Quote:
Originally Posted by opendoor
What are you talking about? The pace of money creation over the last 10-20 years is basically nothing compared to what was going on in the '70s and early '80s.
From 1970-1983, Canada's M2 increased by about 15% a year. That's about the same amount it increased in 2020 in response to COVID, except for over a decade straight.
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Wasn't a lot of that demographically driven? That's the time frame where the boomers came of age and needed to make their fortune in the world. So they were in that borrow/consume/payback stage of life and there wasn't enough capital to supply their needs. So more money creation and high interest rates. We are now coming out of the reverse where these boomers were 55-65 and at peak earnings with money to lend. So the private markets had capital looking to invest.
But those Boomers are now hitting 65 and moving to retirement. They will look to protect savings which should make capital scarce again. Plus they'll start needing to draw CPP/OAS and require more health care.
Everytime this demographic bulge moves to the next phase in life it seems to cause some new ripple.