MICHAEL MILKEN will celebrate his 60th birthday on July 4th. The former “junk-bond king” is still going strong, having seen off prostate cancer, and remains as controversial as ever. The debate over whether Mr Milken deserved his jail term for manipulating the high-yield bond market he largely created rumbles on nearly 20 years later, most recently during the Enron trial, where Mr Milken's genius was championed by none other than Kenneth Lay (as the saying goes, with friends like that...).

Jeremy Siegel turned 60 last November. The Wharton business school economist, whose book “Stocks for the Long Run” was the bulls' bible during the last bubble, is going strong too, trim and fit, with his mind as lively as ever—despite being called “demented” at last weekend's Berkshire Hathaway annual meeting by one of the firm's bosses, Charlie Munger. (“He's a very nice guy,” retorted the other boss, Warren Buffett.)

Mr Siegel and Mr Milken are among the first members of the post-war “baby boom” generation to enter the decade of life in which most people retire. (Mr Siegel puts the dates of America's baby-boomers at 1946-64, which he says technically makes him a pre-boomer.) Lately, both men have been giving considerable thought to what impact the impending retirement of the baby-boomers will have on the prices of financial assets. They have reached sharply different conclusions, which they aired in a conference last month at the Milken Institute.

Having built his career on arguing that buying shares and holding them is the best long-term investment strategy in almost any circumstances, Mr Siegel is now surprisingly worried about the impact on asset prices of the demographic time-bomb in the rich world represented by the baby-boomers' mass retirement. Many boomers have bought assets such as bonds and shares to fund their old age. Arguably, these purchases have helped to drive up prices over the past couple of decades. Now, he says, all else being equal, the sale of these assets will lead to a sharp fall in prices, because there are too few people in the smaller generations that followed the boomers to buy all of those assets at today's prices. For instance, in the developed world share prices could fall by as much as 40-50% over the coming decades because of boomer selling, calculates Mr Siegel. Unless they retire later, baby-boomers could see their standard of living in retirement halved, relative to their final year of work.

Mr Siegel's one great hope is that the shortfall of buyers of assets in the rich world will be made up for by a surge in demand from the developing world, as it gets richer fast thanks to the information revolution and globalisation. The demographic time-bomb of a lot of rich-country boomers having to be supported in their retirement by a smaller group of younger workers disappears when the huge, far younger population of the developing world is added to the mix. Indeed, Mr Siegel calculates that shares will continue to perform as well as they have in the past—generating real returns of above six percentage points a year since 1802, according to the research that made his name—provided that the developing world continues to grow strongly, and that buyers there are able to snap up all the shares they want.

That would need to be a lot of shares, says Mr Siegel, who is writing a new book on the subject, “The Global Solution”. By the middle of this century, he reckons, most multinational companies would need to be owned by investors outside today's developed countries, he says, especially investors in Asia. The challenge is to integrate global capital markets so that selling assets from the old in the rich world to the young in developing countries is no harder, nor more unusual, than today's sales of assets by elderly folk in Florida to younger people in other American states. From this perspective, America's external deficits, particularly with some developing countries, may be both long-lasting and nothing to worry about.

The biggest danger is that growing protectionism in the rich world will both slow the rate of growth in the developing world and prevent its demand for shares being met. Mr Siegel views the recent opposition to purchases of American firms by companies from China and Dubai as decidedly ominous.

Milken honey

Mr Milken, by contrast, is hugely optimistic, mainly because he thinks that many boomers will live far longer than is expected today, thanks to existing medical practice and spectacular advances, such as a cure for cancer, that he expects in the near future. He thinks that average life expectancy could eventually reach 120 years. With good health at a far greater age, people will want to keep working, not retire, he says—just as he and Mr Siegel do. (This prediction, Mr Siegel notes, goes against the trend for rising average life expectancy to coincide with falling retirement ages in the rich world.)

Undaunted, Mr Milken insists that working for longer will become easier thanks to technological innovation, such as using the internet from home. That will increase wealth, fuelling demand for assets. Hence the real issue for the world over the coming decades, predicts Mr Milken, will be not whether there are enough people to buy the assets of the baby-boomers, but whether there are enough assets to buy, given all the extra demand in the world.

Most economists will tend to agree with Mr Siegel that Mr Milken's forecast is “more hope than reality”. But Mr Milken's greatest achievements, from creating the high-yield debt market to beating cancer, have been the result of his refusal to accept conventional wisdom. Perhaps he will be proved right again. And if not, there may be an ounce of good news among the bad. If politicians realise that foreign buyers are needed to prop up the value of America's retirement savings, they may be less inclined to flirt with protectionism.