Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Terry Whitman who wrote (3996)	6/5/2001 3:12:19 PM
From: Hawkmoon	Read Replies (2) \| Respond to of 33421

Terry, That's the Harry Dent theory of US demographics, that Japan has preceded us by 10 years. But you also have to take into account that Japan is a largely homogenous, xenophobic society, not particularly welcoming of permanent immigration. Thus, when they have have a drastic demographic shift, they have no safety valve to compensate against it. However, in the US, we have a tradition of encouraging immigration and we'll likely be able to successfully replace much of our aging workforce. They will provide the tax base necessary to continue to support an aging baby boomer population and maintain US tax revenues. But as you point out Japan has quite a demographic problem. While the US national debt has decreased over the past 10 years to 37% of GDP, Japan's has risen to 130% of their GDP (on a declining tax base). This will likely require monetization of the public debt. And since most Japanese have little in the way of public pension assistance, they have been squirreling away their savings in postal savings plans and JGBs. But a monetization of the Japan's debt will require a devaluation of their currency, and thus the value of Japanese savings. Something will clearly have to give in Japan's economy. And when it does, the US economy will likely reap a windfall from Japanese savers scrambling to seek a safe haven for their $12 Trillion in savings. Hawk