Jeremy Siegel on Boomer Demographics

From BizWeek

When Boomers Cash Out
A buy-and-hold legend sees tough times ahead :

" Wharton School professor Jeremy J. Siegel became a superstar back in 1994 when his book, Stocks for the Long Run, showed how stocks beat out every other investment since the 1800s. Coming just as the 1990s stock boom was revving up, the analysis turned the finance professor into a guru of the buy-and-hold approach to investing. But even as he hit the lecture circuit back then, Siegel recalls, he began to be troubled by the outlook for the future over the very long run. People would come up to him after a talk and ask: "What happens when the baby boomers begin selling their stocks and other assets to fund their retirement?"

Despite professor Siegel's dour view, with the idea that we will need to sell assets to Indian and Chinese investors, I'd bet that prospects will remain good.

Jeremy also fails to factor in the fact that China will "hit the demographic wall" in about 15 years.
(echo of the one child rule)

The piece quotes Mike Milken that boomers will remain healthy and work longer.
The models of "work" may change, but I agree.

"What's more, Siegel underestimated the potential of U.S. technology and entrepreneurialism. "With all this wealth, the problem is not who's going to buy assets, it's are there any assets to buy with all the liquidity [there will be] in the world," Milken said."

On the other hand, we have Europe.
While Jack and Suzy Welch may have a point about revival of business in Vive L'Europe -- Just Not Yet
"A new cadre of business leaders and entrepreneurs will help end the Continent's malaise"

I doubt that business leaders can defeat declining populations.

"Consider a few statistics. Over the past 35 years, according to Joel Kotkin of the New America Foundation, the U.S. economy has created 57 million new jobs. In the same period, Europe, with a combined GDP about the size of the U.S., has created just 4 million. Meanwhile, the European unemployment rate hovers around 10%, double that of the U.S. Demographic statistics are similarly bleak. France, Germany, and Italy all have shrinking populations that (naturally) are also aging. And Europe is poorly positioned to reap gains from the growing science and technology sector: R&D spending per capita in France, Germany, and Italy, for instance, is about half that of the U.S."

Eastern Europe may well be more dynamic, but yet further to the East we have the declining Russia, in even worse shape than Europe.