Alex_G

An Unpleasant Comparison: Demographics and Deflation

Actually, there are millions of educated, skilled workers just dying to emigrate to the USA, but government puts limits on the number that can come.

Imagine an entire new generation (ok, part of one) that cost nothing to raise or educate, ready from day one to contribute to the economy (and pay taxes).


On Jul 09 05:56 PM GeminiAtlas wrote:

> Adding more uneducated, unskilled, poor people won't help the economy.
> In the 19th century the skills matched the jobs (repetitive, no need
> to read, etc.), so it helped the economy. Just adding more unskilled
> folks to the melting pot will make things worse. More skilled people
> are needed for this economy in certain sectors.
>

An Unpleasant Comparison: Demographics and Deflation

Great article, but I am curious as to why you would be buying commodities, as the premise of the article points to deflation. Unless the emerging markets develop internal demand for goods and services, there will be less pricing power for commodity producers. The emerging market export model can't be changed on a dime. It will take years.

Europe's numbers will look just as bad as ours, with worse demographics. Capacity utilization is at all-time lows, developed world credit will continue to contract, pointing to very slow growth for an extended period of time.

Owning debt, not assets, seems to be the investment choice for the foreseeable future.

Alex

The Professor Of Commodities: Interview with James Doran (Part II)

complete waste of bandwith, time, etc.

Another Bullish Argument for Commodities: Demographics

Cam,

When you speak of demographics, you are looking at a long term outlook. Unless you are talking about commodities with limited supply, the increased supply will meet the demand. If it is profitable to mine or grow, new supplies will emerge. Remember semiconductors in the early '90s, houses in '03-'07ish? Capital will flow and produce the commodities, just like any other "shortage" where money was the only barrier to entry.

Another assumption you are making is that the emerging markets will continue to grow without pause. Big mistake. Look at the Asian stock markets, they are telling you something.

That leaves you with gold and oil.

Gold is more about fear (dollar and financial crisis) than it is about demand. Yes, i am told that Asians prize the metal, but at what cost? A house? A business?

Oil is another ballgame. The oil negative countries have been caught with their pants down by a confluence of events partially explained by BxCap above. Oil is up over 10x in the last 8 years. This price increase will have a larger effect on manufacturing based economies (eg. emerging markets) than on service based economies. This lofty price also makes the transformation to electricity that much easier and swifter. If oil prices stay up over $100 per barrel, you will see the developed countries sell more electric cars than gas or diesel by 2015.