Germany’s Demographic Problem

A very good article from Reuters via Yahoo Finance about Germany’s ongoing demographic problem worthy of a read in its entirety.

Germany’s new coalition government wants to attract 400,000 qualified workers from abroad each year to tackle both a demographic imbalance and labour shortages in key sectors…The employer-friendly German Economic Institute estimates that the labour force will shrink by more than 300,000 people this year …This gap is expected to widen to more than 650,000 in 2029, leaving an accumulated shortage of people of working age in 2030 of roughly 5 million.

Reuters/Finance Yahoo

We’ve written about America’s demographic problem and in The Next Civil War Will Be About Labor Not Politics, we made the case that if there will be a “civil war” in the U.S. it will be for labor between states and within states between cities and rural areas not some type of political overthrow – those testosterone driven war mongers won’t exist in 2030 in sufficient numbers to go fight a political war.

We also wrote about China’s demographic problem as well and taken in context from a productivity perspective, China, the US, and Europe all have aging demographics and currently this is where 80% of all goods and services are produced and consumed but that will all change when the productive labor force shrinks over the next decade.

Think about where microchips, cars, TVs, computers, cell phones, furniture and all those other goods are made and what is happening to the populations in those countries, again we point out that global society will have tough choices to make: Care for an aging population or produce goods and services.

Also note that as of November 2021, Germany is the United States 5th largest trading partner and an aging demographic on both sides of the Atlantic will have a significant impact on trade over the next decade.

We’ll continue to monitor the situation and incorporate new information into our investment portfolio matrix.

Stay tuned and stay solvent…