The truth is we have already seen the effects of long term population decline, among the educated and the productive. It has been going on for some time in the West. Immigration has been the stop-gap, but that will fail. China or India will reach demographic plateau, soon. China very soon and India somewhat later.
For the last ten years the Fed, the central bank of the US, has been increasing the portion of the extant money created by them to buy gov't bonds off the secondary market. It's over one third now, about 35%. Most money is still created on the balance sheets of private banks, when private loans are made. The Fed has been taking up a bigger portion over time though, to make up for slack in the credit market. Their balance sheet jumped up a lot in 2008, and it has stayed high since then.
Central bankers know what they are doing, but they have less control than you might think. For a decade they've been fighting deflation. That's what they're afraid of, the deflation of the currency caused by a contracting credit market, which is where all money originates. They can only fight so hard and so effectively though, because what they're fighting is bigger than they are.
Since the Post-War era began the West had been in demographic decline among its productive classes. The demographic debt has started to come due in the last ten or fifteen years, as the last big birth cohort nears retirement. The long-term secular trend has been for decreasing interest rates, because there are increasingly fewer credit-worthy people, especially at the highest levels. That kind of environment cannot support increasing rates, because it is fundamentally deflationary.
It's not hard to tell what is happening either, if you look around. The SAT was implemented and popularized so the big universities, and in turn the big corporations, could suck up the intelligent kids from the hinterlands, and put them to work in the cities. Consequently the small towns die. That's not the only reason, but it's a big one, the biggest. The cities are demographic sinks, and many of those bright kids go on to have very few kids themselves, exacerbating the problem.
The increasing wealth gap is mostly due to the increasingly small cognitive elite of the developed world, pulling away from everyone else, as the big corporations become increasingly desperate and pay increasingly absurd sums to proven performers, whether software developers, financial analysts, or whatever. Business is hard up for talent, and this is only going to get worse.
So what do we see? Bear in mind, none of this is financial advice of any kind, just idle chatter.
1. Low inflation - I'm not including goods with cost disease, like university costs or healthcare.
2. Increasing Fed balance sheet, even more, but money sits idle with banks, because no credit-worthy babies reached adulthood in the meantime.
3. Increasing economic and elite concentration in Silicon Valley and New York. There is no other choice. They need the smart kids close, so they can suck them dry, and there are fewer and fewer of those kids.
4. Top stocks continue to out-perform everything else, because only they can bid enough to get and keep top talent. Winner take all.
Here's the thing. That stuff has already been going on, for sometime. I'm just telling you it's going to continue, HARD. It's also going to wreck us, HARD. Not just us like Westerners, but the entire world. Some East Asian nations, like Japan and South Korea, are farther along even.
Like another commenter mentioned, we are entering a dark age. Literally only Jesus Christ can save us now. He is the only one with the power to transform people and nations, and without Him we will surely perish. He brought us this far, and only He can take us any farther.
For the last ten years the Fed, the central bank of the US, has been increasing the portion of the extant money created by them to buy gov't bonds off the secondary market. It's over one third now, about 35%. Most money is still created on the balance sheets of private banks, when private loans are made. The Fed has been taking up a bigger portion over time though, to make up for slack in the credit market. Their balance sheet jumped up a lot in 2008, and it has stayed high since then.
Central bankers know what they are doing, but they have less control than you might think. For a decade they've been fighting deflation. That's what they're afraid of, the deflation of the currency caused by a contracting credit market, which is where all money originates. They can only fight so hard and so effectively though, because what they're fighting is bigger than they are.
Since the Post-War era began the West had been in demographic decline among its productive classes. The demographic debt has started to come due in the last ten or fifteen years, as the last big birth cohort nears retirement. The long-term secular trend has been for decreasing interest rates, because there are increasingly fewer credit-worthy people, especially at the highest levels. That kind of environment cannot support increasing rates, because it is fundamentally deflationary.
It's not hard to tell what is happening either, if you look around. The SAT was implemented and popularized so the big universities, and in turn the big corporations, could suck up the intelligent kids from the hinterlands, and put them to work in the cities. Consequently the small towns die. That's not the only reason, but it's a big one, the biggest. The cities are demographic sinks, and many of those bright kids go on to have very few kids themselves, exacerbating the problem.
The increasing wealth gap is mostly due to the increasingly small cognitive elite of the developed world, pulling away from everyone else, as the big corporations become increasingly desperate and pay increasingly absurd sums to proven performers, whether software developers, financial analysts, or whatever. Business is hard up for talent, and this is only going to get worse.
So what do we see? Bear in mind, none of this is financial advice of any kind, just idle chatter.
1. Low inflation - I'm not including goods with cost disease, like university costs or healthcare.
2. Increasing Fed balance sheet, even more, but money sits idle with banks, because no credit-worthy babies reached adulthood in the meantime.
3. Increasing economic and elite concentration in Silicon Valley and New York. There is no other choice. They need the smart kids close, so they can suck them dry, and there are fewer and fewer of those kids.
4. Top stocks continue to out-perform everything else, because only they can bid enough to get and keep top talent. Winner take all.
Here's the thing. That stuff has already been going on, for sometime. I'm just telling you it's going to continue, HARD. It's also going to wreck us, HARD. Not just us like Westerners, but the entire world. Some East Asian nations, like Japan and South Korea, are farther along even.
Like another commenter mentioned, we are entering a dark age. Literally only Jesus Christ can save us now. He is the only one with the power to transform people and nations, and without Him we will surely perish. He brought us this far, and only He can take us any farther.
