The Most Important Economic Charts… Aren’t Economic Charts, by Chris Hamilton

Demographics can be destiny. From Chris Hamilton at

The global economy is the sum of its production of goods and services versus its capability to consume those.  This article will outline the mismatch of fast rising capacity versus the deceleration of consumptive capability.

As for productive capacity; mechanization, innovation, technology, and cheap debt have helped ramp up the potential.  Going forward, a flurry of advancements including AI, robots, and autonomous vehicles are among the slew of factors that will drive productive capacity even higher.

Regarding the potential capability to consume; each person is essentially a unit of consumption multiplied by their earnings, savings, and access to credit.  But I really want to focus on the childbearing population (ages 15 to 45 years old) and births to show what is taking place and what is yet to come.  In the charts below, I exclude Africa because they haven’t the earnings, savings, or access to credit to be anything more than a very minor rounding error from a global economic standpoint…but they represent such a large portion of global population growth as to skew the data.  Likewise, African’s represent a very small portion of global immigration (detailed HERE).

Global Childbearing Population (x-Africa)

In the first chart below, maroon columns show the annual change in childbearing population and blue line the total childbearing population.  Annual growth peaking in 1988 at +46 million annually…down over 90% to just +4 million).

Below, the annual change in childbearing population (as a percentage of total x-Africa population…maroon columns) versus total childbearing population (blue line) and adding the federal funds rate (black line) and global debt (red line).  Tellingly, the fed funds rate (approximating inflation) peaked simultaneous to the peak in annual childbearing population growth.  The rise, peak, and now deceleration in the annual childbearing population has essentially been the driver for the rise, peak, and now decelerating growth in demand.  The substitution of fast rising debt for the decelerating population growth is plain.  The subtle uptick in yoy childbearing population change over the next five years is the end of the road for growth…and from there on there is only outright declines likely hand in hand with negative interest rates and parabolic debt creation.

To continue reading: The Most Important Economic Charts… Aren’t Economic Charts


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