Hi KC:
>>1) I think the wealth transfer won't be as rapid or of such magnitude as you predict.<<
Point taken. The research paper that I cited estimates $41 trillion over 50 years, down from estimates of $100+ trillion pre-dot com meltdown. Projections over a 50 year time period can only be the roughest of estimates, but nevertheless, the key point is still valid - the US economy is operating with household balance sheets that are very deep, with unprecedentedly liquid financial markets, and a lot of money is going to change hands through inheritance.
>>I also don't think everyone is 'retiring' when they hit that magic age.<<
Bingo! This is why the so-called "Social Security Crisis" is entirely a work of political fiction, authored by those, primarily Democrats, who have something to gain by selling this fictional idea to the gullible electorate. "Retirement" did not exist in reality or as a concept until the 1930s, when it was invented by FDR as a means to get the old folks out of the workforce. What's so great about ceasing to be a productive member of society, anyway? We should push the concept of retirement back where it belongs, in the laps of the European Socialists who believe that Government should pay for everything for everybody, all the time.
>>It's possible your bubble has a shot but I'm not sold.<<
This is progress. Believe it. Congress and the Fed are feeding fiscal and monetary rocket fuel to the stock market. Inflationary pressures are totally absent, meaning low interest rates continue to the horizon. US final domestic demand is very strong (those Boomers again) and rising towards an inevitable late-decade crescendo. The manufacturing economy is turning (Minus 2MM souls. Oh well, that's capitalism for you). Telcomm and high tech are turning. The Valley is cooking up a whole new generation of must-have technologies. Google will be the most spectacular IPO in living memory (that's 12 to 24 months or so in the US). The Boomers are desperate for one more big stock market score. The third leg of the Great Bull will eclipse the first two. It's 1923, not 1933.
>>BTW your vision of the future post your bubble is likely the bleakest on the board :o)<<
Possibly. I am assigning a non-trivial probability to a full-blown Depression with enormous debt liquidation and economic hardship. You Canadians will be eating wood pulp. The wild cards in the US are immigration and China. Immigration because it may partly fill the yawning chasm in final domestic demand that will appear from 2009 through 2023, China because it may become the global economic growth engine that drags the West through this incredibly challenging period. |
