A new report from the economics department at RBC Financial Group attempts to debunk the notion that demographics are going to spell trouble for financial markets as Baby Boomers age and consume their financial assets.

The report, authored by assistant chief economist Derek Holt, examines the household net worth of countries in the G7. It finds that there is not much of a link between demographics and present patterns of household finances, and concludes there isn’t likely to be much of a link in the future.

Some market watchers have argued that there will be a massive debt paydown and accumulation of financial assets as boomers pass through their saving years, and that these trends will reverse as they head into retirement. The result will be downward pressure on the prices for property and financial assets.

“That flaw is such that even if the evidence against much of any role played by demographic change is ignored, the impact of aging populations on debt and equity markets should not be treated separately,” Holt argues. “They should be treated in the same general context of the market for loanable funds.”

“If aging populations were to result in a reduced demand for savings to borrow while they pay down their debts and also stimulate a reduced supply of new saving dollars as they push into retirement and consume their wealth, then the two effects are likely to offset one another so that no discernible impact on financial asset prices and their implied yields is a distinct possibility,” Holt suggests.

“In economics lingo, a backward shift in both the demand and supply curves for loanable funds occurs with the result being smaller markets but no necessary impact on prices, namely the rate of borrowing and investment returns. The two effects are often times erroneously treated separately and in isolation of every other possible influence.”

The report it also notes that Japanese households are the most heavily indebted in the world, while Italians have the least debt. Japanese households also have the highest net worth, while Canadians have the least.

Japanese households own the most real estate, while Americans own the least.

French households own the most equities followed closely by Americans, while Japanese own the least.