A reader asks:
You talked about how baby boomers have so much money for a generation, and anecdotally so many monetary plans that I run for our people have them with far more than they want…they’re diligent savers and buyers. So we’ve got all these boomers with extreme financial savings/investments which are unwilling to show the change to truly spend that cash.
So my query turns into: do we’ve got a everlasting ground of upper inflation sooner or later attributable to boomers truly spending that money that they’ve in retirement, realizing they’ll’t take it to the grave OR as they go it to the following technology who’re extra snug with the spending aspect of the equation—that would create this persistent increased inflation charge for folks over the following decade or two?
I did inquire about the wealth profile of baby boomers in a current piece.
It’s true that boomers management many of the wealth on this nation (52% in response to Federal Reserve knowledge).
That is what I wrote in that beforehand talked about submit:
There is no such thing as a precedent for the boomer technology. We’ve merely by no means had a demographic this large with this a lot wealth dwell this lengthy earlier than.
We’ve no historic knowledge to look again at with regards to making an attempt to quantify the inflationary impression right here.
If all the boomers mentioned screw the children and their inheritance and spent down all of their financial savings, certain you would argue that may be inflationary.
However with boomers residing longer than earlier generations, that would pressure them to unfold that spending out over a few years, which might mute the impression.
It’s potential it is going to be the millennials that can spend more cash.
Jean Twenge at The Atlantic took a sledgehammer to the concept all millennials are broke.
When you take a look at the long-term development of wealth, adjusted for inflation, millennials are proper on monitor relative to earlier generations on the identical level of their lives:
And take a look at the Actuality Bites technology — Gen X has surpassed the boomers by age 50!
The inflation-adjusted median earnings for millennials is round $10,000 increased than the boomers had on the identical age. And once they have been within the 25-to-39 12 months age vary, 50% of boomers owned a house. That quantity is 48% for millennials.
Millennials like to complain however as a complete, they’re doing superb.
The counter-argument right here could be all the stuff that’s now costlier for millennials — housing, faculty, daycare, and many others.
However millennials would be the largest, richest technology sooner or later. It’s inevitable.
My technology1 is probably the most well-educated technology in historical past and meaning increased common incomes which are solely going to extend over time:
So let’s assume millennials are going to spend extra freely and management huge sums of wealth sooner or later from some mixture of their very own earnings and an inheritance from their boomer dad and mom.
Will that translate right into a ground underneath the inflation charge?
It’s potential.
Researchers at The IMF regarded on the relationship between getting older and inflation:
We discovered that the bigger the proportion of younger and outdated within the whole inhabitants, the upper inflation. Put one other manner, when the working-age inhabitants is bigger, the impact is disinflationary. This hyperlink between age and inflation holds for a lot of nations throughout all time intervals.
These results are giant sufficient to elucidate most of development inflation. As an illustration, the newborn boomers elevated inflation by an estimated 6 share factors in the US between 1955 and 1975 and lowered it by 5 share factors between 1975 and 1990, once they entered working life. Pattern inflation is presently low and steady because the lowering share of younger folks offsets the consequences of the rising share of outdated folks within the inhabitants.
We’ve a big proportion of outdated folks, which must be inflationary.
However we even have a big proportion of working-age folks, which must be disinflationary.
All of which is to say, it is a sophisticated subject that doesn’t have a clearcut reply (welcome to finance).
Inflation may very well be increased if boomers spend down all of their financial savings or millennials don’t save as a lot.
Or AI might show to be a deflationary pressure that offsets any inflationary results of huge demographics.
If the previous 10 years have taught us something about macroeconomics, it’s that there’s a lot we nonetheless don’t learn about inflation.
The Fed tried its damnedest to extend inflation within the 2010s by protecting charges low.
It didn’t work.
A pandemic hits, provide chains get disrupted, the federal government spends trillions of {dollars} and inflation goes bananas.
Now the Fed has aggressively raised charges to extend unemployment and gradual inflation.
Inflation has slowed however the labor market stays sturdy.
Within the immortal phrases of Cousin Eddie, “She falls down a nicely, her eyes go crossed. She will get kicked by a mule, they return. I don’t know.”
Predicting inflation is difficult. Realizing the demographic make-up of the nation most likely doesn’t make it any simpler to foretell its future path.
Michael and I spoke about generational wealth and way more on this week’s Animal Spirits:
Subscribe to The Compound so that you by no means miss an episode.
Additional Studying:
Demographics vs. the Stock Market
Now right here’s what I’ve been studying currently:
1I don’t really feel like a millennial however was born in 1981 so technically I’m on of the oldest millennials within the nation.
A reader asks:
You talked about how baby boomers have so much money for a generation, and anecdotally so many monetary plans that I run for our people have them with far more than they want…they’re diligent savers and buyers. So we’ve got all these boomers with extreme financial savings/investments which are unwilling to show the change to truly spend that cash.
So my query turns into: do we’ve got a everlasting ground of upper inflation sooner or later attributable to boomers truly spending that money that they’ve in retirement, realizing they’ll’t take it to the grave OR as they go it to the following technology who’re extra snug with the spending aspect of the equation—that would create this persistent increased inflation charge for folks over the following decade or two?
I did inquire about the wealth profile of baby boomers in a current piece.
It’s true that boomers management many of the wealth on this nation (52% in response to Federal Reserve knowledge).
That is what I wrote in that beforehand talked about submit:
There is no such thing as a precedent for the boomer technology. We’ve merely by no means had a demographic this large with this a lot wealth dwell this lengthy earlier than.
We’ve no historic knowledge to look again at with regards to making an attempt to quantify the inflationary impression right here.
If all the boomers mentioned screw the children and their inheritance and spent down all of their financial savings, certain you would argue that may be inflationary.
However with boomers residing longer than earlier generations, that would pressure them to unfold that spending out over a few years, which might mute the impression.
It’s potential it is going to be the millennials that can spend more cash.
Jean Twenge at The Atlantic took a sledgehammer to the concept all millennials are broke.
When you take a look at the long-term development of wealth, adjusted for inflation, millennials are proper on monitor relative to earlier generations on the identical level of their lives:
And take a look at the Actuality Bites technology — Gen X has surpassed the boomers by age 50!
The inflation-adjusted median earnings for millennials is round $10,000 increased than the boomers had on the identical age. And once they have been within the 25-to-39 12 months age vary, 50% of boomers owned a house. That quantity is 48% for millennials.
Millennials like to complain however as a complete, they’re doing superb.
The counter-argument right here could be all the stuff that’s now costlier for millennials — housing, faculty, daycare, and many others.
However millennials would be the largest, richest technology sooner or later. It’s inevitable.
My technology1 is probably the most well-educated technology in historical past and meaning increased common incomes which are solely going to extend over time:
So let’s assume millennials are going to spend extra freely and management huge sums of wealth sooner or later from some mixture of their very own earnings and an inheritance from their boomer dad and mom.
Will that translate right into a ground underneath the inflation charge?
It’s potential.
Researchers at The IMF regarded on the relationship between getting older and inflation:
We discovered that the bigger the proportion of younger and outdated within the whole inhabitants, the upper inflation. Put one other manner, when the working-age inhabitants is bigger, the impact is disinflationary. This hyperlink between age and inflation holds for a lot of nations throughout all time intervals.
These results are giant sufficient to elucidate most of development inflation. As an illustration, the newborn boomers elevated inflation by an estimated 6 share factors in the US between 1955 and 1975 and lowered it by 5 share factors between 1975 and 1990, once they entered working life. Pattern inflation is presently low and steady because the lowering share of younger folks offsets the consequences of the rising share of outdated folks within the inhabitants.
We’ve a big proportion of outdated folks, which must be inflationary.
However we even have a big proportion of working-age folks, which must be disinflationary.
All of which is to say, it is a sophisticated subject that doesn’t have a clearcut reply (welcome to finance).
Inflation may very well be increased if boomers spend down all of their financial savings or millennials don’t save as a lot.
Or AI might show to be a deflationary pressure that offsets any inflationary results of huge demographics.
If the previous 10 years have taught us something about macroeconomics, it’s that there’s a lot we nonetheless don’t learn about inflation.
The Fed tried its damnedest to extend inflation within the 2010s by protecting charges low.
It didn’t work.
A pandemic hits, provide chains get disrupted, the federal government spends trillions of {dollars} and inflation goes bananas.
Now the Fed has aggressively raised charges to extend unemployment and gradual inflation.
Inflation has slowed however the labor market stays sturdy.
Within the immortal phrases of Cousin Eddie, “She falls down a nicely, her eyes go crossed. She will get kicked by a mule, they return. I don’t know.”
Predicting inflation is difficult. Realizing the demographic make-up of the nation most likely doesn’t make it any simpler to foretell its future path.
Michael and I spoke about generational wealth and way more on this week’s Animal Spirits:
Subscribe to The Compound so that you by no means miss an episode.
Additional Studying:
Demographics vs. the Stock Market
Now right here’s what I’ve been studying currently:
1I don’t really feel like a millennial however was born in 1981 so technically I’m on of the oldest millennials within the nation.
A reader asks:
You talked about how baby boomers have so much money for a generation, and anecdotally so many monetary plans that I run for our people have them with far more than they want…they’re diligent savers and buyers. So we’ve got all these boomers with extreme financial savings/investments which are unwilling to show the change to truly spend that cash.
So my query turns into: do we’ve got a everlasting ground of upper inflation sooner or later attributable to boomers truly spending that money that they’ve in retirement, realizing they’ll’t take it to the grave OR as they go it to the following technology who’re extra snug with the spending aspect of the equation—that would create this persistent increased inflation charge for folks over the following decade or two?
I did inquire about the wealth profile of baby boomers in a current piece.
It’s true that boomers management many of the wealth on this nation (52% in response to Federal Reserve knowledge).
That is what I wrote in that beforehand talked about submit:
There is no such thing as a precedent for the boomer technology. We’ve merely by no means had a demographic this large with this a lot wealth dwell this lengthy earlier than.
We’ve no historic knowledge to look again at with regards to making an attempt to quantify the inflationary impression right here.
If all the boomers mentioned screw the children and their inheritance and spent down all of their financial savings, certain you would argue that may be inflationary.
However with boomers residing longer than earlier generations, that would pressure them to unfold that spending out over a few years, which might mute the impression.
It’s potential it is going to be the millennials that can spend more cash.
Jean Twenge at The Atlantic took a sledgehammer to the concept all millennials are broke.
When you take a look at the long-term development of wealth, adjusted for inflation, millennials are proper on monitor relative to earlier generations on the identical level of their lives:
And take a look at the Actuality Bites technology — Gen X has surpassed the boomers by age 50!
The inflation-adjusted median earnings for millennials is round $10,000 increased than the boomers had on the identical age. And once they have been within the 25-to-39 12 months age vary, 50% of boomers owned a house. That quantity is 48% for millennials.
Millennials like to complain however as a complete, they’re doing superb.
The counter-argument right here could be all the stuff that’s now costlier for millennials — housing, faculty, daycare, and many others.
However millennials would be the largest, richest technology sooner or later. It’s inevitable.
My technology1 is probably the most well-educated technology in historical past and meaning increased common incomes which are solely going to extend over time:
So let’s assume millennials are going to spend extra freely and management huge sums of wealth sooner or later from some mixture of their very own earnings and an inheritance from their boomer dad and mom.
Will that translate right into a ground underneath the inflation charge?
It’s potential.
Researchers at The IMF regarded on the relationship between getting older and inflation:
We discovered that the bigger the proportion of younger and outdated within the whole inhabitants, the upper inflation. Put one other manner, when the working-age inhabitants is bigger, the impact is disinflationary. This hyperlink between age and inflation holds for a lot of nations throughout all time intervals.
These results are giant sufficient to elucidate most of development inflation. As an illustration, the newborn boomers elevated inflation by an estimated 6 share factors in the US between 1955 and 1975 and lowered it by 5 share factors between 1975 and 1990, once they entered working life. Pattern inflation is presently low and steady because the lowering share of younger folks offsets the consequences of the rising share of outdated folks within the inhabitants.
We’ve a big proportion of outdated folks, which must be inflationary.
However we even have a big proportion of working-age folks, which must be disinflationary.
All of which is to say, it is a sophisticated subject that doesn’t have a clearcut reply (welcome to finance).
Inflation may very well be increased if boomers spend down all of their financial savings or millennials don’t save as a lot.
Or AI might show to be a deflationary pressure that offsets any inflationary results of huge demographics.
If the previous 10 years have taught us something about macroeconomics, it’s that there’s a lot we nonetheless don’t learn about inflation.
The Fed tried its damnedest to extend inflation within the 2010s by protecting charges low.
It didn’t work.
A pandemic hits, provide chains get disrupted, the federal government spends trillions of {dollars} and inflation goes bananas.
Now the Fed has aggressively raised charges to extend unemployment and gradual inflation.
Inflation has slowed however the labor market stays sturdy.
Within the immortal phrases of Cousin Eddie, “She falls down a nicely, her eyes go crossed. She will get kicked by a mule, they return. I don’t know.”
Predicting inflation is difficult. Realizing the demographic make-up of the nation most likely doesn’t make it any simpler to foretell its future path.
Michael and I spoke about generational wealth and way more on this week’s Animal Spirits:
Subscribe to The Compound so that you by no means miss an episode.
Additional Studying:
Demographics vs. the Stock Market
Now right here’s what I’ve been studying currently:
1I don’t really feel like a millennial however was born in 1981 so technically I’m on of the oldest millennials within the nation.
A reader asks:
You talked about how baby boomers have so much money for a generation, and anecdotally so many monetary plans that I run for our people have them with far more than they want…they’re diligent savers and buyers. So we’ve got all these boomers with extreme financial savings/investments which are unwilling to show the change to truly spend that cash.
So my query turns into: do we’ve got a everlasting ground of upper inflation sooner or later attributable to boomers truly spending that money that they’ve in retirement, realizing they’ll’t take it to the grave OR as they go it to the following technology who’re extra snug with the spending aspect of the equation—that would create this persistent increased inflation charge for folks over the following decade or two?
I did inquire about the wealth profile of baby boomers in a current piece.
It’s true that boomers management many of the wealth on this nation (52% in response to Federal Reserve knowledge).
That is what I wrote in that beforehand talked about submit:
There is no such thing as a precedent for the boomer technology. We’ve merely by no means had a demographic this large with this a lot wealth dwell this lengthy earlier than.
We’ve no historic knowledge to look again at with regards to making an attempt to quantify the inflationary impression right here.
If all the boomers mentioned screw the children and their inheritance and spent down all of their financial savings, certain you would argue that may be inflationary.
However with boomers residing longer than earlier generations, that would pressure them to unfold that spending out over a few years, which might mute the impression.
It’s potential it is going to be the millennials that can spend more cash.
Jean Twenge at The Atlantic took a sledgehammer to the concept all millennials are broke.
When you take a look at the long-term development of wealth, adjusted for inflation, millennials are proper on monitor relative to earlier generations on the identical level of their lives:
And take a look at the Actuality Bites technology — Gen X has surpassed the boomers by age 50!
The inflation-adjusted median earnings for millennials is round $10,000 increased than the boomers had on the identical age. And once they have been within the 25-to-39 12 months age vary, 50% of boomers owned a house. That quantity is 48% for millennials.
Millennials like to complain however as a complete, they’re doing superb.
The counter-argument right here could be all the stuff that’s now costlier for millennials — housing, faculty, daycare, and many others.
However millennials would be the largest, richest technology sooner or later. It’s inevitable.
My technology1 is probably the most well-educated technology in historical past and meaning increased common incomes which are solely going to extend over time:
So let’s assume millennials are going to spend extra freely and management huge sums of wealth sooner or later from some mixture of their very own earnings and an inheritance from their boomer dad and mom.
Will that translate right into a ground underneath the inflation charge?
It’s potential.
Researchers at The IMF regarded on the relationship between getting older and inflation:
We discovered that the bigger the proportion of younger and outdated within the whole inhabitants, the upper inflation. Put one other manner, when the working-age inhabitants is bigger, the impact is disinflationary. This hyperlink between age and inflation holds for a lot of nations throughout all time intervals.
These results are giant sufficient to elucidate most of development inflation. As an illustration, the newborn boomers elevated inflation by an estimated 6 share factors in the US between 1955 and 1975 and lowered it by 5 share factors between 1975 and 1990, once they entered working life. Pattern inflation is presently low and steady because the lowering share of younger folks offsets the consequences of the rising share of outdated folks within the inhabitants.
We’ve a big proportion of outdated folks, which must be inflationary.
However we even have a big proportion of working-age folks, which must be disinflationary.
All of which is to say, it is a sophisticated subject that doesn’t have a clearcut reply (welcome to finance).
Inflation may very well be increased if boomers spend down all of their financial savings or millennials don’t save as a lot.
Or AI might show to be a deflationary pressure that offsets any inflationary results of huge demographics.
If the previous 10 years have taught us something about macroeconomics, it’s that there’s a lot we nonetheless don’t learn about inflation.
The Fed tried its damnedest to extend inflation within the 2010s by protecting charges low.
It didn’t work.
A pandemic hits, provide chains get disrupted, the federal government spends trillions of {dollars} and inflation goes bananas.
Now the Fed has aggressively raised charges to extend unemployment and gradual inflation.
Inflation has slowed however the labor market stays sturdy.
Within the immortal phrases of Cousin Eddie, “She falls down a nicely, her eyes go crossed. She will get kicked by a mule, they return. I don’t know.”
Predicting inflation is difficult. Realizing the demographic make-up of the nation most likely doesn’t make it any simpler to foretell its future path.
Michael and I spoke about generational wealth and way more on this week’s Animal Spirits:
Subscribe to The Compound so that you by no means miss an episode.
Additional Studying:
Demographics vs. the Stock Market
Now right here’s what I’ve been studying currently:
1I don’t really feel like a millennial however was born in 1981 so technically I’m on of the oldest millennials within the nation.
A reader asks:
You talked about how baby boomers have so much money for a generation, and anecdotally so many monetary plans that I run for our people have them with far more than they want…they’re diligent savers and buyers. So we’ve got all these boomers with extreme financial savings/investments which are unwilling to show the change to truly spend that cash.
So my query turns into: do we’ve got a everlasting ground of upper inflation sooner or later attributable to boomers truly spending that money that they’ve in retirement, realizing they’ll’t take it to the grave OR as they go it to the following technology who’re extra snug with the spending aspect of the equation—that would create this persistent increased inflation charge for folks over the following decade or two?
I did inquire about the wealth profile of baby boomers in a current piece.
It’s true that boomers management many of the wealth on this nation (52% in response to Federal Reserve knowledge).
That is what I wrote in that beforehand talked about submit:
There is no such thing as a precedent for the boomer technology. We’ve merely by no means had a demographic this large with this a lot wealth dwell this lengthy earlier than.
We’ve no historic knowledge to look again at with regards to making an attempt to quantify the inflationary impression right here.
If all the boomers mentioned screw the children and their inheritance and spent down all of their financial savings, certain you would argue that may be inflationary.
However with boomers residing longer than earlier generations, that would pressure them to unfold that spending out over a few years, which might mute the impression.
It’s potential it is going to be the millennials that can spend more cash.
Jean Twenge at The Atlantic took a sledgehammer to the concept all millennials are broke.
When you take a look at the long-term development of wealth, adjusted for inflation, millennials are proper on monitor relative to earlier generations on the identical level of their lives:
And take a look at the Actuality Bites technology — Gen X has surpassed the boomers by age 50!
The inflation-adjusted median earnings for millennials is round $10,000 increased than the boomers had on the identical age. And once they have been within the 25-to-39 12 months age vary, 50% of boomers owned a house. That quantity is 48% for millennials.
Millennials like to complain however as a complete, they’re doing superb.
The counter-argument right here could be all the stuff that’s now costlier for millennials — housing, faculty, daycare, and many others.
However millennials would be the largest, richest technology sooner or later. It’s inevitable.
My technology1 is probably the most well-educated technology in historical past and meaning increased common incomes which are solely going to extend over time:
So let’s assume millennials are going to spend extra freely and management huge sums of wealth sooner or later from some mixture of their very own earnings and an inheritance from their boomer dad and mom.
Will that translate right into a ground underneath the inflation charge?
It’s potential.
Researchers at The IMF regarded on the relationship between getting older and inflation:
We discovered that the bigger the proportion of younger and outdated within the whole inhabitants, the upper inflation. Put one other manner, when the working-age inhabitants is bigger, the impact is disinflationary. This hyperlink between age and inflation holds for a lot of nations throughout all time intervals.
These results are giant sufficient to elucidate most of development inflation. As an illustration, the newborn boomers elevated inflation by an estimated 6 share factors in the US between 1955 and 1975 and lowered it by 5 share factors between 1975 and 1990, once they entered working life. Pattern inflation is presently low and steady because the lowering share of younger folks offsets the consequences of the rising share of outdated folks within the inhabitants.
We’ve a big proportion of outdated folks, which must be inflationary.
However we even have a big proportion of working-age folks, which must be disinflationary.
All of which is to say, it is a sophisticated subject that doesn’t have a clearcut reply (welcome to finance).
Inflation may very well be increased if boomers spend down all of their financial savings or millennials don’t save as a lot.
Or AI might show to be a deflationary pressure that offsets any inflationary results of huge demographics.
If the previous 10 years have taught us something about macroeconomics, it’s that there’s a lot we nonetheless don’t learn about inflation.
The Fed tried its damnedest to extend inflation within the 2010s by protecting charges low.
It didn’t work.
A pandemic hits, provide chains get disrupted, the federal government spends trillions of {dollars} and inflation goes bananas.
Now the Fed has aggressively raised charges to extend unemployment and gradual inflation.
Inflation has slowed however the labor market stays sturdy.
Within the immortal phrases of Cousin Eddie, “She falls down a nicely, her eyes go crossed. She will get kicked by a mule, they return. I don’t know.”
Predicting inflation is difficult. Realizing the demographic make-up of the nation most likely doesn’t make it any simpler to foretell its future path.
Michael and I spoke about generational wealth and way more on this week’s Animal Spirits:
Subscribe to The Compound so that you by no means miss an episode.
Additional Studying:
Demographics vs. the Stock Market
Now right here’s what I’ve been studying currently:
1I don’t really feel like a millennial however was born in 1981 so technically I’m on of the oldest millennials within the nation.
A reader asks:
You talked about how baby boomers have so much money for a generation, and anecdotally so many monetary plans that I run for our people have them with far more than they want…they’re diligent savers and buyers. So we’ve got all these boomers with extreme financial savings/investments which are unwilling to show the change to truly spend that cash.
So my query turns into: do we’ve got a everlasting ground of upper inflation sooner or later attributable to boomers truly spending that money that they’ve in retirement, realizing they’ll’t take it to the grave OR as they go it to the following technology who’re extra snug with the spending aspect of the equation—that would create this persistent increased inflation charge for folks over the following decade or two?
I did inquire about the wealth profile of baby boomers in a current piece.
It’s true that boomers management many of the wealth on this nation (52% in response to Federal Reserve knowledge).
That is what I wrote in that beforehand talked about submit:
There is no such thing as a precedent for the boomer technology. We’ve merely by no means had a demographic this large with this a lot wealth dwell this lengthy earlier than.
We’ve no historic knowledge to look again at with regards to making an attempt to quantify the inflationary impression right here.
If all the boomers mentioned screw the children and their inheritance and spent down all of their financial savings, certain you would argue that may be inflationary.
However with boomers residing longer than earlier generations, that would pressure them to unfold that spending out over a few years, which might mute the impression.
It’s potential it is going to be the millennials that can spend more cash.
Jean Twenge at The Atlantic took a sledgehammer to the concept all millennials are broke.
When you take a look at the long-term development of wealth, adjusted for inflation, millennials are proper on monitor relative to earlier generations on the identical level of their lives:
And take a look at the Actuality Bites technology — Gen X has surpassed the boomers by age 50!
The inflation-adjusted median earnings for millennials is round $10,000 increased than the boomers had on the identical age. And once they have been within the 25-to-39 12 months age vary, 50% of boomers owned a house. That quantity is 48% for millennials.
Millennials like to complain however as a complete, they’re doing superb.
The counter-argument right here could be all the stuff that’s now costlier for millennials — housing, faculty, daycare, and many others.
However millennials would be the largest, richest technology sooner or later. It’s inevitable.
My technology1 is probably the most well-educated technology in historical past and meaning increased common incomes which are solely going to extend over time:
So let’s assume millennials are going to spend extra freely and management huge sums of wealth sooner or later from some mixture of their very own earnings and an inheritance from their boomer dad and mom.
Will that translate right into a ground underneath the inflation charge?
It’s potential.
Researchers at The IMF regarded on the relationship between getting older and inflation:
We discovered that the bigger the proportion of younger and outdated within the whole inhabitants, the upper inflation. Put one other manner, when the working-age inhabitants is bigger, the impact is disinflationary. This hyperlink between age and inflation holds for a lot of nations throughout all time intervals.
These results are giant sufficient to elucidate most of development inflation. As an illustration, the newborn boomers elevated inflation by an estimated 6 share factors in the US between 1955 and 1975 and lowered it by 5 share factors between 1975 and 1990, once they entered working life. Pattern inflation is presently low and steady because the lowering share of younger folks offsets the consequences of the rising share of outdated folks within the inhabitants.
We’ve a big proportion of outdated folks, which must be inflationary.
However we even have a big proportion of working-age folks, which must be disinflationary.
All of which is to say, it is a sophisticated subject that doesn’t have a clearcut reply (welcome to finance).
Inflation may very well be increased if boomers spend down all of their financial savings or millennials don’t save as a lot.
Or AI might show to be a deflationary pressure that offsets any inflationary results of huge demographics.
If the previous 10 years have taught us something about macroeconomics, it’s that there’s a lot we nonetheless don’t learn about inflation.
The Fed tried its damnedest to extend inflation within the 2010s by protecting charges low.
It didn’t work.
A pandemic hits, provide chains get disrupted, the federal government spends trillions of {dollars} and inflation goes bananas.
Now the Fed has aggressively raised charges to extend unemployment and gradual inflation.
Inflation has slowed however the labor market stays sturdy.
Within the immortal phrases of Cousin Eddie, “She falls down a nicely, her eyes go crossed. She will get kicked by a mule, they return. I don’t know.”
Predicting inflation is difficult. Realizing the demographic make-up of the nation most likely doesn’t make it any simpler to foretell its future path.
Michael and I spoke about generational wealth and way more on this week’s Animal Spirits:
Subscribe to The Compound so that you by no means miss an episode.
Additional Studying:
Demographics vs. the Stock Market
Now right here’s what I’ve been studying currently:
1I don’t really feel like a millennial however was born in 1981 so technically I’m on of the oldest millennials within the nation.
A reader asks:
You talked about how baby boomers have so much money for a generation, and anecdotally so many monetary plans that I run for our people have them with far more than they want…they’re diligent savers and buyers. So we’ve got all these boomers with extreme financial savings/investments which are unwilling to show the change to truly spend that cash.
So my query turns into: do we’ve got a everlasting ground of upper inflation sooner or later attributable to boomers truly spending that money that they’ve in retirement, realizing they’ll’t take it to the grave OR as they go it to the following technology who’re extra snug with the spending aspect of the equation—that would create this persistent increased inflation charge for folks over the following decade or two?
I did inquire about the wealth profile of baby boomers in a current piece.
It’s true that boomers management many of the wealth on this nation (52% in response to Federal Reserve knowledge).
That is what I wrote in that beforehand talked about submit:
There is no such thing as a precedent for the boomer technology. We’ve merely by no means had a demographic this large with this a lot wealth dwell this lengthy earlier than.
We’ve no historic knowledge to look again at with regards to making an attempt to quantify the inflationary impression right here.
If all the boomers mentioned screw the children and their inheritance and spent down all of their financial savings, certain you would argue that may be inflationary.
However with boomers residing longer than earlier generations, that would pressure them to unfold that spending out over a few years, which might mute the impression.
It’s potential it is going to be the millennials that can spend more cash.
Jean Twenge at The Atlantic took a sledgehammer to the concept all millennials are broke.
When you take a look at the long-term development of wealth, adjusted for inflation, millennials are proper on monitor relative to earlier generations on the identical level of their lives:
And take a look at the Actuality Bites technology — Gen X has surpassed the boomers by age 50!
The inflation-adjusted median earnings for millennials is round $10,000 increased than the boomers had on the identical age. And once they have been within the 25-to-39 12 months age vary, 50% of boomers owned a house. That quantity is 48% for millennials.
Millennials like to complain however as a complete, they’re doing superb.
The counter-argument right here could be all the stuff that’s now costlier for millennials — housing, faculty, daycare, and many others.
However millennials would be the largest, richest technology sooner or later. It’s inevitable.
My technology1 is probably the most well-educated technology in historical past and meaning increased common incomes which are solely going to extend over time:
So let’s assume millennials are going to spend extra freely and management huge sums of wealth sooner or later from some mixture of their very own earnings and an inheritance from their boomer dad and mom.
Will that translate right into a ground underneath the inflation charge?
It’s potential.
Researchers at The IMF regarded on the relationship between getting older and inflation:
We discovered that the bigger the proportion of younger and outdated within the whole inhabitants, the upper inflation. Put one other manner, when the working-age inhabitants is bigger, the impact is disinflationary. This hyperlink between age and inflation holds for a lot of nations throughout all time intervals.
These results are giant sufficient to elucidate most of development inflation. As an illustration, the newborn boomers elevated inflation by an estimated 6 share factors in the US between 1955 and 1975 and lowered it by 5 share factors between 1975 and 1990, once they entered working life. Pattern inflation is presently low and steady because the lowering share of younger folks offsets the consequences of the rising share of outdated folks within the inhabitants.
We’ve a big proportion of outdated folks, which must be inflationary.
However we even have a big proportion of working-age folks, which must be disinflationary.
All of which is to say, it is a sophisticated subject that doesn’t have a clearcut reply (welcome to finance).
Inflation may very well be increased if boomers spend down all of their financial savings or millennials don’t save as a lot.
Or AI might show to be a deflationary pressure that offsets any inflationary results of huge demographics.
If the previous 10 years have taught us something about macroeconomics, it’s that there’s a lot we nonetheless don’t learn about inflation.
The Fed tried its damnedest to extend inflation within the 2010s by protecting charges low.
It didn’t work.
A pandemic hits, provide chains get disrupted, the federal government spends trillions of {dollars} and inflation goes bananas.
Now the Fed has aggressively raised charges to extend unemployment and gradual inflation.
Inflation has slowed however the labor market stays sturdy.
Within the immortal phrases of Cousin Eddie, “She falls down a nicely, her eyes go crossed. She will get kicked by a mule, they return. I don’t know.”
Predicting inflation is difficult. Realizing the demographic make-up of the nation most likely doesn’t make it any simpler to foretell its future path.
Michael and I spoke about generational wealth and way more on this week’s Animal Spirits:
Subscribe to The Compound so that you by no means miss an episode.
Additional Studying:
Demographics vs. the Stock Market
Now right here’s what I’ve been studying currently:
1I don’t really feel like a millennial however was born in 1981 so technically I’m on of the oldest millennials within the nation.
A reader asks:
You talked about how baby boomers have so much money for a generation, and anecdotally so many monetary plans that I run for our people have them with far more than they want…they’re diligent savers and buyers. So we’ve got all these boomers with extreme financial savings/investments which are unwilling to show the change to truly spend that cash.
So my query turns into: do we’ve got a everlasting ground of upper inflation sooner or later attributable to boomers truly spending that money that they’ve in retirement, realizing they’ll’t take it to the grave OR as they go it to the following technology who’re extra snug with the spending aspect of the equation—that would create this persistent increased inflation charge for folks over the following decade or two?
I did inquire about the wealth profile of baby boomers in a current piece.
It’s true that boomers management many of the wealth on this nation (52% in response to Federal Reserve knowledge).
That is what I wrote in that beforehand talked about submit:
There is no such thing as a precedent for the boomer technology. We’ve merely by no means had a demographic this large with this a lot wealth dwell this lengthy earlier than.
We’ve no historic knowledge to look again at with regards to making an attempt to quantify the inflationary impression right here.
If all the boomers mentioned screw the children and their inheritance and spent down all of their financial savings, certain you would argue that may be inflationary.
However with boomers residing longer than earlier generations, that would pressure them to unfold that spending out over a few years, which might mute the impression.
It’s potential it is going to be the millennials that can spend more cash.
Jean Twenge at The Atlantic took a sledgehammer to the concept all millennials are broke.
When you take a look at the long-term development of wealth, adjusted for inflation, millennials are proper on monitor relative to earlier generations on the identical level of their lives:
And take a look at the Actuality Bites technology — Gen X has surpassed the boomers by age 50!
The inflation-adjusted median earnings for millennials is round $10,000 increased than the boomers had on the identical age. And once they have been within the 25-to-39 12 months age vary, 50% of boomers owned a house. That quantity is 48% for millennials.
Millennials like to complain however as a complete, they’re doing superb.
The counter-argument right here could be all the stuff that’s now costlier for millennials — housing, faculty, daycare, and many others.
However millennials would be the largest, richest technology sooner or later. It’s inevitable.
My technology1 is probably the most well-educated technology in historical past and meaning increased common incomes which are solely going to extend over time:
So let’s assume millennials are going to spend extra freely and management huge sums of wealth sooner or later from some mixture of their very own earnings and an inheritance from their boomer dad and mom.
Will that translate right into a ground underneath the inflation charge?
It’s potential.
Researchers at The IMF regarded on the relationship between getting older and inflation:
We discovered that the bigger the proportion of younger and outdated within the whole inhabitants, the upper inflation. Put one other manner, when the working-age inhabitants is bigger, the impact is disinflationary. This hyperlink between age and inflation holds for a lot of nations throughout all time intervals.
These results are giant sufficient to elucidate most of development inflation. As an illustration, the newborn boomers elevated inflation by an estimated 6 share factors in the US between 1955 and 1975 and lowered it by 5 share factors between 1975 and 1990, once they entered working life. Pattern inflation is presently low and steady because the lowering share of younger folks offsets the consequences of the rising share of outdated folks within the inhabitants.
We’ve a big proportion of outdated folks, which must be inflationary.
However we even have a big proportion of working-age folks, which must be disinflationary.
All of which is to say, it is a sophisticated subject that doesn’t have a clearcut reply (welcome to finance).
Inflation may very well be increased if boomers spend down all of their financial savings or millennials don’t save as a lot.
Or AI might show to be a deflationary pressure that offsets any inflationary results of huge demographics.
If the previous 10 years have taught us something about macroeconomics, it’s that there’s a lot we nonetheless don’t learn about inflation.
The Fed tried its damnedest to extend inflation within the 2010s by protecting charges low.
It didn’t work.
A pandemic hits, provide chains get disrupted, the federal government spends trillions of {dollars} and inflation goes bananas.
Now the Fed has aggressively raised charges to extend unemployment and gradual inflation.
Inflation has slowed however the labor market stays sturdy.
Within the immortal phrases of Cousin Eddie, “She falls down a nicely, her eyes go crossed. She will get kicked by a mule, they return. I don’t know.”
Predicting inflation is difficult. Realizing the demographic make-up of the nation most likely doesn’t make it any simpler to foretell its future path.
Michael and I spoke about generational wealth and way more on this week’s Animal Spirits:
Subscribe to The Compound so that you by no means miss an episode.
Additional Studying:
Demographics vs. the Stock Market
Now right here’s what I’ve been studying currently:
1I don’t really feel like a millennial however was born in 1981 so technically I’m on of the oldest millennials within the nation.
A reader asks:
You talked about how baby boomers have so much money for a generation, and anecdotally so many monetary plans that I run for our people have them with far more than they want…they’re diligent savers and buyers. So we’ve got all these boomers with extreme financial savings/investments which are unwilling to show the change to truly spend that cash.
So my query turns into: do we’ve got a everlasting ground of upper inflation sooner or later attributable to boomers truly spending that money that they’ve in retirement, realizing they’ll’t take it to the grave OR as they go it to the following technology who’re extra snug with the spending aspect of the equation—that would create this persistent increased inflation charge for folks over the following decade or two?
I did inquire about the wealth profile of baby boomers in a current piece.
It’s true that boomers management many of the wealth on this nation (52% in response to Federal Reserve knowledge).
That is what I wrote in that beforehand talked about submit:
There is no such thing as a precedent for the boomer technology. We’ve merely by no means had a demographic this large with this a lot wealth dwell this lengthy earlier than.
We’ve no historic knowledge to look again at with regards to making an attempt to quantify the inflationary impression right here.
If all the boomers mentioned screw the children and their inheritance and spent down all of their financial savings, certain you would argue that may be inflationary.
However with boomers residing longer than earlier generations, that would pressure them to unfold that spending out over a few years, which might mute the impression.
It’s potential it is going to be the millennials that can spend more cash.
Jean Twenge at The Atlantic took a sledgehammer to the concept all millennials are broke.
When you take a look at the long-term development of wealth, adjusted for inflation, millennials are proper on monitor relative to earlier generations on the identical level of their lives:
And take a look at the Actuality Bites technology — Gen X has surpassed the boomers by age 50!
The inflation-adjusted median earnings for millennials is round $10,000 increased than the boomers had on the identical age. And once they have been within the 25-to-39 12 months age vary, 50% of boomers owned a house. That quantity is 48% for millennials.
Millennials like to complain however as a complete, they’re doing superb.
The counter-argument right here could be all the stuff that’s now costlier for millennials — housing, faculty, daycare, and many others.
However millennials would be the largest, richest technology sooner or later. It’s inevitable.
My technology1 is probably the most well-educated technology in historical past and meaning increased common incomes which are solely going to extend over time:
So let’s assume millennials are going to spend extra freely and management huge sums of wealth sooner or later from some mixture of their very own earnings and an inheritance from their boomer dad and mom.
Will that translate right into a ground underneath the inflation charge?
It’s potential.
Researchers at The IMF regarded on the relationship between getting older and inflation:
We discovered that the bigger the proportion of younger and outdated within the whole inhabitants, the upper inflation. Put one other manner, when the working-age inhabitants is bigger, the impact is disinflationary. This hyperlink between age and inflation holds for a lot of nations throughout all time intervals.
These results are giant sufficient to elucidate most of development inflation. As an illustration, the newborn boomers elevated inflation by an estimated 6 share factors in the US between 1955 and 1975 and lowered it by 5 share factors between 1975 and 1990, once they entered working life. Pattern inflation is presently low and steady because the lowering share of younger folks offsets the consequences of the rising share of outdated folks within the inhabitants.
We’ve a big proportion of outdated folks, which must be inflationary.
However we even have a big proportion of working-age folks, which must be disinflationary.
All of which is to say, it is a sophisticated subject that doesn’t have a clearcut reply (welcome to finance).
Inflation may very well be increased if boomers spend down all of their financial savings or millennials don’t save as a lot.
Or AI might show to be a deflationary pressure that offsets any inflationary results of huge demographics.
If the previous 10 years have taught us something about macroeconomics, it’s that there’s a lot we nonetheless don’t learn about inflation.
The Fed tried its damnedest to extend inflation within the 2010s by protecting charges low.
It didn’t work.
A pandemic hits, provide chains get disrupted, the federal government spends trillions of {dollars} and inflation goes bananas.
Now the Fed has aggressively raised charges to extend unemployment and gradual inflation.
Inflation has slowed however the labor market stays sturdy.
Within the immortal phrases of Cousin Eddie, “She falls down a nicely, her eyes go crossed. She will get kicked by a mule, they return. I don’t know.”
Predicting inflation is difficult. Realizing the demographic make-up of the nation most likely doesn’t make it any simpler to foretell its future path.
Michael and I spoke about generational wealth and way more on this week’s Animal Spirits:
Subscribe to The Compound so that you by no means miss an episode.
Additional Studying:
Demographics vs. the Stock Market
Now right here’s what I’ve been studying currently:
1I don’t really feel like a millennial however was born in 1981 so technically I’m on of the oldest millennials within the nation.
A reader asks:
You talked about how baby boomers have so much money for a generation, and anecdotally so many monetary plans that I run for our people have them with far more than they want…they’re diligent savers and buyers. So we’ve got all these boomers with extreme financial savings/investments which are unwilling to show the change to truly spend that cash.
So my query turns into: do we’ve got a everlasting ground of upper inflation sooner or later attributable to boomers truly spending that money that they’ve in retirement, realizing they’ll’t take it to the grave OR as they go it to the following technology who’re extra snug with the spending aspect of the equation—that would create this persistent increased inflation charge for folks over the following decade or two?
I did inquire about the wealth profile of baby boomers in a current piece.
It’s true that boomers management many of the wealth on this nation (52% in response to Federal Reserve knowledge).
That is what I wrote in that beforehand talked about submit:
There is no such thing as a precedent for the boomer technology. We’ve merely by no means had a demographic this large with this a lot wealth dwell this lengthy earlier than.
We’ve no historic knowledge to look again at with regards to making an attempt to quantify the inflationary impression right here.
If all the boomers mentioned screw the children and their inheritance and spent down all of their financial savings, certain you would argue that may be inflationary.
However with boomers residing longer than earlier generations, that would pressure them to unfold that spending out over a few years, which might mute the impression.
It’s potential it is going to be the millennials that can spend more cash.
Jean Twenge at The Atlantic took a sledgehammer to the concept all millennials are broke.
When you take a look at the long-term development of wealth, adjusted for inflation, millennials are proper on monitor relative to earlier generations on the identical level of their lives:
And take a look at the Actuality Bites technology — Gen X has surpassed the boomers by age 50!
The inflation-adjusted median earnings for millennials is round $10,000 increased than the boomers had on the identical age. And once they have been within the 25-to-39 12 months age vary, 50% of boomers owned a house. That quantity is 48% for millennials.
Millennials like to complain however as a complete, they’re doing superb.
The counter-argument right here could be all the stuff that’s now costlier for millennials — housing, faculty, daycare, and many others.
However millennials would be the largest, richest technology sooner or later. It’s inevitable.
My technology1 is probably the most well-educated technology in historical past and meaning increased common incomes which are solely going to extend over time:
So let’s assume millennials are going to spend extra freely and management huge sums of wealth sooner or later from some mixture of their very own earnings and an inheritance from their boomer dad and mom.
Will that translate right into a ground underneath the inflation charge?
It’s potential.
Researchers at The IMF regarded on the relationship between getting older and inflation:
We discovered that the bigger the proportion of younger and outdated within the whole inhabitants, the upper inflation. Put one other manner, when the working-age inhabitants is bigger, the impact is disinflationary. This hyperlink between age and inflation holds for a lot of nations throughout all time intervals.
These results are giant sufficient to elucidate most of development inflation. As an illustration, the newborn boomers elevated inflation by an estimated 6 share factors in the US between 1955 and 1975 and lowered it by 5 share factors between 1975 and 1990, once they entered working life. Pattern inflation is presently low and steady because the lowering share of younger folks offsets the consequences of the rising share of outdated folks within the inhabitants.
We’ve a big proportion of outdated folks, which must be inflationary.
However we even have a big proportion of working-age folks, which must be disinflationary.
All of which is to say, it is a sophisticated subject that doesn’t have a clearcut reply (welcome to finance).
Inflation may very well be increased if boomers spend down all of their financial savings or millennials don’t save as a lot.
Or AI might show to be a deflationary pressure that offsets any inflationary results of huge demographics.
If the previous 10 years have taught us something about macroeconomics, it’s that there’s a lot we nonetheless don’t learn about inflation.
The Fed tried its damnedest to extend inflation within the 2010s by protecting charges low.
It didn’t work.
A pandemic hits, provide chains get disrupted, the federal government spends trillions of {dollars} and inflation goes bananas.
Now the Fed has aggressively raised charges to extend unemployment and gradual inflation.
Inflation has slowed however the labor market stays sturdy.
Within the immortal phrases of Cousin Eddie, “She falls down a nicely, her eyes go crossed. She will get kicked by a mule, they return. I don’t know.”
Predicting inflation is difficult. Realizing the demographic make-up of the nation most likely doesn’t make it any simpler to foretell its future path.
Michael and I spoke about generational wealth and way more on this week’s Animal Spirits:
Subscribe to The Compound so that you by no means miss an episode.
Additional Studying:
Demographics vs. the Stock Market
Now right here’s what I’ve been studying currently:
1I don’t really feel like a millennial however was born in 1981 so technically I’m on of the oldest millennials within the nation.
A reader asks:
You talked about how baby boomers have so much money for a generation, and anecdotally so many monetary plans that I run for our people have them with far more than they want…they’re diligent savers and buyers. So we’ve got all these boomers with extreme financial savings/investments which are unwilling to show the change to truly spend that cash.
So my query turns into: do we’ve got a everlasting ground of upper inflation sooner or later attributable to boomers truly spending that money that they’ve in retirement, realizing they’ll’t take it to the grave OR as they go it to the following technology who’re extra snug with the spending aspect of the equation—that would create this persistent increased inflation charge for folks over the following decade or two?
I did inquire about the wealth profile of baby boomers in a current piece.
It’s true that boomers management many of the wealth on this nation (52% in response to Federal Reserve knowledge).
That is what I wrote in that beforehand talked about submit:
There is no such thing as a precedent for the boomer technology. We’ve merely by no means had a demographic this large with this a lot wealth dwell this lengthy earlier than.
We’ve no historic knowledge to look again at with regards to making an attempt to quantify the inflationary impression right here.
If all the boomers mentioned screw the children and their inheritance and spent down all of their financial savings, certain you would argue that may be inflationary.
However with boomers residing longer than earlier generations, that would pressure them to unfold that spending out over a few years, which might mute the impression.
It’s potential it is going to be the millennials that can spend more cash.
Jean Twenge at The Atlantic took a sledgehammer to the concept all millennials are broke.
When you take a look at the long-term development of wealth, adjusted for inflation, millennials are proper on monitor relative to earlier generations on the identical level of their lives:
And take a look at the Actuality Bites technology — Gen X has surpassed the boomers by age 50!
The inflation-adjusted median earnings for millennials is round $10,000 increased than the boomers had on the identical age. And once they have been within the 25-to-39 12 months age vary, 50% of boomers owned a house. That quantity is 48% for millennials.
Millennials like to complain however as a complete, they’re doing superb.
The counter-argument right here could be all the stuff that’s now costlier for millennials — housing, faculty, daycare, and many others.
However millennials would be the largest, richest technology sooner or later. It’s inevitable.
My technology1 is probably the most well-educated technology in historical past and meaning increased common incomes which are solely going to extend over time:
So let’s assume millennials are going to spend extra freely and management huge sums of wealth sooner or later from some mixture of their very own earnings and an inheritance from their boomer dad and mom.
Will that translate right into a ground underneath the inflation charge?
It’s potential.
Researchers at The IMF regarded on the relationship between getting older and inflation:
We discovered that the bigger the proportion of younger and outdated within the whole inhabitants, the upper inflation. Put one other manner, when the working-age inhabitants is bigger, the impact is disinflationary. This hyperlink between age and inflation holds for a lot of nations throughout all time intervals.
These results are giant sufficient to elucidate most of development inflation. As an illustration, the newborn boomers elevated inflation by an estimated 6 share factors in the US between 1955 and 1975 and lowered it by 5 share factors between 1975 and 1990, once they entered working life. Pattern inflation is presently low and steady because the lowering share of younger folks offsets the consequences of the rising share of outdated folks within the inhabitants.
We’ve a big proportion of outdated folks, which must be inflationary.
However we even have a big proportion of working-age folks, which must be disinflationary.
All of which is to say, it is a sophisticated subject that doesn’t have a clearcut reply (welcome to finance).
Inflation may very well be increased if boomers spend down all of their financial savings or millennials don’t save as a lot.
Or AI might show to be a deflationary pressure that offsets any inflationary results of huge demographics.
If the previous 10 years have taught us something about macroeconomics, it’s that there’s a lot we nonetheless don’t learn about inflation.
The Fed tried its damnedest to extend inflation within the 2010s by protecting charges low.
It didn’t work.
A pandemic hits, provide chains get disrupted, the federal government spends trillions of {dollars} and inflation goes bananas.
Now the Fed has aggressively raised charges to extend unemployment and gradual inflation.
Inflation has slowed however the labor market stays sturdy.
Within the immortal phrases of Cousin Eddie, “She falls down a nicely, her eyes go crossed. She will get kicked by a mule, they return. I don’t know.”
Predicting inflation is difficult. Realizing the demographic make-up of the nation most likely doesn’t make it any simpler to foretell its future path.
Michael and I spoke about generational wealth and way more on this week’s Animal Spirits:
Subscribe to The Compound so that you by no means miss an episode.
Additional Studying:
Demographics vs. the Stock Market
Now right here’s what I’ve been studying currently:
1I don’t really feel like a millennial however was born in 1981 so technically I’m on of the oldest millennials within the nation.
A reader asks:
You talked about how baby boomers have so much money for a generation, and anecdotally so many monetary plans that I run for our people have them with far more than they want…they’re diligent savers and buyers. So we’ve got all these boomers with extreme financial savings/investments which are unwilling to show the change to truly spend that cash.
So my query turns into: do we’ve got a everlasting ground of upper inflation sooner or later attributable to boomers truly spending that money that they’ve in retirement, realizing they’ll’t take it to the grave OR as they go it to the following technology who’re extra snug with the spending aspect of the equation—that would create this persistent increased inflation charge for folks over the following decade or two?
I did inquire about the wealth profile of baby boomers in a current piece.
It’s true that boomers management many of the wealth on this nation (52% in response to Federal Reserve knowledge).
That is what I wrote in that beforehand talked about submit:
There is no such thing as a precedent for the boomer technology. We’ve merely by no means had a demographic this large with this a lot wealth dwell this lengthy earlier than.
We’ve no historic knowledge to look again at with regards to making an attempt to quantify the inflationary impression right here.
If all the boomers mentioned screw the children and their inheritance and spent down all of their financial savings, certain you would argue that may be inflationary.
However with boomers residing longer than earlier generations, that would pressure them to unfold that spending out over a few years, which might mute the impression.
It’s potential it is going to be the millennials that can spend more cash.
Jean Twenge at The Atlantic took a sledgehammer to the concept all millennials are broke.
When you take a look at the long-term development of wealth, adjusted for inflation, millennials are proper on monitor relative to earlier generations on the identical level of their lives:
And take a look at the Actuality Bites technology — Gen X has surpassed the boomers by age 50!
The inflation-adjusted median earnings for millennials is round $10,000 increased than the boomers had on the identical age. And once they have been within the 25-to-39 12 months age vary, 50% of boomers owned a house. That quantity is 48% for millennials.
Millennials like to complain however as a complete, they’re doing superb.
The counter-argument right here could be all the stuff that’s now costlier for millennials — housing, faculty, daycare, and many others.
However millennials would be the largest, richest technology sooner or later. It’s inevitable.
My technology1 is probably the most well-educated technology in historical past and meaning increased common incomes which are solely going to extend over time:
So let’s assume millennials are going to spend extra freely and management huge sums of wealth sooner or later from some mixture of their very own earnings and an inheritance from their boomer dad and mom.
Will that translate right into a ground underneath the inflation charge?
It’s potential.
Researchers at The IMF regarded on the relationship between getting older and inflation:
We discovered that the bigger the proportion of younger and outdated within the whole inhabitants, the upper inflation. Put one other manner, when the working-age inhabitants is bigger, the impact is disinflationary. This hyperlink between age and inflation holds for a lot of nations throughout all time intervals.
These results are giant sufficient to elucidate most of development inflation. As an illustration, the newborn boomers elevated inflation by an estimated 6 share factors in the US between 1955 and 1975 and lowered it by 5 share factors between 1975 and 1990, once they entered working life. Pattern inflation is presently low and steady because the lowering share of younger folks offsets the consequences of the rising share of outdated folks within the inhabitants.
We’ve a big proportion of outdated folks, which must be inflationary.
However we even have a big proportion of working-age folks, which must be disinflationary.
All of which is to say, it is a sophisticated subject that doesn’t have a clearcut reply (welcome to finance).
Inflation may very well be increased if boomers spend down all of their financial savings or millennials don’t save as a lot.
Or AI might show to be a deflationary pressure that offsets any inflationary results of huge demographics.
If the previous 10 years have taught us something about macroeconomics, it’s that there’s a lot we nonetheless don’t learn about inflation.
The Fed tried its damnedest to extend inflation within the 2010s by protecting charges low.
It didn’t work.
A pandemic hits, provide chains get disrupted, the federal government spends trillions of {dollars} and inflation goes bananas.
Now the Fed has aggressively raised charges to extend unemployment and gradual inflation.
Inflation has slowed however the labor market stays sturdy.
Within the immortal phrases of Cousin Eddie, “She falls down a nicely, her eyes go crossed. She will get kicked by a mule, they return. I don’t know.”
Predicting inflation is difficult. Realizing the demographic make-up of the nation most likely doesn’t make it any simpler to foretell its future path.
Michael and I spoke about generational wealth and way more on this week’s Animal Spirits:
Subscribe to The Compound so that you by no means miss an episode.
Additional Studying:
Demographics vs. the Stock Market
Now right here’s what I’ve been studying currently:
1I don’t really feel like a millennial however was born in 1981 so technically I’m on of the oldest millennials within the nation.
A reader asks:
You talked about how baby boomers have so much money for a generation, and anecdotally so many monetary plans that I run for our people have them with far more than they want…they’re diligent savers and buyers. So we’ve got all these boomers with extreme financial savings/investments which are unwilling to show the change to truly spend that cash.
So my query turns into: do we’ve got a everlasting ground of upper inflation sooner or later attributable to boomers truly spending that money that they’ve in retirement, realizing they’ll’t take it to the grave OR as they go it to the following technology who’re extra snug with the spending aspect of the equation—that would create this persistent increased inflation charge for folks over the following decade or two?
I did inquire about the wealth profile of baby boomers in a current piece.
It’s true that boomers management many of the wealth on this nation (52% in response to Federal Reserve knowledge).
That is what I wrote in that beforehand talked about submit:
There is no such thing as a precedent for the boomer technology. We’ve merely by no means had a demographic this large with this a lot wealth dwell this lengthy earlier than.
We’ve no historic knowledge to look again at with regards to making an attempt to quantify the inflationary impression right here.
If all the boomers mentioned screw the children and their inheritance and spent down all of their financial savings, certain you would argue that may be inflationary.
However with boomers residing longer than earlier generations, that would pressure them to unfold that spending out over a few years, which might mute the impression.
It’s potential it is going to be the millennials that can spend more cash.
Jean Twenge at The Atlantic took a sledgehammer to the concept all millennials are broke.
When you take a look at the long-term development of wealth, adjusted for inflation, millennials are proper on monitor relative to earlier generations on the identical level of their lives:
And take a look at the Actuality Bites technology — Gen X has surpassed the boomers by age 50!
The inflation-adjusted median earnings for millennials is round $10,000 increased than the boomers had on the identical age. And once they have been within the 25-to-39 12 months age vary, 50% of boomers owned a house. That quantity is 48% for millennials.
Millennials like to complain however as a complete, they’re doing superb.
The counter-argument right here could be all the stuff that’s now costlier for millennials — housing, faculty, daycare, and many others.
However millennials would be the largest, richest technology sooner or later. It’s inevitable.
My technology1 is probably the most well-educated technology in historical past and meaning increased common incomes which are solely going to extend over time:
So let’s assume millennials are going to spend extra freely and management huge sums of wealth sooner or later from some mixture of their very own earnings and an inheritance from their boomer dad and mom.
Will that translate right into a ground underneath the inflation charge?
It’s potential.
Researchers at The IMF regarded on the relationship between getting older and inflation:
We discovered that the bigger the proportion of younger and outdated within the whole inhabitants, the upper inflation. Put one other manner, when the working-age inhabitants is bigger, the impact is disinflationary. This hyperlink between age and inflation holds for a lot of nations throughout all time intervals.
These results are giant sufficient to elucidate most of development inflation. As an illustration, the newborn boomers elevated inflation by an estimated 6 share factors in the US between 1955 and 1975 and lowered it by 5 share factors between 1975 and 1990, once they entered working life. Pattern inflation is presently low and steady because the lowering share of younger folks offsets the consequences of the rising share of outdated folks within the inhabitants.
We’ve a big proportion of outdated folks, which must be inflationary.
However we even have a big proportion of working-age folks, which must be disinflationary.
All of which is to say, it is a sophisticated subject that doesn’t have a clearcut reply (welcome to finance).
Inflation may very well be increased if boomers spend down all of their financial savings or millennials don’t save as a lot.
Or AI might show to be a deflationary pressure that offsets any inflationary results of huge demographics.
If the previous 10 years have taught us something about macroeconomics, it’s that there’s a lot we nonetheless don’t learn about inflation.
The Fed tried its damnedest to extend inflation within the 2010s by protecting charges low.
It didn’t work.
A pandemic hits, provide chains get disrupted, the federal government spends trillions of {dollars} and inflation goes bananas.
Now the Fed has aggressively raised charges to extend unemployment and gradual inflation.
Inflation has slowed however the labor market stays sturdy.
Within the immortal phrases of Cousin Eddie, “She falls down a nicely, her eyes go crossed. She will get kicked by a mule, they return. I don’t know.”
Predicting inflation is difficult. Realizing the demographic make-up of the nation most likely doesn’t make it any simpler to foretell its future path.
Michael and I spoke about generational wealth and way more on this week’s Animal Spirits:
Subscribe to The Compound so that you by no means miss an episode.
Additional Studying:
Demographics vs. the Stock Market
Now right here’s what I’ve been studying currently:
1I don’t really feel like a millennial however was born in 1981 so technically I’m on of the oldest millennials within the nation.
A reader asks:
You talked about how baby boomers have so much money for a generation, and anecdotally so many monetary plans that I run for our people have them with far more than they want…they’re diligent savers and buyers. So we’ve got all these boomers with extreme financial savings/investments which are unwilling to show the change to truly spend that cash.
So my query turns into: do we’ve got a everlasting ground of upper inflation sooner or later attributable to boomers truly spending that money that they’ve in retirement, realizing they’ll’t take it to the grave OR as they go it to the following technology who’re extra snug with the spending aspect of the equation—that would create this persistent increased inflation charge for folks over the following decade or two?
I did inquire about the wealth profile of baby boomers in a current piece.
It’s true that boomers management many of the wealth on this nation (52% in response to Federal Reserve knowledge).
That is what I wrote in that beforehand talked about submit:
There is no such thing as a precedent for the boomer technology. We’ve merely by no means had a demographic this large with this a lot wealth dwell this lengthy earlier than.
We’ve no historic knowledge to look again at with regards to making an attempt to quantify the inflationary impression right here.
If all the boomers mentioned screw the children and their inheritance and spent down all of their financial savings, certain you would argue that may be inflationary.
However with boomers residing longer than earlier generations, that would pressure them to unfold that spending out over a few years, which might mute the impression.
It’s potential it is going to be the millennials that can spend more cash.
Jean Twenge at The Atlantic took a sledgehammer to the concept all millennials are broke.
When you take a look at the long-term development of wealth, adjusted for inflation, millennials are proper on monitor relative to earlier generations on the identical level of their lives:
And take a look at the Actuality Bites technology — Gen X has surpassed the boomers by age 50!
The inflation-adjusted median earnings for millennials is round $10,000 increased than the boomers had on the identical age. And once they have been within the 25-to-39 12 months age vary, 50% of boomers owned a house. That quantity is 48% for millennials.
Millennials like to complain however as a complete, they’re doing superb.
The counter-argument right here could be all the stuff that’s now costlier for millennials — housing, faculty, daycare, and many others.
However millennials would be the largest, richest technology sooner or later. It’s inevitable.
My technology1 is probably the most well-educated technology in historical past and meaning increased common incomes which are solely going to extend over time:
So let’s assume millennials are going to spend extra freely and management huge sums of wealth sooner or later from some mixture of their very own earnings and an inheritance from their boomer dad and mom.
Will that translate right into a ground underneath the inflation charge?
It’s potential.
Researchers at The IMF regarded on the relationship between getting older and inflation:
We discovered that the bigger the proportion of younger and outdated within the whole inhabitants, the upper inflation. Put one other manner, when the working-age inhabitants is bigger, the impact is disinflationary. This hyperlink between age and inflation holds for a lot of nations throughout all time intervals.
These results are giant sufficient to elucidate most of development inflation. As an illustration, the newborn boomers elevated inflation by an estimated 6 share factors in the US between 1955 and 1975 and lowered it by 5 share factors between 1975 and 1990, once they entered working life. Pattern inflation is presently low and steady because the lowering share of younger folks offsets the consequences of the rising share of outdated folks within the inhabitants.
We’ve a big proportion of outdated folks, which must be inflationary.
However we even have a big proportion of working-age folks, which must be disinflationary.
All of which is to say, it is a sophisticated subject that doesn’t have a clearcut reply (welcome to finance).
Inflation may very well be increased if boomers spend down all of their financial savings or millennials don’t save as a lot.
Or AI might show to be a deflationary pressure that offsets any inflationary results of huge demographics.
If the previous 10 years have taught us something about macroeconomics, it’s that there’s a lot we nonetheless don’t learn about inflation.
The Fed tried its damnedest to extend inflation within the 2010s by protecting charges low.
It didn’t work.
A pandemic hits, provide chains get disrupted, the federal government spends trillions of {dollars} and inflation goes bananas.
Now the Fed has aggressively raised charges to extend unemployment and gradual inflation.
Inflation has slowed however the labor market stays sturdy.
Within the immortal phrases of Cousin Eddie, “She falls down a nicely, her eyes go crossed. She will get kicked by a mule, they return. I don’t know.”
Predicting inflation is difficult. Realizing the demographic make-up of the nation most likely doesn’t make it any simpler to foretell its future path.
Michael and I spoke about generational wealth and way more on this week’s Animal Spirits:
Subscribe to The Compound so that you by no means miss an episode.
Additional Studying:
Demographics vs. the Stock Market
Now right here’s what I’ve been studying currently:
1I don’t really feel like a millennial however was born in 1981 so technically I’m on of the oldest millennials within the nation.
A reader asks:
You talked about how baby boomers have so much money for a generation, and anecdotally so many monetary plans that I run for our people have them with far more than they want…they’re diligent savers and buyers. So we’ve got all these boomers with extreme financial savings/investments which are unwilling to show the change to truly spend that cash.
So my query turns into: do we’ve got a everlasting ground of upper inflation sooner or later attributable to boomers truly spending that money that they’ve in retirement, realizing they’ll’t take it to the grave OR as they go it to the following technology who’re extra snug with the spending aspect of the equation—that would create this persistent increased inflation charge for folks over the following decade or two?
I did inquire about the wealth profile of baby boomers in a current piece.
It’s true that boomers management many of the wealth on this nation (52% in response to Federal Reserve knowledge).
That is what I wrote in that beforehand talked about submit:
There is no such thing as a precedent for the boomer technology. We’ve merely by no means had a demographic this large with this a lot wealth dwell this lengthy earlier than.
We’ve no historic knowledge to look again at with regards to making an attempt to quantify the inflationary impression right here.
If all the boomers mentioned screw the children and their inheritance and spent down all of their financial savings, certain you would argue that may be inflationary.
However with boomers residing longer than earlier generations, that would pressure them to unfold that spending out over a few years, which might mute the impression.
It’s potential it is going to be the millennials that can spend more cash.
Jean Twenge at The Atlantic took a sledgehammer to the concept all millennials are broke.
When you take a look at the long-term development of wealth, adjusted for inflation, millennials are proper on monitor relative to earlier generations on the identical level of their lives:
And take a look at the Actuality Bites technology — Gen X has surpassed the boomers by age 50!
The inflation-adjusted median earnings for millennials is round $10,000 increased than the boomers had on the identical age. And once they have been within the 25-to-39 12 months age vary, 50% of boomers owned a house. That quantity is 48% for millennials.
Millennials like to complain however as a complete, they’re doing superb.
The counter-argument right here could be all the stuff that’s now costlier for millennials — housing, faculty, daycare, and many others.
However millennials would be the largest, richest technology sooner or later. It’s inevitable.
My technology1 is probably the most well-educated technology in historical past and meaning increased common incomes which are solely going to extend over time:
So let’s assume millennials are going to spend extra freely and management huge sums of wealth sooner or later from some mixture of their very own earnings and an inheritance from their boomer dad and mom.
Will that translate right into a ground underneath the inflation charge?
It’s potential.
Researchers at The IMF regarded on the relationship between getting older and inflation:
We discovered that the bigger the proportion of younger and outdated within the whole inhabitants, the upper inflation. Put one other manner, when the working-age inhabitants is bigger, the impact is disinflationary. This hyperlink between age and inflation holds for a lot of nations throughout all time intervals.
These results are giant sufficient to elucidate most of development inflation. As an illustration, the newborn boomers elevated inflation by an estimated 6 share factors in the US between 1955 and 1975 and lowered it by 5 share factors between 1975 and 1990, once they entered working life. Pattern inflation is presently low and steady because the lowering share of younger folks offsets the consequences of the rising share of outdated folks within the inhabitants.
We’ve a big proportion of outdated folks, which must be inflationary.
However we even have a big proportion of working-age folks, which must be disinflationary.
All of which is to say, it is a sophisticated subject that doesn’t have a clearcut reply (welcome to finance).
Inflation may very well be increased if boomers spend down all of their financial savings or millennials don’t save as a lot.
Or AI might show to be a deflationary pressure that offsets any inflationary results of huge demographics.
If the previous 10 years have taught us something about macroeconomics, it’s that there’s a lot we nonetheless don’t learn about inflation.
The Fed tried its damnedest to extend inflation within the 2010s by protecting charges low.
It didn’t work.
A pandemic hits, provide chains get disrupted, the federal government spends trillions of {dollars} and inflation goes bananas.
Now the Fed has aggressively raised charges to extend unemployment and gradual inflation.
Inflation has slowed however the labor market stays sturdy.
Within the immortal phrases of Cousin Eddie, “She falls down a nicely, her eyes go crossed. She will get kicked by a mule, they return. I don’t know.”
Predicting inflation is difficult. Realizing the demographic make-up of the nation most likely doesn’t make it any simpler to foretell its future path.
Michael and I spoke about generational wealth and way more on this week’s Animal Spirits:
Subscribe to The Compound so that you by no means miss an episode.
Additional Studying:
Demographics vs. the Stock Market
Now right here’s what I’ve been studying currently:
1I don’t really feel like a millennial however was born in 1981 so technically I’m on of the oldest millennials within the nation.
A reader asks:
You talked about how baby boomers have so much money for a generation, and anecdotally so many monetary plans that I run for our people have them with far more than they want…they’re diligent savers and buyers. So we’ve got all these boomers with extreme financial savings/investments which are unwilling to show the change to truly spend that cash.
So my query turns into: do we’ve got a everlasting ground of upper inflation sooner or later attributable to boomers truly spending that money that they’ve in retirement, realizing they’ll’t take it to the grave OR as they go it to the following technology who’re extra snug with the spending aspect of the equation—that would create this persistent increased inflation charge for folks over the following decade or two?
I did inquire about the wealth profile of baby boomers in a current piece.
It’s true that boomers management many of the wealth on this nation (52% in response to Federal Reserve knowledge).
That is what I wrote in that beforehand talked about submit:
There is no such thing as a precedent for the boomer technology. We’ve merely by no means had a demographic this large with this a lot wealth dwell this lengthy earlier than.
We’ve no historic knowledge to look again at with regards to making an attempt to quantify the inflationary impression right here.
If all the boomers mentioned screw the children and their inheritance and spent down all of their financial savings, certain you would argue that may be inflationary.
However with boomers residing longer than earlier generations, that would pressure them to unfold that spending out over a few years, which might mute the impression.
It’s potential it is going to be the millennials that can spend more cash.
Jean Twenge at The Atlantic took a sledgehammer to the concept all millennials are broke.
When you take a look at the long-term development of wealth, adjusted for inflation, millennials are proper on monitor relative to earlier generations on the identical level of their lives:
And take a look at the Actuality Bites technology — Gen X has surpassed the boomers by age 50!
The inflation-adjusted median earnings for millennials is round $10,000 increased than the boomers had on the identical age. And once they have been within the 25-to-39 12 months age vary, 50% of boomers owned a house. That quantity is 48% for millennials.
Millennials like to complain however as a complete, they’re doing superb.
The counter-argument right here could be all the stuff that’s now costlier for millennials — housing, faculty, daycare, and many others.
However millennials would be the largest, richest technology sooner or later. It’s inevitable.
My technology1 is probably the most well-educated technology in historical past and meaning increased common incomes which are solely going to extend over time:
So let’s assume millennials are going to spend extra freely and management huge sums of wealth sooner or later from some mixture of their very own earnings and an inheritance from their boomer dad and mom.
Will that translate right into a ground underneath the inflation charge?
It’s potential.
Researchers at The IMF regarded on the relationship between getting older and inflation:
We discovered that the bigger the proportion of younger and outdated within the whole inhabitants, the upper inflation. Put one other manner, when the working-age inhabitants is bigger, the impact is disinflationary. This hyperlink between age and inflation holds for a lot of nations throughout all time intervals.
These results are giant sufficient to elucidate most of development inflation. As an illustration, the newborn boomers elevated inflation by an estimated 6 share factors in the US between 1955 and 1975 and lowered it by 5 share factors between 1975 and 1990, once they entered working life. Pattern inflation is presently low and steady because the lowering share of younger folks offsets the consequences of the rising share of outdated folks within the inhabitants.
We’ve a big proportion of outdated folks, which must be inflationary.
However we even have a big proportion of working-age folks, which must be disinflationary.
All of which is to say, it is a sophisticated subject that doesn’t have a clearcut reply (welcome to finance).
Inflation may very well be increased if boomers spend down all of their financial savings or millennials don’t save as a lot.
Or AI might show to be a deflationary pressure that offsets any inflationary results of huge demographics.
If the previous 10 years have taught us something about macroeconomics, it’s that there’s a lot we nonetheless don’t learn about inflation.
The Fed tried its damnedest to extend inflation within the 2010s by protecting charges low.
It didn’t work.
A pandemic hits, provide chains get disrupted, the federal government spends trillions of {dollars} and inflation goes bananas.
Now the Fed has aggressively raised charges to extend unemployment and gradual inflation.
Inflation has slowed however the labor market stays sturdy.
Within the immortal phrases of Cousin Eddie, “She falls down a nicely, her eyes go crossed. She will get kicked by a mule, they return. I don’t know.”
Predicting inflation is difficult. Realizing the demographic make-up of the nation most likely doesn’t make it any simpler to foretell its future path.
Michael and I spoke about generational wealth and way more on this week’s Animal Spirits:
Subscribe to The Compound so that you by no means miss an episode.
Additional Studying:
Demographics vs. the Stock Market
Now right here’s what I’ve been studying currently:
1I don’t really feel like a millennial however was born in 1981 so technically I’m on of the oldest millennials within the nation.
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