Japan invariably looms as the central case study for the economic and societal effects of rapid fertility decline, population decline and ageing. Japan is, measured by median age, the oldest country on earth, excluding the greying millionaires of Monaco and the some-5,000 people on British St. Helena. At the end of 2021, Japan had a median age of 48.4, well ahead of the second major country on the list, Italy, with a median age of 46.8. Japan is about to get older still. According to preliminary estimates, the country’s fertility rate fell further last year, albeit marginally, while the gap between births and deaths remained wide as ever. The number of live births fell by 5.0%, to 770.774, while deaths rose by 9.0%, to 1.57 million. Japan’s rapidly ageing population is the result of a quicker and more sustained post-1945 fertility transition than in other developed economies.
Read MoreSpare a thought for the Fed. The hope that inflation had peaked in March was brutally dashed last week as headline inflation printed a new high, of 8.6%. A 50bp rate hike this month is now all but certain, with many forecasters looking for 75bp. We could also spare a thought for the BoE. The Old Lady told markets last time in convened that it expects inflation to rise above 10% by Q4, that the economy could well fall into recession, but that it will continue hiking anyway. Or maybe, we should spare a thought for the ECB. Last week, Ms. Lagarde informed investors that the central bank intends to raise rates by 50bp, at least, between now and September, followed by a "sustained and gradual" rate hikes. Yields and spreads rose on the day, likely more than the ECB would have expected, let alone liked, and the euro weakened. The central bank we shouldn't spare a thought for, however, is the BOJ, apparently.
Read MoreI am generally a tolerant guy, but when it comes to a debate on international capital flows I am a raving lunatic. I have no time for amateurs, and it is my clear impression that president Trump’s trade advisors, and those who agree with them, are just that. You need to understand where I am coming from, though. Specifically, you need to read my two essays about QE, population ageing and the global paradox of thrift. Here is a summary if you don’t want to read the whole thing; read it carefully.
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