Ageing population | Aussie Stock Forums

Population and ageing, unlike climate, has some decided advantages when it comes to forecasting. While it is feasible for pandemics, natural or man-made disasters to significantly reduce global population, fertility and the ageing process mean it is virtually impossible to get massive surprises in the other direction. There is not much we can do in terms of augmenting the working age population for the next few decades. The cake is already baked. Life expectancy, the factor which can provide the surprise when it comes to growing the global population, may not be such a good one economically if it eventuates, given the already daunting challenges in supporting an ageing population.

Source: United Nations – Population Division 2022

Population trajectory and its ramifications still seem .. to be relatively ignored factors when it comes to the reliance of western economies on real estate prices, consumption and ongoing credit growth. Japan provides some salutory lessons when it comes to managing an economy in which incremental borrowing comes almost solely from an insolvent government and real estate is no longer a bank sponsored Ponzi scheme. Europe is heading down the same path. This doesn’t necessarily mean declining living standards and doom and gloom. It does mean economic and business models need to change. Extrapolating economic growth rates, expecting ever-rising property prices and not anticipating significant changes in consumption patterns seems unwise.