weekend commentary - Demographics Key to Future Investments
interesting approach ...
(snip)"1) If Demographics is Destiny, Then America’s Future Sucks. Desperate homeowners counting on a “V” shaped recovery in residential real estate prices to bail them out better first take a close look at global demographic data, which tells us there will be no recovery at all.
I have been using the US Census Bureau’s population pyramids as long leading indicator of housing, economic, and financial market trends for the last four decades. They are easy to read, free, and available online at . It turns out that population pyramids are something you can trade, buying the good ones and shorting the bad ones. For example, these graphical tools told me in 1980 that I had to sell any real estate I owned in the US by 2005, or face disaster. No doubt hedge fund master John Paulson was looking at the same data when he took out a massive short in subprime securities, earning himself a handy $4 billion bonus in 2007.
To see what I am talking about, look at the population pyramid for Vietnam. This shows a high birth rate producing ever rising numbers of consumers to buy more products, generating a rising tide of corporate earnings, leading to outsized economic growth without the social service burden of an aged population. This is where you want to own the stocks and currencies.
http://i562.photobucket.com/albums/s...g?t=1292534366
(snip)3) If Brace yourself. The US is turning into Japan. (SPX) As a silver tsunami of 80 million baby boomers retires, they will be followed by only 65 million from generation “X”. The intractable problems that unhappy Japan is facing will soon arrive at our shores. Boomers, therefore, better not count on the next generation to buy them out of their homes at nice premiums, especially if they are still living in the basement, and not paying any rent. They are looking at best at an “L” shaped recovery, which is a polite way of saying no recovery at all.
What are the investment implications of all of this? Get your money out of America, Europe, and Japan, and pour it into Vietnam, China, India, Brazil, Mongolia, Indonesia, Mexico, Malaysia and other emerging markets with healthy population pyramids. You want the wind behind your investment sails, not in your face with hurricane category five violence. Use any serious dip to load the boat with the emerging market ETF (EEM) and individual emerging market ETF’s.(snip)
http://i562.photobucket.com/albums/s...g?t=1292534366
from
A would add as a 'public service announcement' that DD does not offer 'Investment Advice' , and that the opinions of posted authors are their own ! As always, do your own 'due diligence' ... and especially so given discussion in another thread that China may be significantly 'overpriced' right now.
Re: weekend commentary - Demographics Key to Future Investments
The U.S. isn't turning into Japan because our population will remain relatively young, compared to those of other First World nations, thanks to Mexican immigrants. But China's demographics may become worse than ours, around the middle of the century, due to its one-child policy, and it's population is expected to peak around then.
Still citing the fringe elements, Melonie? :)
Re: weekend commentary - Demographics Key to Future Investments
The author's point in this thread was that profitable investments often stem from countries where the demographics make profitability easier. As the author specifically points out, this means a young to middle-aged WORKING population with money to spend ... and with a manageably small tax and benefit structure such that said money can be spent in the private sector.
Adding Mexican immigrants with no marketable skills, low income potential, and low tax revenue generation potential, to the future US demographic really doesn't help America's future course to steer away from that of Japan.
Re: weekend commentary - Demographics Key to Future Investments
Quote:
Originally Posted by
lesbianbob
The U.S. isn't turning into Japan because our population will remain relatively young, compared to those of other First World nations, thanks to Mexican immigrants. But China's demographics may become worse than ours, around the middle of the century, due to its one-child policy, and it's population is expected to peak around then.
Still citing the fringe elements, Melonie? :)
That is partly true. China does have a demographic time bomb ticking resulting from its one child policy and a shortage of women directly resulting therefrom. Years of female infanticide have left an imbalance between the sexes so that there is a "shortage" of women estimated at 50 to 100 million. They also have a growing elderly population. And serious environmental problems that dwarf those of Russia and other European countries.
Despite these long term problems, for the short term ( the next 5 to 10 years at least ) they still have a population of 1.3 BILLION people; a growth rate more than twice ours and over $ 3 TRILLION in foreign reserves.
Of more immediate concern is a bubbling movement in the U.S., Europe and other Asian economies to "get tough" with China. Folks around the world are tired of Chinese intellectual theft and shameless knockoffs not to mention the deliberate undervaluing of the yuan.