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The floor under the East Asia neighborhood (consisting of China, Japan, South / North Korea, Taiwan, & Mongolia) is about to fall away. These nations (combined) equal slightly more than 20% of the global population and consume 27% of total global energy. From 2000 through 2016, this region (spearheaded by China) represented 48% of the global growth in total energy consumption. So, when I tell you these countries are economically entering long-term domestic declines (or perhaps outright collapses), the impacts will reverberate everywhere.

Why domestic economic decline or collapse? This is simply following a massive population decline which has already taken place (past tense). The chart below details the 44% fall in births since the double peaks seen in East Asia in ’67 and ’89. This is an ongoing birth dearth of over 14 million fewer annually, since 1995. Now this birth dearth will be compounded by the rapidly falling childbearing population of 15 to 39yr/olds, represented by the red line below (I exclude the 40+yr/olds because they simply have so few children as to simply create distraction). By 2035, the East Asia child bearing population will decline by 30% or -202 million (no estimation, this population is already born and will just shift forward). Absent some seismic shift (or turning away from the inflationary urbanization underway?), births will continue to tumble and national populations will ultimately likewise crumble.

Noteworthy above is the low water mark of just 15 million births in 1996…and the muted L shaped aftermath. Those born in 1996 will be 23 years old in 2019, or generally entering adulthood. On an annual basis, this is a relatively sudden 50%+ decline in new adults, new potential employees, new potential parents, new potential consumers entering the economy…and this is just the start of the “new normal”.

…click on the above link to read the rest of the article…

Why the Fed, Nor Any Central Bank, Can Ever Truly “Normalize”

December 31, 2018

Why the Fed, Nor Any Central Bank, Can Ever Truly “Normalize”

Last week, I highlighted that since ’00, when the Federal Reserve has ceased adding to its balance sheet or begun “normalizing” (via rolling off assets), equity markets have swooned (detailed HERE).

A simple idea today…that the end of population growth (where it matters) has long been upon us (detailed below). Absent population growth among the nations that do nearly all the consuming, a debt based economic and financial system (to coerce ever higher levels of debt fueled consumption) can’t ultimately succeed. That is, without population growth, assets generally don’t appreciate, homes are just shelter rather than “investments”, and debt is generally only a drag on future spending. Likewise, without population growth, total global energy consumption is on the precipice of secular decline (detailed HERE).

In this reality, the only means of maintaining or lifting asset prices further is ever more central bank monetization (aka, centrally planned and executed counterfeiting). Of course, this monetization scheme is doomed to fail but while it continues, the gains are privatized while the losses are socialized. But ultimately markets (and economies, as a means of honest exchange), will get cleared. So, without further ado, I detail the end of population growth (particularly where it matters):

1- Simply put, topline global population growth (births) ceased increasing almost 30 years ago! Looking solely at the top-line (dashed black line, chart below), note that from 1950 to 1989, annual global births increased 73% (+57 million). Conversely, from 1989 to 2018, annual global births have risen just 1% (+1 million). Based on UN data and UN median (overly optimistic) future estimates.

However, the distribution of those births among the differing groupings of nations (by income) has dramatically changed from 1950 to present…and will shift further by 2050.

…click on the above link to read the rest of the article…

A Debt Based System Can’t Succeed Without Population Growth

December 30, 2018

A Debt Based System Can’t Succeed Without Population Growth

A simple idea today…that the end of population growth (where it matters) is upon us. Absent population growth among the nations that do nearly all the consuming, a debt based economic and financial system can’t ultimately succeed. That is, without growth, assets generally don’t appreciate and debt is generally only a drag on future spending and activity. The timing of the failure can be delayed and the gains privatized while the losses are socialized, but ultimately markets (and economies, as a means of honest exchange), will get cleared. So, without further ado, the end of population growth:

1- Simply put, topline global population growth (births) ceased growing almost 30 years ago! Looking solely at the top-line (chart below), note that from 1950 to 1989, annual global births increased 73% (+57 million/annually). Conversely, from 1989 to 2018, annual global births have risen just 1% (+1 million/annually). Data based on UN data and UN median estimates.

However, the distribution of those births among the differing groupings of nations (by income) has dramatically changed from 1950 to present…and will shift further by 2050. The chart below shows the proportion of births among the high income, upper middle income nations, and China have nearly fallen in half since 1950…while the proportion of births among the lower middle and low income nations have soared. More simply put, births among those that consume heavily (about 90% of total energy) have long since collapsed while births among those who consume relatively little (less than 10%) have soared.

But now, lets look at the sources and timing of those changing births and the implications for consumption.

High income nations births (blue line) and year over year change (red columns). Incomes range from $90k to $12k, per capita, and these nations (US/Can, EU, Japan/S. Korea, Aus/NZ, etc.) consume 47% of total global energy.

…click on the above link to read the rest of the article…

The curse of Thomas Malthus

August 4, 2018

The curse of Thomas Malthus

Running through some notes from last year, I came across an article by Dietrich Vollrath published in 2017 that I’d printed out to give it proper consideration. It’s called, “Who are you calling Malthusian?”, and it addresses that interesting futures question of why calling someone “Malthusian” is such an effective form of ad hominem attack that it closes down any possible argument.

Poor old Malthus. He has had a bad reputation ever since he predicted, towards the end of the 18th century, that over-population would lead to famine and then to social collapse. It didn’t turn out like that, largely because we stumbled across a one-off supply of cheap energy, and because of the Industrial Revolution. And, because he turned out to be wrong, that means that if you mention Malthus these days you are instantly labelled as a crank.

So Vollrath does us a service in his long post in two ways. First, he tries to create Malthus’ argument in its original context, and second he goes back to the relationships that sit behind Malthus’ model of the world.

Malthusian relationships

The relationships are simple.

One: living standards are negatively related to the size of population. This is because at time of writing the major factor of production was land, whose supply is largely fixed. Vollrath shares a diagram, originally from Greg Clark’s work, which demonstrates this. Peter Turchin’s model in Secular Cycles effectively has this relationship at its core.

Clark UK population and real wages Malthus

Two: population growth is positively correlated with living standards. As Vollrath notes

“This may be because kids are a normal good, and so fertility rises when people have higher incomes. Or it may be because health is a normal good, so people take better care of themselves (and their kids) when they have higher income.”

…click on the above link to read the rest of the article…

Population growth and food: A systems perspective

July 12, 2018

Population growth and food: A systems perspective

In this age of the Anthropocene, it is necessary to look inward as well as outwards to find systemic solutions. People may or may not be “a plague on earth” as David Attenborough has stated, but we are without doubt the dominant force on this planet. Some introspection is needed if we are to use our power ethically.

As Organisational Outreach Officer for Population Matters, my task is to contact ethically-oriented organisations (from faith organisations to environmental NGOs) and suggest ways in which the issue of population growth could be covered on their website and integrated into their ethos. Many organisations I approach agree that population size contributes to climate change, conflict and malnutrition, but they frequently respond by saying that the issue lies outside of their remit. Population Matters’ patron Jonathon Porritt talks about the reasons why organisations avoid referencing population growth in this 14-minute video, debunking a few myths along the way.

To be truly systemic, one has to include all aspects of the problem. So what is ‘systemic’ or ‘systems thinking’? In simple terms, it is an approach for analysing complex issues by viewing them holistically, as purposeful systems containing interdependent variables, stakeholders and perspectives. This allows an awareness of one’s own bias and limitations. Systems practitioners use simplified diagrams to uncover key issues and when this is done comprehensively they are able to see the interwoven social, economic, political and environmental dimensions.

The issue under investigation here is the global food system, the purpose of which is to feed humans (and to a certain extent livestock) over a sustained period of time. It is embedded in and dependent on ‘macro’ systems as shown in the diagram below.

…click on the above link to read the rest of the article…

7.5 billion and counting: How many humans can the Earth support?

July 11, 2018

Humans are the most populous large mammal on Earth today, and probably in all of geological history. This World Population Day, humans number in the vicinity of 7.5 to 7.6 billion individuals.

Can the Earth support this many people indefinitely? What will happen if we do nothing to manage future population growth and total resource use? These complex questions are ecological, political, ethical – and urgent. Simple mathematics shows why, shedding light on our species’ ecological footprint.

The mathematics of population growth

In an environment with unlimited natural resources, population size grows exponentially. One characteristic feature of exponential growth is the time a population takes to double in size.

Exponential growth tends to start slowly, sneaking up before ballooning in just a few doublings.

To illustrate, suppose Jeff Bezos agreed to give you one penny on Jan. 1, 2019, two pennies on Feb. 1, four on March 1, and so forth, with the payment doubling each month. How long would his $100 billion fortune uphold the contract? Take a moment to ponder and guess.

After one year, or 12 payments, your total contract receipts come to US$40.95, equivalent to a night at the movies. After two years, $167,772.15 – substantial, but paltry to a billionaire. After three years, $687,194,767.35, or about one week of Bezos’ 2017 income.

The 43rd payment, on July 1, 2022, just short of $88 billion and equal to all the preceding payments together (plus one penny), breaks the bank.

Real population growth

For real populations, doubling time is not constant. Humans reached 1 billion around 1800, a doubling time of about 300 years; 2 billion in 1927, a doubling time of 127 years; and 4 billion in 1974, a doubling time of 47 years.

On the other hand, world numbers are projected to reach 8 billion around 2023, a doubling time of 49 years, and barring the unforeseen, expected to level off around 10 to 12 billion by 2100.

…click on the above link to read the rest of the article…

A Proposal for a United Nations Framework Convention on Population Growth

February 6, 2018

A Proposal for a United Nations Framework Convention on Population Growth

The United Nations Meeting Room by Keith Burns | Flickr | CC BY-NC-ND 2.0

Introduction

Recently, an international assembly of scientists from 184 countries endorsed an article published in the journal Bioscience entitled “World Scientists’ Warning to Humanity: A Second Notice”. As the warning states, “We are jeopardizing our future by not reining in our intense but geographically and demographically uneven material consumption and by not perceiving continued rapid population growth as a primary driver behind many ecological and even societal threats. By failing to adequately limit population growth, reassess the role of an economy rooted in growth, reduce greenhouse gases, incentivize renewable energy, protect habitat, restore ecosystems, curb pollution, halt defaunation, and constrain invasive alien species, humanity is not taking the urgent steps needed to safeguard our imperilled biosphere.”Further, this 2016 article published in the Chinese Journal of Population Resources and Environment presents an instructive discussion of why population growth remains largely unacknowledged as a primary driver behind such threats. And this 2010 article published in The Globalist introduces then dissects ‘Ponzi Demography’, asserting that “the sooner nations reject Ponzi demography and make the needed gradual transition from ever-increasing population growth to population stabilization, the better the prospects for all of humanity and other life on this planet.”

As Population Media Center’s President Bill Ryerson asserts, population is the multiplier of everything else. Such knowledge demands action to protect life on Earth in a compassionate and intentional manner. People are receptive to this inclusive message. It compels us to act together.

I propose the establishment of a United Nations Framework Convention on Population Growth –one akin to the Paris Agreement for climate change with Nationally Determined Contributions (NDCs) in pursuit of a sustainable population in every country.

…click on the above link to read the rest of the article…

China’s Growth Story…Don’t Look For a Happy Ending!

December 18, 2017

China’s Growth Story…Don’t Look For a Happy Ending!

Many economists suggest China is on the cusp of significant growth in domestic consumer demand as China shifts from exporter to consumer. These economists postulate that rising domestic demand coupled with continued growth as the global exporter will push both China and the global economy into high gear. China suggests that it will achieve 6.5% annual GDP growth. However, I’ll briefly show why none of these outcomes is remotely likely.

Problem #1- China as Consumer:

According to the UN data, China’s 15-40yr/old childbearing population peaked in 2005 and has been rapidly shrinking since. Since ’05, China’s population capable of producing more Chinese has fallen by 83 million persons or a 14.3% decline. By 2030, China’s childbearing population will have declined by 157 million or a 27% reduction of those capable of childbirth (no estimate here…this is simply moving the existing population forward in adulthood). Couple a massive decline in the childbearing population and the ongoing negative birthrate and serious depopulation (particularly among the rural regions) is not only possible but growing more likely. Minor increases in wages will be no match for the massive declines in the consumer base.

The chart below shows China’s total 15 to 40 year old population (in blue) and the annual change (in red).

As for China’s 40 to 65 year old population, peak annual growth is well in the rear view mirror but one final bump in population growth remains before depopulation ensues. However, the mild acceleration in growth will be more than offset by the declining 15 to 40yr/olds (chart below).

Simply put, China has seen peak domestic consumption and peak demand. The impact of large, growing declines in the consumer base are only being masked by massive central monetization and wasteful misallocation of resources. That misallocation has resulted in China’s massive surge in energy consumption.

…click on the above link to read the rest of the article…

Humanity Sealed Its Own Fate: 15,000 Scientists Sign A “Doomsday Warning”

November 14, 2017

Humanity Sealed Its Own Fate: 15,000 Scientists Sign A “Doomsday Warning”

earthquake drought natural disaster

A catastrophic warning about humanity’s impending doom was just signed by 15,000 scientists; they all agree that we’ve already sealed our fate.

The signed letter, which was apparently first written in 1992, claims all of the predictions made by scientists have come true except one. Apart from the hole in the ozone layer, which has now stabilized, every one of the major threats identified in 1992 has worsened.

The prophetic warning letter from 1992 argued human impacts on the natural world were likely to lead to “vast human misery” and a planet that was “irretrievably mutilated.” Climate change, deforestation, loss of access to fresh water, animal species extinctions, and uncontrolled human population growth are all threatening mankind’s and the Earth’s future.

It’s been about 25 years since the first doomsday warning letter was signed and scientists are now saying that the Earth is in even more dire shape. More than 15,000 scientists from 184 countries said humans had “unleashed a mass extinction event,the sixth in roughly 540 million years.”

The message, which was posted online and is an update to the original Warning from the Union of Concerned Scientists and around 1,700 signatories delivered in 1992. The World Scientists’ Warning to Humanity was written and spearheaded by the late Henry Kendall, former chair of UCS’s board of directors. But scientists still agree that runaway consumption of natural resources by an exploding population remains the biggest danger facing humankind, say the scientists.

In the more recent doomsday warning, scientists warn that human beings should eat less meat, have fewer kids, consume less, and use green energy to save the planet. In the past 25 years, scientists have pointed out the following:

…click on the above link to read the rest of the article…

The End is Near…Depopulation is Out of Control…So Buy Stocks (Seriously)

November 3, 2017

The End is Near…Depopulation is Out of Control…So Buy Stocks (Seriously)

The world economy is premised on a ludicrous idea. That Asia, then India, and then Africa will continue to drive economic growth. So as not to turn this article into a book, lets consider this idea focusing on East Asia consisting of China, Japan, North and South Korea, Taiwan, and minor others. This region consists of 1.6 billion persons or about 22% of earths inhabitants. However, since 2008, it is this region that is responsible for nearly 100% of the global increase in demand for oil (best proxy available for true economic growth) and having primarily driven global economic growth. My point in this article is that the growth in this region is entirely a credit driven supernova against collapsing populations which will never be able to fill the 100+ million newly added apartments or pay back the debt incurred to achieve the “growth”. Contrarily, from an investor standpoint, this weakness is the green light to “invest” as aggressively as possible because as long as central banks exist, they have your back.

Consider, since 2000, China’s debt outstanding has risen something like 14x’s to 17x’s or from about $2 trillion to something between $30 to $35 trillion presently. As for Japan, who knows Japan’s true debt as Japan’s central bank is buying much or most of the debt and essentially throwing it in a black hole, never to be seen again(…monetization with a capital “M”).

Why the massive debt creation and central bank monetization? Depopulation with a capital “D”. First off, consider the collapse in fertility rates for these nations (chart below). To maintain a constant, zero growth population, the childbearing population needs to produce 2.1 children in order to replace themselves (dashed line, below). However, as the chart below shows, E. Asian nations have seen negative fertility rates for decades (Japan turning negative in ’74, S. Korea in ’83, China in ’92, and N. Korea in ’96).

…click on the above link to read the rest of the article…

The Tale of Two America’s…Urban Rise, Rural Demise, Rationale to Hyper-Monetize

October 9, 2017

The Tale of Two America’s…Urban Rise, Rural Demise, Rationale to Hyper-Monetize

(The following was written as an outline for a potential book. To this point no publisher has shown interest and time and funds have run out.)

America is in the midst of an ongoing and accelerating shift in demographics and population growth. These trends, long in place, are at a tipping point that are simultaneously driving urban economic growth (plus associated asset bubbles) and rural economic declines (plus associated asset collapses). The spin up and spin down are mutually interconnected, the result of movement in a zero sum game. But for select regions (and rural America in general), there is a surging quantity of sellers and a dwindling quantity and quality of buyers that will result in the primary asset of most Americans, their home, transitioning from an asset to an outright liability.

Many will point to record stock market valuations as an indicator of positive economic and/or business activity to refute my claims. Instead, I argue it is the Federal Reserve and federal government policies, in place as a quasi “life support” for the negatively affected regions and rural America at large, that are driving the asset valuation explosions of equities (chart below, representing all stocks publicly traded in the US) and urban housing. I will outline why the situation in the affected regions will only get worse and thus the Fed believes its hands are tied. Why any amount of normalization will only induce localized collapses across much of the nation. The total market capitalization ($ value) of the Wilshire has nearly doubled the acknowledged “bubbles” of 2000 and 2008 and is likely to continue rising further, precisely due to the worsening issues I detail below.

…click on the above link to read the rest of the article…

Contemplations for a Sunday (unless you can’t get around to it til Monday)

February 28, 2017

Contemplations for a Sunday (unless you can’t get around to it til Monday)

Some simple themes today…

Population growth, economic growth, and resultant energy consumption are inexorably slowing. The Federal Reserve knows it can not stop this and is simply slowing the inevitable with interest rate cuts to incent greater consumption via skyrocketing credit/debt (particularly government debt….debt that is undertaken with no intent of ever repaying it and is really just pure monetization).

The chart below highlights that employment among 25-54yr/olds (the foundation of US consumption) ceased growing in ’00. Once employment among this group ceased growing, total US energy consumption also ceased growing, and accelerating debt was substituted to maintain growth thanks to nearly 40yrs of interest rate cuts.

The impact of the declining rates and rising debt can be seen in the Wilshire 5000 (chart below). The Wilshire represents all publicly traded US equities radically moving upward with surging US federal debt but inverse to US total energy consumption, jobs creation, and economic activity since ’00.

The driver of the Fed’s federal funds rate was and continues to be the rate of population growth and the growing demand this population growth represents. The adult population growth rate peaked in ’79 and the federal funds rate peaked in ’80…rates plus population growth have been decelerating/declining together since.

The chart below showing the 0-64yr/old population growth vs. 65+yr/old growth. The demographic and population situation only continues to get worse. In fact, it’s unlikely the 0-64yr/old population growth will hit the already low estimates from 2017–>2030 due to the ongoing decline in birth rates and slowing immigration.

What about employment? Chart below shows total full time jobs growth has slowed to a trickle (net basis from peak to peak) and total energy consumption growth likewise decelerating, peaking in ’05, and now declining. Federal funds rate moving inversely, all the way to zero. Finally, Public US Federal debt (w/out Intra-governmental holdings) skyrocketing.

…click on the above link to read the rest of the article…

Energy Consumption vs. Core Populations – Trending Down Together

February 18, 2017

Energy Consumption vs. Core Populations – Trending Down Together

In this article, I want to spend a little time reviewing two of the most relatively reliable data sets, population size/growth and energy consumption/growth. I’ll compare the total energy consumption of nations / groupings of nations vs. their core (25-54yr/old) employed populations and total core (25-54yr/old) populations.

What’s the point? We are in the midst of a structural, secular change and policy makers / central bankers insistence that it is just a transitory issue in need of more rate cuts and more credit to ”restart the economy” is absolutely ridiculous. This is the story of cause (declining population, where it counts) and effect, declining energy consumption and economic activity. And this is about to really pick up speed to the downside (more on that, China, below). Plus, we can ponder if real economic “growth” coincident with declining consumption of energy is possible…or is that growth just debt and financialization? Also keep in mind while viewing the charts and data below, if not for the twenty six years of Federal Reserve (& CB’s worldwide) interest rate cuts incenting all the debt creation, energy consumption would have begun declining long ago.

US-
Below, total US energy consumption (quadrillion BTU’s) vs. core employees. Correlation? Causation? Anyway, just is what it is. The US consumes 18% of global energy but US total energy consumption has been falling since 2007 and is now back to where it was 17 years ago, in 1999….likewise, the total number of 25-54yr/old employees peaked in ’07 and is now back to 1999 levels.

Below, same as above but added core population through 2025 (UN assumes, perhaps wrongly, continued levels of immigration to achieve that slight population growth from now through 2025).

JAPAN –

Below, core employees vs. total energy consumption. Japan consumes 3.5% of global energy. Japan’s total energy consumption peaked in ’06 and is now back to total levels last seen in 1992…and the total number of Japan’s core population now employed is on par with total employed in 1982.

…click on the above link to read the rest of the article…

The population problem: should the Pope tell people to stop breeding like rabbits?

April 11, 2016

The population problem: should the Pope tell people to stop breeding like rabbits?

In this post, I argue that overpopulation is a complex problem that has to do with human choices at the level of single families. It is not impossible that such choices will eventually lead to a stabilization of the population at a sustainable level as it has happened in some historical cases, such as in Japan during the Edo period.

The population question arises strong feelings everytime it is mentioned and some people seem to think that, unless something drastic is done to curb population growth, people will reproduce like rabbits, destroying everything else. This position goes often in parallel with criticism to religious leaders and to religions in general, accused of encouraging people to reproduce like rabbits. Or, at least, to hide the fact that people reproduce like rabbits if not prevented to do so in a way or another.

But is it true that people tend to reproduce like rabbits? And would they stop if someone, let’s say the pope, were to tell them to stop? Maybe, but things cannot be so simple. Let me show you an example: Japan during the Edo period.

The population of Japan during the Edo Period (uncorrected data as reported by the bBafuku government). It shows how it is perfectly possible to attain a stable population in an agricultural society, even without “top-down” rules and laws. (data source, see also this link)

Note how the population has remained relatively constant for at least 150 years. It is a fascinating story, discussed in detail in the book “Mabiki: Infanticide and Population Growth in Eastern Japan, 1660–1950” by Fabian Drixler. Here is an illustration from the book:

…click on the above link to read the rest of the article…

Why did everyone stop talking about Population & Immigration?

January 20, 2016

Why did everyone stop talking about Population & Immigration?

[ I tried to summarize the 20 top reasons why population growth was abandoned by environmental groups and received little coverage in the news media the past 40 years. I highly recommend reading Beck and Kolankiewicz (2000) “The Environmental Movement’s Retreat from Advocating U.S. Population Stabilization” and Alan Weisman’s “Countdown: Our last, Best hope for a future on Earth?”. Alice Friedemann www.energyskeptic.com ]

“There is no need to decide whether to stop the population increase or not. There is no need to decide whether the population will be lowered or not. It will, it will! The only thing mankind has to decide is whether to let population decline be done in the old inhumane method that nature has always used, or to invent a new humane method of our own.” Isaac Asimov, 1974.

“Unlooked for but swift, we have come on like a swarm of locusts: a wide, thick, darkling cloud settling down like living snowflakes, smothering every stalk, every leaf, eating away every scrap of green down to raw, bare, wasting earth…There are too many men for Earth to harbor. At nearly seven billion we have overshot Earth’s carrying capacity”. Dave Foreman, co-founder of Earth First.

1) The Consumption of Wealthy Nations is the problem. Not the Poor.

It’s both, obviously. Not one or the other. The famous equation to describe this is I = P x A x T, which translates to Human Impact (I) on the environment = (P)opulation times (A)ffluence times (T)echnology.

It is certainly true that wealth nations consume too much. The United States uses 7 billion tons of minerals a year. Per capita that’s 47,769 pounds per American: 1400 pounds of copper, 9 tons of phosphate rock, 300 tons of coal, 16 tons of iron ore, 700 tons of stone, sand, and gravel, and so on.

But the poor also have a huge effect on the environment:

…click on the above link to read the rest of the article…

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