On Sun, Jun 29, 2003 at 07:10:56PM -0700, Gautam Mukunda wrote: > I would ask why, btw, you think that new savings won't be enough to > counteract the outflow.
I guess I'm not being clear. It is a simple numbers game. Right now there are around 4 workers for every retired person. The GS study says there will only be 2.3 workers for every person 65 and over in 2050. If people retire at 65, there will be a lot more people selling than buying in 2050 as compared to now. Even if some people delay retirement past 65, the gap is so large that there will probably still be a lot more selling in 2030-2050 as compared to now. > The GS study thinks that it _will_ be enough, and they've done the > best work that I'm currently aware of. I missed that statement in the GS paper, could you point it out? Also, I don't put as much faith as you in the analysis of investment bankers. Even neglecting the corruption and conflicts of interest, I don't think most of them knew there was a market bubble in the late 90's, while it was apparent to a number of others (including William Bernstein, who I linked to earlier). The investment bankers have a tendency to invent new explanations to explain why their desired result is possible, like the "new economy". > If you know of a better study, please point it out - it would be > professionally quite useful. Well, Jeremy Siegel was where I first read about the problem. He presents data in chapter 7 of _Stocks for the Long Run_ that shows net outflows of private pension funds starting in 2025 and reaching $600B per year by 2040. Siegel writes "The big picture indicates that the main threat to the baby boomers is not whether the trust fund contains government or private assets but that there is not enough buying power to absorb the sale of ANY asset." I haven't read Siegel's source for the pension flow data, which is cited as John Shoven and Sylvester Scheiber, "The Consequences of Population Aging on Private Pension Fund Saving and Asset Markets,' in _Public Policy Towards Pensions_, A Twentieth Century Fund Book (Cambridge, MA: MIT Press, 1997), Chap. 7, pp. 219-245. -- "Erik Reuter" <[EMAIL PROTECTED]> http://www.erikreuter.net/ _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
