Boom, Gloom and the New Normal

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Summary

Video: Launch of eBook

Financial markets have become more volatile, threatening the value of our pensions and investments.  Commodity markets are soaring, pushing up the cost of living.

What is the underlying cause of these dramatic developments?  How can you better understand what is happening, and help to ensure that you, your family and your company prosper as a result of the changes now underway?

These are the key questions addressed in our new eBook.  It is based on new research, highlighting how the number of babies soared between 1946-70 in the world’s wealthiest nations including the USA, Germany, Japan, UK, France, Italy, Canada.

These babies led to a Golden Age of consumption as they reached the Wealth Creator 25 – 54 age group, when people typically settle down and have children.  Demand took off for all types of products, old and new, as these wealthy Westerners bought houses, autos, electronic equipment and other major items.

By 1995, all of these babies were in the 25 – 54 bracket.  Demand was so strong, a whole new production system had to be developed.  It was called ‘outsourcing’.  Today, this has become an accepted part of our lives, but the word itself only came into existence around 1979.

Before then, companies had usually kept production close to their main markets.  But business models changed, as oil prices stayed in the $10-20/bbl range and trade barriers came down.  It became easy to move product to market from virtually anywhere in the world.

Today, however, this paradigm is changing once again.  The oldest BabyBoomers are now 65, and soon the majority will be in the 55+ age group.  This is when people typically save more and spend less.  And they will have to save more, as their life expectancy has improved by a decade.

One key issue is that the next generation is very much smaller.  And although the emerging economies of Asia and Latin America have seen high growth in recent years, this has been based on an export development model.   Around 37% of China’s economy is export-driven, for example, based on producing goods for the West.

So companies now need to focus on new market opportunities.  A middle class income in India or China is typically $1k – $5k, compared to the $25k – $100k in the USA.  Their demand patterns will be very different.  And the demand patterns of the BabyBoomers themselves are also changing, as they move beyond their peak consumption years.