Italian debt; a financial disaster waiting to happen

The new Italian government will increase public spending and public debt. It promised to reduce taxes, introduce basic security and reform pensions. Italy’s Northern League’s leader Mateo Salvini surged in the polls and the party is now the strongest in Italy. A couple of years ago it was inconceivable that this regional group could become Italy’s leading political party. We should expect more to come. As the saying goes, it just could not happen till it happened. The financial establishments in North European countries like Germany and the Netherlands assume that the politicians of M5S and Lega Nord will follow the Greek script and will backtrack on their promises. But Mateo Salvini and Prime Minister Giuseppe Conte know that if they do not live up to the expectation of the voters, they will be voted out of office. They are also aware of it that the Italian voter has still another alternative called “CasaPound”, a much more radical, if for the time being insignificant, social and anti-migration movement.

The planned reforms could burden the state budget with an additional 125 billion euros per year. Can the Italian government afford such a thing?

The question is rhetorical when you look at Italy’s growing debt mountain.

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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.

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.

Gefira Financial Bullletin #25 is available now

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High suicide rate under the French police as the state is under permanent attack

As the numbers of suicide cases among the French policemen have hit record levels (last year 66 officers committed suicide),the mass media and politicians were quick to provide various explanations which include work-related stress, too large a workload, too small a number of psychologists during police training and in police stations, family problems, too small an amount of time that can be devoted to private life and the like

We have registered nearly a hundred incidents where the police came under attack. (See interactive map).

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The NGOs challenge the Italian government

Giuseppe Conte’s new government and his policy towards the influx of migrants have been defied by the German NGOs whose ships – the Sea Watch and the Sea-Eye – have purposefully ignored the rules that are to be binding in the Mediterranean: the body of water has been divided into areas for which respective – Italian, Maltese and Libyan – maritime authorities are responsible. Hence, NGOs have no business to operate there.

Yet NGOs are above law, and so they are on their mission irrespective of everything and anything. Two recent events with the Sea Watch and the Sea-Eye are case in point.

One. A signal is picked up by the Sea Watch that an inflatable boat, crammed with migrants, finds itself in the waters under the jurisdiction of the Libyan Coast Guard. The Sea Watch responds to the dispatch, but Rome denies her permission to “rescue” the people because the Libyan patrol boat is operating there already and this is the area for which the Libyan coast guard is responsible. Despite that, two Sea Watch rescue boats are launched and approach the boat with the human cargo. At that time the patrol of the Libyan Coast Guard heaves into sight. Seeing which, the migrants, not wishing to be taken back to Libya (after all, they paid the traffickers up to 6,000 euros to arrive in Italy) throw themselves into the sea to reach the NGOs rescue boats because they are aware that the NGO will take them to Sicily. At this point, the Libyan Coast Guard leaves the rescue area, and so the German NGO begins to take migrants on board to ferry them to Sicily. Continue reading →

India cannot finance the oil it needs for its economic growth

At the beginning of the 1990s, about 65% of India’s oil demand was covered by its own production. Nowadays India’s consumption of oil, of which 80% has to be imported, is continuously growing. Due to the population growth and the resultant increase in the number of cars as well as the stagnancy in the domestic oil production, the imports of this raw material will be rising for the foreseeable future. Such a high dependence on external producers along with growing oil prices will become a significant burden on the Indian economy.

With the oil price hovering around 60 and 70 dollars per barrel, US shale on average still generates a negative cash flow. America and other producers therefore need more expensive oil. The Trump administration does whatever is in its power to raise the oil price to make America’s shale oil industry profitable. Since Trump came to office, United State’s sanctions imposed on the biggest oil producers such as Russia,Iran or Venezuela pushed up the oil price. Continue reading →

Mass-migration should be accepted by Western states according to the UN Secretary

UN member states should prepare for great migratory movements, said UN Secretary General António Guterres on 11^th of January 2018 during the presentation of the report on the management of migration processes. And this is not a joke: The UN, led by António Guterres, wants to manage and influence migration. All this, of course, is dressed up in pretty words about the need to provide humanitarian aid, and also justified by the benefits that resettlement of the population is to give to the economies of particular countries. However, in fact, this means only one thing: Europe and the entire Western World must prepare for the flood of Africans.

Currently, nearly 1,3 billion people live in Africa, and by the end of this century there will be 350% more, or 4,4 billion. It is obvious that the continent, whose inhabitants are not able to feed themselves, let alone achieve an adequate level of urbanization and industrialization, cannot cope with such a sharp demographic increase. The UN therefore came up with the idea of resettling Africans to Europe and highly developed countries on other continents.

At the end of 2016, just after his election as UN Secretary General, António Guterres said: “We must convince Europeans that migration is inevitable and that multiethnic and multireligious societies create wealth”. It can be assumed here that the goal set by the former UN commissioner for refugees (A. Gutters served this function from June to December 2015), is to promote migration, give it a legal framework and manage it globally. Continue reading →

Italy and the euro cannot be saved by mass-immigration

The ongoing euro crisis has never been and will never be solved. The native European populations are shrinking and this will have a consequence for the economy, production and public finance. The demographic decline is the single most important economic phenomenon. We do not doubt that the annual visitors to the Global Economic Forum in Davos are fully aware of it: they know that the European and East Asian populations are decreasing and that 18 of the 20 top economies will never experience sustainable growth again. The economic press and mainstream analysts somehow do not get it and still believe that countries that will see their native population shrinking by 30% in the next thirty years can increase their GDP.

Italy is the next epicenter of the demographic crisis. The ongoing euro problems and the orchestrated mass migration into Italy are closely related. Italian population began to dwindle last year, a situation that has never happened in modern history. Without immigration, the Italian working-age population will drop by at least 30% before the middle of the century. If the productivity does not change and even if the Italians are able to balance their budget, the consequences are unsolvable. Continue reading →