When all the money flows to the 1 percent, it doesn’t give the 99 percent much of an opportunity or incentive to start families and fuel economic growth. From Charles Hugh Smith at oftwominds.com:
Your bogus economic dogma of “growth via the wealth effect” created the demographic karma that will bring down the status quo.
What happens when you bleed your workforce while enriching those who already own assets with one bubble after another, all in the name of “fostering growth”? To answer this, let’s modify a felicitous phrase: Sorry Our Demographic Karma Ran Over Your Economic Dogma.
The Demographic Karma is young people can no longer afford houses, healthcare or children and so the birthrate plummets and the workforce shrinks to the point that the bloated, heavily indebted status quo collapses under its own weight.
Demographic-economic chartist CH summed it up very succinctly in a recent Tweet:
@Econimica: Asset/RE bubbles (of assets primarily held by elderly/institutions) must be maintained to avoid a banking/economic crash…but the price will be the ongoing collapse of families/births…saving the present at the expense of the future (again).
This dynamic of Demographic Karma crushing Economic Dogma is global, as evidenced by this Tweet about China’s demographic collapse and bubble-economy:
@fuxianyi: Chinese policymakers now face a dilemma: if the real-estate bubble does not burst, young couples will be unable to afford to raise two children. But if the bubble does burst, China’s economy will slow, and a global financial crisis will erupt.
