Authored by John Rubino via DollarCollapse.com,
There’s never been a generation as influential, for good or ill, as today’s Baby Boomers.
So our mass retirement over the next decade should, in theory, be a big deal.
One scenario has us selling our stocks and either spending the proceeds or moving them into less risky assets like bonds and cash. This reverses the past few decades’ upward pressure on stock prices and sends them down hard. At the same time, we downsize our living arrangements, swapping multi-story McMansions for smaller one-story homes conducive to aging in place. Large house prices, as a result, plunge.
Harry Dent is a well-known proponent of the demographics-as-destiny idea. Here’s his take:
Dent’s “demographic cliff” is both logical and ominous.
But apparently it’s not the mainstream view.
Yesterday’s Wall Street Journal ran a story on future inflation trends, and had this to say about retiring boomers:
The U.S., China and many large advanced economies now face a demographic squeeze that could contribute to inflation.
The larger the share of a country’s population that is working-age, the more the population tends to save, since workers in aggregate produce more than they consume. That restraint on demand tends to put downward pressure on prices. Dependents—children and retirees—have the reverse effect: They consume more than they produce.
As the U.S. population ages, the number of dependents grows more quickly than the number of people in the workforce, and inflation picks up, said Manoj Pradhan, founder of Talking Heads Macroeconomics, an independent macroeconomic research firm, and co-author of “The Great Demographic Reversal: Ageing Societies, Waning Inequality, and an Inflation Revival.”
Baby boomers wield disproportionate spending power, said Peter Berezin, chief global strategist at BCA Research, noting this generation holds a little more than half of all U.S. household wealth. “If you have a group that’s still spending but not producing you have an increase in consumption relative to production that’s more likely to give you an inflationary impulse.”
But with most baby boomers now retired, U.S. working-age population growth will slow to just 0.2% a year between 2020 and 2030, according to the United Nations, from 0.6% in the prior decade and 1.1% during the aughts. The pandemic boosted retirements by about 1.5 million, said Mr. Berezin. “At least for the next couple years, there will be this hit to the actual size of the labor force,” he said.
A paper by Mikael Juselius, a Bank of Finland economist, and Előd Takáts, of the Bank for International Settlements finds lengthening lifespans initially nudge inflation lower because they spur earners to save even more for their retirement. Eventually, though, a rising ratio of dependents to workers adds to inflationary pressures.
Hmmmm…the idea of an aging society being inflationary because of low saving rates seems to ignore the much-bigger forces now at work in the fiat currency world.
It’s more likely that the soaring cost of retiree healthcare would lead governments to run massive deficits and then lean on central banks to finance this debt tsunami with a commensurate amount of newly created currency. THAT would be inflationary.
And that’s exactly what is happening out there right now. So yes, Boomer financial behavior might eventually turn deflationary. But governments’ response to this change will be wildly inflationary. Which brings us back to the sound money community’s assumption that massive debt begets unrestrained currency creation begets financial instability.
Put another way, we’re screwed however it plays out.
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That’s why they have instituted genocide with the kill shot. They are not stupid. Evil, yes.
the boomers made this country great.i am a boomer. we worked our asses off to doit. only to let our kids squander it.
How does that help? I can see why they’d want to kill old geezers, but isn’t the emphasis on more babies to cultivate into wage slaves?
You may be right, but if so, these new gods have no idea how to get chardonnay, let alone a simple pencil.
Theirs will be a Pyrrhic victory.
Anyway, I think I want to go back to the farm now, and bring along enough technology and know-how to try to slip past the disruptions that have already begun and will continue through the next few decades.
It has been a long time since I heard the name Harry Dent.
I though harry dent was a bad guy from Batman.
Now I just think he is a bad guy.
They ruined our countries with free love, no fiscal responsibility and evermore government intrusion into our lives. Now they want to cash out on their real estate holdings, except they never saved anything, so they sign up for reverse mortgages, ensuring their offspring inherit no generational wealth, can’t afford to buy a house of their own and are left holding the bag to pay for the myriad of government programs and debt their parents voted for.
Meh, partially true. It was the “Greatest Generation” that went off the gold standard and initiated deficit spending for the war in Vietnam and the Great Society. We boomers were grunts in the war. Most of us have worked hard and have something to pass on to our children and grandchildren. The collapse you are seeing today is a result of massive overpopulation, multiculturalism and the end of Pax Americana. It will get much worse. If you are smart, you will do your homework, learn some valuable skills and stop blaming other generations.
I hear boomer anymore and I think they are participants in this debacle whether they know it or not. They think they’re different and better, times are different etc. they are just showing their ignorance. How tiresome. There are so many more interesting things to discuss like a GLOBAL PLANDEMIC, emf, Mind control, etc.
That was pretty interesting.
I get the impression that the guy has wildly divergent goals/values than I have, or he has no clue about “what comes next.”
In this short clip, he basically talks about how to jam your foot down on the gas pedal, and what happens when the tank runs dry. Baby Booms, Peak Productivity, Peak Purchasing, Urbanization, Moving from Rural to City, Industrialization, Stock Market Increases, Daycare so Women-can-have-babies-but-not-take-care-of-them-but-still-keep-working, etc.
Then, Demographic Collapse, Decreased Consumption, Old Folks, Tax Shortfalls, Stock Market Sell-Offs, Consumer Demand Collapse, Real Estate Collapse, Deflation, Product Shortages, Deflation, Medical Scarcity, Deflation, Food Shortages, etc.
Nothing about how to make anything sustainable (not the dirty-word environmentalist “sustainable” but just how to best manage things on an even keel “sustainable). Get them people off the farms, and them womans out the kitchen, and everyone into a factory makin’ and buy’n stuff!!!! Your life depends on it!!
What would happen if we took away “corporate person-hood” so that everyone was actually liable for their actions, and obscene wealth creation was limited. What if we let people stay in the country and build small businesses for their local area. What if people lived, worked, and died in their own backyards, and did not (and could not) become cosmopolitan diasporan internationalists who suck the wealth from disparate regions, leaving behind pollution, broken families, perverted culture, and corrupted education/values?
Are we doomed to a boom/bust cycle? Are we always going to either live like Locusts or live under or in the aftermath of those who do? Is he telling us that time is short so get ours now, and screw everyone else?
What exactly should we take away from this?
Really, what comes next? Do we start making more babies in the dystopian ruins of a failed city-based economy? Could we, with rampant crime, no food, and no water? Do we go back to the farms, and raise large families in ignorance, poverty, and technology from the early 1800’s? Is that how we reset this cycle? So that in 100 years, our posterity can have their own economic spike on the hamster wheel?
Will we be forced to go back to the caves like the neanderthals were? Or do we split into some form of Eloi and Morgoths – some enjoying an idyllic yet false bliss, while others toil in unrelenting slavery for their miserable lives?
My question, which seems to be repeated no matter the subject, always boils down to:
WTF?!?
There’s never been a generation as influential, for good or ill, as today’s Baby Boomers.
BULLSHIT ! The “Greatest Generation” and their generation before that fucked this country and had the greatest influence….all for bad .
The generation before the greatest allowed the formation of the Fed and let FDR create SI. Both of those programs fucked us royally .Then on top of it they allowed FDR to steal from them in the gold confiscation EO .
Then the “Greatest Generation ” allowed the Communists to infiltrate the Universities, allowed Johnson to create the Great Society ( which destroyed families both black and white) and allowed Progressivism to take hold of America in the name of Social Justice . They never listened to Eisenhower’s words about the Military/Industrial complex…they were to engrossed in the expanding Middle Class dream .