3 ms·
What do you think your retirement savings represent? They are a claim on goods and services to be produced by a future generation. For that to work there has
by lokar 1y ago
What do you think your retirement savings represent? They are a claim on goods and services to be produced by a future generation. For that to work there has to be a future generation of sufficient productive capacity. If population declines faster then productivity increases the system will collapse.
Look at what is happening to South Korea.
- hellojesus 1y agoThat is part of the risk one must take into account when investing. The same happens regardless of population; you must invest where you expect there to still exist market demand in the future.
- lokar 1y agoIf the productive capacity of the economy declines your capital will be inflated away. Money is a social construct built on a stable or growing economy.
- hellojesus 1y agoThe FED can target either interest rates or the money supply. It could very well adjust supply to meet a shrinking population pool. Otherwise post war losses of many able bodied men would inflate away economies.
- lokar 1y agoEither way you won’t be able to obtain the goods and services you saved for, there just won’t be enough of them.
- hellojesus 1y agoThere could be. Our example hasn't considered productivity gains due to capital improvements or tech advancements. We may not need the same population to produce the samd product count in the future.