Peak Babies, Not Oil

Patrick Cox writing for Tech Digest:

Much of my career has been spent refuting this or that doomsday scenario. From peak oil to overpopulation, I’ve been on the other side of the hysteria and often vilified for it. In the last few days, however, a Wall Street Journal headline told us that “Oil Prices Tumble Amid Global Supply Glut.” Also, a LiveScience story told us that “US Birth Rate Hits All-Time Low.”

Neither one of these headlines should surprise anybody. The math behind both of these stories has been clear for a very long time. Neither peak oil nor overpopulation fears were based on actual science. This, of course, raises questions about our species’ susceptibility to periodic Chicken Little hysteria. I have no explanation for this innate tendency, but it’s been evident for thousands of years.

In the modern cautionary tale, first published in the Anglosphere in the mid-1800s, it’s a chicken that cries that the sky is falling. Ancient Buddhists from India and Tibet told the same basic story, but the central character was an alarmist rabbit. That version was spread into Africa and then via the slave trade into America where the oral version was recorded by Joel Chandler Harris in his Uncle Remus books. What sets it apart from the older versions is that Brother Rabbit starts the panic but never actually falls for it himself. I’m reminded of some current global warming activists who fly in private jets and live in estates with carbon footprints bigger than small towns.

This isn’t to say, however, that we have nothing to worry about. In the immortal words of Henry Saint Clair Fredericks (stage name Taj Mahal), “If you ain’t scared, you ain’t right.”

So I’m not exactly scared, but there are things that concern me. The oil glut isn’t one of them, but historically low birthrates do have enormous implications for investors. The last available data, compiled in 2013 by the CDC, show 62.5 births per 1,000 women aged 15 to 44 in the US. That’s down 10 percent from 2007, which was already below replacement rate. In 2008, the US birthrate was 2.08 births per woman, below the 2.1 level needed to replace the population. Today, we are seeing the lowest recorded American birthrate since government started keeping track in 1909. New Zealand, Australia, and Canada are even significantly lower.

In and of itself, a sub-replacement birthrate isn’t necessarily a problem. The problem is that our ruling elite seem totally unaware that it’s happening. Routinely, in fact, we hear from certain politicians that overpopulation remains a pressing problem even as populations throughout the West are shrinking. The same trends, by the way, are already obvious in Asia and Africa where populations continue to increase primarily because people are living longer. Real demographers know that the world population is on track to contracting, and perhaps quite dramatically.

Once again, I recognize that there are upsides to reduced populations. The problem, however, is that so many government policies are still based on the assumption that every generation will be larger than the last. Growing populations are great in many ways. First of all, more young people entering the work force creates demand for all kinds of goods and services. It grows GDP and therefore tax revenues. The simplest way to achieve economic growth is, in fact, to grow the population.

While this is glaringly obvious, it’s remarkable how many economists miss this elephant in the room when talking about countries such as Japan, where economic problems have mirrored the country’s falling population. Last year, the Japanese population shrank by about a quarter million people.

Japan has the highest life expectancy and oldest population in the world, and the older Japanese people expect that the promises made in the past to help support the aged will be honored. It’s not at all clear to me that those promises can be kept, at least as things now stand.

As I’ve written many times, there were about 17 workers per retired person in the United States when I was born in the middle of the last century. Today, the ratio is less than three to one, and getting worse. Already, 30 cents out of every tax dollar collected in America flows to the aged, but much of that money is being borrowed. In effect, the bill for caring for the aged is being sent to future taxpayers, despite the fact that there will be fewer young workers and more aged people to support. This arrangement is not only unsustainable, it’s unethical. In my opinion, the older, wealthier population should help the younger, less wealthy part of the population, the reverse of the current situation.

Every time I’ve written this over the last 30 years or so, I’ve been attacked by people who claim that I’m a fearmonger and that we have plenty of money to support the aged. Today, however, we’re $17 trillion in debt and still borrowing. The current administration doesn’t even acknowledge that the problem exists, so it’s getting harder and harder to make that case.

We need to face the fact that things are going to get worse before they get better. I have little doubt, however, that we will eventually adjust to the new reality. We’ll see policymakers wake up to the new demographics, as they are in Japan, sooner than most of us think. Other countries are also facing facts and are devising solutions. I particularly like the spirit that some Danes are showing in their efforts to counter the country’s low fertility rate. Japan, however, is leading the way in terms of enabling technological solutions through regulatory reform.

The Japanese government understands that the old model is doomed and is actively looking for ways to increase the national work force. There are two obvious ways to do that. One is to bring more women, who have not traditionally worked to the same extent as Japanese men, into the work force. More working women means economic growth and more funds to support an aging population. The other, more long-term solution is to increase birthrates to grow the national work force.

The problem is that the two strategies counteract one another. Japanese women who work have lower birthrates than those who do not. Therefore, the only remaining solution is to extend health spans and working careers, increasing incomes and tax revenues while reducing medical expenses.

There are several ways that the Japanese are working to do this. The most important is the recently accomplished elimination of phase 2 and phase 3 clinical trials for stem cell therapies. The second is in the field of dietary supplements and nutraceuticals.

Japanese regulators exercise less direct control over the market but provide more solid, peer-reviewed information for consumers and healthcare providers. Recently, for example, the Japanese government issued a patent to Terra Biological for oxaloacetate (trade name benaGene) for use in “life extension.” Oxaloacetate is one of the NAD+ precursors that I take based on recent research. I also take the NAD+ precursor, nicotinamide riboside (trade name Niagen).

In general, Japan is leading the way in efforts to encourage new anti-aging therapies. In the next few years, I anticipate that Japan will continue to lower regulatory barriers for new biotechnologies. This is very unlike America’s FDA, which doesn’t yet recognize anti-aging or life extension as a legitimate therapeutic target.

The current regulatory environment in the US will change, however, because it has to. The only question is how soon it happens.

Fortunately, there is a growing chorus of rational voices in the US. I would recommend that everybody download and read Why Population Aging Matters: A Global Perspective. This relatively brief presentation was written by the National Institute on Aging (NIA), part of the National Institutes of Health. On its website, the NIA states bluntly:

The world is on the brink of a demographic milestone. Since the beginning of recorded history, young children have outnumbered their elders. In about five years’ time, however, the number of people aged 65 or older will outnumber children under age 5. Driven by falling fertility rates and remarkable increases in life expectancy, population aging will continue, even accelerate. The number of people aged 65 or older is projected to grow from an estimated 524 million in 2010 to nearly 1.5 billion in 2050, with most of the increase in developing countries.

The interesting thing about that quote is that it was written in 2007, which means that this historic change has already come to pass. Back then, the authors warned:

Some governments have begun to plan for the long term, but most have not. The window of opportunity for reform is closing fast as the pace of population aging accelerates. While Europe currently has four people of working age for every older person, it will have only two workers per older person by 2050. In some countries the share of gross domestic product devoted to social insurance for older people is expected to more than double in upcoming years. Countries therefore have only a few years to intensify efforts before demographic effects come to bear.

More than a few years have passed since this report was written and nothing has really changed politically in the US, though the rate of demographic change and the pace of scientific progress, which is pushing out lifespans, have accelerated. Things will, therefore, get worse. The dynamics behind crippling governmental debt internationally are growing.

There are upsides to this totally predictable situation though. One is that we can anticipate many of the outcomes and devise ways of profiting from them. This is why I focus on disruptive biotechnologies that can significantly lower healthcare costs while extending health spans and careers. These biotechnologies provide the only real solution for the demographic transformation, except for the Danish solution mentioned above. I find it fascinating, by the way, that the revolution in biotechnology is happening exactly at the point in history when it’s needed.

Another significant benefit that will accrue from this convergence of forces is that many of us will be able to take advantage of these breakthrough discoveries. I’m incredibly excited about the emergence of growth hormone-releasing hormone (GHRH) vaccine which has been used widely in animals, where it seemingly rejuvenates and extends lives. Endothelial precursor therapy has similarly been shown in animals to rejuvenate cardiovascular systems. Hopefully soon, we’ll see brown adipose tissue transplantation curing obesity, diabetes and cholesterol problems. There are, however, significant benefits from recently discovered over-the-counter products.

Whenever I talk to el jefe, señor Mauldin, these days, it seems most of our conversations center on our workouts. Both of us work out and lift weights, as we have for much of our lives. Both of us, however, are making gains that we’ve never seen before. One of the Mauldin Economics executives told me recently that he’d never seen John look so good before, that his arms and shoulders are bigger than they’ve ever been.

I probably shouldn’t claim that I look good, but I can say that I’ve also put on a surprising amount of muscle in the last year. That’s not how it’s supposed to work. Both John and I are in our 60s. I work out less than I did than in my 30s, but I’m suddenly lifting much more weight and have more muscle mass than ever. John’s experience is the same.

My only explanation is biotechnology. The NAD⁺ precursors that I mentioned above have been shown in animals to rejuvenate muscle tissue so I’m not surprised to see the effects in humans. I also credit anatabine citrate, though it is at least temporarily unavailable. I’m expecting word on that front soon.

Also, I’m a devoted user of the AVAcore thermogenic device. Recently, a major research organization presented evidence that it may be able to prevent the damage caused by overheating in athletes, but one of the investigating scientists mentioned, as an aside, that it also accelerates training results dramatically. Neither I nor Mauldin Economics have any interest in this privately held company, but I’m evangelical about the benefits, especially to older people. The stronger you are, the lower your risk of disease and mortality.

I realize that the current price of the device is high for many people, but I understand that the company is going to do some sort of crowd-sourcing project in the near future, probably Indiegogo, to fund a much more affordable product. I’ll let you know about the project when I have more information.

One of the reasons that I love the AVAcore device so much is that it perfectly demonstrates the unexpected and dramatic nature of emerging biotechnologies. The notion that exercise capacity and recovery could be dramatically improved by normalizing core body temperature is so unexpected, I’m still in awe over the science and the impact on my health.

It is, however, only the tip of the iceberg. As Japan is demonstrating, an aging population not only wants but demands access to the scientific breakthroughs that can significantly extend health spans. Just as Japan’s regulatory system is bending to the will of its aging population, America’s regulators will be forced to come around.

John and I talk a lot about assisting in that process, and I’ll have more information about that in the future. If you’d like to help in this effort, I suspect there are ways to do so. As it stands, our portfolio contains technologies that I believe will have dramatic impacts on some of the greatest threats to health and longer lives, including Alzheimer’s, cancers, fibrosis, diabetes, and other major diseases. A reformed regulatory system would accelerate therapies to market, which will improve and save lives. It will also allow more of us to live and invest longer.

From the TransTech Digest Research Team:

As Patrick explains above, new biotechnologies will not only extend and improve lives, they will also save the global economy from the implications of a shrinking population. Workers able to stay healthy and remain active in their careers will, quite simply, reduce overall medical spending and lead to an expansion of tax revenues over time.

Today’s transformational technologies—more than perhaps any set of advances the world has ever seen—hold the potential to increase the wealth and the health of all persons in all countries, regardless of their age. Where only a few decades ago many observers saw science fiction, breakthrough research today is working to create previously unfathomable new realities.

You can participate in this process of science fiction becoming science fact in the pages of Patrick’s Transformational Technology Alert. Each month, Patrick profiles a new publicly traded company and shows you the part it plays in the technology revolution ahead. Click here to start a risk-free trial subscription to Transformational Technology Alert today.Sincerely,
Patrick Cox
Patrick Cox
Editor, Transformational Technology Alert

Mauldin Economics

Source: http://www.mauldineconomics.com/tech/tech-digest/peak-babies-not-oil