Tuesday, June 20, 2017

Some Thoughts for Tuesday, June 20th

Our present economic issues began decades ago.  To understand what is happening economically, simply check the headwaters of (de)population (excluding Africa) under way since 1990...the chart below shows the 0-5yr/old population (excluding Africa) vs. the 0-5yr/old population of Africa.  Population growth is responsible for the majority of GDP growth...so a downturn in population growth matters...particularly when population growth shifts from wealthy or developing nations to the poorest and the wealthy elderly.  I'm not describing something that may happen in the future...I'm describing what has already happened that is continuing to send progressively larger tsunamis swamping the world economy and has the central bankers doing everything and anything to try to sustain the unsustainable.

Anyway, world 0-5yr/old population (excluding Africa):
  • 1950-->1990 + 234m
  • 1990-->2015 <-47m>
  • 2015-->2050 <-67m> (UN med. est.)
Africa 0-5yr/old population:
  • 1950-->1990 + 71m
  • 1990-->2015 +75m
  • 2015-->2050 +95m (UN med. est.)

Why???  The chart below shows the child bearing 0-40yr/old world population (x-Africa) has essentially peaked and will be declining from here forward...but the total births of this population have been declining since 1990.

The above 0-40yr/old declining child bearing population combined with declining birth rates among them means a continued decline in births is pretty much assured.

Worldwide depopulation (x-Africa) has been underway for decades and looks set to gain momentum to the downside as the child bearing population begins outright declining.


For those curious how the US compares...the US 0-5yr/old population has never regained the Boomer peak seen in 1961 and is currently trending down.  However, the ever optimistic Census expects a sudden and significant reversal (red columns) taking the population of young (and ultimately, the total population) to new heights.

Why this is so strange is if one again looks at the 15-40yr/old child bearing US population (red line, chart below) vs. annual US births (blue columns), the US child bearing population has been stagnant for nearly 3 decades...and that child bearing population continues to wait longer and have fewer children...a double whammy.

However, if you'd prefer believe BS about the millennials powering the US economy to new highs, be my guest...but based on simple realities, the chart below outlines the present and Census estimate vs. the far more likely (non-"goal seeked") reality (my red arrow) based on continuing declining birth rates and continued slowing of illegal immigration.

Invest accordingly.