SCENARIO
PLANNING
The grey flag
The ageing of the world’s population
is accelerating and has already slowed
Europe and Japan’s economic growth rate
down to virtually zero. America is younger
and more resilient and will expand its
economy faster. China has revised its one-
child policy to a two-child policy because
of this clockwork flag ticking away in the
background. Nevertheless, public healthcare
is becoming an overwhelming issue
everywhere as the number of old people
spirals upward, with limited resources
available to keep them alive.
In the developing world, the economies
of those countries with competent
governments will easily outpace those
of the developed world. By the end of
this century, Asia and Africa will account
for 83% of the world’s population of just
over 11 billion.
The anti-establishment flag
This flag has already produced Brexit in
the UK, Trump in America and an outsider
like Emmanuel Macron to lead France.
This is a cloudy flag because Macron, with
his belief in a united Europe, is the exact
opposite of the UK’s Theresa May and
Boris Johnson. One simply doesn’t know
where or how the lack of trust between the
public and the political establishment is
going to create the next surprise. However,
inequality between the super-rich and
the rest is still widening so the anger that
caused the flag to rise in the first place is
bound to increase.
The pressure is intensifying on companies
to be more concerned and transparent
about the ratio of top executives’ pay to
workers’ wages. International agreements
are also forcing the banks and others
to share financial information with
governments to stop money laundering
and tax avoidance by rich individuals.
The game of being a financial adviser will
therefore be very different in the future.
The green flag
The latest example of this clockwork
flag’s impact is the projection that global
warming will open up the Arctic as a major
shipping route by 2050 because the ice will
have sufficiently disappeared.
Extreme weather is causing extreme
drought and extreme rainfall in many
countries. California has experienced both
in the past five years. America’s continued
support of the Paris climate change accord
is in doubt – just as scientists are warning
that the tipping point for the planet’s
sustainability could be earlier in this century
than previously thought.
The national debt flag
This clockwork flag is quietly rising as
governments everywhere are abandoning
austerity and budget surpluses in favour of
the Keynesian solution of running budget
deficits to reinvigorate their national
economies. As long as interest rates remain
low, the effect of increasing national debt
beyond acceptable levels is being deferred.
As soon as inflation rates start to go up,
the era of cheap money will end as central
banks raise interest rates. This could lead to
defaults on national debt by countries such
as Greece and Italy, setting in motion the
kind of credit crisis that fuelled the stock
market collapse in 2008.
The world of work flag
High youth unemployment rates will
persist until the educational establishment
understands the nature of this clockwork
flag. Automation, robots and artificial
intelligence have completely transformed
the world of work from what it was like