The Coming Retirement Crisis Part II

Published on
February 10th, 2020
Duration
45 minutes

Declining Fiscal Democracy: Understanding the “Pig in the Python”


The Coming Retirement Crisis Part II

The Expert View ·
Featuring Raoul Pal

Published on: February 10th, 2020 • Duration: 45 minutes

How can ordinary people behaving rationally create a generational threat? Raoul Pal, in his role as CEO and co-founder of Global Macro Investor, joins Real Vision to explain the interconnected problem of the everything bubble and the coming retirement crisis to answer the question, "why do we invest?" He explains in detail how the baby boomer generation, through the rational and reasonable behavior of seeking to live and retire comfortably, has fueled the creation of a massive financial bubble that touches nearly every corner of the economy as pensions take more and more risk. Pal breaks down the crucial demographic, economic, and political trends that have combined to create the problem and suggests potential solutions for Baby Boomers, Millennials, and Gen Xers to get out door before the fire of the coming recession. Filmed on February 4, 2020 in Grand Cayman. See Raoul's first Retirement Crisis video, which was watched by over 2 million people, here: https://www.realvision.com/tv/shows/the-expert-view/videos/the-coming-retirement-crisis

Comments

Transcript

  • sc
    sung c.
    3 March 2020 @ 04:00
    Wow! What a hard hitting, real, and honest assessment by Raoul. Thank you for this. It was truly educational and informative.
  • HL
    Henrik L.
    28 February 2020 @ 21:49
    Excellent, thanks!
  • Am
    Alex m.
    25 February 2020 @ 07:47
    Raoul please float a Monsoon ETF!
  • LW
    Lorenz W.
    17 February 2020 @ 06:32
    What's the simplest way to put this trade on when in Europe e.g. Germany? Any long US/bond ETF to recommend?
  • MR
    Manager R.
    13 February 2020 @ 19:27
    who inherits the wealth that the baby boomers have when they die?
    • Hv
      Hannah v.
      15 February 2020 @ 21:21
      The baby boomers ARE the wealth. When they all try to cash in their hoard at the same time, the “wealth” plummets because there are no buyers (..unless a flood of immigrants count). Wealth isn’t a constant tangible sum; it’s a defined by supply/demand. One Picasso or one Banksy is a store of wealth.. a Boomer amount of the same art piece is worthless.
  • BN
    Barrett N.
    15 February 2020 @ 02:07
    Thank you, Raoul, for all your incredible information and insight. Terrifying to say, I believe you will be right.
  • CC
    Charles C.
    15 February 2020 @ 00:32
    what a great service this is Raoul. thanks for making this free. thanks for making this easy to follow and comprehend. you are a prophet in the best sense of the word.
  • GS
    G S.
    11 February 2020 @ 04:21
    all sounds good until you do research and find out that all this was said 7 years ago and yet were at ATH
    • TC
      Thomas C.
      14 February 2020 @ 18:52
      I've been hearing about the "coming pension and entitlement bust" for almost 20 years, and none of the doomsday predictions have played out yet. It all makes sense to me, I agree with the bears on this. But this stuff can get kicked down the road for 20 yrs. But we MUST be closer to the end by now!
  • SB
    Stephen B.
    14 February 2020 @ 18:17
    Sorry to hear about the loss of your father, Raoul. And thank-you for what you are doing for all of us.
  • TS
    Timothy S.
    10 February 2020 @ 23:54
    Is there any way we can do a series on how the 20-35 age bracket can combat this? What can we do? Where can we go to invest? It will be difficult to buy any of these assets from the boomers, as we have no form of wealth generation. Equities are too expensive, and there is more risk to the downside then upside at this point with all of the issues.
    • RP
      Raoul P. | Founder
      11 February 2020 @ 01:53
      All coming up in the next two weeks...
    • SR
      Suds R.
      11 February 2020 @ 06:07
      Hopefully there is also one for Gen X'ers as well.
    • GA
      Giedrius A.
      13 February 2020 @ 22:24
      This would be brilliant.
  • TH
    Terry H.
    11 February 2020 @ 20:41
    I Know sometimes lifetime income annuities can be a bad word, But with bond yields at historic low rates, and possible market declines coming. In your view should retirees consider annuities as a way to get higher income that is protected from market downturns?
    • JO
      JOHN O.
      12 February 2020 @ 02:58
      Lifetime income annuities are simply institutional portfolios, mostly bonds, with an insurance wrapper. If you can be sure you're going to last to 95 or 100, they can be a great deal due to the fact that you have been able to game the mortality tables. The IRR of an annuity is not that much more than that of a long duration bond portfolio due to the fact that the advantages gained by institutional pricing and use of some derivatives and alts the average investor wouldn't use are largely offset be the cost of insurance (M&E charges) and the profit the issuer has to show. Annuities are the right tool in certain circumstances but I'm afraid the ads you see from insurers are a wee bit too rosey.
    • KC
      Kenneth C.
      13 February 2020 @ 17:29
      When I started in the business I had the benefit of seeing two insurance companies go belly up. So guarantees are only as strong as those issuing them.
  • KC
    Kenneth C.
    13 February 2020 @ 17:14
    Raoul, a potential guest would be Robert Kiyosaki, co author of Rich Dad, Poor Dad. I'm noticing millenials commenting now, I know its an audience you are seeking to develop. I just finished listening to it and Im going to attempt to get my kids to listen.
  • WW
    William W.
    13 February 2020 @ 00:15
    As usual, Ral's analysis is both sound and thought-provoking. Real Vision is one of the absolute best values I have ever experienced, and I am a 56 yr old boomer. There is, however, in my opinion, another contributing variable. That variable is that, since 1971, the world has experienced the historically different monetary scheme of a fiat-currency exchange rate system. Had we continued with a fixed exchange rate system, which is more self-balancing, the world's sovereign governments would not have been able to pile up the seemingly uncontrollable debt that exists today. Also, a fixed exchange rate system would have limited the ability of central banks to prop up the seemingly endless crises that have erupted ever since that fateful day in 1971. Money and credit creation cannot be at the whims of humankind. Just imagine if we could all individually print our own whenever we needed it. Thus, we need intelligent and caring people like Ral and many RV interviewees to restructure our monetary system to where money and credit creation is fixed to something, whether gold, Bitcoin, a commodity basket, or some other variable. Surely we can figure out a better way.
  • SY
    Steve Y.
    12 February 2020 @ 20:43
    Within two two years Michael Lewis will write a book about this and then a movie will be made about it and Raoul Pal will be one the main protagonists. Trump, Powell and his sidekick Neel Cash and Carry will be among the many antagonists. Mark my words. Time stamp this.
  • NG
    Nikita G.
    10 February 2020 @ 15:36
    Working at Google, as part of the comp I receive stock grants over the period my employment (not stock options though, only for top execs), which is a large part of the total comp. The average employee age is quite young and the majority of the workforce joined the company way after 2007/2008 period when the stock price dropped meaningfully. So, at the end of the day, most people around have only experienced the value of their stock grants going up and up. Then you have a pension plan, which is heavily invested in tech and GOOG, your income depends on the company. So virtually all your future is pinned on the company. When I tell people that I am trying to diversify by selling grants and getting out of the pension plan, rolled up eyes is the best I get. Same thing Raoul says - people absolutely believe it is 'bulletproof'.
    • RP
      Raoul P. | Founder
      10 February 2020 @ 15:50
      I had the same at Goldman... the options were worth a fortune in 1999 and then zero in 2002.
    • NG
      Nikita G.
      10 February 2020 @ 15:59
      Haha, I can only imagine what a ride it was. Thanks for the great video, this is a very complex narrative and you are presenting the argument masterfully. I can sense that this has been painstakingly thought through over many hours. Really helps me to benchmark my gut felling against a great macro mind and keep going against the crowd (of even supposedly very smart people). Cheers!
    • JC
      Justin C.
      10 February 2020 @ 17:26
      I work at Apple and the same is happening there. I've been trying to get friends at Apple and other places to at least sell some of the stock they're holding and put the money other places and to watch videos like this. I've gotten only a few people to listen to me and watch the content. Unfortunately, the average person doesn't want to hear about issues such as this. I've found they just want to go through life believing everything is fine. I guess it's human nature
    • JO
      JOHN O.
      12 February 2020 @ 03:39
      I know too many retirees that spent a career at GE, had a boat load of stock and were living off the dividends and occasionally selling a little to help a grand kid with tuition, etc. who are now quickly eating through other savings just to make ends meet. You guys are right to diversify. Don't listen to your critics.
    • NG
      Nikita G.
      12 February 2020 @ 17:02
      Thanks John, that is a great example from the past experiences!
    • JG
      Jordan G.
      12 February 2020 @ 20:03
      I work in tech, and I don't invest in tech. If your industry goes bottom up, you lose your income and your savings at the same time.
  • JG
    Jordan G.
    12 February 2020 @ 19:14
    Raoul, I appreciate your ability to put a comprehensible framework over a complex situation. It's a great accomplishment. Things that didn't make sense at first grab. You said that the monetization of the assets by the federal reserve would likely be bad for the purchasing power of the dollar, but you compared it to Japanification, and the Yen has performed well as a currency. Granted... you did point out that Japan had a high savings rate, although the Fed can also buy both the assets and the securitized debt. Similarly, you said the younger generation would not see inflation for some time, but would see "The destruction of capital from the purchasing power of money." Can you explain what that phrase means, and how it is not inflation? I understand, through lower hurdle rates, that we've destroyed capital by the volume of money - it's going to be hard to get a return on capital for the remainder of our working life (I'm 40, my wife 31). Is that what you're referring to? It hasn't seemed to be inflationary. Or does it mean something else?
  • PG
    Pinchas G.
    10 February 2020 @ 12:27
    I am scared as hell... I’m only 25
    • MW
      Marcus W.
      12 February 2020 @ 13:29
      No need to be. It's shit easy to make money online and live on a beach for next to nothing. Don't buy into the BS save and retire crap. You don't save to retire. You build cashflow streams that pay you whether you're dead or alive. Work if you want or not. Invest in yourself, businesses, real estate. Who cares about markets, I just look at markets to find business opportunities. You don't need to work a crap job. Who needs a house. You have beach for cheap. Just thoughts. Good luck.
  • FB
    Frank B.
    10 February 2020 @ 19:57
    Raoul, you missed the FIRE movement ;) I’ll be on the look out for it in Part IV after the market corrects...”when the FIRE movement blew up...”
    • PG
      Pinchas G.
      10 February 2020 @ 21:52
      Financial Independence, Retire Early.
    • FB
      Frank B.
      11 February 2020 @ 17:28
      One of the outcomes of this bull market cycle is this Financial Independence Retire Early movement. This group of individuals, mostly millennials, have decided to exit the workforce around mid to late 30s. Their plan is to live off their "savings" based off the 4% rule (1,000,000 * 4% = $40,000/yr). Since we haven't had any meaningful pullback in the stock market since 2008-09, these individuals have only experienced an up market and truly believe in owning 100% stocks and the 4% withdrawal rule. As a RV subscriber, there's many flaws to this plan. If we have any meaningful correction over the next 5-10 years, these individuals will be wiped out and will possibly have to go back to work to re-accumulate their savings. This is just one of many outcomes of the 10+ year bull market.
    • MW
      Marcus W.
      12 February 2020 @ 13:23
      Heaps of Millennials also working online living on beaches for next to nothing too and financially free. No need for college. Retire or not. Why do people think you need savings to retire. You need cashflow. So easy to make online with your own business and done from anywhere in the world. The smart millennials are clued in to how to play this. The delayed life plan of work, retire and die, doesn't make any sense. I wanna work till I'm 120. I'll take months and years of here and there but I'll keep building online passive cashflow forever.
  • JP
    John P.
    10 February 2020 @ 22:09
    The harsh truth is that retirement doesn't and shouldn't exist. Historically, it was only available to the rich. A society working from 22 to 65 when you live until 80+ only makes sense if you're willing to consume less than 50% of production while working. The average boomer will need to work until 70 - 75 for the system to not implode.
    • MW
      Marcus W.
      12 February 2020 @ 13:17
      Totally. I can't stand the thought of retirement. The whole delay my life till I'm old, retire and die. I retired at 36, took 18 months off and got bored shitless. I have no intention of ever retiring again. I work in spurts. 3 weeks on 2 weeks off. 1 month on and 2 weeks off. Whatever it is. As always, I'll keep building businesses that bring in passive cashflow and buy real estate. Both produce the most leverage with the lowest risk. I like the whole Macro aspect of RV. That helps me look for opportunities in business and real estate. Some of the data in here perfectly matches the results I get across some of my Facebook advertising results. Great video, sent it along to the olds since they just mentioned how well their retirement nest egg is doing... I did point out 3 years ago that 2020 would probably be the year. Tho I think it will be 2021 after Trump is re-elected. There will be hell for 2 years, then I think the market will go bananas again. Not that I care. Business and Real estate will always do well. I don't have to worry about markets too much.
  • JS
    Jim S.
    12 February 2020 @ 04:55
    Oh geeze I was the 666 thumbs up, someone push it quick!
  • PD
    Philip D.
    10 February 2020 @ 22:54
    If I did post this video on LinkedIn, I'd be guaranteed to be red marked by financial organisations & risk the chances of finding a job in the industry. Let's face it, most financial service firms are not into generating returns for clients but selling a product for a fee.Hence, it ain't over till the fat lady sings. That said, I feel an extreme frustration with Boomers (business leaders, politicians etc) who have ruined it... without any concern for the future & then they blame us Millennial's (just a vent; so don't shoot the messenger).
    • RP
      Raoul P. | Founder
      11 February 2020 @ 01:54
      They were all rational actors...
    • JO
      JOHN O.
      12 February 2020 @ 03:28
      Chill out Phil. We can't honestly blame anything on you. We created you! I'm a Boomer with two Millennial kids. They are who they are in large part because of the way they were raised. We're just yanking your chain 😉
  • RS
    Randall S.
    11 February 2020 @ 11:28
    Got a little lost on the student loan debt section. Is Raoul saying that indebted graduates should be angry at the baby boomer *parents*? Or the baby boomer *lenders* for not paying for their college? I don't see the problem as being that college should have been paid for by someone else, it's that the university education is overpriced and the students were told that taking out unsecuritized loans with bad terms was OK if you were getting an education (aka a diploma/prestige) in return. Truth is, the students didn't understand debt as a general concept, and the education isn't worth the debt pain or even the principal price. When you calculate out the return vs the investment and the payoff tail, it's a really really bad deal.
    • JO
      JOHN O.
      12 February 2020 @ 03:17
      Have to agree with you Randall. I live in Connecticut and where one can go to Yale with a $54K tuition (2018-19) or UConn with a $16K tuition (18-19) or Central Connecticut State College with a $11K tuition (18-19). I know there are is room/board, books and parties so add 25% to each. Part time job, summer job and maybe, if your lucky, a tiny bit of help from Mom & Dad and guess what? Not too much debt when you get out. Then when you do get out, work your ass off and pay down the debt.
  • AK
    Ado K.
    11 February 2020 @ 16:47
    I think we have a lack of order and discipline in the world, when boomers need to sell and there is no buying the FED will bail them out and buy. Bitcoin will fix this though, it will humble a lot of collectivists. I literally cant wait for fiat to just vanish away as it was created, into thin air.
    • JO
      JOHN O.
      12 February 2020 @ 03:03
      I doubt you'll see fiat currencies disappearing as long as there are governments and central banks around. Would be nice to see however.
  • GP
    Geoff P.
    11 February 2020 @ 12:40
    Have to admit, I'm very disappointed in the, absolve oneself of all responsibility and blame someone else, message in this video. If you buy a new car/house you can't afford, your fault. No one else. If you go to college and get a worthless degree, your fault. If you throw money around at bubble highs, your fault. Etc, etc, etc. Own it and learn from it. Blaming someone else is just very bad form.
    • CB
      C B.
      12 February 2020 @ 01:15
      Totally agree. Raoul is on a rant here, and while some of it is warranted, there's no blame for personal accountability in his explanation for where it all went wrong. Easy to blame others, harder to blame oneself. Globalization was also largely responsible for stagnant wages. What is the alternative? Block companies from offshoring, and that drives up the price of labor (good), but the price of end products as well (bad). There's always a tradeoff, the pendulum swings back and forth. I also think the analysis of the wealth divide is a bit facile. There is tremendous wealth focused in the hands of the very very few. They are statistical outliers of many standard deviations. Remove this handful (Zuckerberg, Bezos, Gates, Ellison, Page, etc) from the data set, and is wealth inequality actually any worse than it was 50 years ago? I suspect the answer is not by much. Should we then remake the tax system on this flawed basis? If you want to dramatically change inequality, go after the outliers by breaking up the tech monopolies.
  • GF
    George F.
    11 February 2020 @ 02:54
    OK. Got the problem: it is eloquently and persuasively stated. Again. What’s an individual boomer to do? Lower equity exposure. Right, makes sense. Increase bond exposure. Hmm. Not junk, not corporate, not euro, not yen; so that leaves Treasuries? TIPS? Sell your house and bank the cash. That’s it? The gold and bitcoin crowd will pile in at this point, but I can’t see that as a solution for boomers.
    • GS
      G S.
      11 February 2020 @ 04:16
      i never looked at gold but i recently got an investment property i held for 18 years valuated and the gain was pretty much the same as gold over the same period. That did surprise me.
    • RP
      Raoul P. | Founder
      11 February 2020 @ 11:17
      Treasuries still have very good capital gain opportunities, even though yields are low. After that, its all about the psychology of accepting a lower income than expected and taking step to increase the quality of life balance to compensate.
    • JL
      James L.
      11 February 2020 @ 12:36
      if you watched it to the end, you will find some suggested solutions
    • GF
      George F.
      12 February 2020 @ 00:01
      James L..."If you watched it to the end". How clever of you. Where do you think this list came from? But also, if you had listened carefully, many of the suggestions apply to the following generations not the boomers.
  • ra
    rehan a.
    11 February 2020 @ 23:02
    This should be on PBS
  • DH
    Dale H.
    11 February 2020 @ 21:53
    Thank you Thank you Thank you
  • RM
    Ryan M.
    11 February 2020 @ 18:55
    What % of retirement assets are in defined pension benefit plans? Appears that is the main area of risk being called out
  • MC
    Mike C.
    11 February 2020 @ 18:49
    Everytime I hear some kid who's still quite wet behind the ears say that markets are efficient because he read it in a text book, I'll forward him this video, the sad thing is they've never been more inefficient, most investors now are more clueless than ever! Great piece Raoul!
  • DW
    Daniel W.
    11 February 2020 @ 18:44
    Interesting but, unfortunately, very US centric. As a european I am currently considering buying real estate in Miami, a 10% rent yield plus currency appreciation is still in the cards. Also, the pension systems differ a lot. I pretty knoe my pension is doing well with the downside risk of being taken over by the state if things implode in the governmental pension sector. Looking forward to the next two weeks hoping to see a bit more of an international approach.
    • DW
      Daniel W.
      11 February 2020 @ 18:44
      ...pretty much know..
  • SS
    Sean S.
    11 February 2020 @ 16:30
    """You guys, you young guys - yeah it looks pretty fucked now LOL
  • DG
    Daniel G.
    11 February 2020 @ 15:42
    Raoul, create an ETF of companies not in ETFs. All the money will flow into it and we'll all get rich. Oh, wait.
  • BF
    Bret F.
    11 February 2020 @ 13:39
    US markets are straight up. A 30-40% correction. Then 10 year bear market = Crushing . The harder reality could be young people just keep by the dip and lose everything also. (they don't understand market dynamics aka corrections)
  • jc
    judith c.
    11 February 2020 @ 05:00
    Hi Raoul Great video. Part 1 blew us away. While watching Part 2 our last income property deal is finalizing. We subscribed last year to Real Vision and regularly watch, and ponder the Real Vision talks, and interviews. We just renewed the subscription - no brainer. Just tired of being lied to by main stream media. Old Wall disinformation. I bought my friend a subscription and they aren't watching! Their whole life savings in the stock market.....scary. Building real creative, and valuable content is challenging and Real Vision does just that!
    • RP
      Raoul P. | Founder
      11 February 2020 @ 11:15
      Thanks so much!
  • BP
    Bryce P.
    11 February 2020 @ 04:54
    Excellent Raoul!!!!
  • RG
    Razmig G.
    11 February 2020 @ 04:33
    One comment. Concerning the median wealth being low in the US compared to other countries. Might be due to consumption.
  • SA
    Scott A.
    11 February 2020 @ 00:29
    Alas the vast majority of "young people" are too busy on social media to be watching this much less talking to the old people. I have been with RV since the beginning. Trying to get my well educated successful kids to watch RV is like pulling teeth. Passive investing dangers, covenant lite bond issues, it's all boring to the average person. And while the Street does sell a boatload of crap, it is sometimes hard to feel for people who refuse to do the slightest bit of due diligence in terms of their investments.
    • CV
      Collin V.
      11 February 2020 @ 00:58
      34 year old here, loving all this content. And eating it all up. Hoping to be retired early, neighbors with Raoul.
    • RP
      Raoul P. | Founder
      11 February 2020 @ 01:52
      Interestingly, our smallest demographic is Baby Boomers, the largest are Gen X but closely followed by Millennials...
    • PG
      Pinchas G.
      11 February 2020 @ 03:42
      👋 25 year old I think I’m technically generation Z
  • SV
    Steven V.
    11 February 2020 @ 03:01
    You should put this entire video on YouTube. It would bring a tremendous amount of exposure to RV.
  • RM
    R M.
    10 February 2020 @ 23:10
    Spot on and beautifully told. Well done Raoul!
    • RM
      R M.
      10 February 2020 @ 23:24
      I mean the following purely as an economic thought, not political. US could revise immigration to lower median age over time, expanding the tax base, as long as it simultaneously worked to regionalize manufacturing. There was a time we were like a monsoon economy. Anyway we are going to have to find solutions or go bust.
    • RP
      Raoul P. | Founder
      11 February 2020 @ 01:54
      Yes, agree. There are novel solutions to be found.
  • TL
    Tianyun L.
    10 February 2020 @ 23:35
    I think you are wrong on stocks but right on housing in non-prime areas. The stock of wealth is not held equally which means sell down will be unequal as well. The rich won’t be selling a ton of stocks to fund their retirement while the poor will need to sell their non-prime real estate. Japanese bonds is the more proper analogy to us blue chips and tech.
    • RP
      Raoul P. | Founder
      11 February 2020 @ 01:53
      Yeah, if Im wrong on stocks its because of this...But... recessions will also cause forced selling.
  • BS
    Bevyn S.
    11 February 2020 @ 01:40
    Great clip! Thanks Raoul. I often see the historical chart of corporate debt / gdp quoted for emphasizing over indebtedness, but wonder if its accurate to compare different points in history without somehow accounting for the varying amount of international income produced by global companies. Wouldn't it be more accurate to look at something like total stock market debt / revenue or debt / ebitda? I understand looking at consumer debt / gdp or government debt / gdp, since most of the borrowers income would be from the local economy (i.e. within the US). Seems like corporate debt / gdp is somewhat of an outdated measurement. Am I totally out to lunch here?
  • JL
    James L.
    10 February 2020 @ 09:08
    Video can't be accessed without a subscription, is it going to be marked as free, or will you be uploading to YouTube as well?
    • RP
      Raoul P. | Founder
      10 February 2020 @ 14:49
      It should be free now to share
    • JL
      James L.
      11 February 2020 @ 01:18
      Thanks Raoul! It's just even that $1 payment is enough resistance to stop some people getting to see it.
  • CK
    Chris K.
    11 February 2020 @ 00:05
    'But that's bull****' lmao Raoul I spat my coffee out!
  • pj
    paul j.
    10 February 2020 @ 22:23
    Comparing the wealth of the top ten billionaires (a stock) with the GDP of countries (a flow) is like comparing apples with oranges.
    • RP
      Raoul P. | Founder
      10 February 2020 @ 22:44
      I could have used market cap and it would have been even worse...
  • JH
    John H.
    10 February 2020 @ 22:33
    The key point -- that asset prices are largely driven by a demographic bulge of demand for savings product -- is correct, IMO. The future of rates implied by graph, the polemics against the wealthy (not the cunning players made out, but as clueless and out-of-control as middle-class Boomers), and other things, I question. Nicely done.
  • DK
    Daniel K.
    10 February 2020 @ 21:50
    Well the CPI went lower also bc the inputs changed. It's not a fixed basket of goods.
  • JL
    James L.
    10 February 2020 @ 21:27
    You are so right and yet I fear it get worse before the bubble burst!
  • JC
    John C.
    10 February 2020 @ 21:01
    Innocent question here, as I myself am a millennial that recognizes these trends, has felt them personally, and has a bit of a cynical view of the "system" itself. I'm personally not one who will see any windfall from this as my parents are struggling with retirement themselves (along with many others), and I also understand that this wealth in the baby boomer generation is very, very concentrated among the 1%, market-asset-owning individuals. But have we considered the impact of any "shift" in this money through wealth transfers, gifting, "trust fund" set ups? I understand that this is likely to just be the 1% shifting it back down among themselves, and also understand a correlation between growing up with a "silver spoon" and your earnings potential / likelihood of success (further confirming the old 1% to new 1% shifting in this type of scenario). Do we think this impacts anything? I don't expect to see the poor receive any sort of windfall or anything, unfortunately, but if a bulk of this gets transferred, does it impact any consumer spending / capital investment / etc on a broader level? Just a thought. Thanks for any feedback from the community if so. Always a treat getting to see these monologue type presentations where you can tell this is something Raoul and RV understand intimately and care about addressing / spurring the conversation around finding a solution.
  • MM
    M. M.
    10 February 2020 @ 20:55
    I miss a chromecast mode. My old knees dont hold the laptop for 40 mins
  • HS
    Henry S.
    10 February 2020 @ 20:19
    Really great work Raoul. I'd like to make a point that as a Millennial living at home there are further demographic problems to be had by generations living together. Barely anyone my age is having children (I'm 33 this year) The ones that do have their own homes... they are far and few between. Many of us just can't see how we'd ever afford to raise a family and certainly wouldn't want to whilst still living with our parents. There's a certain amount of arrested development below the surface of this issue. I really appreciate the material you put out. It's the best education I've received.
  • LJ
    Liam J.
    10 February 2020 @ 20:17
    this is mostly US focused. could you do a deep dive on europe as well ? i'd be really interested in that!
  • AT
    Andrea T.
    10 February 2020 @ 19:40
    <3
  • cy
    christopher y.
    10 February 2020 @ 19:16
    You see them skipping along in their linen shirts - but that's bullshit. Oh my gosh I almost fell out of my chair :).
  • JH
    Joseph H.
    10 February 2020 @ 19:08
    Great episode. A crisis with no elixir. A pandemic of 0% real interest rates has euthanized the saver. Rates go up multiples contract and your pile shrinks. Rates stay where they are at and your pile has to be 4.3x's what is was in Jan of 2000, 6.68 % 10Y then vs 1.55% today, for the same level of income. Not to mention sequence of return risk. Oy.
  • TR
    Thomas R.
    10 February 2020 @ 18:53
    Brilliantly explained. Thanks,
  • NI
    Nate I.
    10 February 2020 @ 18:14
    Will anyone ever ask the question - why do pensions have a record funding shortfall in the midst of the greatest boom of all time in stocks and bonds?
    • PU
      Peter U.
      10 February 2020 @ 18:16
      part of the reason is as interest rates fall to zero or close to zero the present value of pension funds' obligations rise (a lot ) as well.
  • PU
    Peter U.
    10 February 2020 @ 18:12
    Interestingly, from 1990 to 1999, bonds accounted for only 10% of the $2.37 trillion inflow into all funds (stocks and bonds). From 2000 to 2009, fixed incomeaccounted for 26% of the $3.5 trillion inflow. And in these past ten years, an incredible 74% of fund inflows have been into bonds, not stocks (the biggest source of demand for equities hasbeen share buybacks). --- From David Rosenberg's 2/10 Daily. Consistent with Raul's message on the baby boomers need for income.
    • PU
      Peter U.
      10 February 2020 @ 18:15
      In January 2020, the inflow to bond ETFs exceeded 2% of assets, bringing the total capital to $850 billion ─the fifth month in a row in which net inflows topped 2% of total assets.In 2019, more than $105 billion flowed into muni bond funds (total assets of $861 billion) ─surpassing the prior record in 2009 by more than 40%. Per David Rosenberg
  • DP
    Daniel P.
    10 February 2020 @ 17:38
    Great video but wish there was more context in terms of other markets' pension systems - e.g. would (selfishly) love to hear what Raoul thinks about the pension system in the UK.
  • PG
    Pinchas G.
    10 February 2020 @ 16:11
    I think we have to get a notification on for when someone responds to a comment thread that you are part of. What do you think?
    • RP
      Raoul P. | Founder
      10 February 2020 @ 17:21
      We are working on it...
  • wb
    willem b.
    10 February 2020 @ 14:50
    I am a Gen-X-er. We have seen house prices in The Netherlands & Australia been bid up by the generation before us all our lives. We have never bought a house. We have always found the prices too high. We keep thinking that the housing market has to reset once this large generation has to sell between 2030-2035 when they reach 75-80 years old. You say that house prices will not reset, because governments will keep propping house prices up, not allowing sales to clear at lower prices. How will the governments keep propping up house prices when this large generation will have to sell their houses to fund themselves? Will the governments buy their houses directly? Or will the government allow the banks to let the owners sell the houses to back to the banks through some government-sponsored program? I still believe prices have to drop significantly after 2030 for the house sales to clear. I realize different parts of the housing market will react differently based on younger generation preferences and immigration. Thanks, WB
    • MC
      Minum C.
      10 February 2020 @ 17:00
      In Canada, there is a reverse mortgage market where financial institutions (not necessarily banks) are happy to earn fat implied interest rates by providing asset rich/cash poor seniors with a steady stream of monthly "income" in exchange for a first charge on the house. It is a total rip off for seniors. The other side is the investors tend to earn decent yields considering the risk.
  • DS
    David S.
    10 February 2020 @ 16:59
    Really looking forward to the presentations. Trying to make sense of current markets nearing age 74 is difficult. The only thing that makes sense to me is massive money flows trying to find a safe home with some or any return. These massive money flows define the narrative of the moment. QEs and other money printing operations around the world have aggregated huge wealth in few hands that is mostly deployed in financially engineered instruments instead of productive assets for many reasons. It is the only way I can make sense of massive US debt and a dysfunctional government with a high US stock market and a low interest rate on US bonds. It seems that all types of investments are subject to high volatility with any change in the investment narrative of the huge wealth pools. I agree the most reasonable outlook is for US treasury rates to continue to fall. With ongoing US deficits in the trillions of dollars however, inflation may become the dominate concern thereby driving interest rates back up and bond prices down. In the old days we trusted that value investing would payoff someday. Now it seems the market is reacting to the narrative of the moment. This makes my confidence in my investments very problematic and very risk adverse. This is the market we are in and must deal with. I applaud all your efforts to inform investors of the false narratives and the Sirens' song of blind ETF investing and illiquid markets. Hopefully many investors will listen and take appropriate actions. DLS
  • DJ
    D J.
    10 February 2020 @ 16:27
    This is a fantastic video!
  • PW
    Patrick W.
    10 February 2020 @ 11:43
    OK, Raoul needs to disclose his stake in International Living. What I'm concerned with what International Living espouses is that you may eventually see push-back from the locals as the Western retirees descend in droves and make everything unaffordable to the locals.
    • RP
      Raoul P. | Founder
      10 February 2020 @ 12:31
      What is International Living?
    • VS
      Vaelin S.
      10 February 2020 @ 13:53
      I'm assuming Patrick is saying that if large amounts of US retirees move to a lower cost of living country, that it would then cause the cost of living to rise and cause issues for the locals?
    • JR
      Janese R.
      10 February 2020 @ 15:02
      I think he's talking about this magazine (https://internationalliving.com/) that promises the perfect retirement life in destinations throughout South America and Asia. I was a subscriber in the mid 2000s but found none of the destinations or investments lived up to what was advertised.
  • OT
    Omar T.
    10 February 2020 @ 14:41
    Hi Raoul: It doesn't look like the video is on the youtube channel. Can you share the free link? Also, you make it sound like Bernie Sanders would address some of the excesses of the current bubble, but it looks to me that he would just pop it faster while president Trump would just extend the bubble further to the benefit of the rich and the baby boomers, and generally at the expense of foreigners (other countries). Thoughts?
    • RP
      Raoul P. | Founder
      10 February 2020 @ 14:48
      Its free to share. Please share !!! You can also use the social media share buttons on the bottom left.
  • BT
    Brian T.
    10 February 2020 @ 14:24
    Raoul, you rock!
    • BT
      Brian T.
      10 February 2020 @ 14:28
      And Happy Birthday!
  • SS
    Sam S.
    10 February 2020 @ 13:48
    There is just nobody as sharp and well spoken as Raoul Pal. To study such a massive amount of "macro" information and put it together in a way to be well spoken and explained, so we can keep up with this ever changing financial & world puzzle, is a gift! Raoul is the whole package and I'm more than grateful to be a part of RV!
  • SS
    Sam S.
    10 February 2020 @ 13:31
    I have extended family deep in the medical profession, in the heart of Silicon Valley. Party talk a few years back, $14 Trillion of Baby Boomer capital was under siege by the massive orchestrated inflation in healthcare everything! Get the money away from them and tax the hell out these transactions paid for by the Boomers. Insurance and risk management. Whether totally accurate or not, that's what's happening and follows along with Raoul's Expert View herein. Happiest Of Birthday Wishes Mr. Pal! Hope I heard that right.
  • GR
    Garey R.
    10 February 2020 @ 13:23
    Wonderful follow up to the original episode! I look forward to the special 2 week focus.
  • HH
    HODL H.
    10 February 2020 @ 13:07
    Boomers had decades to accumulate wealth, but now could lose it. Asset prices need to reset but unfortunately central banks won’t let it happen because of it mushing baby boomers. Thank you for making this video. Millennials need a massive reset/reprice to buy stuff cheap like baby boomers had multiple opportunities to do
  • MK
    Mohit K.
    10 February 2020 @ 10:44
    you are very bullish on INDIA...although in india the unemployment rate is 45 year high....indian market is trading at PE of 27.03 with Dividend yield 1.26% as on 10-2-2020 & have a 2% growth only in EPS of index companies in the last 5 years till CY 2019....India have one of the best demographics in the today's world due to this india needs more factories which required more & more hand made humans which is replaced by technology due to automation...if india doesn't produce enough employment in next decade for youth then these demographics factor become double edge sword ....take final decision after proper study only otherwise anyone can loose hard earned money i am neither presenting +ve or -ve picture of india although I am INDIAN .... As a analyst i am sharing few numbers with you Thanks
    • RP
      Raoul P. | Founder
      10 February 2020 @ 11:43
      Im not bullish here and now but over time and also it might be the knock on effects around the India Ocean what are better plays... we just don't know yet.
  • ks
    karamyog s.
    10 February 2020 @ 09:57
    Absolutely incredible. There is lot of content and talk about this topic but nothing is so comprehensive.
  • UJ
    Ulf J.
    10 February 2020 @ 09:05
    Thanks, Raoul this was great, the example with Germany and Google, Microsoft, Amazon, was an eye-opener. This day a young couple living in a mining town both can work in the mine and make really great money and they never had experienced a downturn in their life and do not know it exist will have a terrible experince when the market turn down
  • MB
    Michael B.
    10 February 2020 @ 08:41
    Excellent analytical summary worthwhile taking the time to listen to. This should definitely be shared amongst friends.
  • VS
    Vasil S.
    10 February 2020 @ 06:57
    Raoul doing what he does best! Excellent analysis!