Demographics I: Pensions in Crisis

Published on
October 8th, 2020
74 minutes

Demographics I: Pensions in Crisis

The Big Picture ·
Featuring Fredrik Nerbrand

Published on: October 8th, 2020 • Duration: 74 minutes

In the first part of his exploration into demographics, Raoul Pal speaks to CIO Fredrik Nerbrand about the structural threats that pensions face. A chief investment officer of a family office, Nerbrand shares his analysis on how a country's future growth pattern is inextricably linked with its demographic curve and how countries that can't replace their working-age population face dire risks as their aging populations stop working and start replacing stocks with bonds in their portfolio. Nerbrand and Pal explore how investors can prepare for these dangers, and they discuss how being aware of these risks actually offers an opportunity in and of itself. Stay tuned for Raoul's upcoming interviews on demographics. Filmed on September 9, 2020.



  • dw
    dude w.
    17 January 2021 @ 00:19
    Well done gents, but now I am feeling a wee bit anxious. Q: I’m a retired 60/40 boomer in USA, what should I do?
  • LW
    Larry W.
    4 January 2021 @ 22:18
    Wow. Great Video. Frederik offered a lot of info. Please have Steven Van Metre do a more detailed Education breakdown like he did with Russell Napier's video. I'd really love more detail on Frederik's thoughts. Thanks Real Vision.
  • BP
    Brian P.
    2 January 2021 @ 06:57
    One of the first times I've seen Raul get genuinely interested/engaged as Fredrik's caliber of insight really touched on one of his key foundations of how he views the investment landscape. This was a great and fascinating interview that gives rock-solid insight into the future of investing.
  • KS
    Kim S.
    1 January 2021 @ 09:49
    A really great video!
  • KO
    Kyle O.
    30 December 2020 @ 21:54
    This would be a great one for sharing with friends/family if you guys could re-enable that feature!
  • LA
    Lars A.
    29 December 2020 @ 20:45
    I think this chat should be analysed and explained by Real Vision Education to get everyone aware of this important and alarming reality that Fredrik´s tries to explain with his slides.
  • LB
    Lorenzo B.
    29 December 2020 @ 19:00
    is there a way to follow Fredrik's work/researches/update?
  • JI
    Janne I.
    8 October 2020 @ 20:02
    If possible I would like to see more from Fredrik Nerbrand in the future. This was a brilliant interview!
    • LB
      Lorenzo B.
      29 December 2020 @ 18:57
      yes, this was brilliant
  • BH
    Benson H.
    29 December 2020 @ 00:42
    Fantastic interview!
  • ES
    Erik S.
    27 December 2020 @ 07:59
    I love when I get to see a great video with a guest I have never seen before.
  • JB
    Joseph B.
    26 December 2020 @ 14:21
    this chat was amazing. thank you so much for bringing Mr Nerbrand in. What a fully integrated view of the world
  • SP
    Sat P.
    22 December 2020 @ 23:16
    The 2 income trap is the most important thing that nobody talks about. When both parents HAVE to work, there is not enough time or money to have kids when you have huge rent or mortgage payments.
  • cm
    charles m.
    14 November 2020 @ 10:10
    Well done Fredrik, jokes not too bad either.
  • MH
    Mark H.
    11 October 2020 @ 19:35
    Is Fredrik's opinion about the future price of oil considered controversial?
    • FN
      Fredrik N.
      19 October 2020 @ 11:06
      The stone age did not end because of a lack of stones...
  • MK
    Mohit K.
    8 October 2020 @ 11:31
    fredrik sir i want to read your future insights on demographics...where i can do this???
    • FN
      Fredrik N.
      19 October 2020 @ 11:05
      Hi Mohit, you can find one report I wrote about this on:
  • OA
    Olivier A.
    8 October 2020 @ 15:43
    Fantastic interview! Great RV content! One quick question - what's the definition of the "Demographic Index"?
    • FN
      Fredrik N.
      19 October 2020 @ 11:04
      Hi Oliver, basically it is an index that takes into consideration both the number of people as well as the distribution of cohorts. Taking the 6 stages of being born, start work, improve, reach max output, retire and die as a distribution of our output over a persons life I take the number of say 20 year olds times their average output (as a % of their max output in their life) plus the number of 21 year olds times their avg. output.... Do this for each year then index this through time. Fairly good predictor of long term growth...
  • JW
    Jay W.
    19 October 2020 @ 00:11
    This was really interesting. Cheers
  • SL
    Shawn L.
    9 October 2020 @ 05:21
    JPMorgan Says Real Yields Are Negative for $31 Trillion of Bonds
    • NI
      Nate I.
      14 October 2020 @ 03:55
      That's why precious metals and bitcoin are going up.
  • DW
    Dean W.
    13 October 2020 @ 01:06
    Outstanding! Very complimentary to the global perspectives of Peter Zehan.
  • SL
    Schulmynn L.
    12 October 2020 @ 04:10
    I wasn't expecting much from this, but this video was very informative. Thanks Fredrik and Raoul. Hopefully, you can have Fredrik back on again in the future. Two thumbs up gents! Maybe Steve Segal will get a lifetime achievement Oscar in the future!
    • JI
      JWD I.
      12 October 2020 @ 11:00
      This was a heavy discussion. Will be watching several more times to further digest.
  • HR
    Humberto R.
    9 October 2020 @ 01:35
    So what is the big driver of gold/bitcoin if we are structurally headed into more and more deflation in the coming decade? If Japan is the "basket case" and they have not been able to create inflation, how is Europe or the U.S. supposed to do it in large enough amounts that forces people out of the monetary system and into hard assets like gold and bitcoin? Is the gold/bitcoin trade based on some "future hope of inflation" or a stronger thesis of structural inflation (which is the exact opposite of the case made in this video). Thanks
    • LK
      Lauri K.
      9 October 2020 @ 10:20
      Governments will fight deflation with de basement. Raoul has talked this idea many times where gold/bitcoin works just as well in deflation.
    • NH
      Nathan H.
      12 October 2020 @ 05:21
      The answer to deflation is currency debasement.
  • CN
    Christopher N.
    11 October 2020 @ 18:32
    Excellent interview and superb information on demographics to help build our long term macro framework. Freddie’s opinions backed up by data and charts. You don’t hear this stuff anywhere else. Nice job!!
  • TM
    Tommy M.
    11 October 2020 @ 16:11
    Are you able to put the chapters/topics back in the interview for ya to click around?
  • SS
    Stephen S.
    8 October 2020 @ 16:37
    I love the Swiss decided it’s not all about GDP growth anymore and focus on per capita GDP. The focus purely on GDP ends up with social chaos, lwhere governments view their population as units of GDP instead of citizens of a coherent country that is something worth preserving across time. Hopefully, more countries will follow the Swiss on this.
    • TN
      Tim N.
      11 October 2020 @ 01:00
      They have low government debt to GDP which explains their change of focus
  • VB
    Vikram B.
    8 October 2020 @ 11:39
    So Germany accidentally let in a million young-ish people during the Syrian refugee crisis who have a desire to improve their lives and can learn German/skill up and contribute to the economy (and have big families). Does that delay the inevitable for a Germany by many years? Should Europe be doing that systematically (eg African immigrants) if their politics will allow it?
    • SS
      Stephen S.
      8 October 2020 @ 16:45
      First I’d say it’s unlikely you get the economic boast you anticipate with this strategy. Second, it seems a very reductionist view of humanity to think populations can so easily be transferred from one place to the next for the purpose of increasing GDP and you won’t have societal problems. I like how the Swiss official mentioned in the interview said they are focusing on per capita GDP as opposed to overall GDP. That way there isn’t a need for constant population growth and Nations can maintain their own identities.
    • JA
      John A.
      8 October 2020 @ 20:36
      A lot of those countries will have a hard time accepting immigration politically. For all the shit about racism in the US, Europe can be much worse. At least in the United States, there is no clear national homogeneous identity like there is in France for example. Yet even in the US, immigration is a tough topic to talk about pragmatically. Still, the answer seems to be clear. If you have an aging population and you don't want to go thru what Japan has gone thru, you need to embrace moderate immigration growth to offset the imbalance in your population.
    • NN
      Naresh N.
      8 October 2020 @ 23:05
      Japan has been very clear from the outset about immigration. Japan would prefer to shrink and hollow out rather than let the gaijin foreigners in to take the place of the dwindling Japanese native population to keep the GDP expanding. They would hollow out than allow their society to fracture and be disturbed by the foreigners. They have seen that this experiment has largely failed in the West and also their Edo era characteristic of being an insular society is what defines their immigration values. Bottom line, robots will take over regular jobs while the population ages and shrinks. Japan will no longer be the third largest GDP in the world, they have enough domestic household savings to tide the hollowing out of their population and the Japanese are okay with that.
    • PP
      Patrick P.
      9 October 2020 @ 11:49
      The problem with immigration boils down to quality... If you're looking for manual labor vs intellectual labor.... makes all the difference... IMO
    • DW
      Daniel W.
      9 October 2020 @ 14:29
      It is not as easy as it seems my friend. Firstly, have a look at average IQ per country. Syrians are barely above 80, most african countries are much lower. Even if these people would would be willing and healthy enough to work in germany, many are simply not intelligent enough. Secondly, health. I am a medical doctor and I have worked in a refugee camp in germany. There are no official numbers (why is that?) but I would estimate that about 30% of the regugees I treated were drug dependent. Let alone their psychological status. I heard psychiatrist saying that far more than 50% have serios mental deseases which will prevent them from ever working in germany. So, to sum it up, I think proof is still out to see wheter this experiment has worked from a GDP standpoint. Excuse any spelling errors, english is not my mother tongue.
    • SS
      Stephen S.
      10 October 2020 @ 18:00
      You can decry the Japanese for letting it shrink and hollow out but that can then be refilled with their own descendants. This seems to be what a Nation should do for it’s future generations. We can also blame the Europeans for holding on to their National Identities, but why shouldn’t they? Within those identities are great histories and cultures. It seems these are things we should want for all people.
  • JS
    Jon S.
    10 October 2020 @ 16:01
    Bring fridik to plus!
  • MO
    Master O.
    9 October 2020 @ 07:37
    So we basically have two great forces battling each other. On one side we have aging demographics and high debts, which is deflationary and is pushing asset allocation toward government bonds, but this force coupled with switching to bonds will eventually create a slow growth to no growth dynamic which should bring equities down. But on the other side of the force is central bank printing of money to counter the deflationary force of demographics and debt so that equities do not deflate and keep retirement accounts whole. I wish Fredrik went into asset allocation for the future, but from what I understood (correct me if I am wrong) your portfolio should be invested in Tech because there is little growth and tech is the only industry that has growth, gold, and bitcoin because of central bank money printing, and look for opportunities in emerging markets with good demographics, and limit your exposure to bonds but they are a necessary evil to stabilize the volatility of the portfolio and act like cash.
    • PU
      Peter U.
      10 October 2020 @ 14:10
      Very good and accurate summary.
  • VS
    Ville S.
    9 October 2020 @ 19:54
    An ounce of gold cost 30,000 yen in 2001 and now costs 200,000 yen.... That's interesting
  • MG
    Miguel G.
    9 October 2020 @ 18:14
    Awesome interview, I wouldnt mind seeing more of Fredrik in the future please.
  • AL
    Aaron L.
    8 October 2020 @ 22:47
    It would be great if you could provide the slides with the links to the publicly available source material. That way we can tinker and play around. Cheers
    • HH
      Heath H.
      9 October 2020 @ 13:35
      I found a report that has a lot of it:
  • DA
    Dina A.
    9 October 2020 @ 10:21
    Great insights!
  • GH
    Galen H.
    9 October 2020 @ 08:11
    What do Millennials do? Vote in a government that's going to give them MMT. (?) Does anyone know what gold demand has done in Japan and other countries with seriously aging demographics? Maybe gold demand only goes up in these countries when there are lack of alternatives in growth and yield. What you reckon happens to "hard" asset prices if governments focus on GDP/Capita (management)? Probably does very well on the way to this realization (long time), but once government and CB mentality changes, one ends up in a very different situation. Why would anyone want to own asset? New textbooks would need to be written. What happens to hard assets if/when IMF/World Bank etc. get together and create a crypto currency (valued against a basket of FX), and distribute it (Universal basic Income), but if you (and governments) accept this currency, into your IMF wallet, you'll only be able to spend it on certain, approved things. Education, food, accommodation, health. Hopefully an enlightenment where tech runs the world and humans look after the environment and meditate. Good wine makers will do well.
  • ds
    durgesh s.
    9 October 2020 @ 06:53
    Great Conversations .....One thing i a can add being from India is that ...... Hydrocarbons have been a big headache for India in the last 40 years .....that one thing (energy cost) not shooting up should help the next few decades
  • jh
    jason h.
    9 October 2020 @ 05:05
    I learned a ton and will certainly rewatch. Thanks for taking the time to share this deep dive!
  • JG
    Jason G.
    9 October 2020 @ 05:03
    Fantastic interview
  • TK
    Tim-Frederik K.
    9 October 2020 @ 02:05
    Excellent content. Would love to hear more about India.
    • DD
      Donovan D.
      9 October 2020 @ 04:50
      I would also like to know more about India but also would like to see Fredrik back on soon.
  • DS
    David S.
    9 October 2020 @ 04:41
    Great interview. So many possible short-term outcomes. I certainty do not know which way to jump. In the long run demographics will be the play. We will be ready. DLS
  • NK
    Nick K.
    9 October 2020 @ 04:17
    Thank you very much! Incredibly interesting views on the future and maybe a few hints at the answers of how we got here. With the reduction in energy costs and technology opening up access to education (RV is a great example, but so is Youtube or online university courses). Can we not expect more from demographically young populations, particularly in regards to innovation? The same reason the US has performed so well..., their system forces their population to strive for a better life, which results in education and innovation which is what has improved GDP. The other thought I had during this discussion, is at some point that aging population loses it's influence on the popular vote and there will be a transfer of wealth back to the younger poorer cohort. Forced devaluations in specific asset classes... The young will not always choose to pay for the old to live comfortably.
  • MF
    Michael F.
    9 October 2020 @ 04:10
    Phenomenal discussion!
  • MD
    Matt D.
    9 October 2020 @ 03:50
    (Another) Excellent interview, Raoul. Thanks Fredrik. The idea that a lot of this is deterministic is hard to ignore. COVID and immigration is a tricky consideration.
  • ly
    lena y.
    9 October 2020 @ 01:36
    Can it be American exceptionalism that keep them thinking what happens in Japan and Europe won't be arriving on shore? Like how virus is not my issue back in January! When I talk to my retired friends who see their 401(k) statements are in great shape they ask what crisis!
  • PB
    9 October 2020 @ 00:27
    Jeez, not even 50% through this one and I know I'm going to watch it again. This captures the slow, drip, drip, drip, and the inevitable. Dang it! Thirty-five years ago, I had a friend who was an actuary in training. We talked about this stuff. Here we are, 35 later now, and the bug is flying along the country road, and then....
  • PB
    9 October 2020 @ 00:19
    +1 For the mentioned book "The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies," primary author Erik Brynjolfsson. The primary author, Mr. Brynjolfsson, is active on the twit with ongoing, insightful thoughts.
  • HH
    Huss H.
    8 October 2020 @ 09:58
    What about Australia as an immigration destination for these South East Asian countries?
    • VB
      Vikram B.
      8 October 2020 @ 11:41
      Frankly isn't steady 1% p.a. immigration the only reason Australia has been growing non-stop for 25 years until COVID hit? I think Canada too.
    • BV
      Benji V.
      8 October 2020 @ 19:23
      Yes, Canada GDP growth is negative without immigration.
    • AL
      Aaron L.
      8 October 2020 @ 22:50
      Vikram B., yes that's a fair call. Of course the mining boom has done us wonders. But that is why being an immigration destination is so essential. It also underwrites housing valuations and therefor the big 4 banks' balance sheets.
    • AL
      Aaron L.
      8 October 2020 @ 23:11
      Follow up: And the big 4 banks make up just 30% of the ASX 200 index which is in every retirement plan/pension. So here's a fun exercise, you allow lower sustained immigration and you get: 1) Subdued gdp growth and a lower tax intake, so higher govt deficits 2) Downward pressure on house prices and construction 3) The main stock index takes a hit because of the massive weight in financials. 4) Banks under pressure which requires further government intervention To coin a phrase, we are all connected in great circle of immigration/housing
  • PB
    Pieter B.
    8 October 2020 @ 15:58
    Very interesting conversation! Thanks a lot Fredrik & Raoul!
  • CD
    Christopher D.
    8 October 2020 @ 13:39
    40:25 "Debt: grow/inflate/default your way out." 2020 asks us how about you just print your way out? Fresh fiat pays the debt, its velocity remaining low there's little inflation. Confidence is maintained by the CB buying every bond.
  • BS
    Brian S.
    8 October 2020 @ 12:35
    Thank you RV. Is the US National Debt now the US National Asset? If we go along the lines of the perpetual bond, will the principal of US corporate balance sheet debt will ever be repaid? It feels like the debt on balance sheets has become one big revolving line of credit.
  • JS
    John S.
    8 October 2020 @ 11:38