China"s Raging Against Dying Of The Light (Or Why Peak Employment Is Imminent)

Authored by Chris Hamilton via Econimica blog,

China"s working age population is clearly defined as those aged 16 to 50 years old for females (55 for "white collar" females) and 16 to 60 years old for males.  China mandates retirement at these outer age limits.  Perhaps of some interest should be that this working age population peaked in 2011 and has been declining since.  This decline will continue indefinitely as China has a collapsing childbearing population (detailed HERE), net emigration (outflow), and a still decidedly negative birthrate.

There is no evidence to believe the working age declines will abate any decade soon.  As the chart below shows, China"s potential workforce will be shrinking indefinitely... and by 2030 China"s potential workforce will be over 100 million fewer than the 2011 peak (an 11% decline)...and only further down from there.

China has one of the youngest average retirement ages in the developed world.  On average, according to a recent study (HERE), Chinese leave the work force by age 55 compared to age 63 in the US (Norway has the latest average departure at age 67).  So, perhaps China will be raising the retirement age to curb the ballooning 60+yr/old population entering retirement (chart below)?  More on that later.

Comparing the working age population versus the 60+yr/old population (chart below).  A shrinking potential workforce since peaking in 2011 and a rapidly growing elderly population.

Below, that elderly growth versus the working age depopulation as a % of all adults (chart below)...think hockey stick.  After nearly six decades of maintaining a consistent 60+yr/old % of the adult population...the elderly explosion is just beginning.

If we take the now declining total potential working age population vs. China"s still rising total number of employed individuals (according to Statista)...the chart below shows that if China adds just a mere million employees a year (about a third of the annual average employment growth seen from "06 through "16)...that by 2030 China"s employment will exceed 100% of the potential workforce.  Wait...what?!?  Or perhaps working from the premise that people who don"t exist can"t be employed...it"s time to start considering China"s employed population is set to begin falling.

This idea that there are "millions upon millions of Chinese just waiting to be incorporated into the workforce"...not so much.  While a continuing shift from rural to urban is likely, China has already or will soon experience peak employment. Simply put, there will be fewer consumers of everything (homes, cars, appliances, etc.) every year than the year before. 

Whatever overcapacity exists now will be joined by massive increases in excess housing, excess production, excess shopping malls as this depopulation plays out over the coming years and decades.

Five big points here:

1) China ends one child policy, with little to no impact...

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  Although China implemented its one child policy in 1979 and officially phased it out in 2015, China"s birthrate was actually consistently higher than most of the other major economies in East Asia (Japan, S. Korea, Taiwan, Singapore...chart below) and only N. Korea"s fertility rate is currently higher.

  
  

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  None of these other East Asia nations ever implemented birth restrictions.  Instead, their populaces chose not to replace themselves responding to the availability of birth control, surging costs of child rearing, and inclusion of females into the workforce, etc.  Simply put, the one child policy was inevitable and has now organically gone global.  The phase out of this policy will have little to no impact of China"s fertility rates.

  
  

2) China to raise retirement age, but no time soon...

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  In early 2015, China suggested it would detail in 2017 (which I still have not seen) a gradual, multiyear process to raise the retirement age (China"s version of political suicide).  Suggestions focused on slowly, incrementally, raising female retirement ages to match males and likewise, pushing retirements out by a month or two per year.  However, none of this was even suggested to start within the next five years and like most things, almost surely be back-end loaded so any real impacts are overstated.  Regardless Communist or "Capitalist" politicians, the game is the same.  A little "razzle-dazzle" that ensures any negative policy impacts never occurs on your watch.

  
  

3) China to institute Universal Pension Plan...

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  In late 2015, China said "We will achieve a basic pension for all employees nationally".  Currently, about 800 million of China"s 1.3 billion are eligible for state pensions.  According to Sinosphere, pensions for non-state employees vary widely, as high as 3000 RMB ($480) month in Beijing to as little as 80 RMB for rural farmers.  Civil Servants pensions are generally higher than those of non-state employees.  The party statement said, China would be;

  
  
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    “Building a fairer and more sustainable social welfare system.

    
    
    
    

    Implementing plans for every person to take part in social insurance.

    
    
    
    
    
    

    Diverting capital from state-owned enterprises to social security funds.

    
    
    
    
    
    

    
    

    Offering all urban and rural residents insurance for serious illness.”

    
    

    
    
    
    
  
  

4) Chinese wages & average per capita disposable income rising but gains are hugely variable...

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  While Chinese factory wages in tier 1 urban areas are now inline with Portugal or S. Africa, this terrific rise has created it"s own problems.  The rise in wages has been met with inflationary spikes in rents, fuel, food, etc. etc.  Average disposable income has risen in the urban areas but flat at best across rural China.  However, the response of employers to the spectacular rising wages has been automation, a shift away from labor intensive production, and outsourcing to lower cost countries.  This is at odds with the generally low skill/low education rural population looking for opportunity in the urban areas.  The breadth and size of further gains in disposable income is likely to be limited.  Economically, a declining total number of workers making marginally more money will not provide the desired growth.

  
  

5) China cannot export its way out of this...

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  The annual change to the 0-64yr/old combined populations of the 35 OECD nations (US, Canada, Europe, Japan, S. Korea, Australia/NZ) plus China, Brazil, and Russia begin declining in 2018 (chart below).  The core populations of the nations responsible for consuming 80%+ of all Chinese exports have peaked and begin shrinking.  Fewer consumers every year than the year before, indefinitely.  As for the nations that are doing all the growing, India and Africa, they consume about 4% of all Chinese exports.  BTW, the chart below shows when each nation/region 0-64yr/old population began declining.

  
  

Simply put, China is offering to increase and broaden it"s pension system to a ballooning population of elderly but will have a decreasing potential number of employees from which to pay for that increase?!? 

How will China achieve this?  Well, as the chart below shows, as Chinese core population growth has been decelerating, Chinese debt growth has been accelerating. 

While China"s GDP and energy consumption have led the world, they have not responded in kind to China"s debt explosion and exponentially more will be necessary to continue to show "growth".  Over a third and perhaps half of all the debt has been mal-invested in a housing bubble for a population that is never coming. 

What comes next isn"t going to be good for China nor the rest of the world as China looks to flood a depopulating nation with new debt only creating more housing overcapacity... China will look to beat the Japanese at the debt game.

For instance, the Chinese public-pension system as of 2014, took in 2.33 trillion yuan in revenue and paid out almost 2 trillion...with 3 trillion in net funds.  The net outflows and drawdown of those net funds is imminent.

But not to worry, the Communist Party explained that..."We will look at some opportunities with higher yields but will contain risk".  Again, no details were offered.  However, one asset it is clear the Chinese will not be buying...US Treasury"s (chart below, showing the net purchases since the debt ceiling debate of July 2011 according to TIC).  Since that date, China has been a net seller of US Treasury debt despite running record US dollar surplus" (BLICS = Belgium, Luxembourg, Ireland, Cayman Island, Switzerland).

From 2000 "til July 2011, China recycled 50% of its dollar trade surplus into US Treasury debt accumulating over $1.3 trillion.  Since July 2011, China has net sold over $100 billion and as of October, held about $1.2 trillion (chart below).

But I"m pretty sure those dollars aren"t sitting fallow and are finding their way into some asset, probably one in particular that is selling on the cheap about right now.

 

The End Is Near... Depopulation Is Out Of Control... So Buy Stocks (Seriously)

Authored by Chris Hamilton via Econimica blog,

The world economy is premised on a ludicrous idea - that Asia, then India, and then Africa will continue to drive economic growth. 

So as not to turn this article into a book, lets consider this idea focusing on East Asia consisting of China, Japan, North and South Korea, Taiwan, and minor others.  This region consists of 1.6 billion persons or about 22% of earths inhabitants.  However, since 2008, it is this region that is responsible for nearly 100% of the global increase in demand for oil (best proxy available for true economic growth) and having primarily driven global economic growth.  My point in this article is that the growth in this region is entirely a credit driven supernova against collapsing populations which will never be able to fill the 100+ million newly added apartments or pay back the debt incurred to achieve the "growth".  Contrarily, from an investor standpoint, this weakness is the green light to "invest" as aggressively as possible because as long as central banks exist, they have your back.

Consider, since 2000, China"s debt outstanding has risen something like 14x"s to 17x"s or from about $2 trillion to something between $30 to $35 trillion presently.  As for Japan, who knows Japan"s true debt as Japan"s central bank is buying much or most of the debt and essentially throwing it in a black hole, never to be seen again(...monetization with a capital "M").

Why the massive debt creation and central bank monetization?  Depopulation with a capital "D".  First off, consider the collapse in fertility rates for these nations (chart below).  To maintain a constant, zero growth population, the childbearing population needs to produce 2.1 children in order to replace themselves (dashed line, below).  However, as the chart below shows, E. Asian nations have seen negative fertility rates for decades (Japan turning negative in "74, S. Korea in "83, China in "92, and N. Korea in "96).

Looking at the fertility rates from 2000 (chart below), some minor rises in fertility rates have been noticed in China since "00 and since "05 in Japan and S. Korea.  However, despite the minor upticks, all nations remain solidly negative and well below the 2.1 zero decline threshold.

For those expecting East Asia to continue driving global economic growth, I have a very big problem for you.  East Asia is in the midst of a population collapse.  The East Asian childbearing population, after rising by 366 million or +125% from 1950 until peaking in 2005, is now collapsing nearly as fast.  By 2030, those of childbearing age will have fallen by 180 million or a 27% decline (chart below).  By 2050, a clean halving of the childbearing population is likely.

So, the size of the childbearing population is back where it was in 1980 and by 2050 will be almost back to its 1960 size...but hypercritically, that population in 1960 was having approximately 5 children per family versus the 2020 or 2050 versions having somewhere around 1.6.  It is unlikely anything can be done to stop the depopulation daisy chain in East Asia and the economic collapse is already assured.  The collapse in demand against record quantities of assets is a mismatch for the ages...but of course central banks will continue to step in and monetize as long as possible.

As for the rest of the population, the growth among the heart of the regions economy, the 20 to 65 year olds, peaked in 1990 and has now indefinitely turned negative (falling something like 12 million from 2015 to 2020...and hundreds of millions fewer consumers, home buyers, tax payers by 2050).  Even the growth among the 65+ year old cadre will peak about 2035 before beginning to rapidly decelerate (change per five year periods, chart below).

Lastly, even growth among the old will be shifting to the very oldest as the bulk (and then the entirety) of the growth will be among the 75+ year olds (change per five year periods, chart below).

As for investors, this is your last and greatest chance.  The depopulation issue is not confined within East Asia.  The chart below shows the diving global fertility rate falling by more than 50% since peak fertility in the mid 1960"s.

It is a global phenomenon exhibited nearly everywhere but Sub-Saharan Africa.  The chart below shows global fertility rates are universally collapsing and it is nearly solely Africa that continues the global population increases...at least for now.

Even India and/or the Middle East / North Africa (MENA) are likewise seeing collapsing fertility rates. India"s fertility rate is almost sure to be negative by 2020.  There truly are no green shoots from a population growth perspective.

Central bankers will continue to "fake it" until they "make it".  Obviously, they never will "make it" but a select few will get absolutely rich beyond belief from central banker "efforts" as they continue to "fake it" as long as possible.  So, invest accordingly.

Economic Recovery - But For Who?

Authored by Chris Hamilton via Econimica blog,

How to judge the effectiveness of the economic recovery since 2008 is a challenge?

Many laud the Federal Reserve for it"s actions to stave off a possible depression.  The Federal Reserve"s policies have certainly helped to promote new record highs in financial assets across the spectrum.  These policies have resulted in a great rise in household net worth yet has created the fewest net new full time jobs and real income increases since WWII.  The chart below shows the household net worth (the combined valuation of all privately held stock, real estate, bonds, etc.) as a percentage of disposable income (what is left after paying taxes) and calls out the decelerating full time job creation.

But as Ray Dalio noted yesterday HERE, the recovery is only a recovery for the wealthy.  As the chart below from the Fed"s own Survey of Consumer Finances shows, all the record growth in household net worth has gone to the top 20% of income earners since 2007 while the remainder have seen declining net worth.

A means to detail the impact of this lopsided recovery is the record low US fertility rate.  During each of the previous run-ups in HHNW, there was a parallel rise in the fertility rate as young adults felt more confident and capable of forming or growing a family.  However, since 2007, the collapsing US fertility rate vs. surging HHNW puts the truth of who is recovering in stark contrast.

And below, the US fertility rate vs. all publicly traded US equities represented by the Wilshire 5000.  Clearly, the recovery was not a recovery for those of childbearing age but in fact an ongoing depression.

The Federal Reserve is protecting, enabling, and rewarding a shrinking number simply for being asset holders (not for doing anything with those assets) while punishing the growing majority for having few or no assets... and ensuring the vast majority never will be asset owners as asset prices surge versus stagnant wages. 

This is all because a flawed economic model premised on perpetual population growth (turning into consumer growth) has now gone off the tracks as growth of the consumer class is collapsing.

The chart below shows annual yoy US 15+yr/old population growth broken down by age groups.  Dark green is growth in 15-24yr/olds, aqua blue 25-54yr/olds, yellow 55-64yr/olds, and red is the growth in 65+yr/olds.  The deceleration of growth among the 15-54yr/old segment from the late 1980"s until growth ceased in 2007 should be pretty obvious.  However, both the quantity and quality of population growth, particularly among the 55-64yr/old cadre (in yellow) is thinning out...this is leaving all population growth coming among the 65+ and 75+yr/old segments.  Periodic spikes in chart are "one time" Census adjustments, not true population growth spikes.

The portion of the population growing is so important because average income and spending peak as the head of the household hits 45-54yrs/old and begins to really decelerate once the head of household hits 65yrs/old.  By the time the head reaches 75yr/olds, their average income and spending are halved and their willingness to use credit to amplify their consumption collapses (chart below).

Below, a close-up of the US 15+yr/old annual yoy population change since 2001.  Take a close look at the dynamics that led up to and culminated in the 2008 "great financial crisis" (first dashed circle).  Compare that to the dynamics since "08 really intensifying now in 2017.  I"m pretty sure the farce that is the present moon shot in asset prices (with central bank thumbs, elbows, and who knows what else on the scale) has aserything to do with this.

Lastly, the collapse of the 20-65yr/old population growth across N. America (US/Canada) is only accelerating and most if not all population growth will be among the 65+yr/old population (data from US Census and UN).

While presidents and political parties have swept in and out of "power", the Fed hasn"t changed a bit for decades and is protecting the wealthiest 20% of families (though really it"s more like the top 1% to 2% truly raking in the benefits) and punishing the other 80% holding minimal or no assets. 

And America"s aging population will not allow America to grow her way out of this hole. 

Only an outright, "revolutionary" change from the current paradigms and removal of "powers that be" will save the bottom 80% from watching the American dream race ever further away.  But of course, better make sure any "new boss" isn"t the same or even worse than the "old boss".

Is Population Decline Catastrophic?

In the 1970’s we heard the earth was going to get so crowded we’d be falling off. Now the panickers have flipped to population decline. They were wrong in the 70’s, so are they wrong again? Is a declining population catastrophic?

Countries from Germany to Japan are investing in mass immigration or pro-birth policies on the assumption that they must import enough warm bodies to stave off economic collapse. I think this is mistaken.

Falling population on a country level is certainly no catastrophe and, indeed, may be positive. I’ll outline some reasons here...

Historically, the first question is why population declined. If it’s the Mongols invading again then, yes, the economy will suffer. Not because of the death alone, but because wholesale slaughter tends to destroy productive capital as well.

On the other hand, if the population is declining from non-war, we have a well-studied natural experiment in the Black Plague. Which is generally credited with the “take-off” of the West. Because if the population declines by a third while capital including arable land stays the same, you get a surplus. Same resources divided by fewer people.

Think of zombie movies where dude’s running around with unlimited resources at his disposal — free cars, riverfront penthouses. That, in diluted form, is what a declining population gives us — more land, more highways or buildings, more resources per person.

Now, if the population’s declining not because of a terrible disaster like the Plague, rather because people simply want fewer children, then you don’t even get the massive hit from losing productive people. A worker dying at 40 takes a lot of productivity with him, while a child unborn isn’t actually destroying anything but hopes and dreams.

So if the Plague was a per capita economic bonanza to Europe, having fewer children should be an even larger per capita bonanza.

Take Germany; before recent rises in immigration, Germans averaged 1.25 children per woman. This translates into a 1/3 decline in population per cycle (i.e every 75 years if people are living 75 years). So without immigration, Germany might expect a 1/3 decline by 2100. Is this good or bad?

The question breaks into 2 parts: absolute number of people, and changes in age composition. On numbers alone, it’s great for Germans; same physical capital, same amount of land and air and water. True there are fewer taxpayers to amortize shared costs like defense, but these costs are small and, empirically, often scale to the population anyway. For example Holland’s military budget and population are both about 1/5 of Germany’s.

So on numbers it’s great — more stuff for fewer people.

Now the second question is age profile. The key here is that a declining population means fewer working-adults to pay out pensions, but it also means even fewer kids. Who are very expensive. The number that captures both is “dependency ratio,” which is the ratio of workers to children-plus-elderly.

To take a real-world example, the UN expects Germany in 2100 to have 68 million people, compared to today’s 82 million — about a 20% decline. The age profile shifts so they expect a third more over-65’s — from 17 to 23 million. Meanwhile, children 14 and under fall from 11m to 9m. So total dependents goes from 28 million today to 32 million in 2100. Meanwhile, population age 15 to 64 goes from 54 million today to 36 million in 2100. Upshot is today a single working-age person supports half a dependent — 54 million carrying 28 million. But in 2100 that worker will support a single dependent — 36 million carrying 32 million. So far so bad, right?

Well, there are 2 big caveats here, both based on long-lasting trends.

First, for over a century now people are not only living longer, but living healthy longer. This is called “health expectancy” and, sticking with Germany, is rising by about 1.4 years per decade.

This implies that 65 year-olds in 2100 will be as healthy as 53 year-olds today. While today’s 65-year-olds are as healthy as 2100’s 78-year-olds. This alone would bring the elderly numbers back down to today’s, but the lower number of children means worker burdens actually decline.

Of course, this would require raising retirement ages in line with health expectancy - 1.4 years per decade - which politicians are obviously deeply reluctant to do.

Second caveat is another long-term trend, economic growth. The irony here is that, from a population growth viewpoint, economic growth is actually the worst-case scenario. Because if the economy crashes instead, then historically the population actually soars — kids become your safety net if the welfare state goes bankrupt. So if we fail to grow, the demographic problem actually solves itself anyway. Either we grow, or population decline was a false alarm anyway.

Quantifying this growth, over the past 50 years Germany has grown 1.65% per year, real per capita. That trends puts a 2100 German worker making 4 times what they do today. Keep in mind this is likely underestimating the benefit, because any outperformance makes Germans richer yet, while any catastrophe probably makes them have more kids.

So, summing up, rising health expectancy implies there will actually be fewer dependents in 2100 Germany, while economic growth implies German workers will be 4 times richer, just on growth alone. The demographic burden plunges by 80% or more.

By the way, if you’re freaked out at the prospect of working an extra 1.4 years per decade, that economic growth alone suggests a 50% decline in worker burdens - twice the dependents on four times the income. So even if politicians are spineless, the welfare burden declines even with more dependents.

Bottom line, whether we look at total numbers or demographically, population decline coming from simply choosing to have fewer kids is nothing remotely catastrophic.

Now, a final point: in a worldwide context, more people does tend to increase investment, therefore innovation and economic growth. This is obvious in the aggregate - there wouldn’t be any factories if there weren’t any humans - but people forget. So, on a world-wide level, we should have a bias towards more humans, while recognizing that, on a country level, a shrinking population is certainly no catastrophe.

America's Fertility Rate Falls To Record Low

The US isn"t yet grappling with the economic disaster that is a shrinking popuation - unlike Japan. Though it"s starting to look like a not-too-distant possibility. US birthrates fell to yet another historic low in 2016 as a whirlwind of economic and cultural factors inspire more women to delay, or forgo, having children. According to provisional data for the fourth quarter provided by the CDC, the US birthrate has declined to 62 births per 1000 women – its lowest level on record, and down from 62.5 in 2015.

This is especially troubling because demographers worry that a dwindling birth rate will hurt economic growth and tax revenues needed to fund transfer payments to a growing elderly population, as more members of the baby boomer generation age into retire.

The CDC did not say why the birth rate is declining. But according to Axios, research and surveys have shown several reasons, including wider availability of birth control, personal economic instability from student loans or other debt, women focused on launching a career before starting a family, and a growing acceptance that not everyone wants to have children.

If the Trump administration achieves higher economic growth, it’s unlikely to do so fast enough to support the mandated 9% increase in entitlement spending for older Americans without more deficit spending. Trump says he intends to preserve Social Security and Medicare spending levels.

The highest birthrates are now seen among women aged 30-34. Previously, the highest rate had been for women aged 25-29, which fell to 101.9 in 2016.

Chart courtesy of Axios

Furthermore, as Statista notes, teenage pregnancy is in continual decline in the United States. As preliminary data released in a newreport by the National Centre for Health Statistics on Friday reveals, the birth rate of mothers in the 15-19 age group dropped to a record low of 20.3, amounting to 209,480 births in 2016. Compared to 2015, this is a decrease of almost 9% and even 62% when compared to 1996.

Conversely, birth rates of women aged 40-44 are on the rise: While it stood at 6.8 in 1996, the provisional birth rate for this age group is 11.4 births per 1,000 women in 2016, which accounts for an increase of 4% compared to the previous year.

You will find more statistics at Statista

Here are a few other interesting data points from the CDC, courtesy of Axios:

• The CDC estimates the fertility rate in 1960 was about 118 births per 1,000 women, or almost double what it is today.


• Despite the record low birth rate, more than 3.94 million babies were born in 2016, which was about 37,000 fewer than 2015.


• The highest birth rate is now among women aged 30-34 at 102.6 births per 1,000 women. Previously, the highest rate had been for women aged 25-29, which fell to 101.9 in 2016.


• U.S. births by race origin of the mother: 52% white, 23% Hispanic, 14% black, 6% Asian, 1% Native American/native of Alaska, Hawaii or Pacific Islands.

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Economists worry that if birthrates continue to decline, America’s economy will enter a period of stagnant growth like that experienced by Japan over the past two decades. As we reported last year, the problem of falling fertility in Japan, which at 1.4 births per woman, has one of the lowest fertility rate in the developed world, is so severe, that Japan"s lawmakers have decided to take action.  Late last year, Japan’ cabinet approved a record $830 billion spending budget for fiscal 2017, which includes child-rearing support. However, the birth rate in the US remains positive, while Japan"s population is shrinking.

However, at this rate, the local population may not need the free money in the not too distant future. The only hope, as in the case of many European nations, is that a surge in immigration will offset the natural decline of the domestic population, whose average age has never been higher...

Mass Immigration & The Looming Disappearance Of The Dutch Population

Via GEFIRA,

A change in demographic trends takes 50 year before they become plainly visible. The decline in fertility in the sixties started to become visible after 50 years. Cerberus, our population simulator, shows with scientific precision that the replacement of the European society has started, and within 50 years it will be visible and irreversible.

Since the seventies of the previous century, the Western societies have not produced enough offspring to keep their communities growing. The fertility rate (i.e. the average number of children per woman) is far below 2.1. i.e. the level of replacement. A population with a higher rate will grow while a population with a lower rate will shrink. As it is, the Western and Japanese societies will begin to implode 40 years from the moment their fertility rate dropped, and this demographic winter, as this phenomenon is sometimes called, will affect the world more profoundly than the climate change, so politicians and investors should take notice. 

According to official state data the Swedish, French and Dutch populations will keep growing for the foreseeable future despite their low fertility rates. Western politicians seem to be taking great pleasure in the population decline in Russia, but shouldn’t they first bother about their own turf? How e.g. is it possible that the number of residents the Netherlands keeps growing if the number of the newborns is smaller and smaller?

To get an insight into the European situation the Gefira team performed the computation, and developed Cerberus 2.0, a software tool that, using copious amounts of demographic data provided by the Central Bureaus of Statistics, simulates the population development.

Cerberus, making use of the CBS Dutch Central Bureau of Statistics data, calculates how many people died and were born for every consecutive year from 1950 till 2100 and then creates a hypothetical Dutch population growth model without migration. This model overlaps with the official data up to 1980 (blue line in Figure 1 below). In the sixties, the Netherlands had an emigration surplus, i.e. more people left the country than arrived, while in the seventies the so-called mass immigration set in and the process was reversed.

Figure 1

A couple of years of immigration has no visible effect, which is why many immigration advocates argue that 50,000 arrivals against a population of 14 million, (i.e. 0.3 percent) is negligible. This is only true if it is a one-time event. If it happens year after year, it brings about a structural change of a population.

The cumulative effect of immigration became visible in the data after 10 years in 1980. The total population in the Netherlands grew according to the official CBS data (green line) much faster than the native population calculated by Cerberus (blue line). The native Dutch population reached a peak around 2015 at 15 million people, while the total number of inhabitants according to the CBS was 17 million and growing. The Dutch society will stay more or less stable with 18 million until 2060, the final year of the CBS projection. Cerberus on the other hand shows that in 2015 the Dutch population started to decline rapidly and in 2060 there will be 12 million Dutch left while at the end of the century there will only be 9 million native Dutch. The Dutch natives will become a minority. Due to demographic inertia it takes a long period before changes in fertility and migration are felt. We remind the reader that the Dutch fertility rate started to drop in the sixties and went below the point of replacement in 1973. Since then it will have taken more than 42 years before the Dutch native population starts to decline. The inevitable replacement of the people of Europe at the end of this century is already set in motion and we believe that after 2030 this process is irreversible.

We use Cerberus to calculate how many migrants are needed to keep the Dutch population stable at 18 million. We input into Cerberus the 1950 population and, starting in 1971, added 15%, 20% and 25% immigration-related growth. Our model showed that the population stabilized with a 25% extra growth, that is about 45 thousand immigrants annually, around 18 million people, which overlaps with the CBS projection

Cerberus proves that the Netherlands needs 45 thousand immigrants to meet the official projections of the CBS. The CBS data is the basis for governmental planning. The Dutch planners keep the mass-immigration unchanged for the foreseeable future instead of anticipating a sharp drop in population. Apparently, the Dutch establishment opts for the replacement of the Dutch society.

Figure 2

To perceive the consequence of the continuation of mass-immigration, one has to take a closer look at the population growth. When more immigrant children are born than those of Dutch natives the effect is not immediately visible, migrants will still be a minority of the total population but inevitably the Dutch will become a minority within that generation. To see how the growth of the Dutch population evolves we divided it into three components:

1. The steadily decreasing number of newborn native Dutch;


2. The steadily increasing number of non-native newborns;


3. A constant number of incoming immigrants.

These components are shown in Figure 2.

In 2060 50% of the growth in the Netherlands will be non-Western newborns (orange) and immigrants (red), and around 2070 50% of all newborns (orange) are non-native Dutch. From there it takes a further 25 years before the natives are a minority. The Cerberus projections are very optimistic as they assume the native fertility rate at 1.66. According to our separate calculation the real current native-Dutch fertility rate is much lower and close to 1.5. Cerberus shows that the next decades are crucial for the survival of the Dutch population. In 2060 we will cross the Rubicon and reach the point of no return, the Dutch will be inevitably replaced with a non-Western society. But in 2035, 17 years from now, the total growth of the non-Dutch population in the Netherlands will already be a shocking 42%. Measures to increase the fertility are rather counterproductive and will probably only increase the fertility rate of non-Western immigrants. It is said that in the seventies and eighties immigrant families with 6 kids were able to live on the child benefit.

Since the demographic decline is observable in all Western countries, we are in for Europeans being gradually replaced by peoples from Africa or South Asia. We are now at the eleventh hour and if we do not put an immediate stop to all immigration, the Dutch society will vanish into thin air.