Europe Doomed by Debt and Demographics

The threat to the euro bloc ultimately stems from an overcommitted welfare state. Greece's situation is so difficult because a low birth rate and rapidly graying population automatically increase old-age assistance even as the government tries to cut its spending. At issue is the viability of its present welfare state. _RCP

Greece's demographic collapse will not allow Greece to pay for its corrupt welfare statism. Greece is a preview of coming Euro-attractions.

Concerns that Greece and other struggling European nations may not be able to repay their debts are focusing investor attention on another big worry: Economies across the Continent have used complex financial transactions—sometimes in secret—to hide the true size of their debts and deficits. _WSJ

Skyrocketing debt combined with rapidly aging and imploding populations. Not the best combination one might have dreamed up. Europe should have provided for her retirement ahead of time.

Demographics crises may be the ultimate determinant of the fate of nations and the easiest to predict. In most cases, the population shift has already occured that dooms a country to slow or sudden decline. __BI

Nations with the highest average IQ are shrinking, due to low birthrates. Nations with the lowest average IQ are exploding, due to high birthrates. This trend is dysgenic, leading to a worldwide idiocracy.

The Russians realize that they're in a race against the clock before their demographics kill them as a country, and so they want to make sure that they've got as wide of a buffer as possible. As long as Europe is at each others throats, even if its just with bureaucratic paper, the Russians are going to take advantage of that to strengthen their western perimeter and push the frontier into Europe as far as they can. They know in 20 or 30 years they're not going to be able to do much, so they want to buy as much time and space as possible.... _StratforPredictions_BI

Russia will take advantage of European turmoil as long as it can. But eventually Russia's own demographic crisis of high deaths and low births will do Russia in.

"First, China’s current economic model is not sustainable. That model favors employment over all other concerns, and can only be maintained by running on thin margins."
"Second, the Chinese model is only possible so long as Western populations continue to consume Chinese goods in increasing volumes. European demographics alone will make that impossible in the next decade."
"Third, the Chinese model requires cheap labor as well as cheap capital to produce cheap goods. The bottom has fallen out of the Chinese birthrate; by 2020 the average Chinese will be nearly as old as the average American, but will have achieved nowhere near the level of education to add as much value. The result will be a labor shortage in both qualitative and quantitative terms."
"Finally, internal tensions will break the current system. More than 1 billion Chinese live in households whose income is below $2,000 a year (with 600 million below $1,000 a year). The government knows this and is trying to shift resources to the vast interior comprising the bulk of China. But this region is so populous and so poor — and so vulnerable to minor shifts in China’s economic fortunes — that China simply lacks the resources to cope." _Stratfor:China Doom_BI

China has not taken the time to firm up the foundations of its hyperkinetic growth. Outside observors see only the high numbers, not the underlying corruption and crumbling of the foundational sandworks.

The hypothetical decline of China is most important as it impacts the overall instability and unpredictability of world affairs over the next ten years. Such a decline could force the Chinese government to attempt some audacious international expansions, not altogether of a peaceful variety. The reverberations from such international adventuring would be felt far and wide, and make the US' interventions in Iraq and Afghanistan look like pastoral picnics.