Your Place in the New US And World Economy

Your Place in the New US And World Economy

What is next for the economy? The economy defines the boundaries within which all businesses must function.

Like the lines on the edges of the road, cross at your own risk. All businesses – and consequently all jobs in the private sector – must function within (length and width) of these boundaries. Business failures occur when companies fall behind the times and are too far ahead of consumer need. Likewise, most business sectors have a comparatively thin range of successful operations. Its hard to survive if you are either the most expensive or cheapest in your market.

The 2010 book from David Wiedemer, PhD, Robert Wiedemer, and Cindy Spitzer entitled Aftershock examines the events that produced the financial meltdown. In this book and the past book, Americas Bubble Economy the authors make the case that the U.S. economy was an illusion, only the interaction of bubbles.

A bubble is produced when an asset temporarily booms. The former (pre-2008) U.S. economy was comprised of bubbles in real estate, personal loans, credit card debt, the stock market, and consumer spending. On their own, each bubble can rise independently. But in combination, the bubbles accelerate and reach unnatural levels!

The financial meltdown felt around the world is the consequence of these bubbles popping, or as the authors describe it, a Bubblequake. The first stage of the financial meltdown included the fall of the real estate bubble, private debt bubble, stock market bubble, and discretionary spending bubble. On their own, each would have been meaningful. Combined, these popping bubbles rule to The Great Recession.

Amidst the economic turmoil, the U.S. government tried to intervene. Bailouts of automakers and investment edges were designed to compensate for toxic assets. Then the government pumped billions into the economy as stimulus to try to offset the funds lost to money heaven as bubbles popped and wealth simply disappeared.

Looking back, we now know that such efforts were ineffective. The results were a dramatically inflated money supply and a devalued dollar. The aftereffect was that the government soon reached the National Debt Limit as a consequence of spending nearly twice as much as incoming revenue.

The authors label this current stage as the Aftershock, defined as the popping of the dollar bubble and the government debt bubble. Their conclusion is that current economic conditions do not simply represent a down market cycle or a typical recession. The difference is the multi-bubble economy, with these inter-connected bubbles ALL on the descent.

The authors also conclude that inflating these bubbles again is simply not possible.

Instead, they predict what is called the triple double-digit economy:

Double-digit unemployment Double-digit inflation Double-digit interest rates

All in all, these make up some dire predictions. So what does this average for you? How will you earn an income in the new, post-Aftershock economy.

The Aftershock authors predict:

1. Decreased need for capital goods, including cars, construction equipment, and major industrial equipment. Lower need method fewer viable firms and fewer obtainable jobs.

2. Decreased levels of discretionary spending. This affects fine dining, entertainment, travel, fact, jewelry, art and so on. Less total spending method fewer stores and fewer employees.

3. A decline (just not as drastic) in the necessities sector including health care, education, food, and government sets. already these areas will confront some pressures to downsize because they are highly dependent on tax revenues. A smaller economy simply produces lower tax revenues. Some programs will simply need to spread, in spite of of the level of necessity. Many jobs will be retained, however the wage growth and benefits will necessarily be constrained.

Conclusion: as many as 50% of businesses in some sectors may simply disappear. This method that job losses will be staggering after the dollar and government debt bubbles pop, and there will be a mad scramble for those jobs that havent been destroyed. For most people it will be increasingly difficult to find a job – any job – in spite of of your qualifications and experience. And for those lucky enough to be employed, keeping a job will average putting up with less desirable working conditions, benefits, hours, and pay. In fact, as competition for jobs greatly increases, most wages will surely fall. After all the bubbles pop, people will accept wage cuts in most jobs for one simple reason: if they dont, somebody else will.

By necessity, the government will be forced to live within tax revenue limits. The world economy will not allow unlimited printing of funny money to allow for unlimited deficit spending. The quantity of currencies injected by numerous countries will have already additional to inflation on a global extent. Too many dollars, yen, euros, etc. will be chasing a declining quantity of goods and sets.

The OLD economy is gone; the NEW economy is here.

In 2011 the federal government is overspending revenue by 40%. already a 10% decline in the size and scope of the federal government would add hundreds of thousands of additional people to the unemployment roles (including government locaiongs and supporting private suppliers and contractors.) This does not consider the same cascading effects facing state and local governments that have never had the ability to simply print money.

So one of the defining characteristics of the post-dollar bubble economy will be a shortage of jobs. Unemployment levels will be much higher, and people will keep unemployed for much longer. At the same time, businesses will be forced to reduce wages and benefits to keep competitive. Millions of Americans will accept cuts in pay.

Especially hard hit will be younger workers and older workers. Prospective employees under 30 will find it hard to compete against older, more experienced and proven workers. Likewise, workers over 50 will also confront extremely high unemployment levels.

At the same time, loss of tax revenue will force the government to tax more and tax deeper. Remaining businesses and employees will be taxed harder! Most will rationalize that 50% taxation is better than not working at all!

Different people will look at the same facts and draw different conclusions. So what do you think? Do you believe the bubbles will miraculously re-inflate and good times are on the horizon? Or do you believe (as the authors of Aftershock have detailed) that the old bubble economy is gone and a newer, leaner economy is what we can expect?

I concur with the conclusion that we are now experiencing the aftershock. I always knew that an economy based on 20% appreciation in housing values, pensions exceeding 100% of wages while working, whole shopping centers selling completely unnecessary novelties and decorations, and unrestrained government deficit-spending had to pop ultimately.

And however I am also believe 100% in the viability of the free enterprise capitalist form. So I going to make some suggestions:

First, if you are under the age of 30 or over the age of 50 you are in danger of becoming a statistic. You either need to make yourself highly useful to your current employer or prepare yourself for the high possibility of a layoff.

Second, clarify some necessary service or product that you can get excited about!

You have arrived at a fork in the road. You have two choices, plus a combination. You can take the wide road and do at any rate it takes (training, cross-training, adult education, apprenticeships, etc.) to become superbly trained for the job you have or would like to have. Remember, there are going to be too many people seeking each job. You are going to need be impressive in every way and probably over-qualified to get noticed.

The second option (the road less traveled) is to design your own occupation. Now this can be a retail, service, or skilled occupation. Each has its attractions to certain people. My personal choice is to provide a product or service on a nationwide (or already global) basis. Again, these offerings should fall in the category of necessities instead of novelties. Luxuries offer a much smaller but profitable niche if you can cater to the affluent.

already in tough times, fortunes can be made by satisfying needs. The time-proven formula for success is to clarify a problem and provide a solution. In the post-bubble Aftershock economy, providing different income opportunities is one authentic solution!

Now owning your own business includes the hassles of regulations and structure that you completely avoid if you stay in the employee category. But your own business also provides a degree of freedom not possible as an employee. The single biggest assistance is that you have no cap imposed on your income, especially if you are selling a product or service and not your efforts by the hour. Operating a business also allows you to deduct expenses before taxes. A higher possible income and tax advantages results in a win-win.

And then there is the combination of the two options, and this may be a viable option for the majority of Americans. If you have a steady job there is additional security in building a part-time business on the side. You gain income and can offset a portion of your expenses that are now cutting into your after-tax personal income (such as a home office deduction, travel expenses for errands, office supplies, etc.) You also gain the security of a income cushion if your regular job evaporates or you confront a cut in wages.

Of course, many small businesses ultimately grow into large businesses. You then have the choice of making your part-time business a new complete-time profession, hiring some employees to manage the additional work, or selling the business outright at a profit. Again, many advantages and few disadvantages (if designed with some forethought.)

The road less traveled provides increased possible rewards for assuming personal responsibility. At the same time, millions of Americans have learned that job security is a contradiction. We have entered the new age of job insecurity in an increasingly lean and competitive global economy.

So where do you start? Here are my recommendations for the ideal business:

1. Unlimited income possible. This is only possible if you are selling a product or service. If you are selling your time, you are limited by the number of hours you can work each day, week, and month. When you stop working you stop earning, and this is true already if you can bill your time at $200 per hour. Also, you want to have at the minimum some products or sets which generate repeat sales – unless what you are providing is incredibly profitable in the initial sale. Likewise, if your business allows you to leverage the efforts of others to provide additional flows of income, so much the better!

2. Time and location freedom. The ideal business will take advantage of current technologies and allow you to be located anywhere, and sell to anyone. These technologies will also allow your sales to recorded 24 hours per day, 7 days per week. Some products or sets may have limitations which restrict the sales area to one location. But many products and sets – especially digital products – allow sales to be made on a worldwide basis instantaneously!

3.Small initial investment. While many downsized employees have bought franchises and other fixed location business opportunities, I can not recommend this option. For one, the start-up costs can be very high, literally hundreds of thousands of dollars with no guarantees. Then you are faced with the reality that you have assumed the job of complete-time personnel director and you use all your time either managing employees or hiring their replacements. Instead, I would recommend an opportunity with a low start-up cost. This allows you to begin

part-time. It also method you wont have to qualify for financing, which may be next to impossible for a new business in the post-bubble economy.

In my opinion, network marketing fulfills all these criteria. There are literally thousands of products and sets that are marketing by networking. Combined with the strength of the Internet and social media, networking has entered the mainstream and is a viable option for a complete-time or part-time business.

Millions of Americans have used network marketing to produce additional income. The company provides all the sustain roles, from billing and credit card processing to accounting for commissions. Networking includes the creation of a downline that produces additional income. And consumable products provide residual income, often from several generations of customers that you have never already met.

There are no restrictions based on age, experience, location, or net worth to join a networking company. People from all walks of life – including unemployed – have become successful in network marketing. In fact, many thousands of networkers are literally unemployable after experiencing the freedom and income possible of network marketing.

If you decide that networking is right for you, there are countless resources (both free and low cost) that are obtainable to shorten your learning curve and help you succeed! There are also turnkey marketing systems designed to automate the time of action of locating customers and claiming your slice of the Internet!

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