WWII is still reshaping our economic reality. The massive global loss of life in WWII and its birth dearth during the war created a demographic hole (unusually high death / unusually low births over a 5 to 10 year period). The subsequent baby booms in the US and globally in Japan, Europe, and so many more locations which were affected by the war created a ‘pig in the python’ moment. This unusually large wave of population growth from ’45-’55 was ‘pent up demand’ from the war. Those of family rearing age who waited, those who remarried, and those who fretted…they rushed to make up for lost time over the decade after the wars conclusion. But the subsequent generations were in no such rush and in fact began an ongoing process of slowing the creation of families and children.
But society and its leaders assumed this baby boom anomaly to be the new reality. They built an entire economic system on the one decade anomaly. But that wasn’t enough. They had to layer the anomaly with the unsustainable and the previously immoral levels of usury (renamed and rebranded as leverage, credit) and economic policies only effective as the passing of the pig was imminent. The baby boom group or entity spanning 10 years will in 2015 turn a collective 60-70yrs old. The ‘pig is passing’ from the American and global workforce into retirement and now the wreckage and folly of such basic misnomers has come home to roost…and will get far worse. Central bank and government actions to create the problems and subsequent responses should be seen for what they are…entirely self-serving and ineffective.
A global multi-variate tipping point was reached in 2007 – too many older boomers leaving the system and too few to replace them. This all put too many requests on that system…too many boomers continuing to work for low, part time wages rather than making way for the following generations. Too many unsustainable layers with inadequate support collapsing in on the system below. In 2007 the total population of 25-54 year olds and total employed within the 25-54 year olds peaked. The total US population of 25-54 year olds has fallen 1 million since, 25-54 year old employees have fallen nearly 4 million, while the 55 cadre has ramped by almost 8 million.
The impact is likely even stronger in Japan, Europe, and other locals upon which the war was waged. The loss of life higher, the birth dearth higher, the subsequent baby boom larger…and the current adjustments even more difficult.
Nearly 70 years later and WWII’s primary participant nations are now aging rapidly and have taken on great debt to serve the aging populations. And these only show the formal on the books debt to GDP but nations like the US have up to 5x’s the formally recognized debt…which from a growth perspective is akin to trying to perform an open water swim with an anchor around your neck…of course the young, unindebted nations like Saudi Arabia or Indonesia with 5% of its population 65 and above and a modest debt to GDP are far likelier to grow rapidly.
This post was published at Zero Hedge on 12/22/2014.
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