Economic Predictions

Japanese banks have a huge amount of bad debt that they have refused to deal with for almost 10 years. It is possible that Japan could get out of its morass without a major collapse, but since they have done nothing for 10 years, it probably will take a complete collapse of a major bank to get Japan to deal with its structural problems and lingering bad debt.

Paying off debt can save you 7-20% (depending on your interest rate) guaranteed per year. In the current low inflation or deflationary environment, that is a nice return without risk.
Despite the volatility, stocks of solid companies will remain a good investment especially when the investor can benefit from tax free gains. The long run-up of stocks may not continue and stock prices may be flat for many years, but you can not go too wrong by giving money to well organized companies that are creating goods that the world needs.
When you own the place you live in, you essentially pay rent to yourself rather than to someone else. Just make sure the rent you can get for your property will at least equal the monthly mortgage and other costs you have to pay. So if you move, you can just have a renter pay off your debt for you.

The US government is the most inefficient organization in the US. It is a financial basket case in need of enormous and expensive structural reform. It is also sitting on huge amounts of debt financed on short term rates. And it is headed by crooks and liars. Despite these problems, US treasury bonds are considered the safest risk-free investment in the world. Everything has a risk and a financially bankrupt organization should not be so well respected. It will probably take a crisis to get the US government to face up to its structural problems and to get investors to see the risk of US government debt.
As long as interest rates stay low and the US government keeps applying Band-Aids, they may be able to limp along for several more years, but eventually US government arrogance will be brought in check.

The computer industry leads the world economy and has been living in the world of deflation (continuously falling prices) for years. Around the world, countries are devaluing the value of their currency thus reducing their prices significantly. In addition, these countries are encouraging companies to beef up capacity to increase exports to improve the economy. This is creating a great oversupply in the production of common consumer goods like autos, chemicals, semiconductors, etc.

Although managers have somewhat learned that they need to work with employees to improve production, unions still live in the 50’s. Unions generally ask for more money for doing less without any regard for the performance of the company they work for. Their complete lack of understanding that they can only make more money by adding more value insures that unions will continue to decline in power.
Working for a union or non-union company just can’t compare with owning your own business. As an owner, you set your hours, control your own destiny, and set your salary. Also, if you build your company big enough, when you retire, you can sell the whole operation for even more money.

We want feedback! Tell us what you think: Contact Us