He believes the uneven sex ratio can explain half of the increase in private saving between 1990 and 2005. He explained that the marriage market is becoming very competitive with so few girls. Chinese parents want to accumulate as much wealth as possible to ensure that their son can attract a wife. It is also important to provide sons with the best education possible. A competitive marriage market means that members of the disadvantaged gender must raise their game, which in China means greater wealth and education.
After the Japanese Government Pension Investment Funds announced in 2009 that it would be forced to sell JGBs to meet cash requirements, it turns out that US Social Security started unloading US Government Treasuries in 2010, 6 years earlier than expected.
Of course it will take years to deplete Japanese or American pension funds, but the switch from being net buyers of government debt to net sellers makes a hell of a difference. First, it finally makes it clear beyond any doubt that the entitlement system is not sustainable and will get worse over time. Second it will push upward pressure on government debt yields, as major buyers of debt not only stop buying, but start selling.
Total world population skyrocketed, mostly due to stunning growth in Asia:
Population of Northern America and Europe stopped growing and might even decline going forward:
I am growing even more convinced that world population growth explains at least 50% of economic and social developments.
See my google spreadsheet for more information.
Inspired by a few reports linking savings rate and demographics I uploaded the following google demographics spreadsheet with some assumptions on fertility rate, mortality rate, income, spending and employment rate, all parameters by age.
It is interesting to see how a population evolves over time (from left to right) for different age cohorts (on the vertical axis).
Enjoy!
Sometime between 2020 and 2050 the world’s fertility rate will fall below the global replacement rate.
Think about it for a moment. We will actually witness the peak of world population.
