The demographics in China are dreadful. For every baby boomer born in the US from 1946 to 1965, approximately 1.5 children were born in China. This workforce is largely retired, and it’s unlikely China will remain the world’s growth engine.
The Next Great Depression
ITR economics has been predicting a global depression between 2030 and 2036 for several years. Nothing as severe as the 1930s but a prolonged period of below-trend growth.
Why are they predicting it to start in 2030? Because that’s when we hit the next demographic milestone: All baby boomers will be over 65, and most will receive full Social Security and Medicare benefits.
What’s Next?
The unprecedented rise in the stock market since 1980 was a byproduct of peak productivity, declining interest rates, and millions of baby boomers saving for retirement. That ended in 2020, and we are in a new paradigm of higher inflation, anemic (real) growth, expanding fiscal deficits, commodity shortages, and rising geopolitical tension.
The appetite to address these problems is nonexistent, so governments will likely continue to print money to paper over their problems. Ultimately, I believe the dollar will be sacrificed, and a better economic system will emerge out of the 2030s, something that perhaps replaces central banks.
Gold Weekly Chart
The weekly chart formed a bullish morning star pattern, and a strong close above the dashed trendline would support an attack and potential breakout above $2090 before year-end.
Note the price action leading into the breakout above $1375 four years ago. A sustained advance above $2090 would support a $3000 price target for Q3 2024.
