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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (27305)	4/12/2005 4:10:14 AM
From: regli	Read Replies (2) \| Respond to of 116555

I understand that the demographics in the EU states you mention are different from the U.S. However, I do not subscribe to the standard interpretation of its effects. First of all, even under the standard interpretation, this is a longer term issue and will not hit in the next few years, just as Social Security in the States will not be an issue in the next few years. I am also not convinced that Turkey will join the EU. Surprisingly, even the Turks might not vote for it and on the European front I expect a lot more obstacles to appear once the Economy turns further South. "Freedom of Movement" is gradually increasing the ability of people in poorer States to move to the richer places and therefore changing demographics. As an example, today even a Swiss citizen (not an official EU member) can move and work anywhere in the EU. There are certain limits on this movement depending on State but the quotas are defined and increase gradually. This will have a pronounced effect on demographics. Just a quick comment on why I disagree with the standard take on demographics. I actually don't expect workers to solve the social services issue as I firmly believe that eventually (in the next 20 years) computing technology will reduce labor demands very significantly. You recently alluded to robotics. By combining robotics, automation and artificial intelligence, I simply don't see enough work being made available for an uneducated work force. I therefore contend that it might very well be of advantage to have fewer workers as there will be fewer people OUT of work. I therefore wouldn't be surprised that social upheaval might be as severe in the States as in Europe, if not worse. The level of expectations (the American Dream) is much higher here and therefore the fall will be much more painful.