The Ponzi Scheme Rolls on — When my parents were my age, everyone told them not to expect to receive social security.
That check won’t be there when you’re our age, they said to them. But now that many Baby Boomers are in retirement or it’s right around the corner, the social security coffers floweth to an entire generation of Americans.
Social Security, by all means, is a bit of a Ponzi scheme. Given the way that Congress borrows against it like a teenager taking margin loans to buy OTM GME calls in 2021, it would seem tough to run your household budget as the government runs the SSA.
For the sake of the Boomers, the millennial generation had to be huge. Not just in physical stature, although there probably is something in the water because only 20% or so of young Americans are in good enough physical shape to join the military, but I digress.
There had to be a sh*t load of millennials so that the government could afford to pay Boomers their social security. It’s science. That’s how Ponzi schemes work.
This is great for Boomers, especially as Millennials hit their stride in the workforce, entering their earnings prime.
But when you consider the large millennial generation hitting their prime, there are some potentially inflationary pressures.
Millennials tend to wait a little longer than their Boomer parents to buy homes, have children, and save for retirement. But it looks like loads of millennials decided to enter the housing market all at once in the last few years, especially as the pandemic raged.
Now that they’ve broken the seal, this trend might not cool off for a while. This might mean that a lot of millennial money is going to be chasing too few goods and homes in this country.
Long term, that’s bad for inflation, and it also means that interest rates might remain elevated for some time.
This is purely a little bit of a hot take. I usually write with a few datasets in front of me and then synthesize ideas from them into words, but this time, it’s the seat of my pants.
Interest rates and home prices over the next decade will paint the full picture and determine if I’m wrong. Which one of you is going to call me out in 2030?
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