Slowing Growth the Problem, Asset Appreciation the Solution?
The Problem:
The Fed and major central banks believe they are fighting a deflationary spiral battling ongoing misses to their inflation targets. But in truth their misguided policies are contributing to a depopulation spiral. They are forcing low interest rates that only exacerbate overcapacity for a consumer base among whom growth is fast decelerating. The cheap money is causing rapid asset appreciation absent like wage growth. Asset holders (primarily older and wealthy) are reaping the rewards while those with little or no assets (young, poor, those of childbearing ages) are paying higher rents, insurance, medical care, schooling, etc. etc. This inequitable inflationary pressure is pushing birth rates to all time lows and cutting off present and future demand…and this is met with even more of the medicine that made the patient sick in the first place.
From a US perspective, there has essentially been no bottom up US population growth since 1950. Chart below shows average annual US births per decade (including births from all sources, legal and illegal). Lower boxes show current age of the population borne during each decade. Births have essentially been flat for seven decades.
Average annual births per each generation and current age of each group, below. Again, births by generation have been flat since the completion of WWII.
Below, annual births highlighting each generation. From the early ’50’s to present, births have been remarkably flat, given the tripling of the total population.
15 to 64 year old population (red line) and year over year change (blue columns). Average annual growth, per period below, has decelerated 50% but will decelerate nearly 80% over the next decade. Average growth, per period:
- 1970 – 2009, +1.93 million
- 2010 – 2018, +0.98 million
- 2019 – 2030, +0.36 million
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