Kurt wrote:The thing I always go back to whenever I hear the "Everyplace else is fucked but the USA" is that in 1988 The Warsaw Pact got together and discussed how to divide up the West to prevent mass riots and starvation since their own intellectuals predicted Western Collapse by 1995.
Yeah, those stupid egg heads.
Here's the thing that's hard to argue with: the demographics are baked in.
Take a look at that bulge at 50-54. Almost 7 million people. Vs. 3.3 million people aged 5-9. When that 5-9 age cohort is 50-54 years old, Germany's population won't be 83 million anymore. It'll be 40-50 million. Meanwhile, that 5-9 group - which is half the size of the 50-54 group will, in 15 years, have to pay for the retirement benefits of that older cohort. And they won't be able to out-vote the larger cohort, because there aren't enough of them. While at the same time, that older cohort will stop making money (and right now, they are making the most money they will make in their lives), they'll move their savings from equity investments to "safe" harbors, and so capital will dry up at the exact same moment you need economic growth to fund your welfare state because your labor market isn't up to the task.
That demographic picture is just as dire across the developed world (except the US and France). It's actually even worse in China.
Then take a look at Germany's trade to GDP ratio. It's 88%. The US is 26.50% (and most of that is with Canada and Mexico, who aren't going anywhere...Mexico has a very healthy demographic profile). As Germany's trading partners' collective populations age, their consumption will drop. Which will, uh, force a "transformation" on the German economy.
Sure, there's enough technical talent in Germany to muddle through, and maybe having 25% of their normal economic activity will finally make their green energy strategy feasible, so it's not all doom and gloom.
Nonetheless, as the US disengages from being the global guarantor of...everything, the rest of the world is entering in a structural and demographic phase that limits the collective ability to respond to crises. And, unfortunately, the world is already in the middle of a crisis with the Ukraine-Russia war. Most of us just don't know it yet.