I was reading DemonDoug's latest blog with the Nikkei chart showing their market still at half of what it was in the bubble around 1990. I was also reading how Greendunk didn't see the housing or stock market bubbles.
It seems to me that box from which we get so much analysis is consistently minute. Doug's post reminded me how there doesn't see to be much focus on the age distribution in Japan and its affect on their market. Indeed, a question I wonder about is an aging population almost a requirement for the type of housing bubble we saw and the one in Japan? With an aging population you simply have more people at a point in their lives where they have money for a second home and naturally more competition.
But, there comes a time when the aging population isn't generating the same assets and price is about supply and demand. When their demand goes down, and even negative as they liquidate, price has to go down.
And where is world population looked at in the markets? I met a woman once who talked about when Vancouver was a village, that's around 2,000 people. There's over 2 million people there once. The rise in human population has even enormous expansion opportunity for anyone in business and that can't happen anymore. We are forever about economic growth, but ultimately we hit a point where we are at economic sustainability and we see that the grow was just about this arberrant period in our history when population grew like the Earth had no bounds. And we developed belief systems about the economy as if this could happen forever.
The ascent of human population has been following an exponential curve for the last 500 years or so, the entire time our modern economic theory has developed around. The human population curve simply tells me those theories are going to be seriously tested.
And China's increasing standard of living means the ride continues? Give me a break. They have about 2.5% of the water per person in that country compared to Canada. The US is bursting at the seams for its inablity to increase its water supply and the serious water issues many communities face. China is limited by their natural resources, plain and simple. The cost of raising the standard of living become increasingly exponential and ultimately water issues will provide the ceiling.