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Sunday, July 5, 2015

Global & US Population Growth and Fertility Rates Slow...Debt, Leverage, and Derivatives Skyrocket

The flow of population growth (and new potential consumers) has slowed despite the larger total global population.

And the slowdown of global population growth has everything to do with this (below)...a neutral fertility rate is considered to be 2.1 children per female.

Everyone knows Japan, Germany, and Russia have been well below the redline of negative birth rates for decades while the US has recently joined them.

And the supposed "engines of growth", China, Brazil, also below the redline of negative birth rates.  India soon to join them below the redline.

And if population growth is dying out, where will funds find their 7.5% to 8% returns to meet their plan redemptions???  Perhaps your local central banker can explain where that "growth" will come from!

And a focus on the US...below you can see the peak of population growth and subsequent "slowing flow" coincided with the beginnings of massive government indebtedness.

But more importantly, consider where the population "growth" is coming from...not from a surge of births (0-55 yr/old population is barely positive) but a surging 55+ year old population simply living longer than any modern generation has.  These 55+ year olds are moving into or already in fixed incomes and spending at 3/5th's their working years rates.  These folks are in or moving into liquidation mode and not recognizable as typical "American consumers".

All this adds up to not just subpar economic growth but almost surely real economic no growth or more likely declines across advanced and developing nations alike (aka, a depression unlike any seen in modern times)...and major indebtedness, leverage, and derivatives are simply avoiding the inevitable economic reset and reorganization.

EXTRA CREDIT - GREEK Population Breakdown...not the stuff of economic "growth"

EXTRA CREDIT II - Puerto Rico Population

And the birth rate in this predominantly Catholic US territory is even lower than the US average.


  1. Hi Chris, population growth and productivity growth all lead to financial growth. What you understand and what many don't, is that without economic growth our financial system collapses.

    Many people believe in our financial system without ever troubling themselves to determine if their belief is well grounded. I didn't think about it for 43 years!

  2. Hey David,

    thanks for the read and agreed I've strived to show the foundations upon which all finances are set...population and demographic breakdowns definitely at the core. However, it's very interesting my all but a handful of blogs and sites have now decided to no longer re-post my work or blocked me entirely. I also now receive a constant flow of very negative views on my posts...I don't bother to post as they seem to go after me rather than making valid counter-arguments. Anyway, I suppose it means my work is truly awful and amateurish and/or it's not the kind of information a propagandist system wants average folks to understand. Probably some truth to both.

    Either way, I expected that 2015 would be the tipping point for an open and blatant central takeover of what were once upon a time markets. I think we are fast approaching the point where the numbers across bonds, equities, RE, commodities are solely driven by policy rather than supply, demand, and a fair pricing mechanism between the two.

    I'm curious if the populace will care or if they are entirely co-opted by their participation in these markets and social safety nets...and they see the central rigging and false pricing as a necessity to avoid the flashing digits from reflecting a painful new reality? Either way, the reality of economic slowdown and financial reset will happen...playing pretend with the numbers ultimately changes nothing.

    1. We are living in strange times. I suspect we usually are.

      The centrall controllers are effectively buying time. A reset is coming. Perhaps we don't have a reset until 'faith' in the omnipotence of central planners is lost.

      It appears that the global economy is now based solely on psychology.

  3. If we can't get growth then they will resort to inflation.

  4. Joesph - I see your name pop up on a couple of blogs we both read. What blogs do you follow? Seems we have similar interests and I always appreciate new suggestions.


    Chris has pretty much finalized my macro economics understanding. If he doesn’t mind here is a list of well known blogs. Each I find has unique things to offer.
    I don’t read Market Watch or Business Insider or CNBC gossip sites. I do read the annoying Bloomberg and Reuters. Be careful with Zero Hedge. I follow several people on seeking alpha. Here are some useful sites.

  6. Thank you for the list Joseph. Chris - As always thank you for your work and great blog.

  7. Expanding the growth formula population increase + productivity increase = growth. Need to add credit expansion. Credit expansion is the more volatile of the components.


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