To say I’ve become skeptical of ‘markets’ and their movements is probably an understatement. However, rather than waste more time trying to make sense of these skewed markets, I believe real economic activity is more accurately represented by changing populations and their energy consumption.
So today, we’ll play a little “To Tell The Truth”, an old television show where two imposters could lie but one contestant had to tell the truth. The celebs would ask questions and then attempt to pick which contestant was the real deal. I’ll lay out the data and let you determine how well this lines up with non-stop narrative of record market valuations and stories of strong economic activity.
I’ll start with Japan and work my up progressively larger. The population data is from the UN and I use the 15 to 60 year old population to avoid speculation about changing birth rates over the next fifteen years. Energy data is from the US Energy Information Administration (EIA) and their projections using their IEO’17 (International Energy Outlook, 2017) models.
I could go on showing nation after nation slumping in population and energy consumption…but instead I’ll sum it up with the chart below detailing the 15 to 60 year old population of the nations that consume over 90% of the worlds energy (15 to 60 year old global population minus Africa, India). From ’85 to ’15, this core population grew by 70% (or 1 billion) and energy consumption among them grew by nearly 50%. However, from ’15 to ’40, this core population will grow just 3% and the change in energy consumption could be something like the EIA’s projected 25% increase or my guestimate of a 10% decline.
Finally, the chart below shows the combined core populations of Africa and India versus their energy consumption and the EIA estimates through 2040. Noteworthy are the half billion person increases in the chart above from ’85 through ’00 and again from ’00 to ’15 resulting in 80 and 120 quadrillion increases (respectively) in energy consumption. Compare and contrast those with the 2015 through 2040 core population increase of 750 million among Africa/India estimated to net “just” an increase of about 50 quadrillion BTU’s.
However, if I’m even half right in suggesting the imminent large scale energy consumption declines that will accompany the “baked in the cake” population declines, then non-linear disruptions or collapses are a probably a very good possibility. As always, make of all this what you will.
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