Demographics sure are depressing from the perspective of North American investors and home owners. Michael Shedlock, author of Mish's Global Economic Trend Analysis blog, doesn't attempt to sugarcoat the issue either, especially as it pertains to house prices: An aging population could create a glut of sellers, sending prices down.
“Boomers hoping to cash out on their homes, are two years or more too late in most places. Four years from now they will be six years too late,” Mr. Shedlock said in his posting, which addresses Canada and the United States.
“To support consumption at the current pace, boomers will have to start cashing out their IRAs and stock portfolios. They will also be looking to downsize autos and homes. When it comes to the latter, who are the buyers? What about the increasing tax burdens placed on the working force to support retirees? That backlash will be starting soon.”
He noted that the demographic time bomb has been ticking for years, though nothing was done to defuse the issue, and now it is too late to do anything about it.
No, this is not uplifting reading. But if you're looking for an upside, you can easily conclude that you should move your money to younger nations, like India, where demographics are in their favour.
