The Premise
For 40 years, the global financial system has benefited from a "Demographic Dividend": Baby Boomers buying assets (Stocks/Bonds) to save for retirement. That engine has now reversed. We have entered the "Demographic Drag" phase. Boomers are now selling assets to fund consumption. The question is: Who is the buyer?
Intelligence Update: The Seller's Market
The Volume: 10,000 Boomers retire every day in the US alone. They are moving from "Net Accumulators" to "Net Liquidators."
The Illiquidity Trap: Pension funds, desperate for yield during the zero-rate era, loaded up on Private Credit and Real Estate (Illiquid Assets).
The Cliff: As Boomers demand cash payouts, funds must sell assets. They cannot sell the Private Equity (locked up). So they must sell the Liquid assets (Gilts/Treasuries/Blue Chips), crushing the prices of "Safe" assets.
Field Evidence: The 2022 Preview
UK Pension Funds faced margin calls on their LDI (Liability Driven Investment) derivatives. To raise cash, they dumped Gilts. This crashed the Gilt market, triggering more margin calls.
The Lesson: This was a preview of the Liquidity Cliff. When everyone runs for the exit, and the exit is "Illiquid Real Estate," the system breaks.
Blackstone's BREIT (Real Estate Fund) hit its redemption limit. Investors wanted cash; the fund said "No."
The Lesson: This is the new normal. You think you have liquidity until you ask for it.
The Verdict
The "Great Wealth Transfer" is usually framed as money going to Millennials. It is actually money going to Healthcare and Cruises. The liquidation pressure on public markets will be a secular headwind for the next decade. Cash is not trash; Cash is the only hedge against a forced seller.