What If All the Underlying Assumptions Determining Economic Outcomes Were Wrong?

Investors and the people who support them have the job of determining the risks and managing the risks to maximize gains. What if the very assumptions driving this effort were wrong?

Are you aware that global population is expected to cease growing and begin falling back by the end of the century? Do you know that Japan's population fell back 75,000 last year and that the country is incenting young people to have children? Are you aware that last year 26 nations saw their population fall? Do you know that U.S. population is expected to peak by 2050?

Given the population trend facts cited earlier, are our projections for social security benefits, federal debt cost management, national economic growth, and so on reasonable?

The fact is on a global basis and even on a national basis over the past decade the world has moved from accelerating growth factors to decelerating growth. Whenever, a major driving statistical component moves from one direction to another, the effects are substantial and perhaps even dramatic. This fact may have a significant but largely unrecognized role we've seen in recent years with the extraordinary swings in market values in the U.S. and around the globe.

To be clear, this is not a doom and gloom discussion. A world without ever increasing population is a long sought after and welcome event. Unfortunately, this event is also unprecedented and comes with implications that until they are understood and applied to our social and economic life will cause significant disruption and losses for some.

The great news is that for investors opportunity lurks in uncertainty and unexpected shifts. So, what can we assume from this emerging environment?

The working population is swelling and aging, but will not grow much more.
Significant infrastructures will not require the unending expansion we've faced for as long as history has been recorded.
The developing nations have a lot of catching up to do and this period will be when that occurs.
There will be major actual population growth that will drive growth generated consumer, government, and business needs before flattening out.
Economic opportunity will be focused on economic disruption.
Global growth will ride on the ability to place more people in productive work. People will be valued for their ability to do what machines cannot do.
Automation and robotics will become major growth focus items.

On the bright side, as this paradigm unfolds, the individual can be expected to be the winner as less and less time will be required for necessities and more and more time to increasing personal wealth, actualization, and maximization.