I read an article that would please Malthus. ?Demographic economist? Richard Hokenson sees world population peaking at 8 billion and then falling. Good news for the planet. But there are implications for investors who?ve only known growing populations (ie. all of us).
Hokenson believes a shrinking population will mean a shrinking global economy and low interest rates.
Japan is a prime example. Its population, unchanged since 1990 at about 125 million, will fall by 20% by 2050. Japanese economic growth since 1990 has been tepid. Repeated efforts to re-start the economy have failed. Even with interest rates at nil, inflation is flat.
Hokenson says: ?Aging populations don?t borrow money. It doesn?t matter what the price of money (interest rate) is. You can push out money but it doesn?t go anywhere.?
Rebuilding after the quake may add to Japan?s GDP, but still, Japan is in decline. (Of course, they may find
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