of probability how the various players will behave. If one knows the properties of a particular chemical, it is not at all difficult in principle to predict how an organism will react to it. Finally, if one is familiar with past events, then seeing a similar play of forces, factors and data, then future in its general outline holds few secrets.

Consider Yugoslavia. What was this country like? A federation, made up of several nationalities and several religious denominations. It included related nationalities and nationalities completely alien to each other. This mixture was held by the strong hand of someone who nowadays would be called a dictator. Somehow this political entity functioned. Furthermore, Yugoslavia was envied by all citizens of the socialist countries of Eastern Europe and praised by citizens of Western countries. Then, as a natural consequence of things, the dictator died and the country fell apart with a bang into several parts. The breakup lasted almost a decade and manifested itself in cruel murders, rapes and destruction.

The authors of Gefira invite readers to entertain just such rational predictions about politics, society, economy and finance. The authors of this issue of Gefira ask readers not to cling to wishful thinking, but to brave reality as it is, and not to believe that things are different now because… No, nothing is different. There are laws that operate in the history of humanity as there are laws that operate in physics or chemistry. If we want to pretend that those laws don’t exist, or that we can act against them, we will be doomed to make the same mistakes forever. Fighting against nature – and man with his instincts, psyche and all biology is part of nature – is as ridiculous as fighting against laws in the sciences.

Going back to the example with Yugoslavia: since the attempt to peacefully hold together nations and faiths has failed twice, since there has been slaughter, rape and destruction accompanying the inevitable breakdown twice (first in the years 1941-1945, then in the years 1991-1999), then why try again and again to conglomerate nations, faiths and anthropological types a third time? Why create Yugoslavia 3.0, the Soviet Union 2.0 or any other union 1.0? because humanity has grown out of its “wild instincts”? Please…

So different and so similar! At first glance, these ladies seem to have nothing in common. Margot Honecker came from a working-class background and for all practical purposes had no higher education. Ursula von der Leyen, on the contrary, is a member of the highest strata of society, a woman with as much higher education as possible. And yet, leaving aside low and high birth and the lack or acquisition of education, these two figures share a great many similarities. Even the facial similarity.

Someone with poorer eyesight, in poorer lighting, casting a fleeting glance could easily mistake one lady for the other. Especially since both of them dress in a very similar way (to be precise, one would have to refer to Mrs. Honecker in the past tense, as she is no longer alive, but in the following text we will refer to her as if she were among us). Both are of German nationality and both pursue a successful political career. Both Margot and Ursula believe deeply in the ideologies to which they have dedicated their lives; both fervently work to improve the plight of the disadvantaged, exploited and marginalized. Margot cared for the working class and peasantry, Ursula – for sexual minorities and (wouldn’t you know!) black Europeans or African Europeans. Further, both Margot and Ursula are very militant ladies: the former set her sights on the military training of East German youth, anticipating the coming clash with capitalist states; the latter is hell-bent on punishing Putin and putting him on trial, and advocates supporting the Ukrainian war effort to the last Ukrainian. (So much for the gentle or peaceful disposition of women, who, by participating in politics, were supposed to balance male aggressiveness.)

There is another common denominator for both ladies, a very important common denominator: neither Margot Honecker nor Ursula von der Leyen, mingling for years in their own circles, ideologies and politics, holding high positions of power for years, has the faintest idea of what lives normal people live and what an average person wishes for. Worse still, both women are convinced that they know better what people want, and because they know better and – as they firmly believe – hold high moral ground, they try to make life better for their subject citizens: Margot saw the salvation of humanity in the Soviet version of socialism, Ursula – in its European counterpart. Both one and the other are convinced that the path they are following is the right one, and that their views are shared if not by a crushing, then at least by an overwhelming majority of citizens.

By the end of her life, Margot Honecker had managed to find out how wrong she was. She had to flee the country she ruled, chased away by the people from whom she expected gratitude. To the end of her days, she denied reality and maintained that East Germans had been seduced by capitalist mirages and that they would regret it. We don’t know whether Ursula von der Leyen will be given a chance to learn about the “ingratitude of the people.” We can be sure, however, that if it came to that, she would deny reality in exactly the same way as her East German political colleague of a few decades ago.

Margot Honecker and Ursula von der Leyen: look at their smiling, seductive faces. How much goodness, warmth and humanity radiates from them!

Assuming that the current crisis or recession is temporary and merely an interruption in the upward trend in the U.S. stock market that has been going on for many years, one should buy U.S. stocks soon, but be very selective.¹

Behind us lies a year of a bear market, in which the word inflation was king in the media. By the end of last year, however, inflation had already subsided, giving way in the media to the ominous recession that is now on everyone’s lips. Historically, recessions have always been the best time to buy stocks, and the ideal time to buy stocks is in the middle of a recession. Therefore, in our opinion, the long-term investor should already be on the lookout for opportunities in the overvalued sectors and build up their positions on a regular basis.
In which sectors could there be great potential? In our opinion, such a search should start with the sectors that have been hit the hardest recently and are currently out of favor with investors. With this in mind, consider the growth sector (growth companies) of the U.S. equity market.

Growth companies are characterized by above-average growth in sales, profits and operating cash flow, as well as high profit margins and a high return on invested capital. In their case, the current valuation of the stock is of secondary importance and the most important factor is the positive outlook for further growth in the parameters responsible for the company’s profitability. Continue reading →