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Baby boomers' financial illusion

Saturday, January 17, 2009, 6:15 PM

In Crash Course Chapter 14 - Assets and Demographics I make these statements:

The boomers are the wealthiest generation ever, they hold nearly all of the assets, and they will need to dispose of those assets to fund their retirements.

In order to fund their retirement dreams, boomers are going to have to sell off their assets.
Who exactly are the boomers planning on selling their assets to? Even if [the smaller following] generation somehow could afford to buy all these assets, there simply aren’t enough people in this generation to buy them.

Figure 1

Boomers_CC_Chart_1-17-2009.jpg

Figure 1: the Yellow and Red bars represent the US population broken out into age bands of five year increments for women and men, respectively. The green circle draws attention to a “hole” that exists in the population demographics with the Boomers represented as the “bulge” just a little higher up the chart from the hole. In red and yellow text to the right we see the six main sources of wealth for boomers (not ranked). Of the six, the five in red have to be sold in order to extract the wealth contained within them.

Now, within a single decade, both stocks and then homes have failed boomers as investment vehicles. Prior to these setbacks, boomers had only known a world dominated by constant inflation and a future that was always larger. The retirement dreams of an entire generation were built upon these two conditions remaining true.

But now we have ample evidence that there was some sort of a flaw in these plans. As I wrote recently, much of this inflation and growth was an illusion based on an unsustainable expansion of debt that was destined to stop. Why? Because it’s not possible to consume beyond your means forever. Sooner or later the bills must be paid.

At this point I am wondering if widespread retirement was a two-generation long experiment, a happy artifact of an oil-driven bonanza of growth that will not soon be replicated. Retirement was a foreign concept prior to 1930 and may well prove to become an exotic destination in the future.

The next illusion to pop, if it hasn’t already for many, is the notion that a substantially larger pool of boomers can sell their assets to a significantly smaller group of younger folks for anything close to their full asking price.

Remember, markets have a very simple rule:

Sellers_and_buyers.jpg

Well, if boomers outnumber the generation behind them, then it stands to reason that, sooner or later, there will be more sellers than buyers.

So while I think it’s reasonable to discount the value of any potential future Social Security payments downward, I also think the total value of boomer assets have to be discounted as well.

And this brings us to the most likely source of future value: community.

If our monetary assets stand a chance of failing us, then it’s time for us to plan on obtaining what we need and want by other methods.

In this, there’s a bright silver lining, because lives filled with deeper connections and personal interdependencies can be just what the doctor ordered.

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40 Comments

Mike Pilat's picture
Mike Pilat
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Re: Baby boomer’s financial illusion

This is an excellent point and an argument that needs to be considered up against the hyperinflationary theories many of us have.

If the boomers are selling like mad and putting doward pressure on prices and the Fed is printing money to keep the prices inflated, the real question is how will the battle play out? I think the Fed might "prevail" (if you can use that term for hyperinflation) in the very short term, but sooner or later, America is going to have to take stock of its real capital (i.e. not FRNs). Suddenly, I think we're going to find that a lot of boomers are bringing a lot of houses, cars, computers, dryers, etc. to the market and we're all going to have to take stock of what real capital America has. This is will also point out some of the glaring luxuries (i.e.non-capital) that we have enjoyed these past years as most people start to realize that paying for a sports car is less important than heating their homes. 

I'm still trying to work through how the reflation of the Fed will play out with the deflationary pressures coming from the boomers. I like dealing with variables and puzzles, but attempting to ponder all of this just brings so many variables into play that it's very hard to call. There's energy scarcity, other resource scarcity, boomers, the Fed, wars, political instabilities, and soaring population. I believe that energy/resources are so fundamental to all of this that they will underpin everything we are going to witness. But even given that assumption, politics can have immense impacts on the future course. Energy scarcity can be studiend in a straighforward manner, but for me, predicting political actions and mass movements can be difficult because sometimes the smallest sparks can ignite formerly unknown powder kegs.

Any comments on how the boomer deflation might tie into the desire to print?

Mike

 

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Re: Baby boomer’s financial illusion
Mike Pilat wrote:

. . .

If the boomers are selling like mad and putting doward pressure on prices and the Fed is printing money to keep the prices inflated, the real question is how will the battle play out?

As a couple on the leading edge of the Baby Boomers (my wife and I were born in 1944), we know how we're going to play this out. We're not going to try to sell anything. Instead, we're going to try to stay in our house until we "shuffle off this mortal coil" and then we'll leave it all to our three kids and let them figure out what to do next! Wink

Mike Pilat wrote:

Any comments on how the boomer deflation might tie into the desire to print?

Mike 

Excellent question, Mike. I will also be interested in Chris' response.

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Re: Baby boomer’s financial illusion

Keep in mind that more boomers are going to defer retirement after seeing their 401K crash; others are trying to seek employment at unfortunate ages and with no jobs available ("paper or plastic?").

 

That may influence their desire to disinvest.

 

SG

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Re: Baby boomer’s financial illusion
capesurvivor wrote:

Keep in mind that more boomers are going to defer retirement after seeing their 401K crash; others are trying to seek employment at unfortunate ages and with no jobs available ("paper or plastic?").

 

That may influence their desire to disinvest.

 

SG

The unfortunate thing for those boomers looking to defer retirement or seeking employment is that, if they are currently employed, they may be laid off or, if already unemployed, may not be able to find work as they will be facing ferocious competition from the younger generations. Makes me glad that I'm already retired as it isn't pretty out there! Frown

[Edit at 1728]

Added this link to show example of my comments above:

http://www.cnn.com/2009/LIVING/worklife/01/15/job.mob/index.html?iref=mp...

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Re: Baby boomer’s financial illusion
cmartenson wrote:

Well, if boomers outnumber the generation behind them then it stands to reason that, sooner or later, there will be more sellers than buyers.

Chris, I'm not sure I understand this.  How could baby boomers outnumber the generation behind them?  Total fertility rate for the baby boomers is projected to settle around 2.1 (approximately equal to, or just slightly below, the replacement rate). 

Furthermore, we can assume that the majority of baby boomers will have borne all of their children before the age of 45.  This means that by the time the boomers retire, virtually all of the offspring borne by the retiring portion of the boomer generation will have matured, and be available to buy assets.  Therefore, the generation behind the baby boom ought to be roughly the same size as it.

By 2030, the baby boomers will be between the ages of 66 - 84, and there will be 3 retired baby boomers for every 10 persons of working age, meaning that each individual baby boomer will have 3.33 people of working age available to buy their assets.

Leaving aside the debt load of the younger generation, how can you say that there are fewer buyers than sellers?  Isn't it that there will be not as many more buyers than sellers, as there were in previous generations?

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Re: Baby boomer’s financial illusion

jrf29,

Does this link help?

http://geography.about.com/od/populationgeography/a/babyboom.htm

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Re: Baby boomer’s financial illusion

It doesn't seem to.  Thank you, though.

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Re: Baby boomer’s financial illusion

How about this:

http://www.novelguide.com/a/discover/eoa_01/eoa_01_00042.html

What I get from both the previous link and this one is that the fertility rate dropped significantly after the baby boom generation was born. Hence, Chris' chart showing lower population right behind the baby boomers.

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Re: Baby boomer’s financial illusion

Hi Sam,

You're looking at lower population by age group.  The fertility rate of the boomer generation did drop significantly from the generation which preceeded it, (to about 2.1, or roughly replacement rate).  However it was never below replacement rate.  If you look on the chart, you can see that each bar represents only a 4 year age group.

The "cliff" which you see behind the boomer generation bars represents the fact that while the average boomer mother will bear 2.1 offspring during her breeding life, these two children may be born anytime during a 25 year window.  If you add up all the bars after the boomer generation which will be of working age by the time a partcular segment of the boomers retire, you will see that it is larger than the boomer generation itself.  

Furthermore, even though the 2.1 children had by the average boomer mother may be born anywhere within a 25 year window, since they will almost all be born before the mother is 45 years of age, all of the boomer's children will have matured by the the time the boomers retire.  The end result is that in 2030, by which time all of the boomers will have retired, there will be 3 retired boomers for every 10 persons of working age, and at least 1 adult boomer child for each boomer retiring at any given moment.

That gap which you see in the chart is not a drop in population.  It is a drop in population growth rate.  Make no mistake, this drop in growth rate is of great significance to the retirement plans of the boomers. however I don't see how it can be strictly accurate to say that the boomers outnumber the generation which follows them.  Each boomer will have 3.33 persons of working age to which they will sell their assets.  Certainly less than in previous generations (and this is very important), but there will still be more buyers than sellers. 

The boomers will retire in a great wave, but each boomer will not sell all of their assets immediately upon retirement.  They will sell their assets slowly over a period of 30 years (~55 years total), during which time the total population will continue to grow.  And the people buying the assets will not buy them all at once upon reaching working age, but slowly over their working lives.  While this may still be bad news for the homebuilding industry, for example, what I don't understand is how this could mean that there would be physically more sellers than buyers.  There should be about the same number, it seems.

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Re: Baby boomer’s financial illusion

jrf29,

I defer to your well thought out description as I now understand what you were trying to get across. Smile

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Re: Baby boomer’s financial illusion

 

jrf29 wrote:

By 2030, the baby boomers will be between the ages of 66 - 84, and
there will be 3 retired baby boomers for every 10 persons of working
age, meaning that each individual baby boomer will have 3.33 people of
working age available to buy their assets.

Leaving aside the debt load of the younger generation, how can you say that there are fewer buyers than sellers?  Isn't what you mean to say that there will be not as many more buyers than sellers, as there were in previous generations?

The above statement makes a lot of sense to me - but doesn't leave me feeling any more comfortable about my retirement prospects (I was born in 1957) since we really cannot "leave aside the debt load of the younger generation" (nor their justifiable disenchantment with those of us in the boomer generation coupled with the growing influence they will have in politics as time moves on).

While there can be some sparring with specific details of statements that have been made - the message remains the same (at least from my point of view).

 

 

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Re: Baby boomer’s financial illusion

P.S.  Also, a significant part of the assets of each boomer will never be sold, but will simply be inherited by their children.  This probably includes many houses, washing machines, and snowblowers.  Their children, it seems, would receive these assets just in time to give them to their children, so that they will not need to buy a snowblower upon moving into a house. 

This certainly means that fewer snowblowers will be purchased new, but I don't think that would depress the price of those snowblowers which are sold on the open market, and must still be bought by boomer grandchildren whose grandparents did not leave them a snowblower in their will

I have no idea what this percentage of boomer assets is which will never see a market, but it must be significant. It seems this might take at least a small amount of price pressure off of those boomer assets which are sold on the market. 

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Re: Baby boomer’s financial illusion
drbarbour wrote:

...this doesn't leave me feeling any more comfortable about my retirement prospects....can't leave aside the debt load of the younger generation.

I agree.  It also doesn't make me feel like going into the snowblower manufacturing industry before I retire...

 

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Re: Baby boomer’s financial illusion

To say the Boomers outnumber the age groups right after them, not the next generation, seems more accurate, depending how you define a generation.  There will still be more workers than retirees, or buyers than sellers, but as CM pointed out in the crash Course that ratio used to be a lot higher than 3:1.  The other factor that seems important is that only certain age groups, not all of them, will  be interested in buying the Boomer's assets because it depends on what phase of life you're in. For example, people like me in Gen X who have growing families and established professions who are ready to upgrade their homes may be most likely to buy Boomer's homes as the Boomers downsize.  But there are fewer folks in my generation, we're broke, and Gen Y and Z probably are not ready yet even if they had money.  I don't have data to back this up but it seems logical.

Tom 

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Re: Baby boomer’s financial illusion
woodman wrote:

 only certain age groups, not all of them, will  be interested in buying the Boomer's assets

  That certainly seems like a logical concern. But since each boomer will be selling off their assets gradually over a period of about thirty years, and each member of the receiving generation (which will be maturing over this same time frame) will buy over the course of their adult lives (albeit with peaks at certain times), it seems as though there is enough overlap to avoid at least a catastrophic crunch.  Not the most profitable ratio of buyers to sellers, and certainly less profitable than in generations past.  I just don't see how there could come a point where there will be more boomers selling houses than members of several younger generations waiting to buy one.  I'm not saying it isn't logical that prices will go down, or that the rate of production of new assets won't decrease, I just don't understand how there could be fewer buyers than sellers.

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Re: Baby boomer’s financial illusion
jrf29 wrote:

P.S.  Also, a significant part of the assets of each boomer will never be sold, but will simply be inherited by their children.  This probably includes many houses, washing machines, and snowblowers.  Their children, it seems, would receive these assets just in time to give them to their children, so that they will not need to buy a snowblower upon moving into a house. 

This is an excellent point, and if I can play a Gerald Celente for a minute, I think that this will also be a trend for the future. I think that we are going to see more and more goods passed down through generations as consumerism goes through its death throes. I think it's pretty clear to say that one of the impacts of the crisis is that families will be forced to be a little more tightly knit and share their possessions more fully. It is already being reported that college grads moving back in with their parents are rapidly rising during this time frame. 

I think this transference of capital to the next generation also brings the possiblility of further destroying the consumerist mentality. As people come to view goods as durable and reparable, there will be less of an urge to buy *crap* and throw it out when it breaks. The default mindset could shift and become more quality focused. If Wal-Mart doesn't make some big adjustments to its business model, it could be facing some strong headwinds.

Mike

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Re: Baby boomer’s financial illusion

Someone needs to throw a "real wages multipllier" into this argument, as Americans have been grossly overpaid relative to a large percentage of the world's workers; that ratio is changing. I suppose this is where the deflation/inflation argument would be seen to be a determinant, but my gut says the net effect of any paper wars will still be the continued decrease in the average American's purchasing power. Look at the auto industry employees for example; exact wages aside, their wages are much further down the spectrum toward Walmart employees' wages; any serious inflation would turn what were some of the best paid blue collar workers in America, for several decades, into working peasants... Working peasants buy food, not stocks and bonds...

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Re: Baby boomer’s financial illusion

Mike, I really hope so.

My mom passed away last year and pretty much most of her furniture was split amongst us.  The house, however, had to be sold. We fixed it up nicely and sold it at $20,000 less than the other houses.  It sold in -1 day (sold to the people that came out immediately to look at it before the open house).

I'm not sure families will inherit and live in a home because jobs will be (and are) scattered all over.  Families currently don't live in the same town so they would have to find a new job or never move out once they graduate from HS or college.

Now that I think about it, I guess that will be the trend - you don't move out and just inherit the house.  You guys already pointed that one out.

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Re: Baby boomer’s financial illusion
Nonzeroone wrote:

Working peasants buy food, not stocks and bonds...

 

Nor the goods they manufacture.

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Re: Baby boomer’s financial illusion
Mike Pilat wrote:

As people come to view goods as durable and reparable, there will be less of an urge to buy *crap* and throw it out when it breaks.

Hopefully.  It's distressing to think that my 1952 Western Electric desk telephone, which has been around longer than I have, has lasted longer than umpteen cheap plastic telephones (with worse sound quality) which would have to have been thrown away by now.

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Re: Baby boomer’s financial illusion

jrf29 wrote:

 

"Hopefully.  It's distressing to think that my 1952 rotary dial desk telephone has lasted longer than umpteen plastic telephones which would have to have been thrown away by now.

 

Gosh, isn't that the truth! I am so over planned obsolescence!

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Re: Baby boomer’s financial illusion

Something in this thread made me think of this and now my curiosity has gotten the better of me. I really hopes the ole USA stays in the configuration of states that is has been in for the last many generations, but if the US changes how might things go down? If the US becomes multiple countries as has been predicted by Igor Panarin what might we expect? We have already looked to the USSR beak up as an example. I'm curious how certain details worked out when the USSR broke up. What happened to their debt? Did they pay it? Was it up to the left over nation to pay it and the break away nations had no debt to pay? What decided where the military assets went? Surely the nukes went to whatever country they resided in, but what about the naval forces, aircraft, and other military assets? What became of them and how might they have been aquired by the breakaway nations?

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Re: Baby boomer’s financial illusion

dickey45,

To your point:

"Fast disappearing is an era when workers on assembly lines can afford to buy the vehicles they make."

http://www.truthout.org/123008LA

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Re: Baby boomer’s financial illusion

To all: Sometimes, I find it easier to understand and analyze this entire thing by ignoring paper money, which today really seems to be an artifact of the 20th Century and the Big Oil era. So if you actually ignore the paper and look at the resources, sometimes it is easier to understand the direction we are heading in.

BN37: You raise some interesting questions. I think there are lessons to be learned from the Soviet Union and Dmitry Orlov has been very insightful into this, but I think the American situation will certainly be unique, even if there are some similar experiences. 

As much as I stand by the ideals that formed this nation, I acknowledge that at this point, fracturing into smaller, less powerful regions might actually be very helpful for America. I greatly like our Constitution and we have many historical things to be proud of (and at least as many of which to be ashamed) but massive empires and centralized authority are "luxuries" of prosperity. The cornucopian abundance is over.

Personally, I think one unique aspect of the "American Experience" as we look forward is going to be the way we've set up our living situations. We have huge high density cities and also some very rural land. But the real unique part comes in the suburbs and how they are going to deal with the crisis. Unfortunately, the suburbs combine the worst aspects of cities and rural areas: they don't quite have access to city infrastructure and proximity and at the same time, they don't take advantage of a small bit of property the way rural areas would.

I can't remember who, but I read a prediction that suburbs could relocalize themselves potentially with each person have a small garden and with the community becoming more self sufficient. I find this to be a little idealistic, but it is an interesting thought of an alternative viewpoint.

As far as the fracturing itself, I can almost see the big megalopolis of the mid atlantic / northeast coast becoming its own city-state. The real catch is that the population density is so high relative to the arable land and resources right on the coast. In a severe crisis, there is going to be a lot of tension between the land and farms of rural areas and the metro areas that are so far removed from them.

Mike

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Re: Baby boomer’s financial illusion

Mike said:

"As far as the fracturing itself, I can almost see the big megalopolis of the mid atlantic / northeast coast becoming its own city-state. The real catch is that the population density is so high relative to the arable land and resources right on the coast. In a severe crisis, there is going to be a lot of tension between the land and farms of rural areas and the metro areas that are so far removed from them."

Mike,

Do you expect that "severe crisis?" Do you think the people in that "megalopolis," who are probably mostly "service" workers who produce little or nothing of use in a a crisis scenario, expect such a crisis?

Are those the exact kind of people that Chris and You All are trying to inform?

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Re: Baby boomer’s financial illusion

Adjusting Chris' graph for "effective population"; what they will be able to purchase:

Real Wage Adjustement to Population Purchasing Power

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Re: Baby boomer’s financial illusion

The world is bigger then the US

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Re: Baby boomer’s financial illusion

I agree with Marko... remember Chapter 18?  70Million new people every year all wanting to live in shiny cities?  They are going to buy my assets.   For the US, immigration legal and illegal will also help provided they are properly acultured to the American dream.    It is absolutely essential that everyone else want what I have so I can sell it to them.

 

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Re: Baby boomers' financial illusion

CNN.Com is inviting submissions for "An Open Letter to the President Elect." I just found this and read today's letter. Do any of the forum members want to present "The Crash Course" along with more of the Martenson view?

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Re: Baby boomers' financial illusion

He may know all about it.

Scientist tell Obama he has 4 years to save the world.

 http://www.guardian.co.uk/environment/2009/jan/18/jim-hansen-obama

 

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Re: Baby boomers' financial illusion

Mike said:

"Sometimes, I find it easier to understand and analyze this entire thing by ignoring paper money, which today really seems to be an artifact of the 20th Century and the Big Oil era. So if you actually ignore the paper and look at the resources, sometimes it is easier to understand the direction we are heading in."

 Mike,

Your suggestion is one that my instinct has been attempting to persuade my mathematician to do for a long time. However I don't make much progress toward any better an understanding due to the collage of random facts below--which are constantly at war in my head:

  • America just sacked the world and used that money to build a whole lot of houses (those are real resources, they are not going anywhere);
  • Energy is progress and GDP;
  • America has been consuming petroleum resources at a per capita rate that, when considered within the context of a quickly developing world (China, India, Your Favorite,...) is no longer sustainable, and will not be tolerated;
  • There ain't no quick fix for the per-capita petroleum use adjustments that seem inevitable (barring disruptive technologies that render that use irrelevant);
  • Who knows what the truth is about oil reserves?
  • Who can believe anything anyone in Washington or on Wall Street says?
  • If paper money (our primary resource to date) were to disappear, what are America's resources?

Just some things that keep me perpetually undecided and self-doubting...

Lee

 

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Re: Baby boomers' financial illusion

Lee: I'm not saying paper money completely doesn't matter today, but I am just pointing out, that on a fundamental level, it is NOT wealth.

I'm am just about to finish reading Kenneth Deffeyes' Beyond Oil: The View From Hubbert's Peak. One graph that he shows in it is that per capita petroleum consumption in America peaked a long time ago. Frankly, I kind of wish we had a per capita FRN peak sometime soon...there's a lot of money out there, but I know middle class incomes have gone just about nowhere since the dot com bust.

It is very difficult to believe or analyze all of the statements coming from Wall Street and the politicians and the Saudis. But I've read the Matt Simmons' Twilight In The Desert book and the one take home point I got from it was that Saudi oil is going to soon start getting a lot more expensive, i.e. harder to extract.

And that's just the point. The pain will start, not necessarily as oil production starts to decline, but absolutely anytime oil becomes more difficult to extract. If we have to use more and more resources to just barely increase our production (and temporarily avoid the dread peak point) we will basically be devoting more of the economy to energy and a lot less of it to Big Macs and Britney Spears.

Again on a fundamental note: Paper FRNs only matter to the real economy if you burn them as fuel, right? And word has it that they are less energy dense than hydrocarbons, and oh, by the way they are filled with Arsenic and other toxins that make soot and CO2 look healthy.

Mike

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Re: Baby boomers' financial illusion

Mike said:

"Lee: I'm not saying paper money completely doesn't matter today, but I am just pointing out, that on a fundamental level, it is NOT wealth."

 Yeah, I understand you there. What I think I'm proposing is that, the U.S. dollar, for whatever of the Usual Suspect reasons, has acted as a de facto resource even though we conjur them from thin air. When I say "if paper money were to disappear," what I mean is if it were generally recognized that it has been the primary resource of the U.S. for quite some time and that it really has no value, what then? What are our real resources? Would they sustain us?

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Re: Baby boomers' financial illusion

Yeah, you raise a good point and touch on the fact that the dollar has basically been a political resource for many of our "leaders" over the years. It certainly is an important tool we use to maintain our empire overseas.

The de facto nature of it as a resource reminds us that we have a faith based currency. The father of a friend of mine is a Ghanian economist working for the World Bank. My friend has challenged him about the bailouts and apparently the father says that our system "runs on euphoria" (i.e. faith). And he points out that we must keep the euphoria going at all costs and that is why we are bailing out.

Sound familiar? Sound like the status quo? Who thinks the new election "at this defining moment in history" (blah blah blah) is going to bring any real change?

Change will only come when the People make it impossible for our lawmakers to keep the status quo. We're not there yet, unfortunately.

scepticus's picture
scepticus
Status: Silver Member (Offline)
Joined: Jan 16 2009
Posts: 129
Re: Baby boomers' financial illusion

Hi there, sorry to hijack the thread but the issues discussed here seem in line with the questions I asked in the General Questions forum, but have yet to receive a satisfactory answer for.

I stated in that forum that world population is predicted to begin falling by 2050, and the population of the devloped world to begin falling well before that. From this, we can take it as read that growth rates are already falling sharply.

Falling growth rate implies an aging population, for the rest of the century, at least. For at least part of this century, it also implies a falling population.

Regarding the boomer asset issues outlined above, it seems to me that this means we'll be in a state of permanent wealth overhang as descibed above for many, many decades - this is not a transitory phenomenon.What does this mean for long term asset price expectations, especially once it becomes common knowledge?

And even more fundamentally,what is long term ageing, following by sustained population contraction in the developed world going to do to interst rates? My current understanding is that a long term -ve population growth will see a negative return on capital. Even a long term static population is likely to result in zero, or very very low return on capital. Extrapolating from this, one can say that capitalism requires a return on capital, otherwise it will cease to exist and give way to some other world system. So is capitalism doomed?

 Am I being naive or  missing some kind of crucial variable here?

 

 

 

 

 

 

EndGamePlayer's picture
EndGamePlayer
Status: Platinum Member (Offline)
Joined: Sep 2 2008
Posts: 546
Re: Baby boomers' financial illusion

I'll throw a monkey wrench in all this -

I thought the housing decline started when King Geo stopped immigrants from crossing the border. . . which was offseting the "negative growth factor" caused by birth control.

California got hit first - and the hardest... . butnot the home state of Tx.

dickey45's picture
dickey45
Status: Bronze Member (Offline)
Joined: Oct 12 2008
Posts: 77
Re: Baby boomers' financial illusion

Yeah, I was going to say the same thing about illegal border crossing increasing our population.  Some are deciding to go back so we could see (possibly) a huge US population decrease.  I mean how did we go from 250M to 350M in, what, 20-30 years.  That is entirely huge.

scepticus's picture
scepticus
Status: Silver Member (Offline)
Joined: Jan 16 2009
Posts: 129
Re: Baby boomers' financial illusion

I think many countries currently relying on immigrants to make up the numbers could be in for major contraction if they start leaving and going home.Particularly the US, UK and germany.

Longer term, bad economic times will lead to lowered birth rates, which will simply hasten the point at which overall populations begin declining.

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Baby boomers' financial illusion

My thanks goes to Congress Circa 1960s for the loophole they signed into law. I don't recall where that is on the video, or where the legal immigration numbers out number the illigal, but I do recall the nine minute mark of the video got my attention.

http://video.google.com/videoplay?docid=4094926727128068265 

Headless's picture
Headless
Status: Gold Member (Offline)
Joined: Oct 28 2008
Posts: 363
Re: Baby boomers' financial illusion

dickey45 said:

"Yeah, I was going to say the same thing about illegal border crossing increasing our population.  Some are deciding to go back so we could see (possibly) a huge US population decrease."

and Scepticus said:

"I think many countries currently relying on immigrants to make up the numbers could be in for major contraction if they start leaving and going home.Particularly the US, UK and germany."

and Davos posted that great and controversial Roy Beck video.

You guys bring up such an interesting (to me) argument, which happens to coincide with a point made by Jered Diamond in reference to why societies collapse, namely (paraphrased): "There is a difference between what is good in the short term for the political elite and what is good for the general population in the long run; the United States is the quintessential example of this..."

There is essentially a war going on between the landowners (the political elite, for the most part) whose wealth and political electability is threatened by falling property values, and the general population who understand their quality of life and wages are threatened by overpopulation. Lot's to argue about there...

What is, in fact, happening?

Well, unlike the forced repatriation of Mexicans in the last depression (http://en.wikipedia.org/wiki/Mexican_Repatriation ), we are seeing a voluntary exit; I say this as a resident of San Diego, a place that has been one od the target destinations of emigrating Mexicans for decades. If you travel down to the border town-ettes here, there are boarded up shops everywhere--like nothing I've ever seen. The Mexicans are going home...

Will this continue? Where would you rather be unemployed, living with your family on a farm in the country, or in an impoverished, violent city?

 Here's another interesting story: Mexican Repatriation in 1930s is Little Known Story

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