Bill Gross – Xanax world

[dumbrenter]

Apologies if already posted, but did any of you read the latest from Gross?
https://www.janus.com/bill-gross-investment-outlook

Do you agree with what he says about the investing implications due to increasing elderly dependency ratio?

[XBoxBoy]

[quote=dumbrenter]
Do you agree with what he says about the investing implications due to increasing elderly dependency ratio?[/quote]

No. As a matter of fact I think the opposite is true. It’s my feeling that in the coming decades productivity will increase tremendously as more and more production is taken over by robots and computers. This will lead to deflation, not inflation as he’s predicting. (Arguably this is already happening?)

Worth mentioning, I do agree with his first two paragraphs in which he points out the sad state of our current govt to citizen relationship. When he says, “November 2016 will not change a thing – 8 years of Hillary or 8 years of a non-Hillary. Same difference. Central bankers, Superpacs, and K street lobbyists are in control.” I think he really hits the nail on the head.

[The-Shoveler]

Of the Boomers i know about 30% plan on never retiring even though they could easily.

The USA is much better off demography than Europe or much of Asia.

You also should take into account that Bill has been a permabear for a long time (looks at the world through cracked roughed up glasses LOL).

[no_such_reality]

Four million boomers will die in the next four years by 2020. Then the pace of deaths picks up.

Meanwhile the last of the 80 million millennials come of age in 2019. And we currently have another baby boom size population under 15 years of age today.

Bill is wrong. It’s going to be economic boom times as the biggest wealth transfer from boomers to the rest occurs as they fight the evitiable and transfer any remaining wealth to their grandchildren.

[The-Shoveler]

[quote=no_such_reality]Four million boomers will die in the next four years by 2020. Then the pace of deaths picks up.

Meanwhile the last of the 80 million millennials come of age in 2019. And we currently have another baby boom size population under 15 years of age today.

Bill is wrong. It’s going to be economic boom times as the biggest wealth transfer from boomers to the rest occurs as they fight the evitiable and transfer any remaining wealth to their grandchildren.[/quote]

I would add to that, no matter what our population is growing, and no matter what more housing (development) must be added. that will add to the economy in and of itself.

[dumbrenter]

[quote=XBoxBoy][quote=dumbrenter]
Do you agree with what he says about the investing implications due to increasing elderly dependency ratio?[/quote]

No. As a matter of fact I think the opposite is true. It’s my feeling that in the coming decades productivity will increase tremendously as more and more production is taken over by robots and computers. This will lead to deflation, not inflation as he’s predicting. (Arguably this is already happening?)

Worth mentioning, I do agree with his first two paragraphs in which he points out the sad state of our current govt to citizen relationship. When he says, “November 2016 will not change a thing – 8 years of Hillary or 8 years of a non-Hillary. Same difference. Central bankers, Superpacs, and K street lobbyists are in control.” I think he really hits the nail on the head.[/quote]

The productivity might increase in coming decades, but if the increase is from robots and computers, what does that do with the welfare spending? Because Robots don’t pay taxes. Do you think the tax tab will be picked up by the companies that use them?
Or do you expect we will go thru another cycle of adjustment as from farms to industries?

[spdrun]

.

[spdrun]

Robots could insource a lot of manufacturing and make local custom manufacturing possible. Imaging going to a store, being measured for a suit electronically, and having it made in-house or nearby for $500 or so. Someone will still have to maintain the equipment, help customers choose/be measured, etc. Whereas right now, most of those jobs are in the Far East.

[no_such_reality]

Yes, I think we’re on the cusp of a very interesting deflationary period. I say deflationary, but I think it’ll be a wild mix of inflation and deflation. Things like food, energy, water and housing will experience inflation while manufactured goods and many services will deflate.

We’re not there yet, but you can see the forerunners. IBM’s Watson to replace much of the purpose of doctors, financial advisers and business ‘professionals’. While personal service jobs which can’t be automated such as hospice care become every greater in demand. With the 99% having less and less, the deflationary impacts are nil, 76% have literally nothing, living paycheck to paycheck. 95%, have less than two million and of those many of yearly consumption patterns that will blow through any savings quickly.

I can see a scenario were capital is in a race to the bottom of providing ever cheaper good and services while physical labor is robust with much more stringent people controls. IMHO, the big fights in the future will be about immigration and the continue importing of ‘cheap’ labor.

[FlyerInHi]

[quote=spdrun]Whereas right now, most of those jobs are in the Far East.[/quote]

I think that insourcing or outsourcing doesn’t matter. We are in globalized economy. As long as we have world economic growth, then we are good. Maybe in the future, we would move to another country just like we move to other states for jobs.

Right now, the US is benefiting because we are an island of stability that attracts capital and population. There was a good article about that in nytimes.

[XBoxBoy]

[quote=dumbrenter]
The productivity might increase in coming decades, but if the increase is from robots and computers, what does that do with the welfare spending? Because Robots don’t pay taxes. Do you think the tax tab will be picked up by the companies that use them?
Or do you expect we will go thru another cycle of adjustment as from farms to industries?[/quote]

How this plays out is anyone’s guess. But personally I think that capitalism as an economic system doesn’t work in the future. (I know that sounds extreme, and in general I’m a believer that things are getting better, not a doomsayer so don’t take it as some pronouncement about the end is nigh.)

My suggestion is to think of it this way. Robots/computers filling many/most of the jobs means lots of low cost production. When you think of it that way, honestly it’s not a problem but a good thing. However, now the question comes as you point out, how do we distribute this production? My personal fear is that we (all us humans) go through a very difficult time politically as we transition from our current system of capitalism to some other system. How that plays out, how smoothly vs how chaotic that change is, what are the details of that new economic order? Beats me. But the world has changed in the past, and it will change again in the future.

One thing I would stress however is that pronouncements about how this coming wave of robots and computers plays out is largely a guessing game. And much of it will happen without people seeing it coming.

Which brings me back to what Bill Gross is doing. He’s making guesses about what the future holds based on taking the current trends/systems and extending them forward. Personally, I think there is way too much disruption in our futures for that to be a valid methodology. All I’ve done is found a likely disruptor and thrown it out so you can see how easily his guess goes awry. My guesses could just as easily go awry.

XBoxBoy

[flyer]

From what I’ve read, although many of us late boomers do plan to leave substantial wealth to our kids, the highly discussed “wealth transfer” when broken down, will be concentrated at the top, and will only amount to a few thousand for most as it filters down. Here’s one interesting article on that topic:

http://www.barrons.com/articles/boomers-spend-their-kids-inheritance-on-supporting-them-1435313494

[dumbrenter]

[quote=XBoxBoy][
How this plays out is anyone’s guess. But personally I think that capitalism as an economic system doesn’t work in the future. (I know that sounds extreme, and in general I’m a believer that things are getting better, not a doomsayer so don’t take it as some pronouncement about the end is nigh.)

My suggestion is to think of it this way. Robots/computers filling many/most of the jobs means lots of low cost production. When you think of it that way, honestly it’s not a problem but a good thing. However, now the question comes as you point out, how do we distribute this production? My personal fear is that we (all us humans) go through a very difficult time politically as we transition from our current system of capitalism to some other system. How that plays out, how smoothly vs how chaotic that change is, what are the details of that new economic order? Beats me. But the world has changed in the past, and it will change again in the future.

One thing I would stress however is that pronouncements about how this coming wave of robots and computers plays out is largely a guessing game. And much of it will happen without people seeing it coming.

XBoxBoy[/quote]

So true about future just being a guessing game and Bill can be as right/wrong as any of us could be.
Your note about capitalism got me thinking: maybe it was a creature of industrial revolution and might have to give space up for another system once the automated productivity skyrockets.
In recent memory, none of us saw what the first iphone was really going bring out in the next few years in terms of mobility & productivity. so yes, changes sneak up upon us but it is always fun to play the guessing game!

I will stick my neck out for this prediction: Nobody will be able to stop the coming wave of massive increase in production. The consequences of that are the ones which are hard to predict.

[The-Shoveler]

The age of abundance.

[dumbrenter]

[quote=flyer]From what I’ve read, although many of us late boomers do plan to leave substantial wealth to our kids, the highly discussed “wealth transfer” when broken down, will be concentrated at the top, and will only amount to a few thousand for most as it filters down. Here’s one interesting article on that topic:

http://www.barrons.com/articles/boomers-spend-their-kids-inheritance-on-supporting-them-1435313494%5B/quote%5D

With more money flowing out of 401Ks than coming in, what do you think it will do to the funds & the fund managers? More importantly, what will it do for folks who are still putting money in hoping to get tax free gain in say, 30 years from now?
I think the fund fees will go higher since we have smaller number people contributing lower amounts to support the lifestyle of the fund managers.

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