원문 보기
Dr. Ed, you mentioned the surprising, you know, resilience of the U.S. economy since the global financial crisis of 2008-2009. We have gone more than 15 years without a typical business cycle-driven recession . What do you think are the main reasons why the US economy has been so resilient to the recession?
Yes. Yes. I'm glad you asked me that because I think this is one area where we've really hit the nail on the head, and that's because I have some inside information . I am 76 years old. I know I look over 36, but I'm 76. I'm a baby boomer. And a lot of my friends are baby boomers. And as I said, I thought their retirement would have a huge impact on the job market.
But they also had a huge impact on consumption. You know , many pessimists have called it a K-shaped economy, which they believe is not sustainable. They say the rich get richer and the poor get poorer. There's a study out of Moody's, which makes no sense to me , that produced the incredible insight that 10% of the population, the rich who are getting richer, represent 50-60% of consumption.
I mean, really ? I mean, they don't eat that much more than we do. As far as clothing goes, it's pretty much the same thing. Maybe they spend more on clothes. Maybe they have bigger closets . Cars are cars and, you know, once you have your yacht, you have your yacht. But it's kind of like, you know, have any of these people ever been to Costco?
Have you ever been to the mall? At the cinema? Have they tried going on a cruise? Did they go to Europe? I mean , it's always packed. And not with 10%, but with a much larger percentage of the population. Real consumption per household is at an unprecedented level. And I repeat, the rich do not consume more health care than the rest of us.
It just doesn't make sense. So I came up with the concept of a G-shaped economy instead of a K-shaped economy. A K-shaped economy is, you know, on one side you have the rich and on the other side you have the poor. There is the problem of affordability. And this is not a sustainable situation. The G-shaped economy is based on my observation that there is likely a larger generational impact on consumption.
Baby boomers retire with $90 trillion. That 's a huge number. It's a significant figure. Huge figure. And, by the way, there are still some old people around, the so-called " silent generation", God bless them. And they have 20 trillion dollars. So we're talking about over $100 trillion in the hands of seniors.
We have never had such a wealthy or large generation of retirees . And you know what? Think about it. Do they care if interest rates go up? Well, it turns out they hold 60% of money market funds, according to Fed data. So they love it when the Fed raises interest rates. Exact. Do they really care about unemployment?
Well, I'm retired. What does he care? They live in a condominium complex in Florida, you know, where they have a great time. However, they have children, adult children, they have grandchildren. If their adult children struggle to find work, of course they care. There are many surveys showing how baby boomers help their children and grandchildren financially.
And I think that explains why consumption is so strong. If you look at consumer data, we see that much of the strength in consumption is due to healthcare. They all go for check-ups, you know, between lunch and an early dinner, they rush to the doctors to make sure they can climb Machu Picchu. I have a cousin who travels constantly.
My wife and I travel quite a bit, but I still work for a living. I don't plan on retiring because I don't play golf, so I don't know what to do. But we take two trips a year to Europe, Asia or somewhere else. So let's go sightseeing. My cousin goes there more often. He's going on a cruise. I get seasick on cruises.
He says, "Well, you know, I know we travel a lot, but we want to do it while we can." So, yeah. You know, the point is, baby boomers don't know how long they're going to live. So they have to be a little careful about how they spend their wealth. On the other hand, they know that if they live a long time, they may not be healthy enough to travel the world.
Do baby boomers care about mortgage rates? They are making them extinct, or rather, they have already made them extinct. They are homeowners, of course. Yes. So, when you think about it, they're almost immune to all of this. You know, isolated from all those problems that affect people like me. Yes.
If they don't read, if they don't watch TV and don't follow the news, you know what? They're, you know, pretty stress-free. Aside from the health concern. You know, I don't understand people who try to make us live longer because, wait, if you live longer, will you live with all your body parts healthy or ...
and what will the quality of life be ? However, that's a separate discussion. But you know, this is one of the reasons why baby boomers spend a lot. You look at the consumption data and guess what? Healthcare spending is high, restaurants, hotels, airports, all of this is doing great. They go to concerts all the time.
Around the corner on Long Island, Paul Anka is giving a concert. It's like, what? Is Paul Anka still alive? But you know, I'm not going to see it, but I'm sure it'll be full of baby boomers, you know, eighty-year-olds and up . But you know, they're having a good time. And like you said, they have a hundred trillion in wealth between the Silent Generation and the baby boomers.
That 's a huge number. I mean, there's never been a generation like it. So, you know, I've noticed among some of my baby boomer friends that some have received a nice inheritance from their deceased parents. The Silent Generation, again, has twenty trillion dollars. And then, of course, young people can expect that their parents won't spend it all.
You know, certain things... baby boomers are staying in their homes. Well, the houses seem too big for them, but then again, you know, some kids end up living with you for a while after college, or, in the case of a divorce, they live with you for a while, so they don't sell their houses. If they still have a mortgage, they have it locked at 3 or 4%.
Exact. So, you know, they're doing great. who is familiar with your specific situation financial advice or a recommendation for any specific securities, strategies, or investment products. recording date, are inherently uncertain and may not occur. Past performance, market analysi ans to third-party data sources.
The opinions expressed are valid assurance that any projection, forecast or opinion will be achieved. Any rates of return quoted are historical or hypothetical in nature and are not a guarantee of future returns. Past performance does not guarantee future performance. possible loss of principal, and are not suitable for all investors.
The value of investments will fluctuate based on market conditions and security holdings. When sold, they may be worth less or more than the cited in other publications construed as an offer or recommendation of such securities.
Comments 0