Zbigniew Piekarski declares that rapidly aging societies and costly pensions will drain Europe of its political and economic power
The three most important things a man has are briefly, his private parts, his money, and his religious opinions.
- Samuel Butler (1835-1902)
Every new religion takes from the old things it can use to its own advantage. According to Bede the Venerable (673-735), the greatest scholar in Anglo-Saxon England, the name Easter is thought to come from the Scandinavian "Ostra" and the Teutonic "Ostern" or "Eastre," both goddesses of mythology signifying spring and fertility, whose festival was celebrated on the first day of the spring, or vernal, equinox. Other scholars say that the word "Oestre" in Latin apparently derives from the Greek. We see this word again in English in "oestrus," meaning a female mammal "in heat" and able to conceive.
Eggs are an obvious symbol of rebirth. They seem to be a miraculous springing forth of life from a cold and dead object. The ancient Persians and Greeks gave eggs at spring festivals to indicate that nature was beginning to bloom again after the harshness of winter. For obvious reasons the rabbit was included as a symbol of fertility and fecundity.
The original festivals were celebrated at the time of the vernal equinox when night equalled day, and the forces of male and female, yin and yang, were in balance. It was the time when the great mother goddess, Gaia, again a virgin, welcomed the young sun god unto her and conceived a child of this divine union. This child was born nine months later at yule, the winter solstice.
Then the "rationality" of man interfered with nature. Easter Day would be celebrated on the first Sunday after the full moon following the vernal equinox. And it would not be the astronomical full moon, but an ecclesiastical full moon as determined by men of wisdom and learning.
As a result, western man became detached from nature, and slowly and imperceptibly the forces of procreation declined. The levels of testosterone and sperm count in each new male generation decreased, and seeds started to fall on fallow ground.
A 100-page CIA report released in July 2001, entitled "Long-term Global Demographic Trends: Reshaping the Geopolitical Landscape," determined that "dramatic population declines have created power vacuums that new ethnic groups exploit. Differential population growth rates between neighbors have historically altered conventional balances of power. Both Europe and Japan stand to lose global power and influence."
In European countries, the elderly will constitute 20%-25% of the population by 2020, only 17 years from now. Japan, the most rapidly aging society in the world, has an elderly population that is expected to continue to grow dramatically in the future to more than 26% in 2020. The population of the "developed countries" will drop rapidly over the next 50 years, while those of undeveloped countries, especially the Islamic ones, will rise.
Germany will experience no population growth and will remain at 80 million people; Russia will drop from 145 million to slightly more than 100 million; Japan is already falling and will reduce from 127 million to 109 million; Italy will decline from 57 million to 45 million. And Poland? We are projected to follow suit, but just how soon depends upon whether Poles follow the example of the rabbit over the coming months and years.
The problems facing the advanced capitalist economies are occurring on three fronts. Not enough people are being born, too many are living longer, and there is not enough money in the kitty to pay for the promised benefits.
Take the example of General Electric, the largest company in the world. The majority of its pension beneficiaries (more than 75% of the total) are already retired, and therefore it is very likely that pretty soon GE may find itself working for its pensioners rather than its shareholders.
On March 31, 2003, Bethlehem Steel sent a letter to its 95,000 living pensioners, stating that it would no longer pay for the life coverage and health insurance benefits to which they were entitled. This pattern will be repeated throughout the capitalist system on both the private and state levels as economies continue to contract. The underfunded pension liabilities of the largest and most established companies in the world will take time to resolve and will put a damper on anticipated increases in shareholder value.
Don't count on state assistance, for the states cannot pay for their promises to retirees and still grow their economies. Can you see any population agree to cut its own benefits? The French, Germans, Italians, Portuguese and Spaniards have all protested against preliminary talks about changes, let alone their implementation. These protests are going to increase.
But unless they unwind their pension promises, the states of Europe will play a smaller role in the world of the future. The role of Asia, especially China and India, will be far more significant as will the countries of the Muslim world.
On the WSE: Remember, Yale Hirsch discovered that the equity markets tend to be bicyclic, meaning that there were essentially two periods in the general market - a "best of times" and a "worst of times." He found that market performance between Nov. 1 and April 30 far exceeded the performance of the market between May 1 and Oct. 31. On what is about to happen, I quote Samuel Butler again: "Man is the only animal that can remain on friendly terms with the victims he intends to eat until he eats them."
Zbigniew Piekarski is a portfolio manager based in Warsaw. He can be e-mailed at zbigp@bipnet.pl.
