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An extremely productive economy with 1/5 the number of consumers (and dropping) will have a cheaper stock index, even with improved productivity. Asset prices o
by missedthecue 1y ago
An extremely productive economy with 1/5 the number of consumers (and dropping) will have a cheaper stock index, even with improved productivity. Asset prices over the long-term are driven by cashflows. Hollowing out revenue while improving productivity still results in a lower asset price because your cashflows are smaller.
Productivity gains will also be swimming against the stream because scale advantage will deteriorate in all sectors.
- triceratops 1y ago> Hollowing out revenue while improving productivity still results in a lower asset price because your cashflows are smaller And that's fine because it means consumption is lower too.
- missedthecue 1y agoOk but good luck saving for retirement when your investments are basically guaranteed a 2% decline every year.