In today’s issue:

  • The war for immigrants is raging
  • The consequences are devastating
  • Voters have had enough, but who can they vote for?

In January 2019, I made some startling predictions about immigration. They earned me more than the usual amount of ridicule. Today, I want to reveal what I wrote back then. See if you think I was right after all…


The war for immigrants

The biggest political reversal you face in coming years has nothing to do with Brexit, the EU or China. It’s all about immigration.

But in precisely the opposite way you assume.

The world is about to vie for labour. For productive people.

Countries are going to provide immigrants with cash handouts, tax incentives, free citizenship and homes for next to nothing. All in a bid to attract young skilled migrants.

It sounds absurd. Especially in the current climate of Brexit and populism. So why do I expect the world to fight over immigrants in coming years?

Well, who else is going to generate GDP growth? Who else is going to pay taxes and fund the national debt? Who else is going to drive inflation and demand?

GDP is a function of population and productivity. That’s it, there’s nothing else in the calculation.

Working-age populations around the world are falling in number. The peaks in many developed countries hit in the last decade. It’s the first time that has happened. Ever. Except in Japan and during the Black Death, arguably.

If your working population is falling, it’s incredibly hard to grow your GDP.

Debt, meanwhile, stays fixed. It doesn’t adjust for the size of the population. Debt doesn’t care about GDP per capita.

Neither do asset prices. With less people chasing the same stock of housing, or a growing stock, what do you think will happen to house prices?

The same goes for investment assets. It’s basic supply and demand. Who is going to buy all the retirees’ shares? If the pool of working people is falling, so is the pool of investors.

Japan was the first country to discover all this. House prices and investment values collapsed the moment Japan’s demographics turned. GDP has struggled to grow since, even while it grew just fine on a per-capita basis. Debt to GDP is at a world record.

The Japanese government is waking up to the only real solution. One of the most xenophobic societies in the world is about to embrace immigration. Against the will of voters, for the most part. But the government realises there is little choice in the matter.

When I got married in Japan last year, it took a week to establish whether to put my surname or my forename first on the marriage certificate. When I renewed my tourist visa, there were no English speakers at the immigration office. Japan deeply struggles with foreigners.

But if even Japan is changing, then I think the rest of the world is going to wake up to the reality of immigration soon. And there will be a competition for productive people. For taxpayers, family builders and entrepreneurs.

This is the battleground on which nations will vie for GDP. Just as they competed for land and then resources in the past. People will be the new constraint in the calculation of land, labour and capital.

Not that I’m missing what’s going on in the news cycle at the moment. It’s bizarre to see Europe currently doing the very opposite to what I expect. Anti-immigration parties are on the move. Nationalism and xenophobia is on the rise in Europe.

But I’m not sure that what drove this anger goes against my idea. Europe welcomed refugees, not skilled immigrants.

The problems associated with welcoming millions of refugees are not exactly surprising. Nor is the reaction of the local population. I’ve seen some of the kindest and loving people I have ever known in my life turn on the refugees and immigrants they initially welcomed (as many of them once welcomed my family into their countries).

Despite the backlash from voters in each country, politicians still fall into the mass migration trap regularly. Spain’s government took a stand in favour of accepting refugees in the last few years, just to publicly differ from the populists of Italy. Unfortunately, they turned themselves into the new gateway to Europe. UNHCR data revealed Spain was the top destination for migrants crossing the Mediterranean into the EU. 60,000 arrived last year.

But even the pro-refugee politicians are waking up. One after the other, they’re trying to put up barriers. French President Emmanuel Macron tried to stop a ship which rescued refugees from docking in Marseille. Malta and the Netherlands did the same.

This is especially bizarre because it puts those governments in breach of the EU law they claim to uphold against the likes of Italy and Hungary on other matters. For a time it was this violation that Italy used to vindicate its budget belligerence. If Europe doesn’t abide by rules on immigration, Italy won’t on fiscal rules.

The immigration debate is throwing up some surreal stories. According to Italian Deputy Prime Minister Matteo Salvini, French police simply abandoned migrants in an Italian forest. At one point, Salvini was investigated for kidnapping when he refused entry to migrants.

A few days ago, the whole migration debate went completely surreal. Italian Deputy Prime Minister Luigi Di Maio claimed Europe’s refugee crisis could be blamed of France’s former colonisation of Africa. He called for EU sanctions on France for impoverishing Africa.

The vitriol was probably in response to this description of the Italian government by French President Macron when it first formed: “populist leprosy”.

And yet, in the midst of all this political drama, the simple truths shine through. Italian and Spanish towns are offering to sell homes to foreigners for one euro. They need immigration to survive. But the sort that can invest tens of thousands of euros. The same phenomenon will happen at the national level.

Even in Australia, country towns are offering incentives to move there. This from the country that actively uses immigration to massage GDP figures.

Australia hasn’t had a recession for 26 years. But on a per-capita basis, the country experienced a dip in 2008 like the rest of the world. It’s just that immigration added enough of an economic boost to keep overall GDP growing.

Australia has proven the power of the idea I’m trying to explain to you. Stealing productive people from other countries is the key to economic success. It allows you to grow GDP, even during the biggest financial crisis since the Great Depression.

Imagine how dramatically the world will change in coming years as countries realise they face economic stagnation and debt crises if they do not manage to solve their demographic problems. By stealing each other’s workforces.

The rise and fall of economies and their stock markets could soon be determined by immigration policies…

And with Europe turning on immigration, it’s not hard to predict what’s about to happen.


That article linked to a report about what would happen in European national and EU elections as governments ignored the people’s wishes.

A prediction I intend to renew next month…

Until next time,

Nick Hubble
Editor, Fortune & Freedom