On page 7 of this document Raoul has a chart that says "US Personal Consumption 10Yo10Y%" does anybody know what that is? i have never heard of it.. Does that mean the percentage increase of something today versus 10 years ago?

Raoul, those are very compelling arguments on demographics but no discussion on demographics is complete until the larger cohort of millennials is factored in. I agree that the Boomers are in a very difficult equity position and that a recession will be more painful than anyone expects. However, the growth side of your argument isn't factoring in the rising consumption of the millennials.

RAOUL & JULIAN: Questions below Interesting macro stuff. Thank you. So the big picture US vs. Europe takeaway from these two disparate forces across the ponds is the following? (1) in the US - declining inflation, rising CB balance sheet accommodation, declining rates and higher Govt. Bond prices ... while ... (2) in Europe - rising inflation, declining CB balance sheet accommodation, rising rates and lower Govt. Bond prices? ... and in both cases declining or pressured Equity markets ( dependent on CN intervention )? ... and what of precious metals in all this? Rising USD ( anticipated by RAOUL and some others ) for various reasons pressuring precious metals downward still in all this? BTW, I also had potential millennial "replacement consumption" coming on line as BB's roll off squarley in mind as I read thru the analysis so great follow up comments and questions from those who raised this and I also would love to see further response from RAOUL on that. One thought on a potential explanation perhaps is that unemployment rate among millennials is higher than prior generation or anticipated to be higher due to a host of work force preparedness challenges ( i.e. many college grads finding it more difficult to get hired on, some not fully prepared for the types of jobs in demand ) and high tech driven automation of jobs? But I'm not sure whether there are any hard data on any of this? Thanks

Have you considered the likelihood of Yellin & Co switching from QE not to QT but to helicopter money and how effective is that do you think as a method to trigger grassroots inflation via the multiplier effect. Is this idea remotely likely or feasible do you think? It is politically feasible as a very public riposte to complaints that QE is Mandatory Basic Income for the Rich and DC is going to be looking for an escape hatch from the political fallout from all this. Bannon is already advocating higher income tax on high earners. That is just the beginning don't u think?

Another point Id like to make when it comes to demographics and pensions and who really owns todays stock market. You stated that retirees have been pushed in to riskier assets to due to chase for yield, which I agree with. The next economic contraction is going to put a real dent in retirement accounts. But what I find very interesting in today's market is that since the Great Recession middle America has continued to shrink and never really recovered from the real estate crash. Therefore their risk to equities is much smaller by percentage than it used to be. The top 25% earners in America today own 84.5% of all financial assets in the United States by household wealth distribution. So in my humble opinion middle America carries very little risk from a percentage stand point than your top 25% of Americans carry. I think we will see a massive wealth redistribution when we enter the next recession as the rich are the ones that not only benefited the most from QE but left the middle class behind. They to shall suffer the worst when the next turn begins!

Raoul I really find your argument fascinating but there are a few key data points that I question. I have a chart from hedgeye that does in fact outline demographics falling off a cliff in Europe but in the US those demographic headwinds plateaued in 2Q14. The US from here accelerates in demographics because we have millennials that will pick up the obligations of those baby boomers retiring (35-54 in US accelerates from 2014-2027/2029). As we know that age group is the worlds core end consumption demand demographics. If youd like me to share that chart I can Im just curious as to what chart is more accurate as far as Americas future spending.

As a retired boomer turned speculator, I agree with the notions on demographics. It is at least possible that since Europe has a better safety net than America, that over a 5 year horizon Europe may not feel as much pain as the US, even if in the near term, a spike in short term rates upsets the apple cart? Would love to hear some longer term views on Europe....

The population has grown and the employment/population ratio has fallen from 45.8% in 2007 to 44.6% in 2016. While one might think this is due to more seniors (or more young people), strangely enough the working age/total population ratio has remained constant. Why is that?