MEGATRENDS TO COLLIDE
After a long in depth research project that first started with a longer term look at some investments, I found out there are some serious changes coming both in the weather but also the economy. Demographics have the “Baby Boomers” which is a large (and getting larger) portion of the population entering the retirement age. This at best is going to be a mixed blessing. By 2030 those “Boomers” will make up approximately 50% of the population. That will be a serious loss of buying power and drastically slow the velocity of money in our economy. There are other adverse effects when this megatrend collides with 2 or 3 other megatrends.
“The retirement of massive numbers of baby boomers over the next decade or so will put a drag on the U.S. economy, say two executives with J.P. Morgan Funds.
The U.S. economy expanded by an average 3 percent a year for nearly 50 years, until baby boomers started hitting retirement age. Now for the past five years, it has expanded on average 2.2 percent a year, says Dr. David Kelly, chief global strategist for J.P. Morgan Funds.
The economy is experiencing a slower expansion rate because the civilian labor force is shrinking. This could lead investors to look to emerging markets and even Europe for higher returns. Despite their aging population, many European countries have a large capacity for increasing the workforce because of their high youth unemployment rate, Kelly said during a Webinar, “Retiring Baby Boomers: How They Impact The Economy, Markets and Retirement Planning,” sponsored by J.P. Morgan Funds and J.P. Morgan Asset Management.
U.S. job productivity growth has slowed with the shrinking workforce and there is not enough capital spending to counter it, he adds. These trends are not short term because more baby boomers will be retiring for the next 15 years.”
The full story is here
There are investments that likely will allow you to offset rising costs in different segments of the economy. These could be the best investments of the next 10 years. These are spelled out in the book…….”The New Ice Age”