Working-Age Depopulation Is Hugely Bullish For Assets... Bearish For Mankind

Authored by Chris Hamilton via Econimica blog,

Population growth is the primary, if not sole, contributor to growth in consumption and the resultant economic growth.  But not simply any population, but it is the growing population of the working age or "core" population of 20 to 65 year olds (particularly among the wealthy or developing nations) that is hyper-critical.  The chart below shows the average household income and expenditures by the age of the head of the household.  Not surprisingly, the 35 to 64 year old age group makes and spends more than double the younger or older age groups.  Although the dollar amounts vary, this principle is true worldwide.

The rise, peak, and deceleration of core population growth among the nations with income, savings, and/or access to credit goes an awful long way in explaining the deceleration of economic growth.  That decelerating growth explains the interest rate cuts, rise in debt, and now the rise in central bank monetization.  This change in core growth (and the central banks reactions to it) explains the great and accelerating divergence of negative economic activity vs. positive asset valuations.  The charts below show core population growth (which is determined through 2035, and estimates from there on all taken from the United Nations).

The chart below details the change (per five year periods) in the "core" global working age population (20-65yr/olds, excluding Africa) and "elderly" (65+yr/olds, excluding Africa...why x-Africa explained below). 

  • Core growth peaked in 2010 and growth will decelerate by 52% in the current real numbers, the core population will grow 150 million fewer between 2015 and 2020 than it did between 2005 to 2010.
  • Core growth will decelerate 80% by real numbers, the core will grow by 230 million fewer from 2030 to 2035 than it did during the peak growth period.
  • By 2040, the core is likely to begin outright declining.

Global 20-65yr/old vs. 65+yr/old (x-Africa)

While working age population growth is decelerating, elderly population growth is accelerating and growth per period will more than double from 2010 through 2020.  Surging elderly growth will likely surpass dwindling core growth by 2025.

Global 65-75 vs. 75+ (x-Africa)

If you looked at the first chart much, then the chart below will be cause for extreme alarm.  2015 through 2020 is the peak of growth among the 65 to 75yr/old group and from 2025 onward, the 75+yr/old will be the primary source of population growth.  But since 75+yr/olds make and spend half as much...the economic impact should be really clear.  A halving of income growth and spending (or a proportionate decline of economic growth should be the expectation).

I'll outline the regions by the wealthiest to poorest and most economically important to least...and you may notice depopulation among wealthy and growth among poor.


European core growth peaked in 1985 and is now indefinitely declining, falling by 14 million during the current five year period...and on and on.  Meanwhile, the quantity of elderly keeps adding up but by 2025, European elderly growth will peak and begin decelerating (chart below).

Breaking down the growth of the European elderly between 65-75 vs. 75+yr/olds...all growth is shifting to the eldest and lowest of earners, slightest of spenders (chart below).  Economically, this portends things are going to get far worse Europe-wide.

N. America (Canada, US)

Core growth peaked in 2000 & growth is down 75% since.  Inversely, elderly growth is surging and will peak by 2025 (chart below).

The chart below highlights that while N. America's growth moves to the 65+ will be shifting to the oldest of the old.  Again, thinking of the income and spending of the elderly, the surge in growth among 75+yr/olds is a death knell economically.


Asia represents about 3/5th's of the worlds population, so even small changes there are a big deal everywhere.

  • Asia adult core population growth has decelerated by 47% in the most recent five year period since the '05 to '10 real numbers, growth has decelerated by 110 million.
  • Asia adult core population growth will decelerate by nearly 80% by 2035 and turn outright negative somewhere between 2040 to 2050 (chart below).

East Asia

China, Japan, N/S Korea, Taiwan, Mongolia

  • Core population growth peaked in 1990 (adding over 100 million new adults from '85 to '90) but has turned outright negative during the current five year period, declining by 12 million.
  • Accelerating core depopulation in China, Japan, Taiwan, S. Korea, etc. will be persistent for the remainder of most of the rest of our lives.  This will be a phenomenon unlike the contemporary world has ever seen.
  • All growth will solely be among the elderly (chart below).

China, Japan, S. Korea, Taiwan will be home to the most 75+yr/olds in the world.  The most elderly of elderly (that add the least possible to economic growth) are set to surge in unprecedented numbers (chart below).

Middle East

West Asia is made up of Armenia, Azerbaijan, Bahrain, Cyprus, Georgia, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Palestine, Syria, Turkey, UAE, Yemen.

  • Core growth peaked in 2010 and is down 31% in 2020 (chart below).

South America

  • Core growth peaked in '05 and is down 28% vs. surging elderly growth.
  • Elderly growth will surpass core growth by 2030 and core growth will likely be negative by 2040 (chart below).

South Central Asia

The most populous region includes India, Kazakhstan, Kyrgzstan, Tajikistan, Turkmenistan, Uzbekistan, Afghanistan, Bangladesh, Iran, Pakistan, Nepal, Sri Lanka.

  • Core growth peaked in 2010 & will be down 8% in the current five year period.
  • Core growth will be down 32% by 2035...and continuing to fall fast from there.

Central America & Caribbean

Core growth peaked in 2010 and will consistently decelerate until turning negative around mid century.  Of course, growth among the elderly will do the inverse.


While the population growth in Africa is in the right places of core vs. elderly, it unfortunately will add up to almost nothing as outlined HERE.


I submit that these changes, unlike anything experienced by contemporary humankind, explain why central banks have taken over.  Global free markets have ceased to exist and asset prices are now centrally determined rather than freely set between buyers and sellers.  This is only the beginning and I haven't a clue how this ends but how central banks will respond is absolutely clear...they will monetize.  The fast rising combined Federal Reserve, Bank of Japan, & European Central Bank balance sheets are charted below vs. decelerating core population growth.  Asset prices will soar due to extreme weakness coupled with extreme monetization until this ludicrous monstrosity falls apart.

Of even greater concern or consequence than the economic or financial impacts, the very viability of democratic republics are at stake.  In a world where the pies that matter are either seeing decelerating growth or outright shrinking indefinitely, the public will be left with a choice.  Vote for the candidate suggesting cuts or the candidate suggesting we need never cut...because We can run ever larger deficits funded by greater central bank monetization (an unconstitutional body for this very reason that it allows the Congress to avoid its sole purpose of finding a balanced compromise of infinite wants vs. limited Tocqueville's fear come to fruition).  Unfortunately the only "viable" choices to lead us through the options will be liars and the public will select the liar who tells the lies they most want to be told and prefer to believe.  This is how a noble idea dies.  But what is born is not clear.

Economic decline masked with financial trickery leading to political farce and ultimately likely culminating in social breakdown (aka war).  But, of course, never have we gone to war with such horrific capability.  I believe we have the capacity to avoid the worst of outcomes...but if We can't even begin to discuss the problems We face (let alone potential solutions), then history seems sadly likely to repeat itself.


techpriest ArthurDaley-Ol… Sun, 10/22/2017 - 19:04 Permalink

Its all about resources - even if you wiped the debt slate clean tomorrow, who has the resources for more goods and/or new investments? The steak dinner can go on the credit card only because the debt has enough value to motivate a farmer (and everyone in the supply chain) to deliver a steak. If it just becomes a number that can be manipulated at will, how can anyone know what to produce?

In reply to by ArthurDaley-Ol…

GeoffreyT IVLIANVS AVGVSTVS Sun, 10/22/2017 - 20:50 Permalink

True, which is why it's particularly egregious that the article is claims that labour force growth is the "primary, if not sole, contributor to growth in consumption and the resultant economic growth"... when it's not.To dismantle this shibboleth (which is rooted in a crypto-Keynesian fallacy), we must proceed backwards..Firstly: Consumption does not cause growth. ("You can't eat your way to prosperity")SAVING causes growth.A simple example of an economy with only one good (corn):

  • Year 1 you plant a field of corn (from saved seed from the prior harvest).
  • Year 2 you harvest the corn; the harvest is poor, and in order to stay alive you eat the lot (you CONSUME it all);
  • Year 3 you're dead - the ultimate 'low growth' scenario.

In fact, subsistence agriculture becomes much more difficult if infant mortality falls (i.e., there are more surviving mouths to feed): this is why most subsistence agrarian cultures (and all hunter-gatherer cultures) practice selective infanticide.Go back to the example again, and imagine a bumper crop;

  • Year 1 you plant a field of corn (either from saved seed, or seed obtained by exchange for non-seed savings).
  • Year 2 you harvest the corn; the harvest is yuuuuge. You eat enough to put on some fat stores and even so, you can set aside more than you planted in year 1 - so you plant that;
  • Year 3 even if the season is a bad year, you have two buffers - extra bodyfat in the short term, and a bigger area under cultivation.

.Secondly: Population growth does not cause growth in consumption.("An individual can fuck their way to prosperity [e.g., porn, Kardashians]; a society can't")Growth in production causes growth in consumption. Not the other way around.Growth in production is primarily driven by capital intensity and technological change; population (workforce) growth is a second-order contributor and the temporal causation is in exactly the opposite direction

  • more production -> more per capita consumption -> more surviving offspring -> larger labour force ... 


  • more surviving offspring -> larger labour force -> more production -> more per capita consumption

Labour force growth is only possible when you have raised children above an age of dependency (prior to that they are a net drain on production; in subsistence societies they are a form of savings); that represents a significant commitment of savings/capital.Once the children are working age, they can contribute meaningfully to production processes (as labour).In other words, current economic conditions affect future demography, not the other way aroundinb4 "You can import labour (through immigration)".True but irrelevant. Why 'irrelevant'?Well, unless there's enough spare capacity to emply them without changing capital-labour ratios, output per worker (and consumption per worker) will fall..FINALLY:If the production system is not capable of producing enough to consume, it does not matter a flying fuck how many people you're trying to feed.Ask the kulaks, or Mao's victims during the Great Leap Forward - you can be up to your balls in population, but all of them can be starving to death..CODA: The reason we have had an almost-unbroken[1] advance in output per capita for the last 200-odd years, is because production technology has improved dramatically, averaging around 2% a year (it has slowed recently, but is still higher than population growth). [1] The advance was 'almost unbroken' because there were periods when the parasite classes destroyed gigantic piles of resources - men, buildings and land - in their periodic pissing contests. During those times, consumption per capita fell, often for a decade after the pissing contest was finished. In the 20th century alone, governments did damage that had a direct cost of a minimum of 2×current world GDP. That's EXCLUDING the utility costs of a decade of rationing after each war in most countries (it also excludes a bunch of other unseen costs: a fairer tallying would say that cost of 20th century wars is more like 4 or 5x global GDP).This is one of the key reasons why all politicians should be expropriated, ground up and fed to pigs - and all dead politicians should be ripped out of the ground and ritually desecrated.


ArthurDaley-Ol… Sun, 10/22/2017 - 17:32 Permalink

Chicken or egg? What came first? Central Banksters funny money and a lack of a decent income and de-population as in Japan or do we now have everyone absolutely scared witless with out a decent income to be able to start a family.  Figure that out and you've solved the problem. In the mean time its a nightmare that no Control + P can solve, yet the Masters of 1's +0's will try and print our way out to prosperity.. Until it all blows up.

Doña K ArthurDaley-Ol… Sun, 10/22/2017 - 18:49 Permalink

For a new family to survive and prosper some day, both husband and wife must work, must escape the seductive ipads, iphones, cable, eating out and forget fancy cars etc. for their first 10 years. Needless to say that booze, cigarettes, drugs should be out of the picture and exotic vacations are on hold.Call it survival for a better future. Buy everything in cash if you can and only buy what you need. Use credit only when it is absolutely necessary. 

In reply to by ArthurDaley-Ol…

Code Duello Doña K Sun, 10/22/2017 - 20:06 Permalink

You seem to be unaware that throughout most of history families were formed, functioned, succeeded without your "...both husband and wife must work..." mandate.  The only reason that the USA has become a two-earner family environment is the establishment of the Federal Reserve System and the passage of the graduated income tax. 

In reply to by Doña K

pitz Sun, 10/22/2017 - 17:36 Permalink

The problem is that they call debt an 'asset'.  When central bankers speak of 'assets', they are usually speaking of debt, or proxies for debt such as highly leveraged real estate.  They are not speaking of things you can touch and actually own.

Iskiab Sun, 10/22/2017 - 17:44 Permalink

I don’t think it’ll lead to war. A declining population should lead to higher wages and cost of labour.

It’ll be really bad for the companies that depend on cheap labour to survive though.

It’ll be survival of the fittest, and I’d expect business’ that are hobbling along to be gobbled up. This is unless the government keeps allowing consolidation and lets monopolies happen, in that case a monopoly only uses the invisible hand to help stuff it’s pockets. Without wage growth it’ll lead to stagflation and a spiraling depression.

War needs cheap labour and people dumb enough to fight. If the economy goes in the shitter there’ll be a war for sure. If it’s higher wages and a rebalancing of rich vs poor inequity there’ll be no reason to sign up.

wide angle tree Sun, 10/22/2017 - 17:43 Permalink

Zero growth is fantastic. We should not want any growth except for growth in the quality of our lives.  Workers should be paid more and taxed less. Spending would increase. Reform the banking system and decrease the need for borrowing.

ArthurDaley-Ol… wide angle tree Sun, 10/22/2017 - 18:08 Permalink

Mark Blyth knows and explains the neoliberalism and economics from 1945 to today.… None of the now 800+ US companies that were domiciled in the US are now in Ireland enjoying the "Double Irish Tax" breaks… Companies used to contribute 20% of Federal tax bill now its 2%. That's why the national debt is pushing $21 Trillion. Wake up guys and find out what is going on..  

In reply to by wide angle tree

Iskiab ArthurDaley-Ol… Sun, 10/22/2017 - 19:22 Permalink

It’s hard to stop, they use some creative accounting to avoid the taxes. Basicly the low tax countries head offices ‘lend’ the high tax countries money at high interest rates. The loan gets expensed and makes it look like they aren’t making any money in the high tax countries and are making a ton in the low tax countries.

The only way to stop it is to try to control the cash transfers (which would create a shitstorm) or for the governments to try and intervene in the accounting, huge political donations take care of that.

That’s why it’s currently a race to lower corporate taxes as governments compete with lower taxes. It’s the countries that lose, there will always be small countries that will lower the rate until it’s 0. What the us should do is raise the sales tax and get rid of the corporate income tax. The US’ strength is the consumer market, and sales tax can’t be dodged unless you export, which means more US industry.

In reply to by ArthurDaley-Ol…

techpriest strickler Sun, 10/22/2017 - 22:36 Permalink

What if we instead try, say, doing away with the patent system, and changing the regulatory structure to make it vastly easier for smaller players to enter a wider number of industries. When you are a 100-man manufacturing outfit you are not looking to play international tax games. It would be far too expensive to set up, and you would instead turn to making and selling product, which is the kind of productive activity that grows an economy.

When you are a multibillion dollar company, hiring a team of 50 accountants and another 50 tax lawyers to shave a billion off your taxes makes a lot more sense than simply producing more goods.

In reply to by strickler

ByTheCross Sun, 10/22/2017 - 17:56 Permalink

Too many are quick to confidently declare that 'It cannot work' (with assumptions).Try starting from the converse, 'It is working', and explore the conditions in which this could be true.

Scrot Sun, 10/22/2017 - 17:57 Permalink

Yeah this was the topic of Bilderberg for 10 years in the 1990's and 2000's. After that rampant immigration at all cost. Why not just tell Westerners to have more babies? That hurts fake climate change narrative. 

Fantasy Free E… Sun, 10/22/2017 - 18:47 Permalink

p { margin-bottom: 0.1in; line-height: 120%; }a:link { }I am going to rebuke this nonsense that a declining population is automatically bad for an economy. GDP can decline and the average person can be better or worse off depending on the circumstances. In a country like the U.S. where a minuscule percentage of the population benefits from a an expanding GDP, that part of the population is rightfully fearful that populations will start to decline. The rest of the population can prosper greatly in terms of real income.

AnarchistRex Sun, 10/22/2017 - 18:56 Permalink

"I submit that these changes, unlike anything experienced by contemporary humankind, explain why central banks have taken over."

CAUSATION VERSUS CORRELATION -- More fallacious thinking by another zerohedge author.

IMO seems more likely that that depopulation is the RESULT of banks taking over ... not the other way round.

Codwell Sun, 10/22/2017 - 19:03 Permalink

Japan has been in a 2 decade Depression because of its aging population. Elderly present a double whammy - long term expensive care  with death at the end. It's like investing in children that go on to never produce anything.This type of population shift probably hasn't been seen since the plague.

Sudden Debt Sun, 10/22/2017 - 19:15 Permalink

In Belgium, there are 10 million people. In Belgium, there are 11 million houses. In Belgium, 1/3 of the population is over 50 years old. Real estate is the backbone in the west and if the rest looks like Belgium, everybody is in deep shit as we'll have a massive surplus of housing while it's where all the wealth is concentrated.