Bill Gross Warns Of Demographic Doomsday
"It’s a wonderful life for the 1% and a Xanax existence for the 99," Bill Gross says, bemoaning the pacification of the masses that the (former) bond king likens to "a day at the Coliseum" for Plebian citizens and "cake" for the French Bourgeoisie.
But while the myriad creature comforts available to a society that's more interested in "Fantasy Sports, cellphone game apps, sexting, and fast food" than it is with the fact that "half of the U.S. population doesn’t go to work in the morning [or] that real wages after conservatively calculated inflation have barely budged since the mid 1980’s," may serve to keep the populace in a state of perpetual stupor thus forestalling an inevitable revolt by both the proletariat and the elite, demographic realities are set to make the "next few decades" difficult - even for an American electorate drunk on Xanax.
* * *
"It's A Xanax World," by Bill Gross
The Romans gave their Plebian citizens a day at the Coliseum, and the French royalty gave the Bourgeoisie a piece of figurative “cake”, so it may be true to form that in the still prosperous developed economies of 2016, we provide Fantasy Sports, cellphone game apps, sexting, and fast food to appease the masses. Keep them occupied and distracted at all costs before they recognize that half of the U.S. population doesn’t go to work in the morning and that their real wages after conservatively calculated inflation have barely budged since the mid 1980’s. Confuse them with demagogic and religious oriented political candidates to believe that tomorrow will be a better day and hope that Ferguson, Missouri and its lookalikes will fade to the second page or whatever it’s called these days in new-age media.
Meanwhile, manipulate prices of interest rates and stocks to benefit corporations and the wealthy while they feast on exorbitantly priced gluten-free pasta and range-free chicken at Whole Foods, or if even more fortunate, pursue high rise New York condos and private jets at Teterboro. It’s a wonderful life for the 1% and a Xanax existence for the 99. But who’s looking – or counting – even at the ballot box. November 2016 will not change a thing – 8 years of Hillary or 8 years of a non-Hillary. Same difference. Central bankers, Superpacs, and K street lobbyists are in control. Instead of cake, the 49.5% (males) will just have to chomp on their Carl’s Jr. hamburger and dream of a night with 23-year-old Kate Upton lookalikes that show them how to eat it during Super Bowl commercials. And if that’s too sexist, then Carl’s is substituting six-pack hunks instead of full-breasted models to appease the other 49.5% (females). It’s a Xanax society. We love it.
But I kid my readers – (that’s what comedians say on TV when they approach an edge). Kidding aside, however, if the 99 think they’ve got it good (bad) now, just wait 10 or 20 more years until their bills really come due. Of course by then, the 1% likely won’t be doing so well either, but there’s the hope that each and every one of them (us/me) can sell before the deluge. I speak specifically though to liabilities associated with the Boomer generation: healthcare, private pensions, Social Security and the unestimable costs of global warming, but let me leave the warming of the planet out of it for now. Let me try to convince you with some hard, cold facts, many of which are U.S. oriented but which apply as well to much of the developed world, because we’re mostly all getting older together. Demography rules.
Explaining this demographic countdown requires an impolitic concession that the world’s population is gradually aging, some at a faster rate than others (Japan, Italy, Taiwan!) but mostly in developed vs. undeveloped countries. And it is the elderly that require more services and expenses than newborns, although at first blush it would seem that an infant in diapers requires more attention and healthcare than a 70-year-old retiree. Not really. To focus on some U.S. centric mathematical realities, several years ago Mary Meeker in a 500 page, softbound edition entitled “USA Inc.” put together a series of U.S. Treasury and other government reports that outlined just how dire America’s future demographic is in terms of financial liabilities. It is one thing to put readers to sleep with a 2030 forecast for aging boomers, as shown in Chart 1 but another to use the government’s own present value of these debts as of 2016. If financial market observers seem aghast at current Greek or Puerto Rican debt traps, they would surely take a double dose of Xanax when confronted with this: Fact – The U.S. government has current outstanding debt of approximately $16 Trillion or close to 100% GDP. The present value, however of Medicaid ($35 trillion), Medicare ($23 trillion), and Social Security ($8 trillion) promised under existing program totals $66 trillion or another 400% of GDP. We are broke and don’t even know it, or to return to my opening analogy, we are having our cake, eating it at the same time and believing that a new cellphone app will be invented in the near future to magically deliver more of the same. Not gonna happen folks.
Some politicians like Paul Ryan who argue for balanced fiscal budgets are intelligent sounding but relatively clueless. “Austerity – if not now, then when?”, he would argue in Reaganesque twitter. “Let’s slow down or even stop the inexorable clicking of the debt clock: 16 trillion, 17 trillion, 18 trillion”…he would add. Well yes, every little bit helps, Mr. Ryan, but the fact of the matter is (a great political phrase, is it not?) that reducing the growth rate of current government debt does little to help what in essence is a demographic not a financial problem: too few Millennials to take care of too many Boomers. Social Security “lock boxes” or Medicare/Medicaid “trust funds” which in essence represent “pre-funded” liability systems, cannot correct this demographic imbalance, because financial assets represent a “call” on future production. If that production could possibly be saved like squirrels ferreting away nuts for a long winter, then Treasury bonds or purchasing corporate stocks might make some sense. But they can’t. Future healthcare for Boomer seniors can only be provided by today’s Millennials and even doctors yet to be born. We cannot store their energy today for some future rainy day. Nor can we save food, transportation or entertainment for anything more than a few years forward. Each of those must be provided by a future generation of workers for the use of retired Boomers. And as Chart 1 points out, the ratio of retirees to workers – the dependency ratio – soars from 25 retirees for every worker to 35 over the next 10 years or so.
There’s your problem, and neither privatization nor any goodly number of government bonds deposited in the Social Security “lock box” can solve it. While these paper assets may “pay” for goods and services, their value will be market adjusted in future years to exactly match the quantity of things we buy, and that quantity will be substantially a function of the available workforce and the price they command for their services. This is another way of saying that the value of Treasury bonds and even private pension held stocks will be marked down in price as they are sold to pay for future goods and services, and that the price of these goods and services will be marked up (inflation) to justify their reduced demographic supply. Productivity gains are often advanced as a solution but productivity gains have been shrinking in recent years, and even so, employed workers cannot be expected to hand over future advances to retirees without a fight. Having more babies would also turn the trick, but at the moment, making fewer seems to be the going trend.
Investment implications? Well it is true that if much of the developing world is younger demographically (think India), then developed nations could and should transfer an increasing percentage of their financial assets to emerging markets to help foot the demographic bills back home. Long-term then, as opposed to currently, think about increasing your asset allocation to the developing world. It’s also commonsensical that if higher Millennial wages are the probable result of a shortage of healthcare workers relative to Boomer requirements, then an investor should go long inflation and short fixed coupons. U.S. 10-year TIPS at 80 basis points seem like a good hedge in that regard. And of course in terms of specific equity sectors, healthcare should thrive, while liability handcuffed financial corporations such as insurance companies as well as the bonds of underfunded cities and states such as Chicago and Illinois, should not. Other countries have similar burdens. The Financial Times reports that the UK pension industry faces a 20-year wait until they might have enough cash to meet their liabilities in 2036. Until then, they cannot. In general, it seems demographically commonsensical that Boomers have in part been responsible for asset appreciation during the heyday of their productive years and that now, drip by drip, year by year, they will need to sell those assets to someone or some country in order to pay their own bills. Asset returns will therefore be lower than historical norms, especially because interest rates are close to 0% in developed countries.
Demographics may not rule absolutely, but they likely will dominate investment markets and returns for the next few decades until the Boomer phenomena fades away. The 1% – in addition to the 99 – will need extra doses of Xanax, or additional slices of cake, to cope in the next few decades. Let the games begin.
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Strange - he didn't mention OBAMA and his $10 trillion in debt once.
Then again, this ass-clown supported Obama. Probably wants you to forget that.
How rich....
A 1%'r telling us how it is like to be 99%'r
Bill. Take your ka-millions and just shut up.
Good luck finding it on paper anywhere, when it is the flickering image cast upon the screen.
Negativity....my my.....
James Quinn is a bad influence.....even on me....
America will eat its hamburgers until they keel over from heart attack......you know that...
And all that social security, and medicaid, will be paid from the P key on Yellons keyboard......
Phase out Social Security, Medicare, and Medicaid. The Olds are sucking this nation dry.
The oldest baby boomer turned 65 in 2011. Most boomers are still in the workforce. It is the millenials who are doing the sucking; get rid of the Olds and who in Hades is going to pay the bills?
Thanks a bunch, squirt. I'm 71 and still working, AND paying. The wrinklies are not the problem. With only 63% of the elgible workforce actually working, .gov is paying your fantasy football buddies to extend unemloyment to near infinity, and if it ever runs out, they hire SocSec lawyers to get them into disability. SocSec payments were never sequestered and managed, just dumped into the general fund. So, blame worthless politicians, apathetic voters, and non-workers with no work ethic. Just leave my wrinkly ass out of it - I earned every nickle.
It’s a banker viewpoint. They want it both ways. They want chaos, they want cheap labor and open borders and they want to reduce Social Security and Medicare while imposing Obamacare and wealth redistribution on America’s middle class. So many of these rulers are Jewish families; and I am so tired of them telling us what to do and forcing their “demographics” including debt on the rest of us. If this is racism, we are up against racism, especially in the Fed and those families who own and control the currency, and perhaps the way to take on racism is racism. The Fed created this demographic doomsday and wants to shift the blame onto the American people. God help us!
At least 139 of the Forbes 400 are Jewish | Jewish Telegraph Agency
By Jacob Berkman October 5, 2009
"Here is the list of Jewish entries that I culled from the Forbes list. The lists includes where they rank on the Jewish list, followed by their rank on the general Forbes list, their net wealth in millions of dollars, followed by their age, location and the source of their wealth. This is just the Forbes list with the rest of the names deleated. (Click here for Forbes complete list, which includes short bios. If you see anyone who we missed, please let us know, and if you see anyone on here eroneously, again, please let us know.)
"Here’s the list [2009] ":
1. 3 Lawrence Ellison 27,000 65 Redwood City Oracle
2. 8 Michael Bloomberg 17,500 67 New York Bloomberg
3. 11 Sergey Brin 15,300 36 Palo Alto Google
4. 11 Larry Page 15,300 36 San Francisco Google
5. 13 Michael Dell 14,500 44 Austin Dell
6. 14 Steven Ballmer 13,300 53 Seattle Microsoft
7. 15 George Soros 13,000 79 Westchester hedge funds
8. 16 Donald Bren 12,000 77 Newport Beach real estate – father is jewish
9. 22 Carl Icahn 10,500 73 New York leveraged buyouts
10. 23 Ronald Perelman 10,000 66 New York leveraged buyouts
11. 24 George B. Kaiser 9,500 67 Tulsa oil & gas, banking
12. 26 Sheldon Adelson 9,000 76 Las Vegas casinos, hotels
13. 29 James Simons 8,500 71 East Setauket hedge funds
14. 36 Steven Cohen 6,400 53 Greenwich hedge funds
15. 42 Eli Broad 5,400 76 Los Angeles investments
16. 44 Len Blavatnik 5,000 52 London Access Industries
17. 44 David Geffen 5,000 66 Malibu movies, music
18. 44 Ira Rennert 5,000 75 New York investments
19. 49 Charles Ergen 4,900 56 Denver EchoStar **
20. 50 Stephen Schwarzman 4,700 62 New York investments
21. 52 Samuel I. (Si) Newhouse Jr. 4,500 81 New York publishing
22. 56 Micky Arison 4,300 60 Bal Harbour Carnival Cruises
23. 61 Ralph Lauren 4,200 70 New York fashion
24. 65 Lester Crown & family 4,000 84 Wilmette investments
25. 65 Richard LeFrak & family 4,000 64 New York real estate
26. 65 Donald Newhouse 4,000 79 Somerset County publishing
27. 65 Daniel Ziff 4,000 37 New York inheritance, hedge funds
28. 65 Dirk Ziff 4,000 45 New York inheritance, hedge funds
29. 65 Robert Ziff 4,000 43 New York inheritance, hedge funds
30. 77 Henry Kravis 3,800 65 New York leveraged buyouts
31. 77 Paul Milstein & family 3,800 87 New York Emigrant, real estate
32. 77 Samuel Zell 3,800 68 Chicago real estate, private equity
33. 84 Leonard N. Stern 3,600 71 New York real estate
34. 85 Stanley Druckenmiller 3,500 56 Pittsburgh hedge funds
35. 85 Bruce Kovner 3,500 64 New York hedge funds
36. 85 George Roberts 3,500 66 San Francisco leveraged buyouts
37. 97 Riley P. Bechtel 3,000 57 San Francisco engineering, construction**
38. 97 Stephen D. Bechtel Jr. 3,000 84 San Francisco engineering, construction**
39. 97 Leonard Lauder 3,000 76 New York Estee Lauder
40. 97 Theodore Lerner 3,000 84 Washington real estate
41. 97 Steven Spielberg 3,000 62 Pacific Palisades movies
42. 97 Warren Stephens 3,000 52 Little Rock Stephens Inc. **
43. 97 David Tepper 3,000 52 Milburn hedge funds
44. 110 Stephen Ross 2,900 69 New York real estate
45. 113 Daniel Och 2,800 48 New York hedge funds
46. 113 Haim Saban 2,800 65 Beverly Hills television
47. 118 Joan Tisch 2,600 83 New York Loews
48. 123 Edgar M. Bronfman 2,500 80 New York liquor
49. 123 Ronald Lauder 2,500 65 New York Estee Lauder
50. 123 Mitchell Rales 2,500 53 Washington Danaher Corp **
51. 123 Steven Rales 2,500 58 Washington Danaher Corp **
52. 123 David Rubenstein 2,500 60 Bethesda leveraged buyouts
53. 139 Mark Cuban 2,400 51 Dallas Broadcast.com
54. 139 Malcolm Glazer & family 2,400 81 Palm Beach sports teams, real estate
55. 141 Steve Wynn 2,300 67 Las Vegas casinos, hotels **
56. 147 Tom Gores 2,200 45 Beverly Hills leveraged buyouts
57. 147 Bruce Wasserstein 2,200 61 New York Wasserstein Perella, Lazard
58. 158 Nicolas Berggruen 2,000 48 New York Investments
59. 158 Leon Black 2,000 58 New York leveraged buyouts
60. 158 William Gross 2,000 65 Laguna Beach bonds **
61. 158 Michael Milken 2,000 63 Los Angeles investments
62. 158 Sumner Redstone 2,000 86 Beverly Hills Viacom
63. 158 Leslie Wexner 2,000 72 New Albany Limited Brands
64. 158 Mark Zuckerberg 2,000 25 Palo Alto Facebook
65. 183 Stewart Rahr 1,950 63 New York Kinray
66. 193 Alan Casden 1,850 63 Beverly Hills real estate
67. 196 Thomas Pritzker 1,800 59 Chicago hotels, investments
68. 196 Jerry Speyer 1,800 69 New York real estate
69. 204 Israel Englander 1,700 61 New York hedge funds
70. 204 Penny Pritzker 1,700 50 Chicago hotels, investments
71. 204 Sheldon Solow 1,700 81 New York real estate
72. 212 Robert Friedland 1,650 59 Singapore mining
73. 212 Henry Samueli 1,650 55 Newport Beach Broadcom
74. 220 Thomas Friedkin 1,600 74 Houston Gulf States Toyota
75. 220 Alec Gores 1,600 56 Beverly Hills leveraged buyouts
76. 220 Irwin Jacobs 1,600 76 La Jolla Qualcomm
77. 220 Anthony Pritzker 1,600 48 Los Angeles hotels, investments
78. 220 Jay Robert Pritzker 1,600 44 Evanston hotels, investments
79. 230 John Morgridge 1,550 76 Portola Valley Cisco ** (NETA with Jewish Agency)
80. 230 Isaac Perlmutter 1,550 67 Palm Beach Marvel
81. 230 Wilma Tisch 1,550 82 New York Loews
82. 236 Neil Bluhm 1,500 71 Chicago real estate
83. 236 Robert Kraft 1,500 68 Brookline New England Patriots
84. 236 Stephen Mandel 1,500 53 Greenwich hedge funds
85. 236 Daniel Pritzker 1,500 50 Marin County hotels, investments
86. 236 James Pritzker 1,500 58 Chicago hotels, investments
87. 236 Jean (Gigi) Pritzker 1,500 47 Chicago hotels, investments
88. 236 John Pritzker 1,500 56 San Francisco hotels, investments
89. 236 Karen Pritzker 1,500 51 New Haven hotels, investments
90. 236 Linda Pritzker 1,500 55 St. Ignatius hotels, investments
91. 236 Marc Rich 1,500 74 Meggen commodities
92. 236 Lynn Schusterman 1,500 70 Tulsa oil & gas, investments
93. 236 John Sperling 1,500 88 Phoenix Apollo Group
94. 236 Mortimer Zuckerman 1,500 72 New York real estate, media
95. 272 George Lindemann & family 1,450 73 Palm Beach investments
96. 272 Bernard Marcus 1,450 80 Atlanta Home Depot
97. 277 S. Daniel Abraham 1,400 85 Palm Beach Slim-Fast
98. 277 John Arrillaga 1,400 72 Palo Alto real estate
99. 277 Alfred Mann 1,400 83 Los Angeles medical devices
100. 277 Michael Moritz 1,400 55 Mountain View venture capital
101. 277 Michael Price 1,400 57 Far Hills investments
102. 277 Tamir Sapir 1,400 62 New York real estate
103. 277 Alfred Taubman 1,400 85 Bloomfield Hills real estate
104. 289 Ken Fisher 1,350 58 Woodside Money management **
105. 289 David Gottesman 1,350 83 Rye investments
106. 289 Marc Lasry 1,350 49 New York hedge funds (92nd Street Y)
107. 296 Edmund Ansin 1,300 73 Miami Sunbeam Broadcasting
108. 296 Ron Baron 1,300 66 New York money management
109. 296 Leon Charney 1,300 68 New York Real estate
110. 296 Glenn Dubin 1,300 52 New York hedge funds
111. 296 Donald Fisher 1,300 81 San Francisco Gap
112. 296 Doris Fisher 1,300 78 San Francisco Gap
113. 296 Jeremy Jacobs Sr. 1,300 69 East Aurora sports concessions
114. 296 Gary Michelson 1,300 60 Los Angeles medical patents
115. 317 Arthur Blank 1,250 67 Atlanta Home Depot
116. 317 Jeffrey Greene 1,250 54 Miami Beach real estate, investments
117. 317 Thomas H. Lee 1,250 65 New York leveraged buyouts
118. 317 Herbert Simon 1,250 74 Indianapolis real estate
119. 317 Peter Sperling 1,250 49 Phoenix Apollo Group
120. 326 John E. Abele 1,200 72 Shelburne healthcare **
121. 326 Norman Braman 1,200 77 Miami art, car dealerships
122. 326 John Fisher 1,200 48 San Francisco Gap
123. 326 Nicholas Pritzker 1,200 65 Chicago hotels, investments
124. 326 Alexander Rovt 1,200 57 Brooklyn fertilizer
125. 326 Margaret Whitman 1,200 53 Atherton Ebay
126. 341 Leon Cooperman 1,150 66 Short Hills hedge funds
127. 341 Barry Diller 1,150 67 New York IAC/InterActiveCorp
128. 341 Joseph Mansueto 1,150 53 Chicago Morningstar **
129. 347 Marc Benioff 1,100 45 San Francisco Salesforce.com
130. 347 A. James Clark 1,100 81 Easton Construction **
131. 347 Robert Fisher 1,100 56 San Francisco Gap
132. 347 Alan Gerry 1,100 80 Liberty cable television**
133. 347 James Irsay 1,100 50 Carmel Indianapolis Colts (Father, Bob was Jewish)
134. 347 Michael Krasny 1,100 56 Highland Park CDW Corp 3
135. 347 Daniel Snyder 1,100 44 Potomac Washington Redskins
136. 347 Henry Swieca 1,100 52 New York hedge funds
137. 366 Peter Lewis 1,050 75 Coconut Grove Progressive Corp
138. 366 Nelson Peltz 1,050 67 Bedford Investments
139. 371 William Fisher 1,000 52 San Francisco Gap
140. 371 Pincus Green 1,000 74 Jerusalem commodities
141. 371 Jeffry Picower 1,000 67 Palm Beach investments
142. 371 Steven Schonfeld 1,000 50 Westbury Proprietary Trading
143. 371 Walter Shorenstein & family 1,000 94 San Francisco real estate
144. 371 Evgeny (Eugene) Shvidler 1,000 45 London Millhouse LLC
145. 371 Charles Zegar 1,000 61 New York Bloomberg LP
146. 394 Jeffrey Lurie 980 58 Haverford Philadelphia Eagles
147. 396 Nancy Lerner 960 49 Cleveland inheritance
148. 396 Norma Lerner 960 73 Cleveland inheritance
149. 396 Randolph Lerner 960 47 Cleveland inheritance
http://www.jta.org/2009/10/05/fundermentalist/at-least-139-of-the-forbes-400-are-jewish
At least 139 of the Forbes 400 are Jewish
At least 95% of professional basketball players are black. It appears some races are genetically gifted at certain tasks. My gift appears to be pissing off wives. It doesn't pay much but I am good at it.
The median income of India Americans — the richest ethnic community in the U.S. — was $100,547, according to new figures released by the US Census Bureau. Median family income for ALL AMERICANS is $53,657.
Those Indian immigrants and their kids etc are doing something right.
You are seeing the cream of the crop out of a country of 1.3 billion and the ones who can make the trip are mostly in professional jobs. Contrast that to Central America where being in "walking distance" means we get mostly the bottom of the barrel. But look at the rest of the country and it is a different story. Average IQ in India is only around 82 which is in the same range as most of Africa. Large sections of the country don't even have plumbing. Anybody who can afford it would want to get out of that disease infested place....
OT:
Is it just me, or has there been a significant increase among users/posters on ZH using this site to self-promote their own blogs?
There's only one solution. MIC will kill all these marauders. Embrace FEMA.
Seems like an easy problem to solve. On your 65th birthday you are required to report to the " New Beginning " center. Your friends and relatives throw you a small party and say goodbye. After the party, a cute, smiling young nurse gives you an injection and you fall asleep, after which the nurse secures a plastic bag over your head with a rubber band. Fifteen minutes later you are off to the landfill.
Only comrades of proven worth get to skip the mandatory 65th birthday party. Scofllaws are hunted down by special police created by crossbreeding Delaware State Police and late stage bill collectors.
You may as well report for the injection Geezer, your food ration card stops working the day after you turn 65.
Off to the landfill?! What a waste! SOYLENT GREENIFY the old dead people. Sell them back to the gubbamint free food centers, make a profit. Win win win!
I thought about turning dead geezers into dog and cat food. I was worried about the effect of residual meds on Rover and Fluffy.
So that's what the .gov cheese is made out of!
'special police created by crossbreeding Delaware State Police and late stage bill collectors.'
I upped you for that line. I can't wait to use it on another blog.
More fiat money and hordes of Mexitrash invaders will solve all this.
Bill Gross, what a piece of America. These guys, many of the 1%, were the bullies, sociopaths and psychopaths of whatever generation they were part of.
I have met and know so many amazing men and women. Smart and hard working, spiritually, virtuous and kind; but middle class to poor. Somehow, we have forgotten that money does not eaual moral superiority, it just means you have money. This society that disrespects new life, old life, bonds of trust, lacks critical thinking, sex obsessed, substance adusing and literally eats itself to death is a nightmare for so many talented and good people.
TPTB worked hard at destroying families and many families while in persuit of individual self interest devoured themselves (divorce, child support, substance abuse and legal issues). Think what you may, but the enemy certainly does seek to steal, kill and destroy and many are like lambs to the slaughter misinformed and ignorant of the traps laid for them.
These pieces of Amerika like Bill Gross are the festering stench of our decomposition. Their smell and the fetid smell of the despair in your city and mine should alert our survival instinct. These people are very parasitic, full of hubris and zero compassion. Monsters waiting to devour the kind, the naive and the distracted.
It's always seemed odd that "The Greatest Generation" won WWII and returned home to get elected to congress and proceed to spend us into oblivion, maybe we lost the war (well, Merkel does have a million known "refugees" raping their women).....Maybe this was planned all along let the US "win" rebuild Germany, they get all Mercantilistic and then se go down without a shot being fired 75 years later....I'm buying an ounce of gold and a pound of lead every month....
Going to be sad seeing the older folks trying to make it with a currency at .05 of it former value. Guess I should consider hedging that outcome. Maybe save back some earnings in an investment that holds its value. But what could it be. Gold? Oh no TIP's you say. Hmm debt for savings. More promises of future payments from the government. You can probably pick up a old single wide and ride it out living with a roommate. Life is going to be a bitch so forget the car the big house and vacations . learn to live on the cheap. Move south less heating costs more summer. Northern Alabama or the mid Tennessee area get on a bicycle if you can. It's what you don't spend that makes it possible.
Thinking about entitlements in present value form is something that I haven't seen before, and I'm wondering where that analysis has been all my life.
the dependency ratio – soars from 25 retirees for every worker to 35 over the next 10 years or so.
That's total bullshit, and it's a shame neither Gross nor any commenter here caught it.
It's still 25 or 35 retirees per 100 workers, and that's bad enough.
I like Harry Dent but he and others, like Bill Gross, who warn about the demographic cliff ignore two factors that will change everything: automation and, if implemented, Martin Armstrong's solution to the federal debt and the federal budget. These can render the demographic cliff utterly irrelevant.
In calculating his dependency ratio, Gross has misplaced his decimal point by two positions. Rather than each worker supporting 35 to 45 retirees, the correct figures are each worker supporting 0.35 to 0.45 retirees. These are nevertheless discouraging numbers, but we should keep in mind that retirement is already moving to 70 and beyond.
But world human population is still growing around 2% or 3% every year!
Higher asset allocation to better demographies mainly in developing nations (eg India) ? A big assumption that these place have the property rights in place and not their crony capitalists that feast on any long term investments there faster than you hoard them. This demographic challenge that blindly equates sheer number of millenials instead of skills is a myth. Sheer # of unskilled millenials is not the "consumer base" and nieither the labor resource to maintain (not even improving) existing technologies. These millienials are also preys looking for Oase. Misguided they walk into potential wastelands that the 1% will cull and not even bother to distract with gadgets, the remnants. The habitats of the 1% are evolving oases that they control.
The savvy millenials do not have to fight for sharing of their production to Boomers who have kicked the cans of debts down their paths. They can walk to new habitats built for them by the 1%. Think of guarded cities and not nations and think of communities globally linked not communities where you have not chosen to be born in.
And the biggest welfare mooches Social Security recipients older than about 78...
The US Social Security retirement system is not an endowment program, it is an insurance program. Some win, some lose. It is like auto insurance. Do you purposely get into a car accident to recover the premiums you have paid? Of course not. By the same token, no one would prolong his life (if he could) on purpose just to recover the contributions paid in during his working life by himself and his employers.
What';s the big deal? Cut all federal spending 1.5% a tear every year across the board until revenues come in line with expenses, then cut it 10% more. In 10 years we ought to have somewhat of a relatively painless handle on it. Setting aside gross wasteful spending on the military to keep us "safe"