Re:The World Economic Forum predicts a USD 400 trillion pens...
by PaulHoule on Friday June 02, 2017 @10:20AM
(#14470066)
Government and private pensions have the same problem, because even the stock market is "pay as you go" in the sense that somebody has to buy stocks in the future at a high price to support future price appreciation.
Either private or government investment could, in principle, lead to economic growth that could expand the physical size of the economy. If people saved more money, I see the price of stocks going up, but I don't know how that translates to real growth in the economy, more jobs, better jobs, etc. Look at how Apple and so many other companies pile up cash, how telecoms refuse to invest in better broadband, the EU can't put together a realistic plan for Greece, and how economic investment is channeled through a series of "bubbles"; just yesterday I heard an acquaintance just bought a GM Suburban, than I heard on the radio that Banco Santander was not happy with their subprime auto loan portfolio in U.S. and then that GM is closing a factory.
Yes, American consumers didn't wait one minute after the price of gas dropped to get big, expensive vehicles because they assume the low prices are permanent. Ray Diallo had a bad year because he assumed high oil prices are permanent. It is completely predictable that oil prices are volatile on a five-year horizon because producers and consumers will change their behavior a LOT on account of a 5x change the price of crude, but people get blindsided every time.
The lesson of history us that people don't learn from history. Add up another 30 years of economic mismanagement in large and small ways and 2050 is not looking so bright.
Either private or government investment could, in principle, lead to economic growth that could expand the physical size of the economy. If people saved more money, I see the price of stocks going up, but I don't know how that translates to real growth in the economy, more jobs, better jobs, etc. Look at how Apple and so many other companies pile up cash, how telecoms refuse to invest in better broadband, the EU can't put together a realistic plan for Greece, and how economic investment is channeled through a series of "bubbles"; just yesterday I heard an acquaintance just bought a GM Suburban, than I heard on the radio that Banco Santander was not happy with their subprime auto loan portfolio in U.S. and then that GM is closing a factory.
Yes, American consumers didn't wait one minute after the price of gas dropped to get big, expensive vehicles because they assume the low prices are permanent. Ray Diallo had a bad year because he assumed high oil prices are permanent. It is completely predictable that oil prices are volatile on a five-year horizon because producers and consumers will change their behavior a LOT on account of a 5x change the price of crude, but people get blindsided every time.
The lesson of history us that people don't learn from history. Add up another 30 years of economic mismanagement in large and small ways and 2050 is not looking so bright.