My Three Economic Predictions for Business 2016 - 2020 - My Crystal Ball

Published in Print Exclusively In the Windham Eagle, Windham Maine - January 15, 2016

Prediction One - Business to itself will flourish and grow over the next five years going from good to great.  The markets, which have been growing slowly over the last few years, will continue to grow except that they will be accelerating.  For the last five years we have been in a "replacement" market.  This market has become the norm for our society today.  We, in general, have not been buying products because we wanted them, but because we needed them - "our old one broke down".  In the next five years, business and market growth will accelerate as there is a pent up demand for the "I Wants" rather than "I Needs".  This points to good times.

Prediction Two - Financial instrument marketers will become more aggressive with the offering of more aggressive products.  Aggressive investment capital was stifled for several years for two reasons, the media told us of impending doom and the investment / tax rules were in flux - we like to invest where we know the rules.  Today, there is still huge pent up capital "waiting on the sidelines", but looking, for a place to flow.  In the next 5 years it will flow, possibly like it has never flowed in the past and probably not peaking for 20 years - yes, a twenty year boom.  This points to good times.

Prediction Three - Business and life are being redefined by our dreams and desires.  In the past, it has always been about security and consistency, which came with stress and vulnerability.  We will see more people stepping out (even if they are forced out) taking on the world satisfying their own entrepreneurial desires and wants setting their own destinies.  This will create jobs, wealth, and be a major part of our future and the economy.  This points to good times.

So where are all these opportunities - examples please?

• Convenience Services
• Landscaping
• Food Prep and Delivery
• Child Care
• Financial Services
• More people today are at least concerned about their future
• Specialty Manufacturing.
• Anything that can be made and shipped inexpensively and/or regonally  There are even boutique steel manufactures

Entrepreneurism will not only be the future, but the thing to be. 

"A True Entrepreneur does not think they can, they just don't know why they can't" ~rel

Bob Leonard
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512-593-8830 (in Austin)

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The Perfect Storm (Economically Speaking) a Year Later. The Worst (Best) is Yet To Come.

To understand this article you will need to read my article from a year ago with a similar name.  The Perfect Storm (Economically Speaking).  What's different, what's new, what have we learned and how far have we come and where are we going?

Capital, even though it is hemorrhaging slowly, is still pent-up. It needs to flow faster to the capital demand and will as it realizes it is missing opportunities (which it is).  What do the markets think?  Go to almost any trade show this year - They are bigger and the crowds are huge, much larger than just last year.  This is definitely a leading indicator of the state of our economy (Peter Lynch style).

Businesses are spending and hiring; the pace on both is going to increase.  Last year I felt like we were in a sling shot still pulling back (potential energy) - it's definitely moving forward now (kinetic energy).

As I have said before, a government that is indecisive, causes money to sit still - no one invests when the rules-of-the-game have not been defined.  Today, even though the rules still need some tuning, the capital and venture markets can no longer hold back - we are moving to flowing dollars.  What is even more amazing (IMHO), business activity is driving our government policies to make decisions (immigration reform).

So what else is coming?  High interest rates, high inflation, low unemployment, cheap non-exportable energy (venture $$$ abuzz), re-urbanization and localization.

Fun times ahead, I wish I were a young entrepreneur again; I envy my children and my grand children as there is a bright future for the young entrepreneur.

Oh, and I took the summer off from writing :) .

Bob

Where Gold is Going and Why is this "Up or Down" So Different.

Everyone needs to do a little research on some basic economic principles because our next economy is going to be very unique - unique in that what could occur will be unique, not only to my life, but in modern history.

What defines today's economic environment:
Low Interest Rates (3.25% Prime)
Low Inflation (1.72% annualized in April 2013)
High Corporate / Business Profit
High National Unemployment (7.6%)
Ridiculously High (and still growing) National Debt 

What I think the future brings us in the next 10 years.
Higher Interest Rates (duh). Yea, yea, but try to remember the 80s where good mortgage rates were 13% - 16% (think about what that would do to your monthly mortgage payment).  Prime rates exceeded 20% (21.5% on December 19, 1980).  So what will cause rates to go up?  Demand for capital and inflation.

Higher Inflation.  No one likes to talk about this one much but there is definitely the buzz  of borrow today (or yesterday) and pay back at and with tomorrow's dollars.  Can our government (the controllers of our M1) do anything else?  With a 100% inflation over a 10 year period (this is not a lot nor hyper) paying back the national debt will be only half as costly.  Think about that... and then consider that inflation could be as high as 250% in the next 10 years.  Back in 1980 inflation went as high at 14.7%; 1980 was a very interesting year.!  It takes only 7.2% inflation to double the cost of living in 10 years (rule of 72).  In a time of record corporate profits and stagnate wages, we can expect our wages to increase because of new and higher demand for labor and profit potential from that labor.

Corporate profits will, likely change hands and most likely drop from their current levels - but not much.  What does this mean?  Stocks are not necessarily the best investment.  Corporate balance sheets will also change from very high cash positions to lower, more normal, positions.

Unemployment can only go one direction and that is down.  This drop in unemployment will be a part of the fuel to drive inflation (again, remember the 80s and Reagen's 84 classic speech repeating what he said in 1980, "are you better off now or then you were 4 years ago".  In addition, there is a "feel good" to big raises even if they are only to keep up with inflation.

National debt is, like said above. The government will address this with tomorrow's less valuable dollar rather than today's more expensive dollar.

The title of this article is "Where Gold is Going and Why is this "Up or Down" So Different".  So where do you think it will be in 10 years?  A better question to ask is why (based on the information above) is the price dropping over the last several months.  My prediction: $8K to $10K per ounce before 2020.  Hmmm, consider contra-investing.! and ask why some pros are buying.

NOTE: I AM NOT AN EXPERT - JUST MY OPINION

Personal Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 30 days. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it.