Deutsche Bank Analysts

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“‘Intergenerational conflict’ is getting worse, Deutsche Bank analysts warn”

Young people and their elders do not always see eye to eye, as evidenced by things like ‘Ok Boomer’ and Pimco founder Bill Gross’s new investment outlook letter that bashes his son for having the audacity to have tattoos.

The Gross vs. Gross feud is unfortunately just the tip of the iceberg that could pose a large problem for the wider economy, according to new analysis from Deutsche Bank.

In a comprehensive report, the bank warned that the divide between ‘young people’ and their elders is a potential powder keg. 

‘The widening generational divide should be a key source of alarm for investors, financial markets and society as a whole,’ wrote DB research analyst Henry Allen.  ‘Young people perceive themselves as losers on issues ranging from housing to climate change to student debt.’

This anger manifests in election outcomes and is an international phenomenon, with the generations often voting as a block.  All of this has significant political and investment implications, especially since the analysts see the situation deteriorating further in the near-term.

There are a lot of grievances.  Housing prices continue to remain high and prevent younger people from having the real estate opportunities to accumulate wealth as older generations have done.  Education costs and student loan debt have ballooned while wages have not.  The Climate crisis has not been addressed in a meaningful way either.  All of this aggravated by Covid-19, Deutsche Bank says, which hurts younger generations more than older ones even though the virus has had the opposite effect.

Another aggravating factor: People are living longer, which has made the aging populations tilt ‘the balance further against young.’

In the Deutsche Bank’s view, a society that does not address the legitimate needs and demands of a huge part of its population is headed for serious problems – something that’s been proven time and time again by countries that have gone through political revolution and those that have not by addressing malcontent head-on.

By Ethan Wolff-Mann

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