This is the problem with our current first world financial system, it is predicated on constant growth. Even the slightest hiccup in growth leads to serious consequences for the over leveraged and make no mistake most of our safety nets are over leveraged and dependent upon unrealistic gains when faced with a stagnant to declining population.
The Great Aging is underway, the EU last year had more deaths than births and will for the foreseable future, Japan has been there for a little while and China's working age population is already in decline. Africa, the Middle East/India and parts of South America are the only places experiencing actual population growth, when immigration is not taken into the equation. With Demographics and Automation deflation is the likely outcome. The Central Banks are trying all they can to prevent this from happening in the near term by spending Trillions of dollars to prop up economies and drive interest rates lower to eek out some inflation. They seem not to care whether growth is actual demand growth or simply a mirage in terms of inflation. The central banks are doubling down their efforts and will be even more accomodative in the next few years when the growth they continue to state is right around the corner never materializes.
Unfortunately I do not see a way out of this without the developing nations taking care of themselves.
The Great Aging is underway, the EU last year had more deaths than births and will for the foreseable future, Japan has been there for a little while and China's working age population is already in decline. Africa, the Middle East/India and parts of South America are the only places experiencing actual population growth, when immigration is not taken into the equation. With Demographics and Automation deflation is the likely outcome. The Central Banks are trying all they can to prevent this from happening in the near term by spending Trillions of dollars to prop up economies and drive interest rates lower to eek out some inflation. They seem not to care whether growth is actual demand growth or simply a mirage in terms of inflation. The central banks are doubling down their efforts and will be even more accomodative in the next few years when the growth they continue to state is right around the corner never materializes.
Unfortunately I do not see a way out of this without the developing nations taking care of themselves.