If anyone entered the dating scene in the last 20 years, you know things changed a great deal from earlier generations. The Internet radically altered things which was truly just a precursor to the mobile craze. Now, with applications like Tinder, we are seeing people being able to "hook up" by just swiping the screen.
Compared to the speed dating games of previous generations, this is sifting through "applicants" on steroids.
A case could be made that efficiency has improved drastically. In a city like New York, there might be hundreds of thousands of people within a 10 mile radius. Of course, with speed and efficiency comes selectivity.
It appears, according to those who researched this, that a fast percentage, especially among the women, go after the same people. In other words, Pareto's rule is in effect: 20% of the guys are getting attention from 80% of the women.
Obviously, simply math means that something is not going to work out. The "players" are getting the lion's share of the action, leaving the rest with very little.
Until the basic dynamics of biology change, we see this could be a problem for many. With so many left out, it is no wonder both marriage and birth rates throughout the developed world are collapsing.
This is a deflationary cycle that does not appear to be waning.
Kids Are Expensive
Much is made of the oncoming demographic crisis within many of these countries. In short, societies are getting older. Japan was the first country to head over the cliff but they are not the last. We have many more that will follow suit over the next 20 years.
Naturally, older people (women) do not have a lot of children. Demographics get very unfavorable after a vast percentage of the women exit their child rearing years. This means there is a lot of pressure on the next generation to make up for it.
Sadly, as the above mentioned showed, rates from those 25-40 seems to be declining in child births.
Without kids, there is a lot of shopping that does not take place. Have you ever noticed you have to buy new clothes even though the old ones are not worn out. That is what happens when those little animals keep growing. Of course, feeding them led to that, something which can get rather expensive especially with boys in the house.
From an economic standpoint, this is healthy. Consumption is what generates resiliency for an economy. As people get married and have kids, spending tends to increase. Over time, if the generations are growing, these kids end up reproducing at a greater rate, bringing on more economic activity.
Unfortunately, it seems the cycle is reversing itself. We are seeing smaller generations with a fair portion of them unwilling (or unable) to reproduce.
This is one of the things that has demographers questioning the future path of China. There are more than 50 million males as compared to females in that country. Sadly, much of this difference is in the birthing age.
Deflation
The fact the developed world is aging coupled with the fact fertility rates are dropping through the floor means we are going to see a drastic reduction in economic output. We see there are a number of reasons for this.
To start, less people simply means not as much is needed. This makes sense and is something that really can carry a significant blow to the economy. Yet, that is not the only factor.
Part of what drives economic productivity is the need to provide for one's family. If that is not happening, especially for the males, things get a lot less expensive. Men can get by on some pretty skinny budgets. If they are not having to buy the mini-vans and diapers, life can get very inexpensive.
This might sound crude but many of the developed economies depend upon the McMansion and fancy cars. There are entire industries dedicated to propping up the ego, ie making men more attractive to women. If that option is not there for many, those industries collapse.
Naturally, we have to then roll this out to things such as child care and assorted industries like that. While online might have been responsible, it makes sense as to why ToysRUs went out of business in the US. The demographics simply did not line up with that is taking place.
As we look out over the next 10-20 years, unless these trends change, there will be a radical shift in spending. Society will see many industries contract as the number of people interested declines. Whatever the cause, when people opt out of certain patterns of buying, negative economic impact is felt.
This is all deflationary. If we add in some more technology, which might be required to keep production up, then we can see how this situation turns very bad.
Of course, some believe inflation bad, deflation must be good. This is not the case. A deflationary spiral is a horrific situation to be in. Just as the Japanese over the last 25 years. Or even better, read how life was in the US during the Great Depression. That was an historic deflationary period which was very dark, economically, in US history.
The point is things are very precarious right now. Long term trends are not changing. If anything, they are being accelerated. This is going to really cause issues for many countries.
It is not outlandish to forecast that if some countries do enter a recession, it might take many years for it to recover.
There are simply a lot of headwinds in play right now.
Ironic, it might be the lack of marriage that is adding to the deflationary woes.
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