are cheap for a valid reason. All in all, the retirement age for the remainder of this century has risen to between 70 and 75. Even then, you will still need an intelligent financial adviser. Otherwise, it becomes a race between poverty and death.
5. Education is out of sync with the job market and changing nature of work
Around the world, youth unemployment is a real issue and in some countries has hit record highs. One of the principal reasons is that schools are educating pupils for the job market of the middle of the last century, not the one that exists now. In those days, a decent academic qualification guaranteed you a job. Nowadays most kids have to be entrepreneurs and start their own businesses. When will schools wake up to this megatrend? I don’t know, but in the meantime society will have a significant propensity for social unrest among its young citizens. They are the first generation for whom life offers fewer opportunities than for their parents because of their inappropriate education.
6. We are witnessing a second scramble, and potentially more dangerous scramble, for resources
All the easy-to-find, easy-to-mine, easy-to-treat mineral and energy deposits have been found, mined and treated. We are now into the remoter deposits which require more infrastructure to get the product to the customer or more difficult deposits which require new methods of processing such as fracking. By the middle of this century this picture can only get worse which will signify that the next big technological wave after IT will be around improving resource utilisation efficiencies as well as making substitutes such as solar energy better-priced for the average consumer.
A growing scarcity of water and food is also developing which is why the Chinese are purchasing land in Africa and why nations on large rivers are beginning to be more aggressive about the way water is shared. Marine mining and offshore drilling are also being stepped up with nations quarrelling over ownership rights in places like the sea off China and Japan. Outright conflict cannot be ruled out.
7. Wars will continue to be fought as weapons become more sophisticated
This century has already seen its fair share of wars, but it is unlikely to have a war of the magnitude of the two world wars of the last century for one good reason: the principle of mutually assured destruction. Nukes have raised the stakes so much with their power of devastation that every nation, including America, will think twice about using them. Nevertheless, conventional weapons are being turned into weapons of mass destruction by improvements in technology as can be seen by the appalling destruction wrought by a single, deranged gunman in incidents in Norway and America. Missiles are longer-range, drones more accurate and explosives more deadly. While mankind’s instinct to kill has in no way diminished, his ability to kill is forever improving. I doubt whether we will see a single month in this century where someone is not fighting a war somewhere in the world. Sad but true.
8. Like black swans, natural disasters will come out of the blue
Tsunamis, hurricanes, superstorms, earthquakes, volcanic eruptions and droughts will continue to take their toll. Mother Nature is beyond our control and, on account of a more populated world, can unleash events of increasing consequence for human life. Moreover, so far this century nothing serious has yet been done by the super-emitters on global warming. It hardly rates a mention among political leaders whose tenure of office is far more determined by their country’s short-term economic performance than by long-term climate change. One hopes that the meticulous collection of further scientific data will put the theory beyond doubt. Consensus has never validated a hypothesis. Often it is one man like Einstein that advances science: but evidence is always the judge.
9. Dictatorial regimes will become rarer, but what replaces them is not necessarily democracy
One of the biggest phenomena of this century has been the trumping of tyranny in all the countries affected by the Arab Spring. However, it is too early to predict that democracy in the full sense of the word (constitutional rights, regular elections, limited presidential terms) is about to flower in the void left by old regimes. What is certain is that the social media combined with the internet and YouTube have irreversibly changed the balance of power in favour of the people. They can publish their gripes.
10. The work/life balance is now even more elusive
In the last century, young business executives did not work 24/7. They did not have mobile phones and could not get emails at home. They switched off at weekends and on holidays because nobody could reach them. Now work has intruded into every aspect of life. The strain is showing.
Eurowinked!
This article was written as a bit of a spoof on how European banks were asked to take a hit on their holdings of Greek bonds in order to prop up the Eurozone. I also wanted to highlight the danger of ‘moral hazard’, where you get seduced into taking a risk because you think part of that risk is laid off on other parties. If Greece had been a stand-alone nation, many of the banks would have seen the true risk of lending to it. However, as a member of an exclusive European club, Greece had access to the goodwill of the other members who were blind to its real weaknesses.
Overheard in an exclusive club in Frankfurt in Germany was this conversation between Angie, a woman of great influence, and Charles, the CEO of one of Germany’s largest commercial banks. They were having coffee in the lounge after lunch. Angie is president of the club.
ANGIE: Charles, you need a haircut.
CHARLES: No I don’t. I had one last week. You can see I have no hair on my neck.
ANGIE: I am not talking about that kind of haircut. You know George owes you one thousand Euro and he needs to repay you next week. Well, I want you to forgive 535 Euro of his debt and have him only pay you 465 Euro.
CHARLES: But then he is defaulting on his debt and I am going to lose more than half the credit I extended to him. That makes me especially angry as the rating agencies gave him a triple A.
ANGIE: Don’t talk like that, Charles. You are going to volunteer to take a haircut on the money he owes you, shave the figure so to speak. Anyway, I know that you are probably insured for part of the loss.
CHARLES: Maybe, but why on earth should I do this?
ANGIE: Because we are a club, Charles, and I also know that you have been very generous and lent money to other members such as Peter, Sam and Ivan.
CHARLES: I must say they are all spendthrifts, lashing out on things they really don’t need. I had the money and I felt sorry for them because they are people like us. They just fell on hard times. Besides which we have to put up a united front.
ANGIE: Precisely, and if people who are not members of this club get to hear that George unilaterally defaulted on his debt and created what I know you call a credit event, it would reflect badly on our collective image.
CHARLES: I see what you mean.
ANGIE: Moreover, it might mean that the world outside becomes harsher to Peter, Sam and Ivan. Then they might not be able to repay their loans either and your back pocket would receive an even bigger hit. Contagion can be nasty.
CHARLES: Gosh, I suppose I better take your advice.
ANGIE: However, I have one other favour to ask of you. Please would you roll over the 465 Euro and make it a new loan to George.
CHARLES: How will I know that I won’t receive another haircut?
ANGIE: Just be a dear. George has promised to adjust his lifestyle and live within his means. The club must
