More thoughts on the stock market

This week, The Economist asks the question: Where have all your savings gone?, with a picture of a guy staring down a bottomless pit. But they're relatively upbeat, now's the time to buy, things will recover, etc. But they also had this nugget:

In demographic terms, asset markets could be seen as a pyramid scheme, in which each generation aims to sell its accumulated savings to the next. Provided the next generation is larger than the one that preceded it, the savers can sell their assets at higher prices. That was the case for much of the 20th century.
Illustration by Brett Ryder

The baby-boomers will upset the pattern. If they retire at 65, they will start offloading their assets in 2011. And even in America, which has fewer demographic problems than Japan, there are not enough new savers coming along to replace them. Some hope that emerging markets will solve the problem, by acting as buyers of developed market assets and a source of higher returns for investors in rich countries, but the theory is unproven.

Yet another way the boomers will screw us all!

The article goes on to talk about a recent report which hypothesizes that Japan's flat market for the past two decades has been because their population got older sooner than in America.