Category Archives: demographics

Will the Global South break free from dollarized debt?By Pepe Escobar

If the South can break free, it’s a whole new world. From Pepe Escobar at thesaker.is:

n his latest book, economist Michael Hudson pits socialism against finance capitalism and tears apart the ‘dream civilization’ imposed by the 1 percent.

By Pepe Escobar, posted with the author’s permission and cross-posted with The Cradle

Michael Hudson’s new book on the world’s urgent global economic re-set is sure to ruffle some Atlanticist feathers. Photo Credit: The Cradle

With The Destiny of Civilization: Finance Capitalism, Industrial Capitalism or Socialism, Michael Hudson, one of the world’s leading independent economists, has given us arguably the ultimate handbook on where we’re at, who’s in charge, and whether we can bypass them.

Let’s jump straight into the fray. Hudson begins with an analysis of the “take the money and run” ethos, complete with de-industrialization, as 90 percent of US corporate revenue is “used to share buybacks and dividend payouts to support company stock prices.”

That represents the apex of “Finance Capitalism’s” political strategy: to “capture the public sector and shift monetary and banking power” to Wall Street, the City of London and other western financial centers.

The whole Global South will easily recognize the imperial modus operandi: “The strategy of US military and financial imperialism is to install client oligarchies and dictatorships, and arm-twist allies to join the fight against designated adversaries by subsidizing not only the empire’s costs of war-making (“defense”) but even the imperial nation’s domestic spending programs.” This is the antithesis of the multipolar world advocated by Russia and China.

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Demographers Warn Of Impending Population Collapse, by Kevin Stocklin

Having a baby is an expression of optimism. There are a number of factors behind declining birth rates, but one of them has to be that the present state of the world doesn’t lend itself to optimism. From Kevin Stocklin at The Epoch Times via zerohedge.com:

Amid the deluge of dire predictions that the human population will rise exponentially, deplete the earth’s resources, and overheat the planet, two recent demographic studies predict the opposite—that the number of people will peak within the next several decades and then begin a phase of steady, irreversible decline.

A father prepares to change the diaper of his newborn daughter as his wife looks on in a hospital in Apple Valley, California, on March 30, 2021. (Mario Tama/Getty Images)

In some places, including Japan, Russia, South Korea, and most countries in Europe, that population collapse has already begun. China is not far behind.

The United Nations has predicted that humanity will continue its rapid expansion into the next century, growing from just under 8 billion today to more than 11 billion by 2100. An oft-repeated interpretation of this data is that people are having too many babies, and many of the models for climate change and environmental degradation are based on projections like these. In August, the U.N. declared a “code red for humanity” over climate change and overpopulation, and analysts at investment bank Morgan Stanley stated that the “movement to not have children owing to fears over climate change is growing.”

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The Demographics of Financial Doom, by Charles Hugh Smith

There’s not enough of the young to support the old. From Charles Hugh Smith at oftwominds.com:

Whether we admit it or not, collapse is the default “solution.” That destiny has already been written by demographics.

The saying “demographics is destiny” encapsulates the reality that demographics–rising or falling trends of births and deaths–energize or constrain economies and societies regardless of other conditions.

Demographics are long-term trends, but the trends can change relatively rapidly while policies remain fixed in the distant past. This disconnect between demographic reality and policies has momentous future consequences. An appropriate analogy is the meteor wiping out the dinosaurs; in the case of demographics, this equates to the complete financial collapse of the retirement and healthcare systems.

As this article below mentions, extrapolating the high birth rates and falling death rates of the 1960s led to predictions of global famine.

As death rates declined and women’s educational and economics prospects brightened, birth rates fell, a trend that now encompasses most of the world.

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Why Markets Always Beat Central Bankers and Presidents, by David Stockman

Economies have never, cannot be, and never will be controlled from above, buy either governments or central banks. From David Stockman at internationalman.com:

Beat Central Bankers
Goodness me, even the Wall Street Journal is catching on. In a piece about the inflationary rebound theory of a former UK central banker named Charles Goodhart, it actually tees-up the possibility of high inflation for a decade or longer due to an adverse, epochal shift in the global labor supply.

He argued that the low inflation since the 1990s wasn’t so much the result of astute central-bank policies, but rather the addition of hundreds of millions of inexpensive Chinese and Eastern European workers to the globalized economy, a demographic dividend that pushed down wages and the prices of products they exported to rich countries. Together with new female workers and the large baby-boomer generation, the labor force supplying advanced economies more than doubled between 1991 and 2018.

He got that right. Now, however, the working-age population has started shrinking for the first time since World War II in developed economies, compounded by an ever more generous banquet of Welfare State free stuff that is shrinking the available labor pool even further. At the same time, China’s working force is expected to contract by a staggering 20% over the next three decades.

Needless to say, as global labor becomes more scarce, developed world workers will finally have bargaining leverage to push up their own previously stagnant wages. In the US leisure and hospitality sector, for instance, where worker shortages are most acute, Y/Y wage gains have averaged 15% for the last three months running.

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Russia’s Invasion Of Ukraine Will Benefit China, by Gregory R. Copley

Here’s an unusual assessment of the beneficiaries of the Ukraine-Russian war from Gregory R. Copley at oilprice.com:

  • China has, in recent years, become increasingly isolated on the global stage and was considered a major foreign policy concern for the United States and its allies.
  • Russia’s invasion of Ukraine has not only reignited geopolitical tensions in Europe but has also pushed Russia towards China and ensured the entrenchment of a new Eurasian bloc.
  • China will be watching the development of Russia’s invasion closely, searching for parallels and lessons for its potential invasion of Taiwan.

Russia’s war with Ukraine has, for the time being, saved the Communist Party of China (CPC) and therefore the People’s Republic of China (PRC).

The isolation of Russia as part of the US-led global information warfare campaign has completed the process of driving Russia “back into the arms of Beijing”. This was occurring at a time when the economy of the PRC was imploding and the CPC, under General-Secretary Xi Jinping, was attempting to retain global power while essentially ring-fencing its economy from outside influence.

The situation does not guarantee the PRC’s revival as a wealthy power, but, even though it now becomes more dependent on Russia, it does at least allow the Communist Party of China to survive.

The PRC, as the world’s largest importer of food and energy, and now with diminishing foreign currency reserves, sees that Russia has nowhere else to go except to elevate the PRC to the position of Moscow’s most important trading and security partner.

And because this is literally an issue that could save a declining PRC, Beijing’s assessment of the ongoing conflict between Russia and the West over Ukraine has to be along far more pragmatic lines than Western assessments, which tend to be either based around irrational fear or euphoric optimism.

General Secretary Xi and his team are, as a result, evaluating ongoing lessons from the current Russian military conflict against Ukraine, and the new phase of the Russian strategic war with the US. Their assessments cannot follow the unrealistic views being promulgated by Western analysts.

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Doug Casey on the Rise of China… And What it Means for the World

Is China topping out? From Doug Casey at internationalman.com:

Rise of China

International Man: Lee Kuan Yew, the former leader of Singapore, once said:

“The size of China’s displacement of the world balance is such that the world must find a new balance.

It is not possible to pretend that this is just another big player. This is the biggest player in the history of the world.”

What is your take?

Doug Casey: China has united 1.4 billion people into a single political entity, so of course they have a lot of weight. But simply having masses of people under your political control doesn’t mean as much as it used to.

China would still be a poverty-stricken non-entity if it hadn’t been for the reforms that Deng Xiaoping made starting in 1980. Masses of uneducated, desperately poor peasants are more of a liability than an asset in the modern world. Deng transformed China’s economy into something that functions pretty much like those in the West. But now, Xi Jinping seems to be returning to the philosophy of Chairman Mao, with much more centralized control. That’s very negative for the country.

Secondly, China’s demographics are horrible. The average woman today only has 1.4 children. Low reproduction rates are to be expected when a society urbanizes. But China also had a draconian one-child policy starting in 1980 that only ended in 2015. That, and the fact the Chinese prefer males for cultural reasons, compounded the phenomenon.

Few people in the West realize that as a result of these things, the Chinese population is in steep decline. UN projections—which aren’t worth much but are still interesting—find that by the end of this century, their population could collapse to 600 or 700 million. And they’ll mostly be old people, so it’s not going to bounce back quickly.

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The West’s Fear That Dare Not Speak Its Name, by Patrick Buchanan

Will migrants supplant the people who call the nations of Europe and North American their ancestral homes? From Patrick J. Buchanan at buchanan.org:

With the drowning deaths of 27 migrants crossing the Channel from France to England, illegal migration from the Third World is front and center anew in European politics.

Prime Minister Boris Johnson has proposed that France take back to its shores all migrants who cross the Channel illegally and come ashore in Britain.

In the run-up to French elections this April, a startling development suggests that resistance to illegal migration is spreading and the idea of dealing with it resolutely and unapologetically is taking root.

Marine Le Pen, president of the rightist National Rally, formerly the National Front, who is expected to reach the finals for president of France against Emmanuel Macron, is suddenly being challenged.

The rising star on the right is Eric Zemmour, who, writes The New York Times, “became one of France’s best-selling authors in the past decade by writing books on the nation’s decline — fueled, he said, by the loss of traditional French and Christian values, the immigration of Muslim Africans bent on a reverse colonization of France, the rise of feminism and the loss of virility, and a ‘great replacement’ of white people.”

Zemmour is being called “the Donald Trump of France.” And he and Le Pen are now running third and second behind Macron in the polling to become the next president of France, which suggests the power of the issue on which they agree: uninvited and unwelcome Third-World migration.

“You feel like a foreigner in your own country,” said Zemmour in his announcement speech Tuesday, declaiming, “We will not be replaced.”

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The Demographic Time Bomb, by James Rickards

Demographics will be economic destiny. From James Rickards at dailyreckoning.com:

The reason humans are dying out is simple and straightforward. It’s best summarized in the famous line from Walt Kelly’s 1970 Pogo cartoon: “We have met the enemy and he is us.”

Humans are the reason humans are dying out. We’re not having enough babies. It’s that simple.

When I use the word “enough” it’s important to put a mathematical value on that. This is not guesswork. The key number is 2.1. That refers to 2.1 children per couple, known as the replacement rate. The replacement rate is the number of children each couple must have on average to maintain global population at a constant level.

A birth rate of 1.8 is below the replacement rate of 2.1. This means your population is declining. It may be aging also as the existing population lives longer and new births neither replace the dying nor lower the median age.

A birth rate of 4.1 is well above the replacement rate. This means your population is expanding and your median age is falling even as individuals live longer. Behavior is complex, but the math is really that simple. The replacement rate of 2.1 is the dividing line between population growth and decline.

Why isn’t the replacement rate 2.0? If two people have two children doesn’t that maintain the population at a constant level? The answer is no because of infant mortality and other premature deaths.

If a couple has two children and one dies before reaching adulthood, then only one child can contribute to future population growth as an adult. A birth rate of 2.1 makes up for this factor and contributes two adult children per two adult parents.

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Eurozone finances have deteriorated , by Alasdair Macleod

The Eurozone is on the verge of a financial crisis. From Alasdair Macleod at goldmoney.com:

Despite negative interest rates and money printing by the European Central Bank, which conveniently allowed all Eurozone member governments to fund themselves, having gone nowhere Eurozone nominal GDP is even lower than it was before the Lehman crisis.

Then there is the question of bad debts, which have been mostly shovelled into the TARGET2 settlement system: otherwise, we would have seen some substantial bank failures by now.

The Eurozone’s largest banks are over-leveraged, and their share prices question their survival. Furthermore, these banks will have to contract their balance sheets to comply with the new Basel 4 regulations covering risk weighted assets, due to be introduced in January 2023.

And lastly, we should consider the political and economic consequences of a collapse of the Eurosystem. It is likely to be triggered by US dollar interest rates rising, causing a global bear market in financial assets. The financial position of highly indebted Eurozone members will become rapidly untenable and the very existence of the euro, the glue that holds it all together, will be threatened.

Introduction

Understandably perhaps, mainstream international economic comment has focused on prospects for the American economy, and those looking for guidance on European economic affairs have had to dig deeper. But since the Lehman crisis, the EU has stagnated relative to the US as the chart of annual GDP in Figure 1 shows.

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An Old Soldier’s Denial on Afghanistan, by Jacob G. Hornberger

Whatever US soldiers were doing in Afghanistan, they weren’t acting pursuant to oaths they took to support and defend the Constitution. From Jacob G. Hornberger at fff.org:

In a letter to the Los Angeles Times regarding the Afghanistan debacle, Stephen Sloane, a retired captain in the U.S. Navy who served in the Vietnam War, is a perfect demonstration of how so many people, especially in the military, live lives of denial when it comes to foreign interventionism.

Addressing Marines who served in Afghanistan who are now frustrated and angry over the result in Afghanistan, Sloane tells them that there is no disgrace in defeat because U.S. soldiers “took an oath to the Constitution.”  He says, “Loyalty to that oath has helped preserve the right of Americans and others to life, liberty and the pursuit of happiness for more than 200 years.”  He points not only to “the failed effort to keep Afghanistan out of the hands of the Taliban” but also to “the failed effort to keep Vietnam free from communism.”

That’s just sheer nonsense.

Loyalty to the president

While U.S. soldiers technically take an oath to support and defend the Constitution, as a practical matter their oath is to serve the president and unconditionally obey his orders. Since the president is democratically elected, in their minds they are supporting and defending the Constitution when they dutifully and loyally obey the commands of their commander in chief.

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