The World Economy +10 Years

[imoldernu]

Quote:

Originally Posted by free2020 Dr Hans Rosling (late) has spoken about this in his quest to educate the world on how to be more fact based. One of them is that peak child is behind us. All over the globe. By 2050 it will become obvious to all. We tend to not change the narrative in our heads because we don’t dig for data and also there are several instincts/ biases that humans are inherently given to. Listen to Dr Rosling on Ted or read his seminal book “Factfulness”

Yes... I was fortunate to tune in to this TV show about China. Am hoping that somewhere, the entire show will be repeated. I do believe I watched it with my jaw wide open... seeing 150 MPH trains connecting vast areas and technology that is no longer just stolen, but created... and the extremely high living standards of the advanced cities... Absolutely awesome.

This was the preview to an hour show:

https://www.youtube.com/watch?v=8MX_DB68M54

The article here:
https://www.nbcnews.com/tech/tech-ne...drain-n1029256

Don't know about you, but I've got a lot of catching up to do on this world.

[AnonEMouse]

World population is around 7 billion now and projected to level off around 10b as birth rates are dropping. This of course implies the world has to be aging as well:

"The world's older population continues to grow at an unprecedented rate. Today, 8.5 percent of people worldwide (617 million) are aged 65 and over. According to a new report, “An Aging World: 2015 ,” this percentage is projected to jump to nearly 17 percent of the world's population by 2050 (1.6 billion)."

This would severely stress the current economic model if everyone retired at the same age and rate of the past. But there are signs this isn't happening and the system is adapting. Countries are raising the minimum age for state pensions (e.g., SS in the US). Russia recently raised the age to much protest and Brazil is doing likewise. More people of retirement age are working now than ever. That should relieve some pressure on the economy, though obviously not all.

So in the short-term there shouldn't be much adaptation required. Those already retired will likely live out their years without too much worry.

Those on the "young dreamers" forum, however, would face a much more difficult path. They must content with stagnant wages, lower expected future returns, phasing out of pensions, lowering of state pensions (either thru raising minimum age or outright benefit cuts), all while paying out more taxes to fund current retirees and pay for past government expenditures.

The social ramifications are already evident. There are more and more dual income households (hard to survive on one income alone). People are delaying marriage and kids or foregoing them altogether (thus the declining birthrate).

In order to be financial independent, they would have to accumulate a bigger fund but with lower pay. This means this board's membership would likely decline over the years as fewer people would be able to attain/aspire to FI/RE.

[imoldernu]

Quote:

Originally Posted by AnonEMouse The social ramifications are already evident. There are more and more dual income households (hard to survive on one income alone). People are delaying marriage and kids or foregoing them altogether (thus the declining birthrate). In order to be financial independent, they would have to accumulate a bigger fund but with lower pay. This means this board's membership would likely decline over the years as fewer people would be able to attain/aspire to FI/RE.

Nice post..Well done!

[TheRunningMan]

Quote:

Originally Posted by Navigator I think even more telling is the population growth rate of these countries: https://www.indexmundi.com/g/r.aspx?v=24 . Three of the countries have a negative growth rate and only three are above 1%. With such low growth rates, indicative of an aging world population, I wonder if there will be enough economic growth to fund my retirement.

Yep, we should push all of our portfolios into Africa...micro-finance perhaps

[Running_Man]

The world is on a financial addiction of growing markets and investing in baskets as the baskets get bigger. As population growth slows or goes to zero the financial system no longer works, the strains are already evident, look at the past 200 years and find negative interest rates anywhere, they are a tax on savers and becoming the primary means of funding international currency and government relations. This will act as a force putting more people into the workforce and out of retirement. In the beginning this forces equity and bond capital prices higher but eventually negative interest rates will work as a tax for anyone saving money and put them back to work.