Ive been hearing a lot about the demographic cliff lately and its potential effects on the global economy. The term, made popular by investment advisor Harry Dent in a book by the same name, refers to the consequences of aging populations leaving the workforce and spending less money.

Dent contends that the United States reached its demographic peak spending between 2003 and 2007 and is headed for the demographic cliff. Germany, England and Switzerland are also headed toward the cliff. And China will be the first emerging market to fall off the cliff in a few decades, he noted.

Theres no denying the world is getting older. And there is rampant speculation that were headed for a global financial downturn that may be worse than the recession were still recovering from. It all comes down to an aging population. Dent contends that when the ones who are dying start to outweigh the ones who are buying, the market changes.

This theme was echoed in a recent email from ICIS promoting a study theyre about to launch: How to survive and prosper in todays chaotic petrochemical markets: 5 Critical Questions every company and investor needs to answer. The prospectus states, Globally, aging populations are creating a demographic deficit in spending. Petrochemical companies and investors in the industry have, therefore, come to a fork in the road. It is no longer possible to believe in the concept of a quick return to trend following the financial crisis.

As Paul Hodges warned in an October blog posting on the ICIS site, We have long passed the point of no return in terms of the impact on demand patterns and economic growth. Companies and investors simply must revisit their strategies to take account of how these changes will impact them.

If these predictions hold true, we may be headed for another financial roller-coaster ride in the next few years. Hang on tight!