As I mentioned, I was at this investment meeting last week. They gave us a bunch of papers, and being a giant nerd, I actually read the stuff. (Hey, I do want to retire, and sooner rather than later)
There were a few things I read that I think are interesting for the long term.
According to the Employee Benefit Research Institute and the US Bureau of the Census, we’re gonna have a lot of old people soon. Yeah, big surprise. Well, let’s put some numbers to it. Here’s the number of people over 65.
- 1990 – 31.2 million
- 2000 – 35.0 million
- 2010 – 40.2 million
- 2020 – 54.6 million
- 2030 – 71.5 million
We’re going to nearly double the number of old people in the next 20 years. Buy stock in Ensure. No, really. Buy stock in companies that make stuff for old people. That’s one of the big reasons people are freaking out about health-care. We’re going to need lots more doctors & medical technology, and the price is going up. Apparently, health-care costs are currently increasing 3x faster than the Consumer Price Index.
Oh also, old people? Thanks for taking care of Social Security. And by “taking care”, I mean “can we get some health-care to replace Social Security’s kneecaps after that cool thing you did with the crowbar?” You people just can’t handle credit, can you?
In the early 90s, Sweden had a financial crisis. In the 80s, they had a credit boom which produced high consumer spending and real estate prices. They had a currency crisis, in the 90s, and the boom was reversed. Sounds a bit like now. I think this is what the US is looking to as a model for our current crisis, because Sweden was able to solve their problem in only a few years. They nationalized 22% of banking assets, and then created some private companies to help come up with values for, and sell off the bad assets. I hope it works in our case.