17/06: Structural Adjustment
Are we prepared as a nation to undergo a change from spending to saving?
How else will we be able to navigate our way through the demographic time-bomb in our future?
If Baby-Boomers are to live comfortably in retirement with adequate income and health care it seems we must increase our saving. How else can we prepare?
Our current approach of saving little and spending more than we earn (both as families and nation) will leave us poorer in the future. As someone has pointed out elsewhere (Bill Bonner at the Daily Reckoning perhaps), a nation or a family cannot get wealthier by spending more.
The investment implications of this coming adjustment are murky in the short term but certain in the longer term. Our future will involve more saving which means less spending. The impact on our nation's businesses may well be significant when this change occurs.
Are we ready?
O. Sam Folin, CFA
June 17 2005
How else will we be able to navigate our way through the demographic time-bomb in our future?
If Baby-Boomers are to live comfortably in retirement with adequate income and health care it seems we must increase our saving. How else can we prepare?
Our current approach of saving little and spending more than we earn (both as families and nation) will leave us poorer in the future. As someone has pointed out elsewhere (Bill Bonner at the Daily Reckoning perhaps), a nation or a family cannot get wealthier by spending more.
The investment implications of this coming adjustment are murky in the short term but certain in the longer term. Our future will involve more saving which means less spending. The impact on our nation's businesses may well be significant when this change occurs.
Are we ready?
O. Sam Folin, CFA
June 17 2005
