Interest on sight deposits at the Swiss National Bank remains at 0.75% below zero, policymakers said on Thursday. They also decided to leave the target range for the three-month Libor (London Interbank Offered Rate) unchanged at between 1.25% and 0.25% under the neutral level. The central bank reiterated it will "remain active in the foreign exchange market as necessary," willing to intervene to ease upward pressure on the franc.

The inflation outlook was slightly dampened. After 0.3% this year, the main gauge is expected in 2018 at 0.3% or 0.1 percentage points less than what was estimated in March. The rate-setters took the forecasted rate also 0.1 points lower for the year after that, to 1%. Growth in 2017 is still expected to reach 1.5%.

"In the first quarter, growth in mortgage lending remained constant at a relatively low level, and momentum in residential real estate prices continued at a measured pace. At the same time, owing to developments in fundamentals and the generally subdued activity on the mortgage and residential real estate markets, imbalances have fallen slightly in recent quarters. Nevertheless, they are still just as pronounced as they were in 2014, when the sectoral countercyclical capital buffer was set at 2%," the statement said.

Two articles about demography.

Demographics will decide the world's history within the next decades. 2045 is the year in which, as the U.S. Census Bureau projects, Whites will become a minority in their own country. The same trend is observable in Europe. In the eighties these continents began their transformation from relatively monolithic into multi-ethnic or multicultural societies, which resulted in a rapid increase in the US Latino population, and the influx of immigrants from Africa and Asia into Europe. 

The native European population growth will soon reach its peak and then the reverse trend, already observable in Russia and Poland, will set in. The population of the Netherlands and Germany is only expanding due to the rising number of second generation non-Western migrants. In no time (historically speaking) will the European ethnic composition resemble that of Brazil or India.

The unprecedented rise of Front National, the riots in the Banlieu, the first Turkish party in the Dutch Parliament, Islam-driven terrorism, the Black Lives Matter movement and the endless discussions in the Western media between multi-cultural opponents and proponents, Whites and non-Whites, Islamists and Christians are just a few pieces in the broader picture, and we expect much more to come.

Significant demographic changes are by no means restricted to Europe. The population of Africa, which is likely to keep on growing at the current unprecedented pace till 2100, is already outnumbering that of Europe, and India’s population will outnumber that of China, which will be at its peak in 2030. In 2100 Africa will make up 40% of the world’s population, while contributing close to nothing to the world’s GDP. Africa’s GDP is only 2% of the World’s total GDP.

Far more people will live in Africa and South Asia than in Europe and North America. A neoliberal economist’s take on this phenomenon is that we are all the same, replaceable human beings, irrespective of race, heritage, or religion, hence there is no reason to believe why Africans should not be as productive as the Japanese and as efficient as Germans. If such is the case then the shrinking populations of Europe, Japan, the US and China will be compensated for by Africa’s young, energetic, vibrant men and women who will, they say, successfully take over and handle the world’s growth engine.

A cursory look at the condition of those American cities with African-American majorities, Haiti or African states does not raise such high hopes, which is why our team holds a different view. Sub-Saharan Africa’s recorded history started about a hundred years ago, hand in hand with the beginning of the European colonization, which shows that even African historical consciousness has been shaped by Europeans, to say nothing of the continent’s economy, which continues to be dependent on the technical and financial support from Europe and China. The approaching shift in demographics will create ethnic tensions, and will have a profound impact on the world’s economy at large.

Article published by Gefira on May 5th, 2017