RM, it is certainly possible, but the last time the demographic argument was thrown at me was in '89 in Japan. of course, now no-one remembers that anymore...
but i wouldn't rule out anything at all...simply because the mania has obviously bounced back from every setback it has experienced, and as you say, it is a deeply ingrained psychology that's at work here.
btw, the biggest buyer of stock by far this decade was corporate America in the form of stock buybacks. this was largely done by going heavily into debt. contrary to conventional wisdom, households have been net sellers. so the liquidity may well dry up NOW with the recent seizing up of credit markets.
what you are proposing is essentially that the greater fools game is set to continue...to that i have to say, how can you expect the imbalances that have so ballooned in recent years to continue without reaching a natural limit? it takes $5,30 in additional credit for every dollar in GDP growth. the current account deficit is exploding. at some point, this extreme leverage will reach the breaking point...the pyramid game can only be kept going if ever more credit is created and ever more IOU's are printed out of thin air to support it.
i know J6P is not worrying about these things, but that's in the nature of things. he didn't worry in '73 either, and was up to his eyeballs in debt and mutual funds, just like now. when the bottom was reached, 56% lower, in '74, mutual fund was a dirty word. |
