Changing Demographics In An Aging Global Population—Are We On The Verge of Economic Collapse?
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There’s a huge gap in understanding the future of global economic stability because it ignores one crucial factor—there will be far older people than economically active ones.
Statistics indicate that most countries will reach the cross over point within the next ten years. These changing dynamics spell out that global economic activity will slow down, savings will fall, and incomes will fall.
Then there’s the problem of how governments will keep up with social security and pension payments to balance out cash outflows with cash inflows.
Perhaps one of the biggest concerns of this sudden increase in social payments and potentially liquidity deficits, is how the new generation of millennials will manage their finances.
The fall in the workforce population doesn’t spell good things for anyone, and with the existing economic pressures, it’ll take some very smart investments to survive this economic decline.
With falling productivity, lower returns, and the resulting lower wages signal the arrival of a long period of economic slumps around the world.
The Domino Effect From Aging Populations
With the decreasing productivity, the rising fiscal costs from social security payments, and the payouts needed from IRAs will reach a critical mass that no one will be able to deal with.
Never before in the history of the earth have older people outnumbered the younger, and our existing financial structures can’t meet those needs.
The sudden increase in capital outflows won’t be met with inflows since productivity will fall across entire economies.
This will erode the profitability of private corporations and reduce the tax revenues collected by the government—we will arrive at a point of liquidity deficits that can’t be met.
With these falling revenues, we’ll see goods and services get much more expensive and falling revenues with fewer consumers contributing to the revenues earned.
People will be laid off from jobs, increasing pressures on the government and stock markets will collapse because there’s no money coming in.
Add to this the fact that a lot of these older people have a lot of money tied in the stock market through their IRAs, and the crashing markets won’t bode well for anyone.
An increasingly aged population spells downturns in stock markets and general global economic instability.
The Path Out of Financial Destitution
The financial dominos will fall, not because of someone’s mistake, but rather as an inevitability of human societies and aging patterns.
Once the effect starts, people will start diverting their funds to commodities markets, which will surge with the increased demand for these investment instruments.
The only people to get out of the cycle with their wealth intact are those who moved their money out into other investments.
Where Should You Move Your Investments?
It’s part of basic economic theory that the fall in returns from stock markets forces people to move to commodity markets instead—particularly for precious metals.
The surge in demand raises the prices of these commodities to generate higher returns for these people as the demand continues to grow.
Considering the trends in the demographic make-up of the global population, the smartest move would be to reduce your holdings in conventional stocks and bonds.
As the changes become more pronounced and the economic effects become apparent, you won’t have the time to shift your investments.
Now is the time to move towards greater diversification in your portfolios and to move away from strict IRA custodians to choose instead SDIRAs or some other retirement account that allows for diversification.
You should preferably invest in gold to make sure that you stay afloat in times of financial crisis.
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