The Demographics of Less Demand

Bill Gross of PIMCO has this warning:

To think that all the boomers have to do is sell their homes to pay for retirement and healthcare begs the legitimate question of "to whom and at what price?"If there are fewer X'ers and Y'ers to unload even their second homes to, rudimentary supply/demand curve analysis suggests prices must adjust downward to facilitate the transfer, incorporating the ability of immigrants and future first time buyers to afford what now seem to be unaffordable starter homes. Similar logic applies to holdings of domestic stocks, bonds, or any other "“asset" which boomers count on individually to fund their retirement needs, but which collectively must be unloaded to a smaller demographic of tentative buyers. It will be next to impossible to borrow or sell our way out of this one.

What Bill Gross is warning is the real inflation adjusted value of real estate and stocks is probably not going to go up,but could probably go down.Demographics is destiny and the demographics of who's going to be on the other side of these trades doesn't look too good.When one of the biggest holders of U.S. securities talks about this unpleasant subject,you can't say you haven't been warned.