🔴 The Coming Retirement Crisis Explained and Explored (w/ Raoul Pal)


What’s very comfortable now may not be so
comfortable later on. That’s when I might have to take out my mutual
funds. My only worry is my dad works for the state
of Illinois. The state’s pretty much insolvent. And even his health care, which is through
the state of Illinois, it could take up to a year for him to get reimbursed for things
like that, so that is worrisome. Justine Underhill: Retirement is all some
people ever think about, especially the 50-million-plus Americans set to retire in the next few years. They obsess over it, like my dad did. It’s what they worked for. It’s their dreams. But those dreams could be shattered. You’re about to hear Real Vision’s founder
and CEO, Raoul Pal, explore why we’re heading into a retirement crisis in America and around
the world as many people take on more risk than they understand. I was curious to see if anyone was thinking
about this, so we spoke with people in New York and heard the same story over and over–
people pushing off retirement, people not having enough savings, people relying on government
pensions. Here’s some of what they said. No. No way I could have saved enough for retirement. I mean, I have enough to retire, let’s say,
if I want to go to Wyoming or something like that. I saved enough for at least the next 10 years. Who knows with inflation what will happen,
but I feel the next 10 years, I’m OK. If the United States government goes out of
business, then my pension won’t be there. These stories were just a small sample of
what we heard. And this is not just something that those
actively looking for retirement are going to face. It’s something that’s going to have a big
impact on my generation as well, whether it’s figuring out pensions, or social security,
or potentially supporting our own parents’. Retirement is part of the promise of life
in the developed world. And if that promise isn’t met, it’s really
going to affect everyone, whether you’re hoping to retire in 5 years or 50. Roaul Pal: My name’s Raoul Pal. I’m the CEO and co-founder of Real Vision. But today, I’m talking on behalf of Global
Macro Investor, my research business. I want to talk about what I think is the biggest,
single theme of our generation. And I think it’s the most important thing
that anybody can understand. And it’s all about the pension crisis. You see, demographics is the big story of
our time. And it’s all about the story of the baby boomer
generation. This was the largest generation of people
the world had ever known in the richest countries in across the globe. Now, that generation drove all of the macroeconomic
forces that we come to recognize as normal. When they first came into the labor force
back in the 1970s when they 20 or so years old, what they did was they bid up the demand
for goods. Because if you think about it, a record number
of people came in to buy their first suits, their first house, their first car, their
first table, their first chair. Everything was new. That demand created an enormous problem for
the world to deal with, and it created the inflationary environment of the ’80s. Yes, there were monetary reasons behind that
as well. But really, a lot of it was driven by demographics. Now, as that generation moved through their
lifetimes, they had a particular set of behavior patterns that affected the financial world
particularly. The main one is the fact that after the second
World War, that young generation decided they didn’t want to be their parents, as almost
everybody does. And they said, we don’t want to be austere. Their parents had lived through two world
wars. What they wanted to do was spend. They wanted to be free of the shackles of
the things that their parents had had in the past. So what happened was Wall Street, being clever
as ever, came up with this genius idea. It was the pension plan. Now, pension plans had existed for a long
time before. But really, this is where the pension plan
became everything. Wall Street fed them a story. The story was simple. You don’t need to save as much money as your
parents. You don’t need to spend or save 20% of your
income. What you need to do is give it to us. We’re the smart guys, and we’ll turn into
more money. And that means you’ll have more money to spend. So that started the largest stock market boom
in all of recorded history. Now, the other thing that happened is as consumption
became a larger part of the economy– and that was driven by government policy as well–
is the baby boomers were offered another piece of magic from Wall Street. They were offered credit. So in the ’80s, Ronald Reagan and Margaret
Thatcher basically allowed credit to be available to everybody. So suddenly, the credit boom took off. So there we have two monetary booms happening
at the same time. The baby boomers have stopped saving, have
given a little bit of money from their 401(k)s to Wall Street that starts accumulating quickly. Their income has also then gone into credit,
the servicing of credit to buy more and more goods. That trend continued for a long time. The trend of consumption within the US economy
continues to this day. It’s massively outsized because of this credit
boom. That meant that Wall Street became outsized
too. It was taking the money from the pension system,
and investing that– or speculating with it– and also making money from the credit side. Now, that all ended in a complete blow up
that happened in 2008. But why did 2000 happen? Well, interestingly enough, that’s when the
first baby boomers started retiring. When they started retiring, suddenly there
were some sellers of stocks. Before that, everybody had been buying stocks
every single month in their 401(k). Buying-the-dip mentality became the key thing
for the world. But the problem is now we’re facing the demographic
time bomb. I remember when I was back at Goldman Sachs
in the late ’90s. Some of my colleagues wrote an article called
“The Demographic Time Bomb.” And that was about the issues the world will
face in the future as retirees start retiring and whether the state sector could afford
all of the draw on the capital. Now I’m not going to talk about the state
sector in this particular presentation. We all know the story that there’s too few
millennials and younger people paying into the system to pay for these retirees. The maths don’t add up, so the entitlements
can explode. And these numbers can be in the hundreds of
trillions of dollars. But I don’t want to talk about that. I also don’t want to talk about the defined
benefit pension system. That’s another big story that I think many
of you are aware of. We’ve seen it all across America and all across
Europe into the UK where defined benefit pension schemes will never be able to afford to pay
out the promises that they had to the retirees. You see, the returns in financial markets
weren’t quite as good as the snake oil salesman on Wall Street told everybody. And that was a problem. It’s kind of like a Ponzi scheme. The first people to get out made all the returns. The last people to get out get nothing. And that’s the real issue. The real issue is all of this is coming to
a head because everybody is about to retire. If you look at the chart of the baby boomers
reaching retirement age, you can see it’s a demographic wall. Currently we’re retiring at about 3.9 million
in America alone, baby boomers. And it goes up in a straight line all the
way through to 2027. What we’ve got is more and more people, every
year, retiring. That is an extraordinary state of affairs
because retirees have a different behavior pattern than the average person. You can see the chart in a different way here. You can see that the average retirement age
is currently around 64 in America. And this year, 2018, the average baby boomer
is 64. It’s telling us the average person is destined
to retire this year. But the real question is here– who can afford
to retire? You see, if we look at the retirement age
of Americans, the actual retirement age is going up. And those who haven’t retired, they’re deciding
that they’re going to have to work longer too. You see, the real issue here is that people
can’t afford to retire. So they’re having to extend retirement– either
expected or current retirement dates– out into the future. It’s this problem of not being able to afford
retirement that is creating the problems we’ve got today. The other way you can look at this is when
we look at the labor force participation rate of the people above 65 years old. Oddly, the 65-year-olds have been coming back
into the labor force at a record rate. They’re competing for jobs with millennials
and others. This is an odd states of affairs. And, again, is driven by the issue of these
baby boomers having far too much debt to retire and not enough savings. So let’s drill down to the numbers. It’s really important to understand the numbers
behind what I’m talking about. So let’s dig into the stats. See, the US average pension benefits are $23,000
a year. But there’s a bit of an issue because disposable
income per capita is $44,000 a year. Now, the ideal retirement income that these
people want obviously matches their disposable income, which is about $44,000 to $45,000
a year. But really, when you impute from their savings,
what they really get is another $9,000. So their total benefits are about $31,000
versus their needs of about $45,000. This is a huge problem. There’s a 30% shortfall in their savings. And that has to come out of consumption. I think many of you have seen this before. It’s the household net worth, the average
net worth of the American household. And it looks pretty good, right? They’ve got $24,000 in bonds. Americans don’t seem to like bonds, and that’s
something I’ll talk about in a bit. They’ve got $269,000 of equities, $300,000
of real estate, savings of $107,000, pension fund assets of $264,000, and other savings
and assets of about $120,000. Now, that’s a pretty healthy million dollar
balance sheet, so what’s the problem? The problem is it’s massively skewed by the
1%. That 1% that we hear about versus the 99%,
well, they’ve got all the assets and all the savings. When you strip out the data for the 1% and
calculate the median net worth, it’s an entirely different game. The median net worth offers something that
I think is terrifying and sad. The average person has $4,000 in their bonds. They have $45,000 in equities, $53,000 in
real estate, which is extraordinary, right? That is all they have after their mortgage
is $53,000 for a lifetime worth of household investment. They have savings of $18,000, pension fund
assets of $44,000, and other assets of $20,000. You see, the problem is these people are benefiting
from one of the biggest shifts the world has ever seen– life expectancy. Life expectancy, although it dropped a couple
of years running recently in the US, is rising. So life expectancy in America, and across
the world, is in an exponential trend higher. It is going higher and higher every single
year. Obviously, the last couple of years were the
opiate epidemic saw a bit of a pullback. But generally, the average American doesn’t
know how long they’re going to live for. It’s going to be longer than they thought. You see, not knowing how long you’re going
to live for changes your behavior pattern. It means that you start pushing out your retirement
date because you don’t have enough money to retire. Because if you’ve moved your life expectancy
on 5 years, well then you need a lot more money. In a low-interest-rate environment, it becomes
almost impossible to generate the income, so you’re drawing down on capital very, very
rapidly. So let’s look at this balance sheet to see
where the capital really is. Now, what have to understand is US households
have really taken on board the fact that they’re going to live longer, and they don’t have
enough savings. Because after 2000 and 2008, the world hasn’t
generated enough returns. So what they’ve done is taken the most amount
of risk possible. Normally, if you’re about to retire, you should
be increasing your fixed income allocation to guarantee your future retirement income. However, behaviorally speaking, if you don’t
have a high enough income to retire on, you have a kind of shit-or- bust scenario. What you have to do is take that risk. That risk, for American, is buying real estate,
and they did that in droves back in the 2000s. Now, they got burned in that, and they don’t
have much net worth left in that any longer. So the real driver of net worth has been the
equity market. The equity market is the only driver of net
worth going forwards, and this has meant that people have doubled up their bets and tripled
up their bets. They have this bet directly in equities, and
they have this bet in their pension plans. The pension plans themselves have record holding
of equities versus fixed income. They also have record risk in terms of credit. Private equity, venture capital, hedge funds,
they all have equity-like returns. They’re risk-seeking investments. And they’re doing this because nobody can
fund their retirement. It’s the same story at government level. It’s the same story at defined benefit pension
level. And it’s the same story for households and
their 401(k)s. Corporate pension plans, they’re all the same–
nobody has enough money to fund retirements. So everybody is taking the maximum risk. Now, in a rising equity market, this kind
of makes sense. You’re clawing back some of the ability to
retire. But if things change, the picture gets a little
bit worse. You see, the one bet people are taking is
they’re actually putting the maximum allocation in all of recorded history, across the entire
system, into risk- seeking, equity-like assets when equity valuations are off the charts. You see, when we look at the chart of the
median price revenue of the S&P 500, we can see it’s at all time, ridiculous, record highs. We could use any measure. I just used this chart because it’s the most
dramatic. But we can use the P-ratio. It’ll be the second most overvalued market
in history. The median P will be the most overvalued in
history. Market cap to GDP, the most overvalued in
history. We have an extraordinarily overvalued market. Now what’s the worst thing about this is that
there is a record over weight of equities. Nobody has owned this many equities or equity-like
instruments– risk- seeking instruments– ever before when the valuation is so high. That is a dangerous setup. You see, the real problem here is it’s all
about the business cycle. The business cycle, as you know, ebbs and
flows. You can see it on the chart here. It goes up and down, and it’s relatively predictable–
within some boundaries. But what happens is a peaking, booming economy
eventually gives way to a recession. And they come along periodically– every 4
to 8 years. Now what’s interesting about this expansion
is this is the second-equal, longest expansion in all economic history. And by next month or the month after, this
will be the second longest outright. So what that tells you is there is a probability
that this expansion has to end at some point. Could it roll on for another couple of years,
2 or 3 years? Of course it could. Could this end up being the longest ever expansion? Of course it can. The point being is the clock is ticking, and
it’s moving towards the next recession. Now, normally, that’s no big deal. But this time, it’s a bit different. You see, in recessions, the stock market generally
crashes. That’s normal. Companies earn less money. Investors fear worse outcomes than are expected. And the market sells off massively. And over time, it has had a tendency to recover. Well, again, that’s a bit of a recency bias. Because all across Europe and other markets
around the world, things never did recover. And why didn’t they recover versus America? And that’s because the Americans have a cult
of equity, and the Europeans tend to have a cult of bonds. So Europeans basically gave up on the equity
market. The structure of the pension system there
means that they own much less equities. They’re about 70% or 80% in bonds for this
particular cohort. The Americans are the opposite. They’re about 70% in equity and equity-like
instruments. They’re taking huge amounts of risk. Now, normally, in America with this risk seeking
culture, once the equity market falls, the 401(k) payments come in as everybody’s income
starts filtering into the stock market and acts as a break and helps the market rise. The problem is the next recession is going
to cross the exact point that the maximum num ou see, the real problem here is it’s
all about the business cycle. The business cycle, as you know, ebbsber of
people are going into retirement. This has never happened before anywhere. What it means is that all of the life savings
that are in equities, which is basically 70% of the entire household balance sheet is going
to get wiped out in one recession. And they won’t be able to buy back because
they won’t have an income to buy back. This is the biggest problem I can see in the
world today, and nobody really understands that juxtaposition between the business cycle,
risk taking, and demographics. It’s this Nexus that makes me so concerned
about what is going to happen to this baby boom generation unless somebody tells them
about the risks that they’re taking. Wall Street doesn’t want to tell them. The asset management firms don’t want to tell
them. The TV companies don’t want to tell them because
everybody’s cashing in on the same boom. Just look at the amount of advertising based
around asset management and this industry. It’s terrifying to be pushing people in at
this peak. It’s OK to trade and invest. But if you are of retirement age, you should
be cautious. If you’re a millennial, you should be the
opposite of cautious. You should be waiting for this opportunity. So there’s behavioral mindset that needs to
take place, but there’s more to this. You see, demographics also tell us where the
economy is going to go in the future. And the reason being is that a number of things
are correlated to demographics because people of a certain age generally act in a certain
way. That’s not to say all generations and all
the age groups act the same. But overall, a retiree will spend a lot less
than somebody who is in the peak of their earning career. I always use the example of my father. When my father retired at 60 years old, he
was the kind of guy where we were lucky enough to buy a new car every 3 years, and it was
a fancy German car. And he’d have nice wine in the house and go
out for dinners all the time. Cut forward to retirement, suddenly he had
his fixed investment pull. That’s what he had to live off. He didn’t know how long he was going to live
for, and he didn’t know what the cost of living was going to be. So what does he do? Pull on the handbrake on his spending. Cut forward 5, 6 years, suddenly, I would
say he’s spending 60% less than he used to spend in a year. Now when you multiply that out across the
entire baby boom population, you’ve got a dramatic economic event, and there’s no getting
around that. This is kind of baked in the cake. Let me show you some charts about how demographics
tie into the economy. The first chart is the unemployment rate versus
the labor force participation rate. Now the labor force participation rate is
key because it’s really how many people are earning in the labor force to drive the economy. Now what’s interesting is people have said,
oh, look at this. It’s amazing. The US economy is generating so many jobs. Well, it’s kind of odd. The unemployment rate is low, but the economy
has not generated anything near the number of jobs that it has done in previous cycles. Why is that? It’s because people are opting out of the
labor force. So it’s naturally driving down the unemployment
rate because the labor pool is shrinking. So it’s a bit of an old indicator. This is exactly the reason why the Japanese
have had an incredibly low unemployment rate over the entire time of their lackluster,
post-demographic, crash economy. It’s one of the reasons why the European unemployment
rate has come back sharply. It’s because of the fact that people opt out
of the labor force. Now in America, it means that we should expect
the labor force unemployment rate to fall and fall. Now that’s interesting, and many people say
that’s inflationary. But it’s not because of the number of people
competing for those jobs or deciding to opt out. Anyway, let’s look at some more charts to
build more of a picture. As I talked about, the thing I really fear
the most in this whole equation is what happens to spending rates. You see, the spending rate, the personal consumption
rate, basically follows your age group. You spend in a predictable pattern. Yes, I know. We all think we’re individuals. But we’re actually not. We all basically do the same thing as people
of our age, give or take the parameters of which we earn and some of the other behavioral
aspects. But really speaking, consumption is based
on age. And what happens is the older we get, the
less we begin to consume. That kind of makes sense because you bought
most of the things you need. You tend to buy larger, big-ticket items–
holidays, cars– when you’re older if you’ve still got that kind of income before you retire. You see, if you’re a bit younger in peak earning,
you tend to buy more things for your house. You know, you might buy yourself better bed
coverings, or a new bed, or go to IKEA a bit more often. You tend to buy yourself a few more luxuries. You tend to spend a bit more in the supermarket. And that’s normal. Everybody does the same thing because you’re
at peak spending. But when you get older, you tend to buy less
of those things. You tend to buy more big-ticket items. You might buy a nice car. You might buy a nice holiday. But you’ve got most of the things you actually
need. You’ve accumulated them across your lifetime,
and your consumption goes down. Another fascinating chart is you can see gasoline
retail sales also exactly mirror the labor force participation rate. Now why the hell is that? Because basically the older you get, the less
you consume gasoline. You drive less. Again, I can use my parents for that. They used to drive everywhere. They live in Spain, and they would drive across
the country to go and see the place. But the older they got, the smaller their
circle got. And now, basically, they go to the local supermarket,
to the local bar, to the local restaurant. So their mileage goes down. They just consume less gas. They’re not running around as much. So interesting enough, the whole of the petrochemical
complex is tied to demographics. I bet you didn’t know that. Also, monetarist talk about the velocity of
money. And it’s a key indicator for inflation. If money is moving around the system, it tends
to be more inflationary. It kind of gets around the system a lot more
and creates inflation. Now the problem is velocity of money is essentially
a demographic phenomenon. The older people get the more they save and
the less they spend, and the money doesn’t go around the system. They’re not reinvesting in things. They’re not spending as much. And like consumption, it tends to fall over
time. So they’re basically a function of each other,
and I think that’s really important. You can throw in the low interest rates into
this. They’re all interconnected and tend to drag
down velocity of money, tend to drag down the labor force participation rate, tend to
drag down consumption. Now I want to give you something new to think
about. Most people think about the Fed as this desperate
attempt to keep the system as is and not let the banks go under, and they didn’t really
understand why they were doing what they did. Now what happens if you look at the Fed balance
sheet through the prism of demographics and it becomes entirely different? Basically, the balance sheet almost exactly
mirrors the labor force participation rate. The Fed is taking the slack for the retirees
and people leaving the labor force. This is all they’re doing. They’re trying to offset this. Now, whether they are cognisant of doing this
or not, this is essentially what they’re doing. It’s so fascinating, and it makes total sense
to me. What I love about demographics is you can
essentially extrapolate forward the demographics of a nation because it’s baked in the cake. When those people are born, you kind of know
when they’re going to die, roughly what they’re going to do, and how they’re going operate
within the economy. So Remi Teuto and myself, Global Macro Investor,
put together a composite index of how are we to construct a participation rate using
a number of different statistics. Now what’s interesting is it mirrors the data
pretty cleanly, so it us a good idea of where we think this is going. And then we can look forward and see where
it goes, and this is where things get ugly. You see, because of the demographics, the
labor force participation rate is about to fall off a cliff. Yes, there’s a bit of wiggle, but 2018, 2019
is we should see a collapse in labor force participation. Now, obviously, that kind of makes sense. I’ve told you that we’re hitting that point
where the retirement age and the average age of Americans are crossing. So they’re going to start this wall of retirement. Now that means that people are coming out
of the labor force, and that has some big knock-on effects that you need to be aware
of. Now armed with our future labor force participation
rate, we can look where the Fed balance sheet is going to go. The Fed balance sheet here is inverted. It’s saying it’s going to go to $8 trillion
dollars. What’s interesting is, again, how great this
fit is. And think of the prism I talked about of the
business cycle. At some point soon, we’re going to have a
recession. And soon meaning 1, 2, 3 years. Now what we know in the recession is we have
no other outcomes except the Fed expanding their balance sheet. We’ve not come up with another way of dealing
with this yet. Yes, there’s going to be fiscal stuff. Yes, there’s going to be other untried measures. But the Fed are going to expand, whether we
like it or not. So this will lead us to expect a massive expansion
in the balance sheet to come to offset this wave of retirees. Again, what’s interesting is a bit of economic
history because Japan has an older population by 10 years. So if we look at the BOJ balance sheet and
look at the Fed balance sheet now as a percentage of GDP and put them against each other, it’s
very clear where this is going to go. It’s telling us we’re going to see an absolute
explosion of the balance sheet as a percentage of GDP over time. Now I’m not going to get into the ramifications
of that. It’s something we’ve discussed on Real Vision
a lot. We kind of know it’s coming, and there’s a
number of ways it will get dealt with. But the point being is that demographics are
pretty much dyed in the wool right now. And if they’re dyed in the wool, then we know
where personal consumption is going. Personal consumption is going to unwind the
great boom of the last 30 or 40 years where consumption became over 75% of the US economy. Consumption is going to shrink as a percentage
of the economy, and consumption itself is going to go negative. Now that is something nobody is set up to
understand. Can you imagine a world where consumption
is the net takeaway from the economy and not the driver? That’s what we’re setting up for. This is something truly extraordinary. Now, again, go back to the big cycle. To drive consumption further, you’re going
to have to ram the millennial generation with enormous amounts of debt to drive consumption
and offset some of this. But they don’t want to do that. They’re already saddled with debt from their
education. So they don’t have the ability to do anything
about this. They also don’t earn enough. They’re not offsetting the same amount of
wealth as their parents. There is a mismatch here, so don’t expect
the millennials to save the day. There is a mismatch of an age gap. It will come out eventually, and I’ll talk
a bit about that in due course. You see, the equity market is also a function
of demographics. Now the chart’s are a bit noisier because
equities are a much noisier instrument than most others because they’re built on fear
and greed, almost more than any other asset class. But equities should follow the returns offered
by the labor force participation rate. An aging population obviously needs to sell
equities to realize income to retire and live off. There is no way around that situation. They will have to sell equities, and they
will sell as many equities as they can into the next recession because, behaviorally,
they need to protect themselves. They will become more risk adverse than any
generation in history at that point when the recession comes and the market sells off. It is just tied in to human behavior, and
that means that the returns on the S&P are going to be somewhat problematic. And not just a sell off and a rally back afterwards,
but a more extended downturn in the future returns of equities and potential, long-term,
compounding, negative returns, which is something many other countries with aging populations
have seen. But the US has not seen it yet, and doesn’t
believe it can happen. If you think all the things I told you about
consumption, about gasoline sales– I’ve told you about what’s going to happen to equities–
what that also means is inflation is almost impossible to generate. It’s impossible because people cannot consume
enough. The millennials do not offset the largest
spending generation of all history. So what you get is a falling of inflation. This is why I’m a dyed-in-the-wool reflationist,
and I remain so until something dramatic changes. Sure, we could see the end of globalization,
and maybe that could change the structure. But I think the slow decline in globalization
is not going to do that. So I fear that this incredible fit of inflation
and the births as a percentage of the total population– i.e. the aging of the population–
is going to hold true for a long time to come. And that means people have wrongly allocated
in risk-seeking assets versus bonds for example. It just makes the world understand that fearing
cash is not the worst thing. You see, CPI really is just a reflection of
births as a percentage of the total population. I.e. the less people are getting born, the
less inflation is going forward. So that’s the whole trend going forwards. And it says inflation’s not coming back. It’s not something we should fear. We shouldn’t fear bonds. Yes, there is some elements of inflation,
and we’re not going to hide from the fact that inflation’s strangely calculated. And that certain things have seen huge inflation,
such as rents and health care. And other things have seen huge deflation,
such as the price of Real Vision. But there’s a number of things that balance
that out, and you’ve seen the Million Prices Project. It tells you that broad inflation is not really
there, and it is driven by this phenomena of age and demographics. So this is why this is the biggest story in
the world. We have the richest generation in all history,
by all measures, but with the median person with no savings, with too much risk-taking
investments, way too many equities versus fixed income or any other investment– and
certainly over cash– at the point in the business cycle that is getting mature and
we’re waiting for the next recession to roll along. When that recession comes, it’s going to half
equity prices– or more. This is the most overvalued stock market in
history. And therefore, we should expect the price
of equities to fall significantly. That leaves a huge hole in the balance sheet
of all of those people, the biggest group on earth ever to retire. They won’t be able to buy equities to buy
the dip. They’ll have gone. The gen-xers and millennials can’t afford
to buy that dip. This is a huge risk to the largest generation
of all time. And it’s something people need to be massively
aware of. You need to think really hard about the risks
you’re taking this late in the cycle. I completely understand you might not have
the money to be able to retire. But it’s better to have what little you have
now than have half of this later. It’s something you really have to think about. Now many of you will think about, well, how
are the government going to stop this? And how the Federal Reserve going to stop
this? And they will try because they have to. And this is where some of the problems lie. If you believe in free markets, the right
answer would be for that baby boom generation to pass their wealth on to their kids, either
via inheritance or by transfer of assets at a low price that the kids can buy. So that’s the accumulation of equities at
lower prices that the baby boomers had in the ’70s and ’80s. Particularly in the early ’80s when they really
started buying equities, Ps we’re below 10, 8, 7, 6– a lifetime opportunity. The millennials faced with the same investing
set right now have an all time record over evaluated stock market, an all time record
valuation bond market, all time overvalued real estate market. They have nowhere to invest that has a positive
rate of return over the next 5 or 10 years. It is a stupid point for them to invest. What they need is lower prices in all of these. The baby boomers should supply it in a free
market. But it’s unlikely to happen. The Federal Reserve are like to step in the
way and increase the balance sheets I showed you. They’re likely to be buying stocks, buying
pension assets, stopping those pension assets go plummeting. Now that means that the stock market gets
supported. The Fed start owning the equity market, exactly
as the Japanese have done. But it means that the young generation can’t
buy them because they’re too expensive. What happens to the real estate market, is
that the clearing mechanism– possibly. Or do the baby boomers and millennials end
up living together? I think that’s the most likely outcome. That’s what the pre-war generation did, and
that’s maybe how this will all end up is we have larger households of more household members. And I think that would make certain sense
to society, and would free up a bit of savings, and would help counteract the loss of savings
that the baby boomers are going to have. You see, this is a really tricky world to
navigate. And I think you really all need to think hard
and fast about what you’re going to do and the plans you have. There are also financial market people that
said there are opportunities in this. Although, it makes me feel a bit grim to say
there’s an opportunity in what I see as the biggest crisis a generation has ever faced
in financial terms. And it’s not a bank crash. It’s a systemic loss of savings from everybody. But there are opportunities. Because, you see, once you understand the
world through a behavioral standpoint, you understand that different people faced with
different issues will behave differently. And that means they will change how they spend. We’ve already seen this in the restaurant
sector. As the baby boomers are moving towards retirement,
they’re starting to spend less in restaurants. Restaurants have really struggled in recent
years. They’ve been firing people. They have had less profits than they’ve seen
for a while. They’ve been in and out of recession. We’ve seen it in a number of consumption areas
within the economy that there is a problem as these people are starting to finally save
as much as they can before they go into retirement. But it does mean they’ll do certain things. And I call this Boomerville. It’s the world to understand when people retire. You see, go again back to that chart of the
net worth of the median household. They have $53,000 in their house. So are they supposed to sell their house? That basically gets them to live for another
year and a bit. Don’t forget, they wanted $45,000 a year. The house only gives them $52,000 of equity. So with this so few savings and this little
cash, what will they do? Well, you see, there’s a different consumption
pattern that’s going to come. And it’s a slightly grim consumption pattern. If you also think about why the middle of
America was so pissed off is because they didn’t participate in a lot of the final stages
of what is going on. The closer you are to that median person,
the further away you are from any boom. And you see, if we understand how those people
live now– the really neglected from society– it is actually the leading indicator of where
many more people will need to go. And that’s sad. It’s going to increase, probably, populism
within the economy and certainly a bifurcation of politics even further than we’ve seen today
because it’s going to be tough on people. Dining is going to go towards fast food. It’s still sadly true that it’s easier and
cheaper to get food from McDonald’s than it is to cook yourself. That hits supermarket sales. That hits a number of people, particularly
the restaurant industry. But it keeps fast food sales ticking along
nicely. It’s the cheapest way for the masses to afford
to eat, and that’s not good for the overall health of the population. It could, actually, reduce the life expectancy
of the population too and continue to drive the obesity epidemic. It’s really not good. Now if you think about the $52,000 in the
house, well, that basically gets you to buy a trailer park. Now trailer parks become very interesting
for people because they can get rid of the debt around a house, own the assets of a trailer
park, and release some cash. So owning a trailer is a key thing. Now, trailer parks, I think are already high
yielding investments. You can get basically 18% returns. And there’s a listed trailer park business
owned by Sam Zell that I think is an interesting play here. There’s a number of ways of playing this downsizing
of housing. But it is an important feature that’s to come. And again, it’s less of the Mac mansions and
the other things that we saw in 2007. It’s just anybody trying to realign equity
from their regular homes. The other thing are cars. Nobody is ever going to buy a new one again,
none of this generation will. They will keep onto their car as long as possible. We saw this a long time ago in Germany where
your average car turnovers were every 3 or 4 years people buy a new car. It then moved to 8,9, 10 years. It’s my father. You know, that guy, my dad, hasn’t changed
his car for the last 15 years now. That is going to be very common. The used car dealership market, yeah, that’s
OK. It’s not so bad. But still not good because people are still
not buying as many new cars. There’s a big problem. The entire world is betting that China is
going to take up the demand from the baby boomers. I’m not so sure about that. What we do know is the millennial generation
currently is less interested by cars. So they’re more likely buyers of secondhand
bangers than they are buying new cars. They don’t see the status symbol involved
that older generations did. But anyway, the point here is the consumption
pattern of America and Europe is changing, and it’s going to change dramatically. That’s going to change the investment philosophy
and where you could hide in the stock market that’s going to be under stress or where you
can find real opportunities. I do think that it is going to drive bond
yields lower. I think most of you know my view on bonds. Unless something changes, demographics will
trump all. The other thing we need to think about, many
of us watching Real Vision, is we are part of the financial industry. You see, the financial industry was one of
the biggest secular booms of all time. It was driven by this baby boom generation. When they took on debt, it created an enormous
amount of opportunity and a swelling of the financial system. When they invested in pensions and the 401(k)
system was created, it created an asset boom that spread. That asset boom, between those 2 building
blocks, went into the hedge fund industry. They went into the private equity industry,
the venture capital industry, the real estate industry. Everything we understand as the asset management
industry was driven by these people. And these people are going to take their money
out. That is an enormous change and the final return
to trend for the economy and its outsized financial industry. We’re all seeing it in the financial world. We’ve all seen the banks shrinking. We’ve also seen things like the robotization
within the industry and the changes taking place. We’ve seen the disruptors, the vultures hanging
around the system like Bitcoin, Ethereum picking at the carcass of the financial industry. It’s true it’s going to change. Now, it will adapt. Some of the smartest people in the world are
in that industry. They will adapt. They will change fast. Looking how firms like Goldman are adapting
their business model is breathtaking in its speed. It’s at startup speed change that they’re
doing stuff. But there are other things that are going
to happen, too. All of the people in the industry are going
to have to think, how do I get the millennial? And how do I get them to invest their life
savings? Now, they’re right. They need to invest savings to save for their
future. But they were wrong in how they made it before. They made false promises to a generation of
which they couldn’t keep. This time around, they get to wipe the slate
clean. Or they get to defer the blame on somebody
else. Let’s call it the robo advisors. It’s not our fault. The algorithm gave it to us this way. So that’s something we need to think about. And the industry needs to manage that messaging
unless it wants to get held to blame again some point down the future. But the real opportunities may lie with the
future of the financial industry. Again, if you remember, this millennial generation
is faced with the all time record valuations of equities, bonds, real estate, private equity,
pretty much anywhere. There is no opportunity for them to buy assets. Yes, of course, you could buy gold. That’s cheap. Some commodities are relatively cheap. But commodities tend to be more cyclical than
secular, and that becomes somewhat of an issue when you’re trying to build long term wealth. The right answer is for young people to build
businesses. The startup culture is exploding. This is incredibly important. This is the structure of the future economy. If you can shift from a financial economy
to an entrepreneurship-based economy, you’ll build an agile, nimble, and developing economy
that looks for opportunity and generates GDP growth. It may not employ as many people. That’s fine because so many people are leaving
the labor force. So I’m really encouraged about the startup
and entrepreneurship culture that’s generating around the world and resonating everywhere
from the Middle East to India, from America to Berlin. It’s everywhere, and I love that. The other thing is the crypto space and the
blockchain space. Now, this is slightly contentious, but it’s
something I’ve been mulling in my head. If you think about that problematic allocation
to all of the other assets, and you have something like a cryptocurrency or a set of cryptocurrencies,
or even ICOs– and I know most of them are complete scams. But there are some that are good. And the world will change. And they will get regulated, and will be some
amazing opportunities. Now if said the future expected return from
a cryptocurrency over the next 30 years is zero or a million, and we’re at– let’s use
Bitcoin as the example– we’re at about $8,000, $7,500. Well, then, as a millennial, you’re basically
faced with the same fact set that you had in equities back in 1982 or in bonds back
in ’82. Was inflation going to be there forever? Or was the 18% returns you were given in bonds
exceptional? Was the P of 6 meaning the cult of equity
was dead? Or was there a long-term opportunity in America
and the global economy to revive itself? I think crypto is here to stay. The blockchain development will come. I think the ICO market will develop to be
rich and deep, and as large and as important as the equity market is now. It will be like the credit markets. It’ll be an ancillary, a big part of the financial
market. So if you’re looking for the future, and if
you’re looking for where the money will be in the future– where life savings will go–
it’s going to be there over time. Now, I’m no crypto bull right now, but I can
understand something with a risk-reward that is attractive to somebody now who wants to
create a saving for the future. So I just want to leave you to think about
all of the things I’ve said. There’s a lot to digest here, and I’d really
love your feedback on this topic because I think it’s misunderstood. But it is the single most important topic
in the world today.

100 thoughts on “🔴 The Coming Retirement Crisis Explained and Explored (w/ Raoul Pal)”

  1. It so worried about it. If I need care my house will be sold and money go to thieves who own the homes.If I sell up now the dss will know how much I got profit and my son have to pay if I give all money and house to him even I live 29years they will class as my estate.I know this happening to me at moment

  2. Raul, Subjective IMHO. Many retirees (20%) are spending as much or more. Including us.
    Replacing all appliances, cars, dine out, travel more, medical expenses, health clubs, house upgrade, entertainment. These retirees also are diversified in bonds, life insurances (with payout), balanced funds, income from RE, foreign tax shelters, foreign investments.
    I agree that a crash is likely soon. The crash will hit people differently based on wealth and cleverness. There could also be a crash like the great depression. Or a meteor may hit us.

  3. Most of us millennials know the simple fact: there is no real way many of us can retire. We know we will likely keep working in some capacity until we die. In 45 years we will probably not have much of a planet to retire on anyway.

  4. Beating around bush, trying to say the people caused this no they didn't the wealthy demonetized the economy, sucked it dry.

  5. Sorry…
    But my SS is not a problem for others to worry about paying. At least it shouldn't be.

    I paid in, as did my employers. I'll gladly that that plus a mortgage type interest accumulation. Should be about $200,000.

    That plus my own efforts to set myself up will put me in a pretty good place.

    Btw, I'm 65 soon. Worked all my life. Paid my taxes… LOTS of TAXES! So I'll take the monthly payout if I have too (that's what they offer), or a one time cash me in settlement as I stated above. My break even on those two payouts is about 75ish…

    Btw I plan to work to 68 because I'm good at what I do and rolled a job I actually enjoy. After that I'll be an artist of many trades… 😝

  6. With every generation, there are opportunities to compensate for current problems. Precious metals have always been a hedge against inflation, and still are, but Bitcoin (BTC) offers this current generation a better escape route IMO. It has 10+ years of proven durability, exists in limited quantities, is produced in limited quantities which decline over time, allows a large number of funds to be transferred anywhere in the world without relying on intermediaries or risk of forfeiture. The USD is a depreciating currency losing value every month to give the bankers their cut–while BTC, on the other hand, is an appreciating currency because you can't print them to start new wars, etc. If the people ever get back their currency from the banks, it will be an amazing revolution–and BTC and other cryptocurrencies are waiting to fill the void.

  7. Just turned 66….. will work till I die ……have no savings…… would not piss in a bottle for a job so I just payed my bills with little left over…..learned how to fix a truck…..live in an RV…….won't pay 120.00$ an hour when I can learn to do it myself…….civilisation is a shell game……..

  8. This guy speaks the the truth…..the gig economy will not support any lifestyle…..never had any money to spend…..learned to grow my own weed…..eat one meal a day…….the asset class since Reagon…Thatcher has been busy privitizing profit socializing risk ….the government pays corporations to offshore factories and jobs……retaliation for the sixties and unions….robotization of what little factories are left……George Carlin laid it all out….this hippie hillbilly refuses to buy the lies told daily by institutions…..Republicans….Democrats…..they prosper while we head for the street looking forward to a tent or RV in our golden years…..voters voted for the looting and polluting of America…..and you know what most people are fine buying the rope for the hanging ….. we will March off a cliff if some tinhorn Yahoo tells us he will make America great again by blaming them for the crappy state of our lives……when it was the asset class who perfected the art of playing both sides against each other and profiting from the fallout…..well that's just my opinion man……..

  9. Your figures are too high for what we call average if you are talking about the USA. The average American if they are lucky might make $15,000 – $20,000/year before taxes. Most have $0 to a few thousand dollars savings if they are lucky that they didn't have an emergency that depleted it. Most have had to move together with either friends or other family members renting a place. Most have no tangible assets and no property. Now, I don't know where you got your figures from, but they are severely off in real. I've spoken with many and most can't even afford to buy a home. I've spoken with many who dont even have $400 aside for an emergency. Where did you get your figures? I know where I got mine, from the average American.

  10. No one mentions all the billions spent on fucking space travel. To check out some goddamn rocks that look like any other rock. Read and believe the bible; there’s nothing out there

  11. This is not a class issue. This is a simple case of the dangers of living beyond your CASH means. If you have to finance your lifestyle, you can't afford it. Be willing to endure short term pain for long term gain. You're not going to die if you don't have a big house or brand new car. Stop giving your money away to buy stuff you don't even need. Pay cash for everything and you'll see how much money you have each month..  money to.. oh I  don't know.. INVEST over decades.. You know.. Like rich people do… Here's an example.. If you invested $800/mo for 30 yrs. at 8% interest, you'd have $1.2M.. Then you can actually live off the interest of that for about $60K/yr. ( 5% of $1.2M) and never touch the $1.2M.. That's not including any Social security or other savings you can have by living a debt free life for 30 yrs. The answers to your problems are right in front of you. But you're too busy with your head on a swivel looking for someone to blame/save you.. You're not a victim!! Just a whiney, entitled, immature. lazy, waste of oxygen.. But I don't mean that in a bad way… :–)

  12. Millions of obese broke, stupid homeless state worshipping TV educated moochers running around in their piece of crap cars looking for opioid pills and doing anything to get them. Welcome to Merica… Better get into Crypto Currency and start learning about it.

  13. Meanwhile America spends 680 +BILLION Dollars Per Year on the Military…. Like it hasn't got enough nuclear bombs…

  14. Cds and savings were 3 to 12 percent between 1980s to 2006 when I was a little kid as soon as I become 18 in 2012 I basically inherited a shii economy due to 08/09 recession

  15. Excuse me but many of us who have worked hard and long all of our lives and did not spend extravagantly have never had enough to save for retirement. Then we saw how people who did have pensions, had them stolen from them by rich CEOs. These people were not given an option to save in savings accounts since the interest on savings accounts is practically nothing. It's a crime which is now being blamed on the retirees themselves.

  16. Pay for everything in cash. Buy used if you have to. You can always upgrade when your ship comes in.
    Don't totally trust anyone else with your money. Check and double check everything.
    Buy land. Plant a garden. Learn to cook from scratch. Learn to sew, make things yourself, repair and maintain things. Set it up to live off grid in case you need it.
    Protect your health in case you need to work longer.
    Live within your means. Learn to barter.

    The Amish have it figured out. They insure themselves, they don't rely on the government for anything. They help each other out. They can do most things for themselves.

  17. Stop blaming Thatcher and Reagan for peoples poor choices in taking on unwise credit. That is just stupid.

  18. I wonder about all the people with high credit card debt. I know a lot of people that are in there late 40s and 50s with about 10 credit card's maxed out and they continue to use more card's. What's going to happen when there too old to work but still have tens of thousands in credit card debt at the age of 70?

  19. Why is a British man trying to explain the United States’ retiree? The British colonised most of the world and now look at their country, filthy rich and also people freezing to death.
    My Mom worked four jobs and raised six kids by herself.

  20. Global monetary reset coming soon, central banks and sovereign nations are stockpiling gold at rates never seen before. Central banks just ended declaration on gold selling. Trade deals being renegotiated worldwide. United States will be losing reserve currency soon, we won’t be able to run trade deficits on the same scale. Get use to living a 30 to 40 percent lower standard of living. Prepare with purchasing physical gold and silver.

  21. Why didn't these people be responsible? I understand that there are exceptions to what I'm saying, but it seems like majority of these Baby Boomers and Gen X'ers were just completely irresponsible. Terrible savings, spending and enjoying themselves, and selling out the future of this country so they could be selfish and enjoy themselves more without thinking. I have no sympathy for the morons that didn't save, that didn't plan, and solely thought the government would take care of them. Shame on them for being such poor examples of this country. We need to end the Federal Reserve and we need to end dependence on the government.

  22. It is not, "kinda like a Ponzi scheme." It is a Ponzi scheme. We worked and paid into a system that should have profited based on how we supported the world with our willingness to work, the economy by spending and investing and the population expansion by having children. The world took what we gave and wasted it away. Now there is nothing left to support us as we were promised. Hell, quality healthcare is even something we have to beg for. And some of us wouldn't mind if that didn't force us to suffer a painful end. We should have wonderful healthcare and, in the end, the right to choose a death with dignity, but the powers that be deny us whatever we request from them. They are basically saying we are too expensive to maintain but too necessary to the profits of the healthcare system to let go of. As long as we are breathing the healthcare system can invoice the government for services whether we needed them or not, whether we wanted them or not, whether we received them or not. The world is still using us boomers as pawns in a game of power and profit. And the assets you mentioned, if we have them at all, the states have put in place laws to usurp what we have left as reimbursement for end of life care.

  23. There is no such thing as retirement in this part time working world anymore! The value of a working class individual has been lost to greed and overpopulation! As the overpopulation grows the workforce continues to downsize through automation and greed! Thus in the future all economies will fail miserably! There has to be a balance between the working spending populous and the greedy corporate entities! This balance is lost now and forever will be! God bless us all!

  24. So, if I am a Millenial, I am supposed to get "excited" about the opportunity that is coming. I heard I am going to live under the same roof as my parents (a mobile home), while I start a lawn mowing business for my neighbors, and eat Mcdonalds, because the American Dream is about to be revealed as a maggot filled shell? That's what I got out of it. Am I missing something? Oh, maybe I can feed the maggots to my chickens? Now we're getting somewhere.

  25. Ok Raoul has officially sent the baby boomers to our trailer park hell where we will work until 90 then starve to death. There you now have your pound of flesh. Before you gloat too much I want you to look in the mirror. How much oil did you use td? How many people drove around on your behalf bringing you food or running errands for you? How much electricity and water did you use? How much garbage did you produce? How many other resources did the world have to give you to support your lifestyle? Did you ever think maybe I should use less resources so that a person born in 2036 can have a similar lifestyle? Of course not. The boomers of which I am of 2027 retirement age didn’t think of you either. It is our American lifestyle. We all live for today and hope the future settles out in our favor. After listening to Raoul guess that was wishful thinking wasn’t it.
    What about money? Do you even have a job? If so how much are you saving each check towards your retirement? How much is saved? What are your plans for that time in your life? You are a day closer to it than when you got up this am. We botched it big time. Don’t copy us. Live below your means. Skip the Starbucks and cut cable. Save save and save some more. Show us how we should have done it. Then you can gloat. I wish you all the luck in the world.

  26. Information top notch. Delivery highly compelling.
    I would love to see an analysis of what climate changes will have on markets.

  27. "Retirement" is a cultural construct. Personally I am not working for a moment in time when I can not be productive. I enjoy being productive.

  28. Most people don't know that the system is based on lies is bullshit. so even if you save or invest the money inflation will make you poor! and if you play the stock is also bullshit manipulated to suck up your resources .

  29. You can make up all this fairy tales and predictions but the pension is bullshit. Give them a big fuck you

  30. He's barking up the wrong tree. Reagan did them in with now the owners will run the country. They gave socialism to the rich inverstors and banks froze wages of workers so all inflation was created by printing money and banks leveraging it. Not wages!

  31. £10 says all of these freedom aint free boomers hell no to socialism quickly change their tune when they suddenly realise they've not got a pot to piss in.

  32. I think the fed somehow is going to become an equity buyer in the next decade, we might see a new program or government trust buying equities from boomers who are retiring to keep the supply and demand balance and avoid prices to fall

  33. If the crooks in Washington didn't steal the Soc security fund blind. There would be no problem. Seniors paid for their Soc security by paying in all their lives.

  34. The funny thing with this is you can retire if you simplify simplify your life simplify your life that's all you have to do stop following the Joneses trying to keep up your nice cars in your nice big houses if you're retired and old sell your car your new car get rid of your house to the Army limited to tiny house looks more simple and you'll have more money and more time to retire…

  35. I can retire now because I set myself up in a way I can leave cheap and simply but okay not retire entirely I do after work to go pay bills but I don't have to work to three jobs I can work to three days a week and that's it and the rest of the week is mine… alternative living is the way to go guys van life is the way to go or part-time weekend but living simple cutting back a lot of stuff you don't need you can retire basically good…

  36. Living simple is the key guys cutting back living simple stop buying stuff you don't need your back to retire live simple you can retire now then work to three jobs to retire later and still being that seventies and eighties and still doing two jobs just to live I'm not doing that I'm in my 50s I'm slowing down and I'm doing it now..

  37. Not to worry, Im sure this unfounded, delusional, exploitative religion of star-spangled capitalism, will fix everything perfectly as it always does 😉

  38. The problem is the country doesn't care. They hollowed out social security stealing money for wars. People talk about stealing money from younger generations but the government is also stealing from the elderly. And now we have reverse interest on bonds that retirement companies have to purchase by law. My 401K will vanish soon.

  39. Be very scared with bonds. They are in reverse interest. You pay to just keep the value. How long will that last?

  40. WOW I thought I was doing well with my investments until now😭 thanks for the truth I still have time to prepare.. This is why
    Warren Buffett isn't buying anything and sitting on a boat load of cash. The market is overpriced!!!

  41. I'm a first time homebuyer. Will my home value half? If so, should I sell now or will I be offered a refinance during recession?

  42. Seems like it could be a soft landing. As more older people retire in huge amounts more jobs for the younger people. Companies will have to scale back a bit to adjust. Real estate will take a huge dive hopefully so the cost of living will be better for the lower and middle classes which is much needed. I would love if this crash helped the poor and kicked the greedy in the guts.

  43. There are a lot of reasons why we have a retirement crisis, from artificially repressed interest rates to an over-reliance on government pensions, the real problem is much more fundamental: The basic idea behind government provided pensions is what makes it unstable:
    You don't pay taxes for YOUR retirement, you pay taxes for SOMEONE who is in retirement right now!
    Instead of investing in real assets that contribute to the capital stock over the decades, we transfer wealth and hope the demographics will work out. This is beyond foolish. It worked out great when it started out when the population had few old people and everyone had kids. Today? Not so much.
    We could be incredibly rich today, with a far more productive economy, and the size of the next generations would be far less important.
    Thanks, government,

  44. pension saving is lost money, my focus is to have a job for as long as I can, we are rule by scumbags, and unfortunately, even though we are so many, not enough of us would uprise, and they depend on it.

  45. The Economic system do not make any sense for the 21th Century Reality…If we don't adress the reality we are heading for very very bad time. THE REALITY IS FOR THE FUTURE IS………..WORK LESS-ENJOY LIFE-BE IN SUPERMAN SHAPE- TRAVEL THE UNIVERS

  46. The biggest scam IN AMERICA. we paid into our retirements and social security and get nothing back. Well stop giving money to other countries, people who dont work, illegals immigrants, alot of PORK, and military spending, disabilities theist goes on. USA gives so much without getting anything return. It's our government wasteful spending.

  47. I say everytime "Those who don't know about debt and how to use it will definitely pay for who knows it". If u believe in funds then u don't know about debt. Rich invest in debts so as long as people and economy exist they never gonna be poor.

  48. The government will keep the cost of health care high so that the elderly boomers will not be able to afford it and die off sooner rather than later.

  49. His signs of determined seriousness tells me that his research is legit.

    You don't have to be serious to remain focused (abstractly, though, because you are you doing whatever you are doing.)

  50. The most well balanced and articulate message I have had the privilege of absorbing. Everyone needs to hear and understand that their future should never be fully dependent on institutional instruments. Millennials, this is your time to let your creativity shine. Fabulous video, thank you.

  51. So the equation is: while you are working, spend only on food, do not buy a house, car, nothing at all, only food and some clothes. Do not have a family, do not have kids, they cost money. Only work, sleep, eat and save every penny so when you are retired at the age of near 70, you can survive.. for a couple of years. 👍 Sounds joyful…

  52. We are already there ( Romania). We had a forced BabyBoom for over 33 years by restricting abortion and contraception. The comunism fall down in 89,and now we see the efects . Less active workers and more elderly retirement. The population is visibile older. The country try to fix the problem by giving 2 years maternity leave but that doesnt work as plan. Even today i read an article saying that we have less baby's for the first semester than we had last year. Without the 2 years maternity leave things would be even worst. Not to mention that the emigration is massivly among the youth and we are loosing manpower and with that aswell taxes and pension contribution and other important things an active worker contribute as taxes for school, roads,unemployment gouverment help, medical care, and list cand go on and on 🙁

  53. Why do we spend trillions in wars? Why does the US govt gives Israel $109M/day? May no bailouts or subsidies for big corps & banks. Pension companies are crooked & govt officials. If we added all the money spent above , would be more than enough for early retirement. Wealth was taken from low & mostly mid incomers.

  54. So the problem is that the boomers are retiring and also that they're not retiring, and they are living too long? Clearly we just need to set them loose in the desert then, right? Aren't you a peach.

  55. Raoul, I can't find a flaw in your logic, except for this. I don't think we'll see the end of globalization, just like we didn't see an end to it in the 1930's. It changed, evolved, we went through the horror show of WWII, but it came back stronger than ever. What the current upcoming generation has to do is figure out how to fix the problems with globalization and climate change (which you didn't mention) without seeing nation states go to war against each other for dwindling resources like water and energy. If we don't teach them to do this, they will figure it out without our help. I hope they do.

  56. In Australia 80% of the population
    Are on welfare or middle class welfare .,, Fake public servant's jobs.
    I see people in there 60s
    Buy big 4+4 SUV .
    And have no money in savings .
    And thay all going to put there
    Hand out to get fat fat pension

  57. My parents spend money like water without a care in the world.Everywhere i go with them it's retired folk sitting in Restaurants and nobody young. I pay 85 per month out my wages for government pension of £5 per week in nearly 20 years time. It concerns me that we are paying large sums out our wages for a pittence return in todays market. Reckon i will work till i die.

  58. 401k plans are a scam. People don't know how to manage and invest money. Mutual Funds are a scam. No accounting and high fees. I'm buying Bitcoin and Silver.

  59. Excellent!!!! Thank you!
    Seems to be that we find no way out!!!
    Therefore I moved 2014 from the extremely expensive Switzerland to the affordable Paraguay. Even better than falling in dept…
    Swiss, 61

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