Megacities & the Growth of Global Real Estate Companies


A megacity is an urban area with a total population of 10 million or more people.

There are 47 megacities today.

Thirty of the world’s megacities are in Asia. China, with a population of 1.42 billion, has 15 megacities, and India, with its population of 1.3 billion, has six. The three largest megacities—with populations of over 30 million—are also in Asia. Tokyo, the largest megacity in the world, has a population of 38 million, while Shanghai has 34 million and Jakarta has 32 million.

The United States has two megacities—New York and Los Angeles. The other megacity in North America is Mexico City, with a population of 21 million. Europe also has three megacities (or four if you count Istanbul). North America, Europe, and the Commonwealth combined have six megacities, compared to Asia’s thirty.

Clearly, it’s time to think about what the explosive growth in Asian and Southern Hemisphere megacities means in terms of competition for resources, including global capital for real estate and infrastructure investment.


In 1950, there were 83 cities with populations exceeding one million. New York City was the only urban area in the world with a population of over 10 million—making it the first megacity.

By the end of the 20th century, 47% of the global population lived in cities, as compared to 3% in 1800. Today, an estimated 50% live in urban areas, and the percentage is still growing. The UN forecasts that today’s urban population will increase from approximately 3.5 billion to nearly 5 billion by 2030. Some predict that the proportion of the global population living in cities is headed toward as much as 80%.

In short, globalization is turning out to be synonymous with urbanization—much of it in association with rapid growth and urbanization in Asia and the emerging markets of the Southern Hemisphere.

I chose megacities as the theme for the Third Quarter 2018 Wrap Up as a logical follow-on to our Second Quarter 2018 Wrap Up theme—The Rise of the Asian Consumer. I wanted to explore what increased urbanization means for our culture, geopolitics, and financial markets.

This includes taking a look at global real estate companies. For many decades, investors have followed real estate companies and real estate investment trusts (REITs) in the United States and Europe. However, the steady adoption of the REIT model globally and the explosive growth of publicly traded real estate companies and REITs in Asia are opening up a new area of investment. The growth of cities and the global middle class means significant demand for real estate and related infrastructure investment. How will the flow of global capital into real estate markets express itself in the global equity markets?

Our Third Quarter 2018 Wrap Up comes with audios and this written discussion on a dedicated web presentation. This includes tables of megacities and publicly traded global real estate companies listed and traded on the U.S. exchanges for your review.

Our goal is to ensure that you are aware of megacities and urbanization as a primary trend—one with consequences for culture, health, environment, and investment for the foreseeable future. This includes considering how consolidation of the global population into dense living areas where residents are more dependent on centralized systems fits into an integrated framework of global governance and the centralization of global control.


When it comes to megacities, no one size fits all. Other than sharing large, dense populations, each megacity is unique—reflecting its uniqueness through people, culture, geography, economic and technological evolution, religious and national identity, and history. Although each megacity emerges its own unique living system, it is also possible to identify patterns—particularly between megacities in the developed and developing world.

Developed world megacities have had centuries to build, run, and manage the physical and intellectual infrastructure necessary to support a great city. These cities attract human talent and have operated as centers of culture and transportation for quite some time. Although developed world megacities may struggle with the stress of increased global competition for resources and the integration of new technologies, they have significant capacity with which to manage these challenges. For the most part, they have overcome the problems and health crises associated with rapid growth and slums that many experienced during the industrial revolution and/or subsequent periods of war and technological change.

As opposed to their developed world counterparts, developing world megacities are often the result of the rapid industrialization of agriculture in recent times—of people forced off the land, rather than just attracted to economic opportunities in the cities. This means that when looking at the rapid growth of developing world megacities in Asia and the Southern Hemisphere, it is essential to understand how they relate to the industrialization of agriculture and policies related to the global flow of capital—particularly government credit and related treaties and legal structures—which are often engineered to encourage, if not force, rapid urbanization.

Megacities bring front and center the question we keep asking on The Solari Report: Is this happening because it is practical and economic, and because it reflects free choices by free people? Or is it because it is wealth-creating and risk-reducing for an invisible governance system? Is it because the banks and corporations are centralizing control with the benefit of sovereign government credit, manipulated legal systems, enforcement, and black budgets?

My expectation about megacities is the same as for all cities. We are going through a major period of change. Some megacities are going to figure things out and emerge as highly attractive centers of global trade and culture. Others are not going to manage the transition well and will get bogged down by unstable politics and corruption, social inequality, and organized crime. Compare the development of Singapore to Calcutta or Dhaka after World War II—proof positive that not everyone will get it right or that millions may be seriously harmed until they do. My prediction for 2030 is that there will be wide disparities in the appeal and well-being of different large cities and megacities—even wider than today.


We each have a point of view about large cities. It is worth exploring what that is and why. Here is mine. I recommend that you ask yourself what yours is and why.

I grew up on the streets of West Philadelphia. It was a world described by Bill Cosby’s early comedy routines on street football, and the stoop sitting and street corner hanging in Spike Lee’s movie Crooklyn or Sylvester Stallone’s Rocky.

When various excursions led me to the suburbs, to the country, or to the estates of the wealthy, I returned with the notion that city life had distinct advantages. There was a lot more to do in cities than in the country (the important exceptions were horseback riding and mountain climbing!). The pressure to keep up with the Joneses in the suburbs seemed emotionally and financially exhausting—something avoided when living in the midst of a melting pot of income groups in the city. Finally, my city neighbors were more diverse, nicer, and infinitely more relaxed than the people who lived on wealthy estates.

My love affair with cities grew more serious when I was 14. I was attending a private Quaker school in center-city Philadelphia. One sunny spring day, one of my classmates and I cut class and took a bus to New York City. I walked down Fifth Avenue past Tiffany and into Central Park. I had never seen such vitality and such diversity of people and architecture in my life. I turned to my classmate and said, “I will live here one day.” Although I was suspended for truancy shortly thereafter, I was confident that my introduction to the world’s first megacity was well worth it.

My education and travels in college and graduate school took me to many cities around the world—Boston, New York, Baltimore, Washington, San Francisco, Tokyo, Hong Kong, Bangkok, Calcutta, New Delhi, Kathmandu, Kabul, Istanbul, Athens, Madrid, Paris, London, Vienna, Geneva, Charleston, Atlanta, Chattanooga, New Orleans, and Albuquerque, to name just some. Travel encouraged my notion that cities offered the greatest vitality and diversity to be found.

Large cities enjoyed the spirit described by poet Richard Eberhart:

“If I could only live at the pitch that is near madness
When everything is as it was in my childhood
Violent, vivid and of infinite possibility.”

My travels led me to the conclusion that big cities were first and foremost places defined by “open minds.” Most of these large cities were places that attracted a wide range of curious, intelligent, talented people who created open-minded cultures. This big-city culture encouraged leadership and entrepreneurship characterized by the openness and values that support innovative thinking.

With open-mindedness came a greater learning metabolism. When there were disagreements, people explored them for entertainment and to generate new ideas and greater insight. Typically, they also valued intellectual diversity. Trust and disagreement coexisted in celebration of a never-ending search for greater intelligence and clarity.

Traveling the entire Northern Hemisphere, I did not find a place that I loved more than New York on that spring day. After I graduated from The Wharton School with my MBA in 1978, I moved to New York, where I lived for the next 11 years. I lived and worked in all areas of Manhattan—downtown, midtown, uptown, East Side, and West Side. I explored and experienced the city with a vengeance—the financial markets, the parks, the street life, the theaters, the opera, the restaurants, the museums, the gyms, the sports events, and, most of all, the people and their multiple cultures and societies. I even explored and learned the guts of the urban infrastructure as part of recapitalizing the New York City Subway and Bus Systems, the Long Island and Metro-North Railroads, the Triborough Bridge and Tunnels, the City University of New York, and the New York Water and Sewer System. (For more, see Business Week article)

If you love great documentaries and are interested in the history of New York, I highly recommend Ric Burns’ eight-episode series—now available online for free—New York: A Documentary Film.

Burns’ documentary does an excellent job of describing the growth of the first megacity as well as showing the pros and cons and struggles of urban living. Burns also includes a description of two of my heroes, whose lives and work are helpful to understand urbanization in America, with lessons for urbanization globally: Alexander Hamilton and Jane Jacobs.

Hamilton was the organizer and coauthor of The Federalist Papers, a Founding Father of the United States, and the first Secretary of the Treasury. Among other accomplishments, he founded the New York Post and the Bank of New York. His was a story of the immigrant who finds opportunity in New York City.

Jane Jacobs was a Canadian-American author and journalist who wrote The Death and Life of Great American Cities, The Economy of Cities, and Cities and the Wealth of Nations. She made a remarkable contribution to our thinking about successful cities, describing them as engines of innovation and economic wealth and zeroing in on what makes a city human, livable, and wealthy.

Jacobs also focused us on how successful cities attract ambitious talent and create a higher learning metabolism because of the density of communication and activity. A city well done, Jacobs argued, is a significant generator of productivity, innovation, and wealth. I agree. There is no telling what the human race can cook up when we get together.

One of the videos we highlighted in the 2nd Quarter 2018 Wrap Up describes the remarkable economy of Shenzen, which demonstrates this potential wealth-creating dynamic of cities.

My love affair with cities was not to last, however. In the 1980s, the same narcotics trafficking that had destroyed my community in West Philadelphia when I was a teenager moved out from the inner cities into the cities more broadly, with the crack cocaine epidemic. One of my favorite authors on contemporary America, poet and essayist Michael Ventura, was inspired to write an essay, “We All Live in the South Bronx Now.”

“We all live in the South Bronx because that neighborhood is the unavoidable proof that American civilization can stop. It can stop literally right around the corner, and if it does nobody can do a thing about it.

Those drug profits and the profits of financial fraud flowed into Wall Street, changing the culture and institutions in profound ways, as described in my online book Dillon Read and Co. Inc. and the Aristocracy of Stock Profits.

Much of America’s economy has been built and financed with the profits of organized crime, so, in one sense, organized crime was nothing new in the 1980s. However, there was a meanness to this new ascendancy of organized crime that was contributing to a rising “creep factor.” It was one of the reasons I left New York to go to Washington—to find out why it was happening and what could be done.

Organized crime was one aspect. Another was technology. I associate what was happening to the growing introduction of cell service and the power of the NSA and U.S. intelligence and enforcement to centralize surveillance and data capture through back doors in software and telecommunications. Technology was fueling the ascendancy of the national security state and the fusion of organized crime profit margins and cash flows with the lethal power of a sovereign state, whether expressed by military, intelligence, or enforcement means. The black budget and hidden system of finance were growing. The number of federal agencies authorized to carry guns, make arrests, and impose civil and criminal fines was growing rapidly.

My time in Washington helped me dig deeper into the source of the creep factor. After leaving the Bush Administration in 1990, I started a company with the goal of figuring out how to reengineer investment in places in a manner that would end poverty and heal the environment. Ultimately, a healthy society produces greater wealth than one being liquidated by organized crime. What I discovered is that those goals are doable, if we could just persuade the national security state to go along—which is easier said than done.

I left Washington in 1998 and gave up my temporary apartments (in New York shortly thereafter and in Philadelphia in 2003), primarily in an effort to avoid covert operations and physical harassment. Although there is plenty of organized crime in rural areas, the covert operations, in my experience, are less intense there.

My concern regarding the fusion of organized crime with the application of digital technology—including mind control technology—to centralize political and economic control has continued to grow for the last two decades since I left Washington. It is one of the reasons that I avoid large cities or megacities in the U.S. and many areas of the world, particularly those that played a leadership role in engineering a financial coup d’état at taxpayers’ expense.

The criminals and illegally subsidized are arrogantly ascendant in these cities, in a manner that continues to grow the creep factor. Examples include the steady deterioration of San Francisco, the rise of homelessness, and the fires that I believe are being used to clear land for future development.

I just spent a week in New York City. The homelessness there, combined with the extraordinary investment in luxury living and goods, was extremely disturbing—not that I hadn’t seen that in the 1980s. Back then, I was on the board of the New York City Food Bank and regularly worked with activists involved in homelessness.

However, what I found most disturbing during my recent visit was the mind control.

I find living close to nature helpful in offsetting EMF radiation and entrainment, subliminal programming, and other mind control technologies. I also find it helpful to live with people who deal with concrete functions—such as truckers, farmers, electricians, and builders. The result is a culture grounded in practical realities—as opposed to the culture now created by the abstract functions of finance, information technology, and media and entertainment.

Consequently, I now live in the country. Among other things, technology has permitted rural access to products and services that once were only available in the great cities. I also have many opportunities to visit and spend time in cities that are livable and rich with cultural offerings. This summer I was in Vienna—often voted the city with the best quality of living. Its reputation is well deserved and is a reminder that every city is unique and that some will get things right.

What concerns me the most is that the growth of cell and entrainment technologies is producing a mind-controlled society that is destroying the open minds of some cities. It is creating a closed-minded society—one closed to diversity of thought and ideas. New York is a place where, increasingly, the mediocre rise because they are good at rigging government money and carrying out financial fraud and can kill with impunity.

Without its powerful open-minded culture, what does a megacity like New York become? It becomes inhuman, which makes living next to a cow pasture—as I do now—more attractive than living—as I once did—near the Metropolitan Opera of New York. However, I still miss being able to walk to the opera!


Under the “Megacities” section on this web presentation is a link to our 2016 Annual Wrap Up: The Global Harvest. One of the topics it explored was the continued industrialization of global agriculture.

During the Industrial Revolution, the United Kingdom and the United States—and the rest of the developed world—transformed from societies in which as many as 80% of the people worked in agriculture to the less than 1% now working in U.S. agriculture. Many of those people went to the cities, and then some moved to the suburbs as roads and transportation systems extended outward from the cities as hubs.

We are going through a second global Industrial Revolution, if you will, in which we are dramatically reducing the number of people who work in agriculture in the emerging markets. Right now, Asian countries have as many as 30% to 50% working in agriculture. With automation, robotics, and other technology, that number can decrease to as little as 1%, as it is in the United States. If that happens, the question is: Where will those people go and what will they do?

One of the factors facilitating this transition is what I call “financialization.” The use of government credit and debt to centralize control has given a tremendous advantage to the large urban financial centers in both the developed countries and the developing world. That helps to facilitate centralized control and industrialization of agriculture.

A second link in the navigation bar under “Megacities” is to the Sir James Goldsmith video interview on globalization that underscores the resulting urbanization. Sir James Goldsmith had come to the United States to try to stop Congress from passing the Uruguay Round of the General Agreement on Tariffs and Trade (GATT), which created the World Trade Organization (WTO) and kicked off the current process of globalization.

Long-time subscribers of The Solari Report may tire of hearing me say, “You have to watch this video,” but if you have not seen it, it is a must-watch to understand the global economy today.

This is one of the descriptions that Goldsmith provides on the industrialization of agriculture related to the passage of GATT, the creation of the WTO, and the resulting rapid globalization:

“The idea is to create what is known today as efficient agriculture and to impose it worldwide. Let me just give you one impact of GATT on the Third World. The idea of GATT is that the efficiency of agriculture throughout the world should produce the most amount of food for the least cost. But what does that really mean? What is the cost?

When you produce the intensified agriculture, and you reduce the number of people on the land, what happens to those people? They are chased into the towns. They lose their jobs on the land. If they go into the towns, there are no jobs, there is no infrastructure. The social costs of those people, the financial costs of the infrastructure, has to be added to the cost of producing food.

On top of that, you are breaking families, you are uprooting them, and you are throwing them into the slums. Do you realize that in Brazil, the slums did not exist before the Green Revolution of intensifying agriculture?

In the world today, there are 3.1 billion people still living in rural communities. If GATT succeeds and we are able to impose modern methods of agriculture worldwide, so as to bring them to the level of Canada or Australia, what will happen? 2.1 billion people will be uprooted from the land and chased into the towns throughout the world. It is the single greatest disaster in our history—greater than any war.

We have to change priorities. Let’s take agriculture. Instead of just trying to produce the maximum amount for the cheapest direct costs, let us try to take into account the other costs. Our purpose should not be just the one dimensional cost of food. We want the right amount of food, for the right quality for health and the right quality for the environment and employing enough people so as to maintain social stability in the rural areas.

If not, and we chase 2.1 billion people into the slums of the towns, we will create on a scale unheard of mass migration—what we saw in Rwanda with 2 million people will be nothing—so as to satisfy an economic doctrine. …We would be creating 2 billion refugees. We would be creating mass waves of migration, which none of us could control. We would be destroying the towns which are already largely destroyed. Look at Mexico, Rio, look at our own towns.

And we are doing this for economic dogma? …What is this nonsense? Everything is based in our modern society on improving an economic index…The result is that we are destroying the stability of our societies, because we are worshiping the wrong god… Economic index.

The economy, like everything else, is a tool which should be submitted to, should be subject to, the true and fundamental requirements of society.

…This is the establishment against the rest of society… I am for business, so long as it does not devour society… [But] we have a conflict of interest. Big business loves having access to an unlimited supply of give away labor…

…You cannot enrich a country by destroying the health of its population. The health of a society cannot be measured by corporate profitability…

…We have allowed the instruments that are supposed to serve us to become our masters.”

~Sir James Goldsmith, 1994 interview with Charlie Rose

Let me throw into the mix the issue of robotics and AI, which Sir James Goldsmith wasn’t thinking about in 1994 when he recorded that interview. If you look at the potential of automation to exacerbate inequality globally, it is quite extraordinary, but nowhere as much as in areas where you still have very high percentages of people living on the land and growing the food. If you industrialize them, the potential for explosive inequality is far greater.


When thinking about megacities and urbanization, it is important to consider how we share intelligence. This includes “morphogenic fields,” which are an aspect of culture.

Rupert Sheldrake, an English biologist, originated the concept of “morphic resonance,” and he has written several books on the topic. The book I most often recommend, however, is The Field by Lynne McTaggart, which is listed in Best Books for 2018 in this and each of our 2018 Wrap Ups. The Field is an excellent introductory survey of the scientific research on shared intelligence. You can also check out our interview with Lynne in the Solari Report Library.

One of the reasons I love author Michael Ventura is that he describes, in poetic fashion, what the urban field is like and how technology is transforming the vitality of the morphogenic fields in growing cities. He says, “We are standing in the psychic storm of our own being.” He moves back and forth between the physical reality of the city—and the people who live there—and the psychic reality of this living environment.

I talk about what manipulation of “the field” means in a series of Solari Reports and Wrap Ups. I recommend the 3rd Quarter 2017 Wrap Up on Control 101. I believe that the leadership is trying to manipulate the field and get human fields to resonate with machines instead of with nature and all living things. In the process, mind control is replacing finance as the leading control system.

I also covered these ideas in our Solari Report interview on entrainment with Adam Trombley. Then, there are two Solari Reports with Jon Rappoport—one is called The Power of It and the second is titled Spiritual Warfare.

One of my theories is that if you move everybody to much denser, closer quarters where you get them living on concrete—divorced from nature and the soil—and you encourage cultures that are hypermaterialistic, it makes populations easier to manipulate and mind control. In addition, the reality is that if you convert people to renters instead of homeowners and ensure that they are dependent economically on the government or large corporations, it is much simpler to control them.

I think that one of the goals of urbanization is to make it easier to get the human population to resonate with a machine instead of all living things and the divine intelligence. So, instead of a living resonation, you get a machine resonation. This is the beginning of all sorts of problems, the big one being transhumanism.


Urbanization and the growing number of megacities are having a significant impact on the transportation sector. There are several trends worth your consideration.

The first trend is driverless cars. If the growing global middle class were to adopt a U.S. lifestyle, including suburban living and personal cars, the demand for infrastructure and automobiles would be impractical to meet, if not impossible.

Densities in Asia argue for car sharing, most easily accomplished by driverless cars. Converting to driverless cars shifts investment out of roads and bridges and into the Internet of Things (IoT), 5G networks, and satellites that, among other things, feed the AI databases. As described in our 1st Quarter 2018 Wrap Up on The Space-Based Economy, driverless cars’ data needs are expected to be a primary contributor to growing satellite company profits in the future.

One of the risks, however, is less privacy and greater central control of transportation freedoms and funding. The health impacts of the EMF radiation generated by the IoT wireless infrastructure required to support driverless cars, trucks, and related applications are another risk.

The second transportation trend is trains. Trains continue to be the most economic way to transport freight over long distances. If everyone lives in large cities, a lot more materials and people, in theory, could move by train, especially as track capacity between Asia and Europe grows.

All eyes are now on China’s impressive record of building high-speed passenger trains. These trains dramatically expand the radius of feasible bedroom communities—which can help ease the affordable housing crisis in many big cities. Given the nature of the affordable housing crisis in Los Angeles and Silicon Valley, expect significant pressure to proceed with the high-speed rail system in California. And, if a U.S. West Coast high-speed train system goes into operation, there will be increased pressure for cross-country and East Coast high-speed trains as well. I believe such systems already exist underground on a classified basis (see our Solari Report with Richard Dolan on Underground Bases).


Cities mean living in dwellings with a lower square footage. I will never forget my first week in Hong Kong. I was living in Tsim Sha Tsui in Kowloon—at the time, the densest neighborhood on the planet. The amah (housemaid) who worked for and lived with the family I was staying with when I first arrived lived in a large closet. Her organization and management of her worldly possessions was remarkable—it would have made a NASA engineer proud.

A global middle class with lower average-square-footage living spaces will focus its spending less on material things that require space and more on things that save time, increase skills and intelligence, store things digitally, or provide experiences. This includes electronic goods, travel, entertainment, and education.

Look at the recent Hong Kong IPOs and some of the deep learning AI applications in China described by Kai-Fu Lee in his book AI Superpowers. You can see that the consumer products that are doing well are services that offer convenience. They save people time with essential needs—such as food—rather than focusing them on buying lots of big items that cannot fit into small homes and tight living quarters.


Let’s turn to an important area of our Megacities discussion—real estate. In 2016, total global real estate was estimated to be valued at $217 trillion.

“Ever wonder how much the world is worth? Look no further. In a new report, the London-based real estate advisor Savills has tallied up the value of all global property, including commercial and residential property and forestry and agricultural land. By the firm’s count, it comes to a whopping $217 trillion total, and residential property makes up about 75% of the total value.”

~ Robert Hackett, Fortune

Shortly thereafter, the research and index company MSCI estimated that professionally managed global real estate approximated an $8.5 trillion value. This is real estate owned directly by investors such as endowments, sovereign wealth funds, pension funds, or family offices.

“The size of the professionally managed global real estate market expanded to $8.5 trillion in 2017 from $7.4 trillion in 2016.”

~MSCI, “Real Estate Market Size 2017”

Publicly traded real estate companies, including REITs, represent smaller holdings. The REIT association Nareit currently states:

“While the U.S. remains the largest listed real estate market (Editors Note: app $1.2 trillion), the listed real estate market is increasingly becoming global. The growth is being driven by the appeal of the U.S. REIT approach to real estate investment. Today more than 35 countries have REITs, including all G7 countries.”

The value and number of publicly traded real estate stocks in Asia have been growing. As a result, it is likely that outstanding stocks representing global real estate in liquid securities form have reached as much as $2 to $3 trillion. When compared with a total global stock market valuation of $60-$70 trillion and total global real estate of $217 trillion, securitized real estate does not represent a significant percentage of either. The crossover between real estate and the equity securities market is not significant—at least not yet.

A large part of real estate ownership and control continues in entrepreneurial, family, or government hands, or on general corporate balance sheets. No doubt, outstanding mortgages represent a significant and influential portion of the real estate economic value held by banks, insurance companies, pension funds, and other lenders. Since the 1980s, a growing number of those mortgages have been securitized into both the fixed income and equity markets.

Real estate investments have traditionally been a place investors go for yield. This includes REITs, in particular, because—as a matter of law—they are required to pay out most of their earnings.

Using ETF performance as a benchmark, real estate stocks have underperformed the general market in recent years. One of the reasons is that the tech industry and technology stocks have significantly outperformed the general market index since the financial crisis and bailouts. However, if you expand your horizon to a longer period—say, 20 years—then real estate outperforms the general stock market.

As interest rates rise, as they are now doing, real estate prices adjust. Once rates level off, expect real estate to offer both yields and some protection against inflation—so long as the underlying investments focus on the cities and places that get things right in this period of change. Be careful—not everybody is going to get things right. Areas where the rule of law breaks down could be ugly and generate significant losses.

Unfortunately, mortgage fraud, disaster capitalism, and transhumanism are likely to produce high-yield income—even mind-boggling fortunes. Historically, mechanisms used to produce investor yields have included land grabs from Native Americans, the European-U.S. slave trade, the build-out of cotton production in the southern states with slaves, and the opening of U.S. cities to hard narcotics trafficking after WWII—more recent mechanisms (including low-income housing, tax shelters and credits, and prison stocks) were created to do the same.

Here is the primary trend you need to focus on: Expect real estate securitization to grow in both relative and absolute terms. Mr. Global is making a big bet on moving global real estate ownership into the securities and professional investor markets. Increased convergence of real estate with global stock markets will be a primary trend for some time to come.

In 2016, S&P Dow Jones Indices and MSCI announced that they were changing the Global Industry Classification Standard (GICS) structure—an industry taxonomy that they introduced in 1999—to break real estate out into its own sector.

“When GICS (The Global Industry Classification Standard Structure) was introduced in 1999, we committed to keeping the structure up to date as the global economy evolves. The creation of an eleventh sector recognizes the growing importance of real estate in the world’s equity markets. The decision to add a real estate sector was based on extensive comments from investors and analysts as well as in-depth analysis and discussions between S&P Dow Jones Indices and MSCI.”
~David Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices, March 8, 2016

Real estate had traditionally been included in the banking sector. With the 2016 decision, the index companies broke it out to become a classification of its own, creating an 11th sector. Since that time, the GICS structure has added one more sector, breaking out communications into a 12th sector.

These classification shifts represent an important signal as to the growth expected in these two segments in the global equity markets.

The real estate equity securities markets are expected to grow. One reason is the growth of urban areas, which is creating a demand for capital investment in both real estate and infrastructure. That capital investment is expected to create income-producing assets that lend themselves to securitization.

Changing demographics also mean demand for highly specific products, such as housing for the elderly or agriculture. For example, the United States now has over 200 “agrihoods.” These are communities organized around a farm. Homebuyers are looking for a trusted source of fresh food rather than a golf course. Add to this a push to integrate new technology. Should I mention that the Chinese are using large 3D printers to create houses quickly?

“In the past few years, demand for private capital for real estate investment and supporting infrastructure has increased enormously. In the emerging economies, the great migration to the cities, growing population and swelling middle class are creating a desperate need for more urban real estate. In the advanced economies, the cities are also growing, although not so rapidly, while technology, demographics and environmental issues are becoming new value drivers…. Real estate as an asset class is changing fast. Mega real estate managers are emerging, which are building and investing in real estate on an epic scale; yet, small specialist managers are also playing a significant part. The landscape is becoming more widespread and complex with a wider range of risk and return than ever; plus new drivers of value.”
~PwC: Real Estate 2020—Building the Future

This is all part of the push for “Planet Equity” that I have talked and written about for many years, starting with the 2014 Annual Wrap Up.

My guess is that Mr. Global’s vision is that the global population will move out of rural communities and into the cities as industrialization and central control of the seed and food systems proceeds. This means turning people from owners of land who can grow their own food into renters who will be dependent on the company store. This was part of the global housing bubble—creating product for Wall Street to pump and dump, while ultimately generating rental properties for investment vehicles. Greater securitization of real estate is a part of broader efforts to centralize data, control, and wealth.

The Planet Equity vision includes significant increases in global rental income and properties that can be securitized and traded globally. One of the greatest challenges in the securities market, however, is that global retail investors outside of the United States traditionally have not been equity market investors. For securities markets to offer broad liquidity globally, emerging market populations need to own stocks. Real estate stocks are a logical product to get them to participate.

The bottom line is that global REITs and real estate securities are likely to grow significantly as an asset class over the next 10-20 years. This means that if you are interested in equities and are looking for opportunities to earn income, it would be a good use of your time to get to understand this sector now.

Here is a place to begin. Our tables of real estate companies listed and traded in the U.S. markets as of the 3rd Quarter of 2018 are organized into three sections.

General Real Estate Companies
Real Estate Services Companies


Do you want to live in a megacity? It depends.

We all want to live in places where we can be close to nature and enjoy a human culture. You can do that in some of the great megacities. The dividing line between human and inhuman is not between rural and urban; there are plenty of inhuman rural living situations. Nor is the distinction necessarily about population density.

There are great megacities—rich with parks, lakes, and public spaces—that can be quite livable, particularly if you have sufficient income and assets.

If you are an entrepreneur and want to co-locate with a rich cluster of talented people and start-ups in your sector, or you are a young professional who wants the best training, many megacities provide opportunity. Will that change with the adoption of 5G, more invasive surveillance technology, and smart grids with increased EMF radiation? This is likely. Any location with intense EMF radiation combined with heavy entrainment and mind control strikes me as unlivable—albeit we may be challenged to find alternatives. Given the anticipated rollout of satellite networks to blanket the planet with 5G+, the question is: Will the rural areas, oceans, and forests offer an alternative? Maybe.

The open minds that created the cultural power of cities are closing—certainly in the United States. It is essential to keep your mind open to be able to navigate and innovate in a complex world, let alone live a free and inspired life. I continually return to the places that have an open mind and avoid those that do not.

Lots of urban complexes are exceptionally livable. The area in the Netherlands from Rotterdam to Amsterdam is one. So are cities such as Vienna, Zurich, and Chattanooga, to name a few. Looking down the list of megacities with lots of parks, lakes, and public spaces, I could enjoy living in Paris for an extended period of time. (No, an immigration problem and riots are not enough to kill Paris—ignore the Shriek-o-Meter!) After a week in Dhaka, however, I know there is no way I could live with that traffic! As for Hong Kong, it feels to me like Americans are no longer as welcome as we once were.

The economics of new information technology should favor greater dispersion. In North America, as discussed often with Dr. Farrell, the national security complex will likely disperse the manufacturing and technology base throughout America. So, while urbanization may continue, don’t be surprised if it spreads into cities such as Boise, Austin, Nashville, Cincinnati, and Pittsburgh that have universities and enjoy clusters of high-tech and specialized skills.

Before you choose to live in a megacity, there are several risk issues to consider—all of which we cover on an ongoing basis on The Solari Report.

Transnational Crime:
The current global economy has emerged from a model that uses organized crime to pool capital. Organized crime has become an integral profit line of the banking and corporate infrastructure. Large banks and corporations and the governments that front for them are not only married to the mob—they are the mob. Consequently, our existing establishments and infrastructure and a great deal of employment and family income are dependent on organized crime. This can make for two problems in any specific location.

The first problem is street criminals and their operations, including physical violence. This reflects the day-to-day harvesting that is part of a model dictated by the folks at the very top of society. Any individual criminal is expendable in a high-turnover capacity—the cash flows they generate are not.

The second problem is a leadership class that has risen to power through organized crime (including illegal uses of government spending, credit, and securities). This group has a very different set of values than wealthy people who made their money from adding real productive value. Street crime is usually easier to navigate than living with a leadership that enjoys poisoning, maiming, and killing with impunity—and does so regularly, particularly if you fail to affirm their social prestige.

I find that the larger the urban area, the greater the intensity of these two problems is likely to be.

When I went to Mexico City earlier this year, I told my allies that I was headed to Mexico City. I got several frightening emails saying, “You cannot go to Mexico City. It’s not safe; it’s dangerous.” Of course, downtown Mexico City is perfectly safe and lovely, but you wouldn’t know that by reading the headlines. The purpose of those headlines is to deflect blame from the center and to keep your tourist dollars at home.

It is true, however, that I tend to avoid Latin and South America. That is because, without strong local contacts and relationships, it is more dangerous for someone like me to deal with U.S. intelligence and secret society operations in those areas than in the United States. Who do you think Mexican drug cartels work for or are allied with? Transnational crime knows no borders.

Before you move to a megacity, please assess the organized crime from top to bottom of the social strata of the area. Then, ask the question of whether the leadership provides for a healthy space for law-abiding citizens. Some megacities do.

Unfortunately, my interpretation of the fires in Paradise, California—as well as in other countries in the developed world—is that we are entering a period in which “all bets are off” in many places. This is one reason why I live modestly and spend at least half of my time living nomadically.

In periods of rapid change, “movement is life.”

Technology and the Shift from Global 2.0 to 3.0: The future of megacities raises a question I asked in The Rise of the Asian Consumer:

Question #2: What will the impact of robotics be, including in agriculture and manufacturing?

One McKinsey study said that by 2030,
automation would replace 236 million workers
in China, 120 million in India, 73 million in
the U.S., 30 million in Japan, 18 million in
Mexico, and 17 million in Germany.

So, if China has 36% of its people work-
ing in agriculture and has the capability with
robotics to bring that down to 1%, what will
happen to those people as the same degree of
automation occurs in manufacturing and other
industries as well?

Given the importance in China of keep-
ing people working and fed, I think that the
biggest wildcard question is automation. How
does the middle class survive and grow in the
face of significant automation? It’s going to be
a similar question in the United States and G7.
Automation has the potential to exacerbate
inequality throughout Asia and Europe and
the United States.
~ The Rise of the Asian Consumer, 2nd Quarter 2018 Wrap Up

If automation and innovation create the equivalent of a new “industrial revolution” that results in significant unemployment, how will people in megacities adjust? The descriptions of what happened in the urban areas during the last industrial revolution are dire—read Charles Dickens.

Who will capitalize the entrepreneurial and education process to help migrate people to new economic functions, especially in a world where agriculture has been industrialized and is centrally controlled by large corporations? If people own land and can grow their own food, automation will have a very different impact.

If, however, we automate manufacturing, transportation, and agriculture in Asia, where 30% to 50% of the population now lives in farming communities dependent on small farmers, how is this supposed to work? This is the topic addressed by Sir James Goldsmith in the video above.

If anything first created a partnership and then drove a wedge between the U.S. and parts of Asia, it is the practical necessities faced by Asian politicians trying to keep their populations fed, employed, and/or receiving income. Add to this an aging population in China without a pension fund infrastructure, and you get significant stress points in the rebalancing of U.S.-China relations.

Health: The cities that don’t get it right will not have the proper infrastructure to support a healthy population. Even where they do get it right, the pressure in some areas for the general population to poison itself with vaccines, pharmaceuticals, fluoride, and nutrition-deprived foods is producing populations with weak immune systems and high toxicity levels. A physically weak population is a breeding ground for diseases. If natural health doctors have been suppressed or systematically outlawed—even assassinated—in your area and you don’t have trustworthy health care practitioners in your family or close personal networks, you will not have access to economic pathways to get and stay healthy.

Whatever you do, try to live in jurisdictions where you can access fresh food and competent health professionals. For some of us, that means DIY health care, moving, or going offshore.

Reserve Currency and Sovereign Debt:
Another risk is the exhaustion of sovereign government debt capacity. One of the financial mechanisms that makes centralization go, including urbanization, is the use of sovereign government credit and debt to subsidize and centralize the global capital and resources. That means centralizing transactional flows into big urban centers. If various parts of the world get to the point where they exhaust their sovereign debt capacity, what does that mean for urbanization?

Again, without centralized subsidy and force, information technology should disperse capacity. Technology should benefit the little guy. I know it hasn’t worked that way yet. Without sovereign debt and one global reserve currency to finance centralization and the related military expenses, could fundamental economics result in sudden shifts in megacity economics? What happens to the capital city if the provinces grow independent and the hunger games are cancelled?

My guess is that this is unlikely, given the patterns of disaster capitalism operating around the world today. The centralized powers are able to deliver dramatic force, which is likely to be the controlling variable.

The High-IQ Trap: We see tremendous variation in population-level IQs in various nations throughout the world and in IQs within any given population. There is no doubt that cities attract talent, particularly where they have the central bank and sovereign government as partners to direct talent. They can attract a lot of high-IQ people.

Indeed, I believe this is an intentional part of our current immigration policies—the ones we are implementing, as opposed to the ones we are describing publicly.

In my article, The 2016 Presidential Election: The Productivity Backlash, I talked about the fact that people in the rural areas who have had to function in difficult local market economies may have lower IQs but they are, in fact, infinitely smarter than people with IQs of 150 who have been working in Silicon Valley and have no clue what a market is because they are so richly subsidized and don’t realize it.

There is nothing more frightening to watch than a highly confident, very wealthy person with a high IQ who is completely clueless about how the covert side of the economy works. They have been encouraged to carry out a limited function, and their success in that limited function confirms their worldview. They don’t know what they don’t know. They cannot fathom that they are simply another one of Mr. Global’s patsies. This kind of ignorance in powerful hands can become very cruel and dangerous.

We risk the possibility of having centers in megacities populated with extraordinarily high-IQ people who are ingesting invisible entrainment and mind control and don’t know what they don’t know. Be on the lookout for this as an element of the creep factor in cities—especially when some of these groups get squeezed by AI applications and inflation.

This alone should provide every urban mayor with an incentive to add as many green spaces as possible—parks, lakes, trees, and exercise and bicycle paths—within their city, while rebuilding robust personal and professional networks with people and businesses in the rural areas surrounding the city.

I used to have a partner on Wall Street who explained the world as a place divided between the heavy sleepers and the light sleepers. The light sleepers would hear the lion coming in the night and sound the alarm. The heavy sleepers would ensure that someone was sufficiently rested to rid the cave of the lion. He would end his explanation by emphasizing that we need each other. Some things, it seems, never change.

Transhumanism: My biggest concern when it comes to megacities (or any big city) is transhumanism. I think that the bigger the city, the more likely that urban populations will be target markets for prototyping and promoting transhumanism.

I discussed this with Dr. Farrell in News, Trends & Stories in this Wrap Up. We made a little “Just a Taste” video about Gender X.

To introduce robots and use robots for labor will require a legal and financial system for robots. This could take many decades and be very expensive. However, if existing legal and financial systems—including taxation systems that are used to manage human labor—can be adapted to integrate robots, the process becomes much easier and simpler.

One of the reasons this is a practical solution for the leadership of a highly centralized corporate system is because the integration of digital technology into humans and the integration of AI into robots is going to create a continuum of human to cyborg to robot. For some period of time, expect open-ended prototyping to determine the optimal combination for various labor functions. This creates the need for one integrated system—one that will allow for experimentation with different combinations of living and digital.

Imagine a large city where you have lots of workers who are renters—cut off from family and financially dependent on centrally controlled employment, with few reserves. You further lay the groundwork with a culture of hypermaterialism. You get them cut off from nature and indoctrinate them with a steady diet of mind control. What you have is a population that is going to be susceptible to being used to prototype thousands of transhumanist applications and combinations.

If you haven’t watched the movie, The Kingsman, I would recommend it. A billionaire decides to hand out free SIM cards that permit him to mind control anyone carrying a smartphone that is using his SIM cards. This includes triggering homicidal behavior and mass killing.

Megacities will have environments conducive to such crowd control and manipulation technologies. Don’t believe me? Here is the video of the Chuck E. Cheese brawls in Miami that I regularly encourage subscribers to watch. During the same year, we had reports of many instances such as this one in other Chuck E. Cheese establishments around the country as well as in malls.

One of my greatest concerns in any densely populated area is that this technology and other very powerful mind control technologies may be applied much more frequently and broadly—particularly once 5G is launched. This includes using techniques such as holograms to engineer fake news and false flag attacks.

You need to know that this type of technology exists, and that it is being used and applied. Of course, it can be used and applied everywhere, but there is a greater chance that it will be tested and applied in dense urban areas.

If you live in a megacity or a large urban area, you’ll want to keep an eye on whether transhumanism is catching on. I think you don’t want to be around it.


In closing, there is a lot about the explosive growth of urbanization that I find ominous. However, I never cease to be amazed at the human innovation that can turn things in a positive direction. I believe Mr. Global counts on that dynamic when he or she implements these gut-churning movements of people and resources.

I would like to close with a quote I was reminded of while researching megacities that I posted on The Solari Report during the financial bailouts. It’s a quote from TV producer Chuck Lorre, who describes the major impetus behind what keeps the slow burn going:

“I believe that Newton’s first law of motion is the reason we will emerge from our current economic woes. That law states that an object at rest tends to stay at rest and an object in motion tends to stay in motion with the same speed and in the same direction unless acted upon by an unbalanced force. How does that relate to the financial $#%* storm we’re now cowering under?

Allow me to explain. There are slightly less than seven billion people on this planet. Assuming that roughly half that number are either too young, too old, too lazy, or too loaded to work, that still leaves almost three and a half billion people getting up in the morning to chase the almighty dollar, the transcendent rupee, the Zen yen, the dear ol’ euro, the what’s goin’ on yuan, the… Well, you get the idea.

Now, call me crazy (and many have called me far worse), but I happen to think that three and a half billion motivated people is one big damn object in motion. And the only thing acting against that object is the friction caused by a small bunch of greedy, dumbass, screw-the-pooch, Ivy League pot stickers (the unbalanced force). I therefore assert that the unbalanced force (you know who you are, shame on you) will eventually be overwhelmed by the object in motion (three and a half billion people with pluck, aka pluckers), thus allowing the object in motion to continue its relentless journey forward, thriving and conniving until it is once again slowed down by other unbalanced forces, or a very large meteorite. Or a plague. Or fundamentalists with nukes. Or atmosphere-eating nanobots. Or a super volcano. Or Skynet. Or Cylons.”

I’m betting on 3.5 billion people to transform and outwit the bankers once again and find a way to make our cities human places. As part of that process, the growth of global real estate companies will continue, as demographic changes and growth in the emerging markets drives demand for real estate and infrastructure. Where good governance and good management thrive, investment opportunities will present themselves.

What I want you to do is appreciate that growth in urbanization and megacities, and the continued convergence of real estate and the securities market, are primary trends in our lives and economies—and very much part of the rise of Asia. Wherever you choose to live, my goal is to encourage better “maps” of your economic landscape that will help each of you create your own unique, free, and inspired life.