Why the smartest people are real scared

The Milken Institute’s Global Conference held recently in April gets together with a mission to put some smart people together to look at the worlds most pressing challenges, and seek solutions. Fortune magazine reported on the events here, and while I was not surprised by what was said, I was surprised that is was in the public domain. There is an underlying fear from some of the top minds, ex policy makers, investors, etc.

If you missed the article, it’s worth a read. The fear centered on a number of topics

  • Demographics

Billionaire real estate investor Sam Zell said in the article “the coming demographic revolution, when many rich countries will see the rapid slowing of population growth or outright decline is the worst demographic situation we’ve had in 500 years.” Most of us know this point is no surprise.

  • Central bank policy

Mohamed El-Erian, Chief Economic Adviser at Allianz, is worried that the financial system isn’t set up to process the inevitable transition it will have to make from massive central bank stimulus to something resembling normal policy. In the article he said, “While the Fed is easing its foot off the accelerator a little, the [the ECB, Bank of Japan and Bank of China] are pressing their foot even harder. So collectively, we’re still in the central bank trade. And that means, unless we see an upside surprise in terms of growth, “then we’re going to have a major adjustment” in the next couple of years.”

Ex-Treasury head Tim Geithner summed it up by saying, “We live in a scary, dark, messy, and uncertain world. That is the normal state of mankind.

mmm, not very refreshing words.

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