I believe your theory has validity but I have more certainty in another theory: that the government will attempt to inflate us out of this mess.

That is why I want to own a home ASAP (within reason). And why I wouldn’t be surprised to see the stock market priced higher and higher in years to come.

Sure, if you price the stock market in gold or Euros, then the stock market has been pathetic. But nominally, it looks like it has held up because of asset inflation. Thanks to the government printing money at a pace never before seen.

Ironically, the government can’t can’t let the stock market or housing prices drop in price too drastically exactly because of the reason you stated. Baby boomers are depending on their homes and their stock market 401k assets for retirement.

In essence, the government can outprint and outpace the upcoming 401k withdrawals.