A major change is taking place and little is being reported about it.  While today the deviation is minor, if it continues to develop, which appears likely, we will begin to see a different world in a decade’s time that will change the economic landscape.  This change is a declining fertility rate.  Led by Japan, the industrialized world faces a shrinking population along with all its consequences.  Only the Middle East, India and most of Africa will continue to have a growing population.  Yet, even most of these countries rates are sliding. 

For the second year in a row, Japans population will shrink and continue to do so for the foreseeable future.  At 1.4, the fertility rate is one of the lowest in the world (2.1 is required for growth). To exacerbate the situation, their population is aging and the country allows little immigration.  This means market demand for all goods and services will weaken naturally over time.  What is to become of excess homes, stores, and local manufacturing?

Last year was the first time in years that America’s birth rate slipped under 2.1.  The U.S. is the only industrialized country that had a fertility rate above 2.1.  If this trend continues their population will also begin to shrink without immigration.  As the map above illustrates, a negative birth rate is common all over the world. The trend appears to be that the more democratic and well educated the society becomes, the lower the birth rate is.

Adding to the potential for a shrinking population, 2015 is the second year in a row that more Mexicans are leaving the U.S. than are entering.  Today, Mexico offers the local’s better jobs than they can get in America.  Their car industry is growing and taking jobs away from Canada and America.   It is believed that Mexico will soon be the world’s biggest auto manufacturer.  If Mexicans returning home is a new trend it will hurt America even more. 

In order for North America and Europe to maintain today’s standard of living they will have to increase immigration.  Unfortunately, as the map above illustrates, we will be competing with many other regions of the world.  Even when immigration does increase, it will not lead to a growing fertility rate overnight because it is the immigrants’ offspring that tends to have the larger family.  Therefore, a climbing fertility rate is at least 2 decades away.

With zero interest rates destroying personal savings throughout the world, historic levels of debt and population changes in force today, the global economy is setting itself up for slow economic growth (0 to2% annually) for the next few decades.  The outcome will be a transfer of wealth from the West to Africa, Asia and the Middle East.  This is already evident with GDP growth in these three regions surpassing most of the Western nations.