The MEICAP™ (Macro Economic Investment Capital Availability Platform) model was developed by Patrick Schwerdtfeger and completed in 2005.  MEICAP uses a dynamic population platform combined with income and spending data to model P/E ratios (stock market) and interest rates (bond market) and predict them into the future, yielding valuable insights for future stock valuations and housing prices.

The chart to the right displays historical and expected annual real estate appreciation rates on a nationwide basis.  The value of this information becomes immediately apparent.  Click on MEICAP Results for more results for the housing market as well as the stock market.

This proprietary model is built on a demographic platform that calculates America’s population and age profile using a combination of birth rates, immigration figures, fertility trends and mortality statistics.  Income, spending and savings patterns are then incorporated to calculate the aggregate Supply and Demand of domestic investment capital.  Click on Methodology for more details.

MEICAP™ dispels the notion that political policy decisions and geopolitical circumstances play the primary role in determining macro economic conditions.  While such factors do indeed make measurable contributions, they are easily dwarfed by the country’s population and age profile.  In other words, Jimmy Carter cannot be blamed for the rising interest rates of the late 1970s any more than Bill Clinton can be credited for the stock market boom of the 1990s.

Most people believe stock valuations and interest rates are significantly influenced by tax cuts, oil prices or interest rates manipulations.  Patrick Schwerdtfeger disagrees.  “The foundation of any economy, especially one with limited exports, is the size of its population and the age profile”, Schwerdtfeger explains.  “MEICAP™ has accurately mapped every major economic phenomenon of the past 70 years with nothing more than population data combined with income and spending patterns.”

Click on Foundation for a detailed explanation for the model's underlying assumptions and the logic behind its mathematical structure.  MEICAP is not the only model based on these assumptions.  Most economic models are built much the same way.  The difference is that most of these models aren't publicly available.  MEICAP offers the general public an unusual and insightful vantage point to inevitable future trends that are easily predictable today.