What happens stock markets and real estate if consumption growth hits natural limits and stops?

SPC100

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Given finite resources on Earth, (assuming inter planetary doesn't work out), doesn't eternel growth have to stop at some stage?

It seems, that we think, consumers will buy more and more forever, and there will be more consumers forever. OK, we accept we can have temporary recessions, but ultimately growth will continue.

There appears to be a small but growing trend towards sustainble, reduced consumption and production, e.g. recycling, organic farms, investing in renewable energy that may not ROI.

How much runway do we have left for eternal growth until we hit natural, societal, legally enforced limits? 10,100,1000 years? Is this something I need to consider over my investment lifetime?

What will happen real estate and stock market if people think growth will have to stop at some stage, or if it does stop?
 

Allpartied

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If societies reach the stage where everyone has all their needs met, every day, for the whole of their life, healthcare, education, housing, leisure, transport, energy, nourishment and luxuries, what would you be investing for?
Many people have reached that stage and they are, generally, the ones who come on this site and ask what to do with the extra 150k they get every year. They obviously don't need it and won't need the investment growth it makes.
Nike and Reebok destroy millions of tons of goods every year, because they don't sell at the dictated price. Supermarkets throw away food, clothes and other usable materials for the same reason.
If growth stops and it has stopped for many economies, ( the growth is fictitious produced by service industries that just manipulate figures on a screen), then all will be ok, if the distribution of wealth is equitable. The alternative is a tiny portion of the population hoarding wealth, while millions go needy. The history of mankind generally results in the tumbrels trundling up the road, at that point .
 

PGF2016

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Is this something I need to consider over my investment lifetime?
Not a chance. I would guess this is hundreds of years off. Most of the third world or developing nations will want similar material possessions to the developed world.
 

almostthere

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I think that there will always be the speculators and gamblers to feed the gambling need. Whether there are enough gamblers out there is another thing.

I believe that many people have cut back on their frivolous spending, reusing products rather than dumping them etc. They don't need as much stuff anymore.

Those with money will treat themselves to more upmarket products, hotels, flights

I think that the way people spend their money will change and as a result some businesses will fall by the wayside but others will step in to take their place.

Those with money will spend it on "comfort".

I have a family member who lives in China. They can't get enough of Western products and brands.
 

Purple

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The history of mankind generally results in the tumbrels trundling up the road, at that point .
Yep; to much concentration of wealth in Capital = Revolution, to much concentrated of wealth in Labour = Recession due to lack of investment.

A 50:50 split and things generally go okay. Anything more than a 10 percent swing in either direction and things go bad.

Will we ever all be relatively wealthy? Possibly, but as countries get richer their birth rate drops so we'll face slowing growth and an ageing global population. That'll bring a whole new set of problems.
 

Allpartied

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Not a chance. I would guess this is hundreds of years off. Most of the third world or developing nations will want similar material possessions to the developed world.

The problem might be that a full scale expansion of energy use, to the extent that the entire world is using the same amount of resources as the richest members of western society, is unattainable. It might not be fair, but the laws of physics are immutable, and the resources of the planet are finite. It's possible that innovation, clean energy, some form of cold fusion or automation will produce a solution.
But if you are hoping for investment returns from billions of people, across the world, using more and more resources, while we continue to use just as much, there will be a reckoning. At that stage your share portfolio won't be much use to you or your grandchildren.
 

Purple

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The problem might be that a full scale expansion of energy use, to the extent that the entire world is using the same amount of resources as the richest members of western society is unattainable. It might not be fair, but the laws of physics are immutable, and the resources of the planet are finite. It's possible that innovation, clean energy, some form of cold fusion or automation will produce a solution.
But if you are hoping for investment returns from billions of people, across the world, using more and more resources, while we continue to use just as much, there will be a reckoning. At that stage your share portfolio won't be much use to you or your grandchildren.
Clean Nuclear could be in place now. It is political will rather than technical issues which have stopped it. There is absolutely no need to generate power using fossil fuels. New battery technology coming within the next decade is at least 3 times more efficient than what is currently in use.

There is absolutely no reason why this planet cannot support 10 billion people (the projected number at which the population will top out) in a sustainable way while they live comfortable lives of a standard similar to ours. We just have to behave differently. To suggest otherwise is to ignore what is easily attainable and surrender to a dystopian vision of the future.
 
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joe sod

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I believe that many people have cut back on their frivolous spending, reusing products rather than dumping them etc. They don't need as much stuff anymore.
Actually that's not what's happened, people have switched their spending from holidays , hospitality and experiences to doing up their houses, more diy etc etc, that's why the price of building materials is going through the roof , it's a world wide phenomenon. When the Suez canal was blocked last month it was reported that trade in stuff had increased in the last year, more tonnage was being shipped.

If you look around the country you will see far more litter and dumping , a lot of builders waste, cabinets and beds dumped, which points to the above. It also shows that while the narrative is that people are becoming more environmental the reality is different. Just look at the litter and dumping everywhere.

As regards the end of growth narrative , I think the ability to extract more virgin natural resources relatively cheaply is ending, therefore the price of commodities is increasing now leading to inflation eventually. Actually the most critical and shortage of natural resources affects the green manufacturing the most , electric cars etc require lots of copper, lithium and rare earth metals. The high tech industry requires metals that are pure and not recycled due to the exacting demands of their critical components. Therefore looks like the price of everything is going to increase a lot , oh and the government's also need more money to pay for the pandemic so also more taxes
 

moneymakeover

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I would ask two questions:
Is the world's population going up?
Are governments still printing money?

And if so the stock markets will keep going up

I would also note the reason for deflation/low interest rates/surplus money in past twenty years is due to efficiencies in technology and these will continue. Probably leading to more deflation and unemployment.
 

Purple

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I would also note the reason for deflation/low interest rates/surplus money in past twenty years is due to efficiencies in technology
I think there's more to it than that. Inflation happens when labour resources become scarce because of increased demand but there's been a decoupling of demand and production. That's due to technology but it's mainly due to so much production moving to Southeast Asia. The injection of vast amounts of liquidity may also have contributed to those very low levels of inflation.
 
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