Suite101.com Market Timing Model: Baby boom retirements

» Demogremlin - Baby boom retirements

OK, so the best case scenario is that foreign workers pick up the slack when the boomers retire. It's important to keep in mind that this could happen. In that case, those who expected a major contraction and bought a bunch of 6% 20 year zeros to prepare will probably not do as well as those who stay invested in, say, stocks.

But what if the shrinking domestic labor pool does lead to an economic contraction? Two further questions to repeat:

1) Is this worth taking into consideration for long term forecasting and investment planning?

2) In that scenario, what do people think? would the contraction be inflationary or deflationary? It seems that most contractions tend to be deflationary with higher unemployment. But could the shortage of workers lead to inflationary pressures instead? I really don't know what to think. It seems that it could go either way depending on other factors. What would those other factors be?

Panspar

-- posted by Demogremlin