--- Erik Reuter <[EMAIL PROTECTED]> wrote: > I skimmed through it. They really gloss over the > 2030 period, but they > do say several times that GDP growth will slow. If > GDP growth slows, so > will equity returns (probably due to decreased > earnings and declining > multiples from selling pressures). If that happens, > do you think people > will be anxious to buy stocks as you suggest? And > even if they do, they > won't buy enough to offset the baby boomers selling. > That sounds a lot > like the beginnings of a 10+ year depression to me. > > "Erik Reuter" <[EMAIL PROTECTED]>
Well, they have to put their money _somewhere_. Actually, one factor that they haven't modeled is the extent to which foreign money might well come into the US capital markets even more, since the US will be one of the few developed countries that's going to do okay through this - which suggests that the impact might be even less than the GS models predict. Additionally, retirement accounts, even in the US, where they are about the same size as those in the rest of the world put together, are only about (IIRC) 30% of the total market. There's a _lot_ of money out there sloshing around. The GS model suggests a (very small) negative cash flow in US capital markets from around 2030-2035, IIRC. That's hardly catastrophic, and something that policy changes can probably control for fairly easily. I would ask why, btw, you think that new savings won't be enough to counteract the outflow. The GS study thinks that it _will_ be enough, and they've done the best work that I'm currently aware of. If you know of a better study, please point it out - it would be professionally quite useful. GS is generally pretty competent, however. I agree that GDP growth is likely to slow - although that is (as JDG has pointed out) heavily dependent upon productivity increases. But no one - not the CSIS, not the World Bank, and Goldman Sachs or Merrill Lynch, that I'm aware of thinks that the situation is nearly as bad as you suggest. It's a problem, not a disaster. For us, anyways. Even for the Europeans, if they act quickly enough. ===== Gautam Mukunda [EMAIL PROTECTED] "Freedom is not free" http://www.mukunda.blogspot.com __________________________________ Do you Yahoo!? SBC Yahoo! DSL - Now only $29.95 per month! http://sbc.yahoo.com _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
