Just the Beginning of the Demographic Bite

While most are aware of the aging demographic conditions sweeping across the globe, the shift in many of the most economically significant economies (e.g. Europe and China) from an expanding workforce to a contracting workforce may be broadly underappreciated (Figure 4).

The bottom line is that the combination of extended debt levels, China’s economic maturation and deceleration, and the global swing to a contracting workforce may be delivering a much lower equilibrium of interest rates than forecasters expected. And as we’ve posited before, the combined impact of these factors isn’t behind us, but is likely just beginning (See Countdown to Zero— The Final Chapters).

@2020. For Professional Investors Only. The views and opinions of the author are as of 31/12/2019, are for informational purposes only, and are subject to change.