Mike Shedlock has put into context what I have felt from the first, that the economy will be stable until the complete retirement of the Baby Boomers. Elements that Students should contemplate from the information are such:
1) The $400 Billion in Baby Boomer Savings: There will be practically no real Savings to the Generation as a Whole, as Unemployment rates of Boomers will chew up a lot of assets. The Net Effect of Boomer Retirement will that the Boomer Generation will still be unprepared for Retirement. Boomer Retirement will still be a vast Black Hole for Government and economy.
2) The Boomer share of disposable national Income will decrease by about 4% per year from Now until Retirement in 2017; it almost totally replaced by Government expenditure due to the Cost of medical care.
3) Boomer share of Unemployment will almost be double that of the national unemployment rate by the end of 2010 in my estimation, likely to negate the growth rates in younger groups due to Boomer control of disposable assets.
4) The economy is going to structurally Downsize within the next decade, as We have a smaller Consumer market, with fewer Consumers with Dollars. This will lead to less Employment with reduced Pay, unless the Money Supply is inflated to hide the Downturn. It is at this point that One has to ask if a Period of Deflation is actually not desirable, just to get the slower elements in the Consumption market to recognize the reality of the Recession.
The impulse of economic growth has switched to China and the undeveloped World. Their advancement will be with less personal Consumption growth, due to the sheer Numbers involved. The American economy could be in a very advantageous position, if the American Consumer and Business took cognizance of current conditions. The Stupidity resides in the fact that Government and Advertisers would hide these factors from the American Consumers. We need the Price increases which reflect the increased Cost of Production, and a Government and Fed which does not inflate the Money Supply artificially. We will get neither, and it will cost Us. lgl