My interest in economy is growing. Numbers has always been interesting to me, but add the human intent of 6 billion people behind those financial statistics, the reports almost unfold like a drama. Maybe it is just my over active imagination and lack of economic background, but I found it a challenge to separate facts from propaganda. More often than not, I had to read the same event from the US News Source, Chinese News Source, Digg's comments, and Europe News Source to get the full picture.
I am currently learning about world economy in terms of birth-rates. Without a formal study of economic, I started with some assumptions. Such as - 1. finance is driven by people, 2. supply and demand is not artificially conjured by companies, 3. competition is relatively free to reflect that supply and demand. In another words, I am trying to figure out financial trends in-terms of human psychology. I am interesting in the long term overall picture of the interaction between money and people.
An interesting thing to note is that
China is having a baby boom right now due to a slight change in the One Child per Family Policy. I am still trying to figure out how that factors into world economic trends. How does a baby boom of the world's more populous country shape spending trend? I plan to take a look at the US baby boom after world war and see if the two can be compared and the trend predicted.
China's population is expected to reach 1.36 billion by 2010 and 1.45 billion by 2020. The peak will come in 2033 with a total population of 1.5 billion, according to a report issued by the State Population and Family Planning Commission this January.
On similar news, Japan's baby boomers started to retire this year and US baby boomers will begin to retire soon (see 3.Shifting Demographics of Western Civilization from
Global Intelligence Briefing for CEO).
It seems developed nations has a trend of lower
birth-rate. I am interested in finding out why. Is it the taxes? the social pressure? government regulation? Is the lower birth-rate an essential element towards becoming a developed nation or is it a by-product of becoming a developed nation?
China seems to think it is an essential element judging by the implementation of One Child per Family policy, but i am not quite convinced - then again, I don't even know enough to ask the right questions yet.
There are some million-dollar questions that countries would love to find the answers. How to maintain a stable economy with a society that is heavily populated with elderly. By 2020 Japan will have 1 in 5 people over age 70. Japan's birth-rate is 1.3 and you need 2.1 to maintain stable population. Japan will loose 60 million in population number by 2020.
Some things are easy to foresee, even for me. Housing cost will decrease in a society that decreases in population. In fact that has been happening for 14 straight years in Japan. The same real estate trend will happen in US as US baby boomers start to retire. The problem is that Real Estate has been one of the 3 backbones of US, along with Stock and Auto-Industry. A tripod missing one leg is shaky and unstable. In fact, I think it is urgent for US to rethink its fundamental planning.
Before, trying to encourage new housing and production of cars, US tend to build houses far apart, with wonderful yards and separate commercial and living zone to the point that everyone must have a car to buy milk. The zoning makes sense before because it props up auto-sale, but is now hurting the economy. As oil price rises, driving everywhere is costly. Baby boomers that get older would also be better served to live in a tighter community, with public transportation.
Of course, Urban planning at this late stage won't save or change the economy in the short term. But I think it is a wise long term investment. What US will have to do short term is shift and update its service industry to cater to elderly. Which I am surprised I have not seen yet. There are not nearly enough nurses for home care, there are no competent public transportation to allow elderly to travel freely, there are no education for elderly to ease them from retirement to a life of productivity.
I found it odd that we have required education to ensure children acquire the minimum skill to function in society but no such education for elderly. Such education for elderly can serve many purposes, not the least it will enable elderly to form new social networks. It can inform elderly of voluntary services that will mutually benefit society and the retiree. It can educate about rampant elderly fraud. It can teach about health care issues. The list goes on and on. On a similar note, why isn't practical money management a required course of high school or college? Just a simple course to teach kids about the dangers of credit cards, about loans, basic tax preparations and keeping receipts. This kind of practical course will be beneficial and pays for itself by cutting down credit card debts.
The more I learn about economy the more abstract it becomes. At first, it is all numbers and trend, products and service. But more and more it is about intents and demands, fears and hope. In fact, at one point I was thinking how much similarity religion and money have in common. Religion is about faith, the more a person believe in it, the more power it has to change your life. Money is about faith, the more people believe in it, the more purchasing power it has to buy things. Both system are build upon faith. Both are imaginary to begin with. Money without faith backing it is just pieces of useless paper. Religion without faith backing it is just a gruesome fairy tale. It makes me slightly uncomfortable that out of the two faith based system I find money more real than religion.
