As we near 2021, I offer a prepper to detail where we stand demographically heading into the new year and close with a great clip from Fight Club summing up where we stand.
To begin, I'll divide the world into two roughly equal groups, consumers and non-consumers, using the World Bank gross national income per capita.
"Consumers" are half the worlds population, have average income per capita above $4,045...enjoy 80%+ of the income, savings, access to credit and likewise consume 80%+ of the worlds exported commodities and 80%+ of the worlds energy. They have average income of $12,000'ish. Consumers include:
- 83 High Income Nations ($12,536+) - EU, US/Canada, Japan, Australia/NZ, Saudi Arabia/UAE, S. Korea, Taiwan, Israel
- 56 Upper Middle Income Nations ($4,046-$12,535) - China, Mexico, Brazil, Russia, Iran/Iraq, Indonesia, Argentina, Thailand, Colombia/Venezuela
"Low or Non-consumers", the other half of the worlds population, have average income per capita of a few hundred dollars to $4044...earn less than 20% of world income, savings, access to credit and consume less than 20% of all exported commodities and burn less than 20% of global energy. They have average income of about $1,200 a year...10x less per person among non-consumers than the average "consumer".
- 50 Lower Middle Income Nations ($1,036 to $4045) - India/Pakistan, Philippines, Bangladesh, Nigeria, Egypt, Vietnam, Ukraine, Honduras/Nicaragua/El Salvador, Bolivia
- 29 Low Income Nations ($1,035 and below) - Afghanistan, Haiti, Somalia, Yemen, Syria, N. Korea, Madagascar, Chad, Uganda
Critically, as you read through this and see large scale present and future population declines among the consumer nations...you will note that while there is growth among non-consumer populations, it is more typically on a 1:1 basis...meaning the decline of one "consumer" is being met with the replacement of one "non-consumer"...each replacement resulting in something like a 90% decline in consumption capability.
First, a look at the head waters of global demand...annual global births. The yellow shaded area in the chart below shows global births peaked at approx. 135 million annually in 1989...and have not likely ever returned to that high water mark. Although UN expected 2020 births to surpass the 1989 quantity...when the UN releases its next updated report, births will have been adjusted down by millions to reflect the reality demographers have been witnessing, putting births well below the 1989 peak. And in 2021, the dearth of global pregnancies in 2020 will turn into one of the largest birth dearth in history.
Family formation and resultant births is the greatest force in creating growing demand (inflation). UN data shows that annual "consumer" births (blue line, below) have declined by 18 million from the 1989 peak back to the same number of births as were seen in 1950. A full roundtrip, with 4 decades of rising births followed by 3 decades of declining births. These consumer nation numbers are generally inclusive of the births to immigrants within the consumer nations...absent that, the decline would have been much steeper. Low consumer nation births (yellow line) have risen by the same quantity as consumer nation declines. Both are expected to maintain their current trajectories...Low consumer births continuing to replace consumer births 1:1.
For those paying attention, inflation (as represented by the Federal Reserve set Federal Funds Rate) has been declining nearly in tandem with the declining consumer nation births, and global debt has blasted off inversely...with the impact of pulling demand forward against a future with organically declining demand. The question here, how would an ever smaller future of consumers pay off or outgrow ever more debt???