Submitted by Chris Hamilton via Econimica blog,
In this article, I want to spend a little time reviewing two of the most relatively reliable data sets, population size/growth and energy consumption/growth. I'll compare the total energy consumption of nations / groupings of nations vs. their core (25-54yr/old) employed populations and total core (25-54yr/old) populations.
What's the point? We are in the midst of a structural, secular change and policy makers / central bankers insistence that it is just a transitory issue in need of more rate cuts and more credit to ''restart the economy" is absolutely ridiculous. This is the story of cause (declining population, where it counts) and effect, declining energy consumption and economic activity. And this is about to really pick up speed to the downside (more on that, China, below). Plus, we can ponder if real economic "growth" coincident with declining consumption of energy is possible...or is that growth just debt and financialization? Also keep in mind while viewing the charts and data below, if not for the twenty six years of Federal Reserve (& CB's worldwide) interest rate cuts incenting all the debt creation, energy consumption would have begun declining long ago.
US-
Below, total US energy consumption (quadrillion BTU's) vs. core employees. Correlation? Causation? Anyway, just is what it is. The US consumes 18% of global energy but US total energy consumption has been falling since 2007 and is now back to where it was 17 years ago, in 1999....likewise, the total number of 25-54yr/old employees peaked in '07 and is now back to 1999 levels.
Below, same as above but added core population through 2025 (UN assumes, perhaps wrongly, continued levels of immigration to achieve that slight population growth from now through 2025).
JAPAN -
Below, core employees vs. total energy consumption. Japan consumes 3.5% of global energy. Japan's total energy consumption peaked in '06 and is now back to total levels last seen in 1992...and the total number of Japan's core population now employed is on par with total employed in 1982.
Below, same as the above, but with core population through 2030...by 2030, there will be fewer in the core population than are total core employees now. For a highly levered economy, disaster.
EU -
I have more difficulty finding employee data on the EU...so 25-54yr/old population vs. the energy data I can gather. The EU consumes 14.4% of global energy. Present EU energy consumption is now on par with levels last seen in the 1980's.
For reference, below is the Italian core employment vs. total Italian energy consumption, as an example of what much of the EU looks like.
CHINA -
You are welcome to draw your own conclusions what the data below portends for China. Core population vs. total Chinese energy consumption (China consumes 22% of global energy).
Taking the above on an annual change basis (chart below)...annual change in core population vs. annual change in total energy consumption. Couple points should be evident, China's massive growth in energy from 2000 onward was entirely against their population trends (or simply a massive credit fueled misallocation). In the most recent year available for energy data, 2014, the Chinese core population was still growing by 10+ million annually and despite obscene debt creation, energy consumption stalled. This year the core will only grow by 2.6 million...and soon the massive secular contraction begins. The implications for energy and economic growth are simply put, dire.
But the world was driven by the Chinese misallocation of capital (debt). The chart below shows total annual change in energy consumption, China vs. the World (ex-China). The importance of China since 2000 cannot be overstated.
From 2000-->2011, China was responsible for 55% of global growth in energy consumption...but stranger still, since China's energy growth collapsed from 2012-->2014, China's % of global growth in energy has increased to account for nearly 65% of all energy growth. Or said more simply, without Chinese growth, there is no growth. And against a collapsing core population, Chinese energy consumption (despite mountains of misallocated debt) is set to fall significantly.
Feel free to draw your own conclusions...as for me, the chart below showing Chinese annual 15-64yr/old population change (which has now turned negative), rising oil consumption via a parabolic spiral of debt is an aberration awaiting a rude return to normalcy.
INDIA-
Just to round things out...India uses 4.5% of global energy but strangely, from 2012-->2014 India's energy consumption has declined by 7%...as if they are being pulled into the gravity of China's credit supernova.
EURASIA-
Eurasia, with Russia at it's heart, uses 8% of global energy. It has some of the lowest population growth and it's total energy consumption is essentially, amazingly, unchanged since 1980.
CENTRAL & S. AMERICA-
Central and South America account for 5.5% of global energy consumption...and their population growth trends are slowing quickly. Brazil's core will peak around 2030 and begin it's long, secular decline.
AFRICA-
As for the center of all population growth, Africa, the continent uses 3% of global energy (up from 2% in 1980) but has grown at less than half the rate seen in China since 1980. Unfortunately for Africa and the world, on a global economic basis, Africa doesn't matter...detailed HERE.
For those interested, why America awaits it's own, very painful, return to normalcy outlined HERE.