Hacker News Reader

Comment by al_borland | Hacker News Reader

I often wonder how much the average return on the stock market, which everyone with a retirement plan depends on, has simply been a function of a population growth.

If the population shrinks, economies will have to contract, the market will need to fall in proportion to the people available to buy stuff, and the compound interest gravy train for a comfortable retirement will end. This is my selfish reason for wanting more people.

This is based on nothing but my own rumination. I’d love to be proven wrong, as this worries me.

View on HN

It's worth considering that stock market valuations are supposed to be driven by revenue and profit, not by population (valuations have gotten completely out of whack since the financial system effectively broke in 2008). There are multiple ways to do this - one is certainly to increase the population, but another is to increase productivity per person in conjunction with expenditure per person. i.e. The same number of people doing more with less and living more lavish lifestyles as a result.

Or, the majority working more than ever, and a vanishingly small amount of people living increasingly lavishly. I see no reason to believe the current systemic factors that drive the growth of wealth disparity will slow down or reverse.

The problem is entitlement programs likes socialized health care and pension programs like social security. When retirees begin to outnumber working adults, the system will start to collapse. Maybe countries will adapt? Japan and China are at the forefront of the age demographic bomb. They are about 30-40 years ahead of us in experiencing this problem. The US and Canada has been able to counter it much longer than anyone else primarily due to our origins in and experience with immigration. No other countries on earth can compete with either the US or Canada when it comes to assimilation of immigrants.

Certainly had hasn't hurt Japan's stock market. The Nikkei is at an all time high, back to the lofty heights of the 80s.

Retirement in Japan is also wonderful. You should check it out.

How much of this is due to globalization and Americans buying a lot of products from Japan? If the global population reaches a peak, or population growth is centered in areas without much money, would that still hold up?

Didn't it take thirty years to get back there?

Is it really at an all-time high? Adjusted for inflation?

Japan's inflation rate has been close to 0% since 1990

https://tradingeconomics.com/japan/inflation-cpi

Reply on news.ycombinator.com