Mattonomy

Finance, Technology and everything in between

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Posts Tagged ‘deflation’

US Recovery Bust?


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For those who know me well, they know that I am a student of demographics and I have been preaching for a few years now on how the global economy will shrink as baby boomers exit their peak spending years.  I am seeing this threat stronger than ever.  The baby boomers had pretty much fuelled the real estate bubble and the credit bubble in the last few years and they were also the same people who lost a lot of money as the bubble bursted.   The effect of this has caused many baby boomers exiting their spending cycle earlier so that they can protect whatever they have left for retirement.   Couple this with the high unemployment rate in the US, you have a formula for disaster.   As much as the Fed has been trying to intervene by popping up the credit bubble using massive stimulus, demands remain weak.  People are saving more than ever.  Bubble deflation will only be a good thing for the economy.