Storm Watch Dow 3000
I remember that there was a prediction of a Dow 30,000, I believe it was H.S. Dent, at the time it was correct in direction but not in magnitude. It never reached that level but if you were invested in the market you would have done well at that time. Is there a chance that the Dow could fall to 3000? Perhaps the odds are the same as the Dow reaching 30,000 but there are flags up that are pointing to a lower Dow. It is a good idea to watch carefully and be prepared to minimize the downside risk of your portfolio if you are invested in the market.
There is a storm approaching the coast of North Carolina that is expected to bring winds of a 115 mph or greater. People are leaving the area and protecting their personal belongings and their homes. The prudent ones are preparing for the storm by watching and listening, some are evacuating, and there are the very few brave ones or foolish ones who will ride it out and take their chances.
What kind of investor are you; will you ride the wild swings, are you evacuating by taking your money out of the financial paper markets and putting it into gold or other commodities, or are you shifting into less volatile stock market investments while watching and listening closely to the market gurus?
It is a good idea to seek safe shelter, especially for those headed into your retirement years or are already there. While the government puts into action plans to decrease their debt burdens we should all follow suit, by keeping our expenses down and our savings up.
Dow 3000 may sound extreme but it is a possibility if the our nation's debt problem is not resolved, if there is a global debt problem, and the banking industry cannot manage out all the risk they still have in their loan portfolios.
Are you an entrepreneur, then you are an optimist. You see the glass half full not half empty. But you aren't foolish and you know how to manage through rough waters. There are and will be opportunities for new business and old businesses re-inventing themselves. Prepare for the storm, but keep an eye out for the clearest path and the opportunities that will present themselves as the clouds move on.
We don't want to think it, but there may be tougher times coming around the corner. It would just be prudent to prepare. The other thing that usually happens in difficult financial times is that families, friendships, and marriages break down, so we need to remember to fight for and hang on to what is really important, family, friendships, our marriages, our hearts, and Agape love.
I hear Ethel Merman in the background singing, "Everything's Coming Up Roses," right about now.
Stay focused, don't waste, give when you can, save, work hard, work smart, love one another.
Bizincubators, inspiring and educating entrepreneurs.
js
Thursday, August 25, 2011
Thursday, August 18, 2011
Global Debt Meltdown coming soon to a theater near you
Global Debt Meltdown
The situation hasn't just happened because of one president or another. It took many years for this situation to take place. Every time one governing body wanted to keep their hold onto power by giving their constituents whatever they wanted to be in favor. Mix this with waste and fraud and you get the economy and the nation into a bad situation. And it isn't one country that's doing it, there are many. This is a global debt crisis and the root cause is the selfishness of the political constituents.
It is said that in the near term there is over $70 trillion in liabilities and over the longer term the outlook is closer to $700 trillion in government debt liabilities. Yet those who represent us in government continue to spend our money at an increasing rate. I heard a senator in Washington say that currently we have no problem of a default because the US can easily pay the $20 billion in interest that was due at the time. It seems the senator cannot grasp the fact that $20 billion is a lot of money to most of our population. Just the interest is $20 billion, those who control our nation's budget have no grasp of the huge amounts of money that each taxpayer will be responsible for over the long term. I guess its not coming out of their pockets, they can just give themselves a Cost of Living increase or raise if their increased taxes and fees are too much too bear. Most of us can't do that, it comes out of our living expenses. I know that you and I have to live on a real budget, with real limits, we can't just print money like they can.
The sad thing is, is that they are pulling the wool over the eyes of our senior citizens. They tell them that they are going to get more social security, more medicare, more healthcare, more medicaid, more "safety nets" so that they won't have to live in poverty. Yet, more and more senior citizens are going into poverty are requiring help from non-profit groups outside of their government aid and subsistence. And they are also putting a burden on the future generations, their children, grandchildren, and great grandchildren. The truth is you can't get something for nothing.
Lets follow the money that goes to the "security net" for senior citizens. Let's take a business perspective for argument's sake. The business gets a customer to buy a product from them at $1, it cost them 50 cents for the product so they clear 50 cents, but wait they have a cost, they had to pay rent, electricity, employees, shipping, legal, insurance, etc. and, they may have cleared 5 cents. Within all of that the government took out payroll taxes, such as social security, unemployment insurance, medicare, as well as taxes for fuel and shipping, and now they still want their cut of the five cents. So they get another say 30% of the five cents so the owner of the business keeps about three cents. That seems like a lot of work for 3 cents and we haven't even mention the risks that the owner takes every time he sells a
product.
If you are a senior citizen you could say so what, I don't have to pay anything, I've already paid my dues and now I get to reap the rewards of what I paid in. How does the governments spending and increased taxes on the "rich" affect you. Who cares if the "rich" gets taxed more? If we assume that the "rich" that they are taxing are the corporate entities, then in most cases they must answer to their stockholders. People like you and me, who have placed our retirement into businesses so that we can eventually retire, take care of our grandchildren, perhaps take a trip or two and not worry about running out of money before we pass away. But if the business fails to make a good profit to pay dividends to their stockholders or loses money because of government regulations and tax burdens, then we end up with a smaller retirement because the price of your stock will fall since it is usually pegged to the growth potential and profit potential of the company. That translates into less retirement income or savings, which means ramen noodles instead of steak, cans of tuna instead of caviar. Now, in order for the business to stay in business and keep their investors, like you and I and all the other people saving for retirement, happy they need to raise prices so that they can increase prices and subsequently their stock value will increase also. So when the President or any of the political parties say that they will increase taxes on the reach it still reaches down and affects the rest of us.
The government doesn't really create wealth, they print money. The difference is that real wealth is created from a true increase in production or productivity. Printing money or money created by increasing the money supply is not real wealth. Now let's consider this, if you are baker, your wealth is in pies. If you bake ten pies on one day and sell them at $10 each and make a $3 profit or 30% for your efforts, you have increased your wealth by $30. The next day you bake another seven pies and you have netted another $30 dollars. Now you have doubled your wealth, you have $60.
Now the Government doesn't produce anything it merely takes your money and puts it into its pocketbook. We'll use 30% as the governments tax rate for the baker so without doing anything they tell the baker that he owes them 30% of the $60 or $18. And they do this to every single corporate entity and individual and lets say that adds up to $1014 billion. They took in over a trillion dollars without lifting a finger. These are the funds they use to protect you militarily, protect you socially, protect you environmentally, protect you financially, protect you physically, protect you from being swindled, take care of your health, educate your children, help you save for retirement, and they will benevolently take care of those who can't help themselves, like the poor and uneducated just for starts.
Have you ever heard of the saying if it sounds too good to be true its is. When you turn over your money to the government, they will spend the money on administration, collecting the money costs a lot of your money, then they have to make sure they go after anyone who doesn't have the money to pay them , so they must foreclose on homes, automobiles, land, bank accounts if necessary. For those who just don't want to pay, they have to take them to court and imprison them. What actually gets back to you, for your benefit is probably a very small percentage of what went in.
Sounds like something from a movie. The story line goes like this, the Empire is in control, forcing people into slave labor gives them only enough to eat and lives regally off of their backs. A lone brave hero walks into town to save them from their miserable lives as they work harder and harder in the hot scorching sun so that they will be able to have a few crumbs left for the day they can retire. Sounds funny, but it may just happen only because we created, we can't blame any party or president.
We, the people, are responsible for what is happening. Each one of us needs to be the lone brave hero and take responsibility for the situation our nation is in. We can't just sit back and wait for someone else to do the work. We need to get involved and talk to our representatives and ask them some tough questions and help with solutions. If you are an entrepreneur at heart, now is the time to go out and do something. You can either be a part of the problem or part of the solution. Choose to be the solution.
Bizincubators: educating and inspiring entrepreneurs
js
The situation hasn't just happened because of one president or another. It took many years for this situation to take place. Every time one governing body wanted to keep their hold onto power by giving their constituents whatever they wanted to be in favor. Mix this with waste and fraud and you get the economy and the nation into a bad situation. And it isn't one country that's doing it, there are many. This is a global debt crisis and the root cause is the selfishness of the political constituents.
It is said that in the near term there is over $70 trillion in liabilities and over the longer term the outlook is closer to $700 trillion in government debt liabilities. Yet those who represent us in government continue to spend our money at an increasing rate. I heard a senator in Washington say that currently we have no problem of a default because the US can easily pay the $20 billion in interest that was due at the time. It seems the senator cannot grasp the fact that $20 billion is a lot of money to most of our population. Just the interest is $20 billion, those who control our nation's budget have no grasp of the huge amounts of money that each taxpayer will be responsible for over the long term. I guess its not coming out of their pockets, they can just give themselves a Cost of Living increase or raise if their increased taxes and fees are too much too bear. Most of us can't do that, it comes out of our living expenses. I know that you and I have to live on a real budget, with real limits, we can't just print money like they can.
The sad thing is, is that they are pulling the wool over the eyes of our senior citizens. They tell them that they are going to get more social security, more medicare, more healthcare, more medicaid, more "safety nets" so that they won't have to live in poverty. Yet, more and more senior citizens are going into poverty are requiring help from non-profit groups outside of their government aid and subsistence. And they are also putting a burden on the future generations, their children, grandchildren, and great grandchildren. The truth is you can't get something for nothing.
Lets follow the money that goes to the "security net" for senior citizens. Let's take a business perspective for argument's sake. The business gets a customer to buy a product from them at $1, it cost them 50 cents for the product so they clear 50 cents, but wait they have a cost, they had to pay rent, electricity, employees, shipping, legal, insurance, etc. and, they may have cleared 5 cents. Within all of that the government took out payroll taxes, such as social security, unemployment insurance, medicare, as well as taxes for fuel and shipping, and now they still want their cut of the five cents. So they get another say 30% of the five cents so the owner of the business keeps about three cents. That seems like a lot of work for 3 cents and we haven't even mention the risks that the owner takes every time he sells a
product.
If you are a senior citizen you could say so what, I don't have to pay anything, I've already paid my dues and now I get to reap the rewards of what I paid in. How does the governments spending and increased taxes on the "rich" affect you. Who cares if the "rich" gets taxed more? If we assume that the "rich" that they are taxing are the corporate entities, then in most cases they must answer to their stockholders. People like you and me, who have placed our retirement into businesses so that we can eventually retire, take care of our grandchildren, perhaps take a trip or two and not worry about running out of money before we pass away. But if the business fails to make a good profit to pay dividends to their stockholders or loses money because of government regulations and tax burdens, then we end up with a smaller retirement because the price of your stock will fall since it is usually pegged to the growth potential and profit potential of the company. That translates into less retirement income or savings, which means ramen noodles instead of steak, cans of tuna instead of caviar. Now, in order for the business to stay in business and keep their investors, like you and I and all the other people saving for retirement, happy they need to raise prices so that they can increase prices and subsequently their stock value will increase also. So when the President or any of the political parties say that they will increase taxes on the reach it still reaches down and affects the rest of us.
The government doesn't really create wealth, they print money. The difference is that real wealth is created from a true increase in production or productivity. Printing money or money created by increasing the money supply is not real wealth. Now let's consider this, if you are baker, your wealth is in pies. If you bake ten pies on one day and sell them at $10 each and make a $3 profit or 30% for your efforts, you have increased your wealth by $30. The next day you bake another seven pies and you have netted another $30 dollars. Now you have doubled your wealth, you have $60.
Now the Government doesn't produce anything it merely takes your money and puts it into its pocketbook. We'll use 30% as the governments tax rate for the baker so without doing anything they tell the baker that he owes them 30% of the $60 or $18. And they do this to every single corporate entity and individual and lets say that adds up to $1014 billion. They took in over a trillion dollars without lifting a finger. These are the funds they use to protect you militarily, protect you socially, protect you environmentally, protect you financially, protect you physically, protect you from being swindled, take care of your health, educate your children, help you save for retirement, and they will benevolently take care of those who can't help themselves, like the poor and uneducated just for starts.
Have you ever heard of the saying if it sounds too good to be true its is. When you turn over your money to the government, they will spend the money on administration, collecting the money costs a lot of your money, then they have to make sure they go after anyone who doesn't have the money to pay them , so they must foreclose on homes, automobiles, land, bank accounts if necessary. For those who just don't want to pay, they have to take them to court and imprison them. What actually gets back to you, for your benefit is probably a very small percentage of what went in.
Sounds like something from a movie. The story line goes like this, the Empire is in control, forcing people into slave labor gives them only enough to eat and lives regally off of their backs. A lone brave hero walks into town to save them from their miserable lives as they work harder and harder in the hot scorching sun so that they will be able to have a few crumbs left for the day they can retire. Sounds funny, but it may just happen only because we created, we can't blame any party or president.
We, the people, are responsible for what is happening. Each one of us needs to be the lone brave hero and take responsibility for the situation our nation is in. We can't just sit back and wait for someone else to do the work. We need to get involved and talk to our representatives and ask them some tough questions and help with solutions. If you are an entrepreneur at heart, now is the time to go out and do something. You can either be a part of the problem or part of the solution. Choose to be the solution.
Bizincubators: educating and inspiring entrepreneurs
js
Monday, August 8, 2011
Wall Street Down 600+ S&P Downgrades US credit rating
The markets are in turmoil and investors have lost trillions in valuation. What's next for investors? S&P downgraded the nation's credit rating and has been trounced by the left leaning media and organizations. Bill Gross who manages the PIMCO bond fund, courageously backed the downgrade. It seems that there are people in government and in the media who want the public to be led by, not fed, with the information that is publicized. Trying to hide or mislead the public as to what is actually happening in our economy, is not fruitful for anyone, it only delays the inevitable results and possibly magnifies the panic as investors head quickly for the fire doors. Without good information people can't make good decisions. We have put our trust in the media and they are taking their customers for granted. Try finding an article that is not biased one way or the other. What we need today is good quality truthful and investigative journalism. Just the facts Ma'am as the Dragnet detective, Sergeant Joe Friday, would say. I hope that we can get the truth from the media that will enable its readers to form quality decisions about their financial futures.
If you've bet most of your retirement on the market, then you're probably quite stressed about the situation that is occurring in the financial markets. We often hear that it takes risk to make money and the more risk you take the more money you can make. We also hear that the investor needs to think long term and ride out the ups and downs in the market. Then, if that is the common principle of these investment houses and community, why does the market swing so wildly. Maybe the investment houses that sell these investments to us don't believe in their own wisdom. Perhaps--we shouldn't believe them either. If you look at the people who really make the huge money, they often take very little risk with their own money and, instead, they put their investors' money at great risk. They make money when the market is going up and when it is going down.
Sadly, there is no bottom in sight as everyone tries to exit the fire doors at the same time.
Gold has been doing well and it seems to be a safe haven for many investors. Those who fled early to this safe haven are in the money. We are in unstable economic times and we need to get back to the basics. Here's some food for thought, look at the information on the Mises Institute website, its another perspective focused on Austrian economic theory. They have some interesting information and facts.
Even Warren Buffet seems to be making some big bets on the market. He is a long term investor but there is one issue that I think may affect his excellent stock picking prowess. He is becoming biased. Prior to this it was about the numbers, buying good value and holding for the long term. Recently, he has been making predictions that look to be personal and politically motivated. Only time will tell. Short term though his picks aren't doing very well. But, then again, not many investors are.
The engine that drives an economic recovery will be in the small business community. The success of the nations business community and allowing them to be profitable is essential to foster a growing economy. The entrepreneur is the solution. If our policy makers are sincere in their desire to find a solution to our economic woes they should create economic policies that fosters growth in the small business community.
Bizincubators, educating and inspiring entrepreneurs.
js
If you've bet most of your retirement on the market, then you're probably quite stressed about the situation that is occurring in the financial markets. We often hear that it takes risk to make money and the more risk you take the more money you can make. We also hear that the investor needs to think long term and ride out the ups and downs in the market. Then, if that is the common principle of these investment houses and community, why does the market swing so wildly. Maybe the investment houses that sell these investments to us don't believe in their own wisdom. Perhaps--we shouldn't believe them either. If you look at the people who really make the huge money, they often take very little risk with their own money and, instead, they put their investors' money at great risk. They make money when the market is going up and when it is going down.
Sadly, there is no bottom in sight as everyone tries to exit the fire doors at the same time.
Gold has been doing well and it seems to be a safe haven for many investors. Those who fled early to this safe haven are in the money. We are in unstable economic times and we need to get back to the basics. Here's some food for thought, look at the information on the Mises Institute website, its another perspective focused on Austrian economic theory. They have some interesting information and facts.
Even Warren Buffet seems to be making some big bets on the market. He is a long term investor but there is one issue that I think may affect his excellent stock picking prowess. He is becoming biased. Prior to this it was about the numbers, buying good value and holding for the long term. Recently, he has been making predictions that look to be personal and politically motivated. Only time will tell. Short term though his picks aren't doing very well. But, then again, not many investors are.
The engine that drives an economic recovery will be in the small business community. The success of the nations business community and allowing them to be profitable is essential to foster a growing economy. The entrepreneur is the solution. If our policy makers are sincere in their desire to find a solution to our economic woes they should create economic policies that fosters growth in the small business community.
Bizincubators, educating and inspiring entrepreneurs.
js
Thursday, August 4, 2011
Raising the Debt Limit and Shrinking the Dollar
Was raising the debt limit a victory for America or just the people who run our country? They literally bought more time for themselves. I remember reading an article about Nouriel Roubini who stated that the perfect economic storm is on the horizon and it will create a global slowdown.
Another perfect storm is brewing for the US economy. An increasing money supply with no real increase in production of new products or services. A rising debt problem with huge entitlement programs that politicians and the general public are unwilling to reduce. To stop this economic meltdown will be like trying to stop an avalanche from occurring. Our political leaders will have to tread very lightly and they will be forced to take drastic measures to reduce spending, selectively and surgically implementing them to minimize the damage, but there will be suffering.
The increase in the money supply without any real economic production such as producing a product or service is only causing more inflation and is a short term fix. QE2 already inflated prices and the Federal reserve is considering QE3. I don't know why they call it quantitative easing rather its effects are similar to counterfeiting. This strategy usually hurts the little guy like small businesses and the middle income wage earners and below.
Governments consider counterfeiting a crime because it is detrimental to their economy. The reason why counterfeiting is so bad is that the only person who actually benefits is the person who created the counterfeit money. It is interesting that once the bills get into the system no one really knows that they are moving these fake bills through the system. The fake money enters the system and people go on spending it like it was real money. Is it real or isn't it, that is the question? You go to the bank and deposit it and if no one can tell the difference the fake bills continue to be circulated. Now, is everyone who passed on the fake money guilty of stealing? It is like a trying to find the answer to a Zen koan. The problem with counterfeiting is that it increases the money supply and it causes inflation. Printing more money doesn't improve the economy and it doesn't create sustainable jobs. Its like injecting steroids into the system, it looks and feels stronger for a little while but at some point you'll have to get off of it or the long term effects will end up crippling the user.
The consequences of what the Federal Reserve is doing is similar to that of counterfeiting. The additional printed money will flood the system and increase prices again. If you have purchased anything recently I'm sure you have noticed the increase in prices on practically everything due to the huge influx of this printed money.
The debt problem cannot be resolved by printing more money. Our government, which means our congressional representatives must reduce expenses quickly, like any household or business would do in these trying times. The other problem is that our government does not produce revenue on its own, it takes it from each one of us. If our incomes are shrinking then they cannot increase revenues to sustain an increasing budget without asking more from each one of us.
Still, I believe that there are opportunities here in America and globally for those who have the spirit that brought the original settlers here to find a land of opportunity and to carve out a future and a hope for themselves, their neighbors, and their children. The heart of America is still beating strongly.
Thankfully we still live in the land of the free and home of the brave, we are able to seek out new opportunities and venture into the realm of becoming an entrepreneur. The solution for our weak economy is to create real products and services. The entrepreneurs who have the courage to take the challenge and the risk of starting a business will be the heroes who can move us out of this faltering economy.
Bizincubators - Inspiring and educating entrepreneurs.
js
Another perfect storm is brewing for the US economy. An increasing money supply with no real increase in production of new products or services. A rising debt problem with huge entitlement programs that politicians and the general public are unwilling to reduce. To stop this economic meltdown will be like trying to stop an avalanche from occurring. Our political leaders will have to tread very lightly and they will be forced to take drastic measures to reduce spending, selectively and surgically implementing them to minimize the damage, but there will be suffering.
The increase in the money supply without any real economic production such as producing a product or service is only causing more inflation and is a short term fix. QE2 already inflated prices and the Federal reserve is considering QE3. I don't know why they call it quantitative easing rather its effects are similar to counterfeiting. This strategy usually hurts the little guy like small businesses and the middle income wage earners and below.
Governments consider counterfeiting a crime because it is detrimental to their economy. The reason why counterfeiting is so bad is that the only person who actually benefits is the person who created the counterfeit money. It is interesting that once the bills get into the system no one really knows that they are moving these fake bills through the system. The fake money enters the system and people go on spending it like it was real money. Is it real or isn't it, that is the question? You go to the bank and deposit it and if no one can tell the difference the fake bills continue to be circulated. Now, is everyone who passed on the fake money guilty of stealing? It is like a trying to find the answer to a Zen koan. The problem with counterfeiting is that it increases the money supply and it causes inflation. Printing more money doesn't improve the economy and it doesn't create sustainable jobs. Its like injecting steroids into the system, it looks and feels stronger for a little while but at some point you'll have to get off of it or the long term effects will end up crippling the user.
The consequences of what the Federal Reserve is doing is similar to that of counterfeiting. The additional printed money will flood the system and increase prices again. If you have purchased anything recently I'm sure you have noticed the increase in prices on practically everything due to the huge influx of this printed money.
The debt problem cannot be resolved by printing more money. Our government, which means our congressional representatives must reduce expenses quickly, like any household or business would do in these trying times. The other problem is that our government does not produce revenue on its own, it takes it from each one of us. If our incomes are shrinking then they cannot increase revenues to sustain an increasing budget without asking more from each one of us.
Still, I believe that there are opportunities here in America and globally for those who have the spirit that brought the original settlers here to find a land of opportunity and to carve out a future and a hope for themselves, their neighbors, and their children. The heart of America is still beating strongly.
Thankfully we still live in the land of the free and home of the brave, we are able to seek out new opportunities and venture into the realm of becoming an entrepreneur. The solution for our weak economy is to create real products and services. The entrepreneurs who have the courage to take the challenge and the risk of starting a business will be the heroes who can move us out of this faltering economy.
Bizincubators - Inspiring and educating entrepreneurs.
js
Friday, July 29, 2011
Record Debt, Sustainability & Green Jobs
Record Debt Unsustainable
Our nation's debt is at record levels whether the people of America like it or not. The unsustainable spending practices makes it clear that the current Administration's policies are out of line with their sustainability objectives. Our economy cannot sustain spending at such levels.
Examine the logic of our government budget cuts, the cuts are based on an expanding expense account. For instance, if your company gave you an expense account of $500 per month you would, in most cases, try to stay within your budget. You would also be kept accountable by having to keep a good record of how you spent the money and turn in all of your receipts. Now, if your company told you that they needed to cut expenses next quarter by ten percent, you would make this change in your expense account - deduct $50 from your current budget of $500, which will then give you $450 as your monthly budget for the next quarter.
Our government on the other hand does it something like this. They will decrease spending by 10% by saying that we had $500 in our current budget and for next quarter we have factored in that our expenses will be $600 so we will cut 10% off of that and now we have only $540 to spend. Hmm... still seems like they have more to spend next quarter, but they can say confidently to their constituents that they did cut spending by 10%. With the smoke and mirrors budget accounting practices of our Government, the taxpayer is working more and more to pay for the government's expenses. More taxes equals less money in your pocket alternatively less taxes equals more money in your pocket and everyone else's.
Sustainability and Green Jobs
If sustainability and green ($$$) jobs are important to our Administration and Government they should take into consideration the sustainability of the economy. The pace at which the government continues to grow is unsustainable. A basic principle of sustainability is that you harvest what you need and leave the rest to allow the ecosystem to replenish and sustain itself for the future. If you deplete the resource faster than it can be replaced, it dies or goes on the endangered species list. This is what is happening in our economy. The entrepreneur is becoming an endangered species. Taxes, regulations, cost, etc. are making it extremely difficult for entrepreneurs to open and operate a business. Without "New Shoots" we are losing business and opportunity to countries that encourage entrepreneurs to start new businesses through their policies and practices.
On a positive note, the plight we are in is reversible over time. The answer is to foster the creation of new businesses that are sustainable in the current marketplace. Some will grow and some will close.
Resources will be moved towards their most productive and efficient use. Government policies and taxes should encourage entrepreneurs to create new businesses. If the market is allowed to determine which businesses, products, and services are economically sustainable then jobs will be created, and tax revenues will be generated.
Bizincubators - Inspiring and educating entrepreneurs visit our website at www.bizincubators.com
js
Our nation's debt is at record levels whether the people of America like it or not. The unsustainable spending practices makes it clear that the current Administration's policies are out of line with their sustainability objectives. Our economy cannot sustain spending at such levels.
Examine the logic of our government budget cuts, the cuts are based on an expanding expense account. For instance, if your company gave you an expense account of $500 per month you would, in most cases, try to stay within your budget. You would also be kept accountable by having to keep a good record of how you spent the money and turn in all of your receipts. Now, if your company told you that they needed to cut expenses next quarter by ten percent, you would make this change in your expense account - deduct $50 from your current budget of $500, which will then give you $450 as your monthly budget for the next quarter.
Our government on the other hand does it something like this. They will decrease spending by 10% by saying that we had $500 in our current budget and for next quarter we have factored in that our expenses will be $600 so we will cut 10% off of that and now we have only $540 to spend. Hmm... still seems like they have more to spend next quarter, but they can say confidently to their constituents that they did cut spending by 10%. With the smoke and mirrors budget accounting practices of our Government, the taxpayer is working more and more to pay for the government's expenses. More taxes equals less money in your pocket alternatively less taxes equals more money in your pocket and everyone else's.
Sustainability and Green Jobs
If sustainability and green ($$$) jobs are important to our Administration and Government they should take into consideration the sustainability of the economy. The pace at which the government continues to grow is unsustainable. A basic principle of sustainability is that you harvest what you need and leave the rest to allow the ecosystem to replenish and sustain itself for the future. If you deplete the resource faster than it can be replaced, it dies or goes on the endangered species list. This is what is happening in our economy. The entrepreneur is becoming an endangered species. Taxes, regulations, cost, etc. are making it extremely difficult for entrepreneurs to open and operate a business. Without "New Shoots" we are losing business and opportunity to countries that encourage entrepreneurs to start new businesses through their policies and practices.
On a positive note, the plight we are in is reversible over time. The answer is to foster the creation of new businesses that are sustainable in the current marketplace. Some will grow and some will close.
Resources will be moved towards their most productive and efficient use. Government policies and taxes should encourage entrepreneurs to create new businesses. If the market is allowed to determine which businesses, products, and services are economically sustainable then jobs will be created, and tax revenues will be generated.
Bizincubators - Inspiring and educating entrepreneurs visit our website at www.bizincubators.com
js
Tuesday, July 26, 2011
Confusing Stock Market & Trillion Dollar Debt
The idea of being trillions of dollars in debt doesn't seem to scare our leaders in Washington. Many households have debts that are looming and scary but tiny in comparison. Where did all that money go? Someone spent it. I don't think that our government really has a true budget like a good business or well run household has. If our government was run like a business and audited like one, either the budget would be balanced or there would be a lot of people in prison for fraud and embezzlement. Yet, we can't blame anyone but ourselves, it started with the individual voter and non-voter. Those who don't vote must be included because of their apathy, the system has become the system because we all let it happen. Why don't we ask tough questions and have our representatives show us the evidence of how they are spending our hard earned money.
The stock market is defying logic, but then again, avarice is not known for being logical. Would you pay 40 to 50 times a company's earnings if you were to invest your life savings in say a computer vender down the street. Let's say he claims that his sales went from $10,000 a month to $20,000 a month year over year. He wants to sell you his business so knowing that he made double what he did last year, and your projection of future sales and earnings is for the trend to continue at the same pace, based on analysts estimates the business will make $40,000 a month next year. You quickly take out your life savings and plunk down your $1 million dollars to purchase the business. He walks away a millionaire and you get a business that you know, based on your logic, will be worth $2 million next year and all you have to do is find someone just like you to take it off your hands for a nice gain of $1 million. Easy? Yet, most people wouldn't just buy that business without asking more questions, getting a complete set of audited accounting records, examining future demand and R&D for new products, investigating who their competitors are out there and many other things before they bet their life savings. Still, this happens everyday in the stock market. People put their life savings into the hands of Wall Street money managers and hope for the best.
The way out of this financial roller coaster ride is to get back to business fundamentals. It is simply this, produce something of value, sell it at a profit, save some, reinvest some, and go back to step one. Too many people rely on the government to be the solution to the economy and they don't rely on their own abilities.
I read this quote in the book, "How Privatized Banking Really Works", by L. Carlos Lara & Robert P. Murphy.
"The most efficient organization in the world is not any group of people but a single person. A normal person can conceive a plan, figure out how to carry it out, and communicate the orders to do the task to his faculties instantly, with minimum likelihood they will be misinterpreted... Moreover, an individual who owns his own material, has put up the investment for an undertaking and stands to gain whatever profits arise from the enterprise, must have the greatest incentive to do the job well."
--Clarence B. Carson
Our goal at Bizincubators is to inspire and educate aspiring entrepreneurs, we believe that the solution is right in our own backyards, it is people like you who have a personal dream to become a successful entrepreneur.
js
The stock market is defying logic, but then again, avarice is not known for being logical. Would you pay 40 to 50 times a company's earnings if you were to invest your life savings in say a computer vender down the street. Let's say he claims that his sales went from $10,000 a month to $20,000 a month year over year. He wants to sell you his business so knowing that he made double what he did last year, and your projection of future sales and earnings is for the trend to continue at the same pace, based on analysts estimates the business will make $40,000 a month next year. You quickly take out your life savings and plunk down your $1 million dollars to purchase the business. He walks away a millionaire and you get a business that you know, based on your logic, will be worth $2 million next year and all you have to do is find someone just like you to take it off your hands for a nice gain of $1 million. Easy? Yet, most people wouldn't just buy that business without asking more questions, getting a complete set of audited accounting records, examining future demand and R&D for new products, investigating who their competitors are out there and many other things before they bet their life savings. Still, this happens everyday in the stock market. People put their life savings into the hands of Wall Street money managers and hope for the best.
The way out of this financial roller coaster ride is to get back to business fundamentals. It is simply this, produce something of value, sell it at a profit, save some, reinvest some, and go back to step one. Too many people rely on the government to be the solution to the economy and they don't rely on their own abilities.
I read this quote in the book, "How Privatized Banking Really Works", by L. Carlos Lara & Robert P. Murphy.
"The most efficient organization in the world is not any group of people but a single person. A normal person can conceive a plan, figure out how to carry it out, and communicate the orders to do the task to his faculties instantly, with minimum likelihood they will be misinterpreted... Moreover, an individual who owns his own material, has put up the investment for an undertaking and stands to gain whatever profits arise from the enterprise, must have the greatest incentive to do the job well."
--Clarence B. Carson
Our goal at Bizincubators is to inspire and educate aspiring entrepreneurs, we believe that the solution is right in our own backyards, it is people like you who have a personal dream to become a successful entrepreneur.
js
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