The twentieth stage of America’s Financial Endgame™ will occur when the cycle of innovation resumes, and the economic productivity of labor and capital assets enters into a phase of explosive growth. The reason for this is because stability lays the foundation of innovation. Once the financial chaos subsides and entrepreneurs begin looking for ways to re-deploy capital more profitably and ways to generate productive innovations, the economy at large will benefit. This sustained growth trajectory is a critical part of the economy’s return to fundamental viability.
To comprehend this fully, one needs to understand where economic growth really comes from, plus the difference between nominal and real growth.
The nineteenth stage of America’s Financial Endgame™ is where stable money and prices steer the economy toward a sustained growth path. This is a highly important part of America’s return to prominence in the global economy, because stable money and prices will reward investment in viable businesses and projects, instead of chasing after speculative bubbles.
This is the environment where prudent investors will be rewarded the most handsomely. The reason for this is because money always chases returns. This means that when a market is in a bubble, capital chases after whatever has been “hot” in the bubble. When the bubble ultimately crashes, the market runs away from what was “hot” in the bubble.
To many people, bonds are the ugly step-child of the financial markets, with nowhere near the interest or appeal of the equity or commodity markets. It is certainly true that equity markets have historically out-performed bonds over long time horizons, and that commodity markets express frantic volatility that generate both euphoria and despair within the hearts and minds of traders on a daily basis.
However, it is also true that bonds (i.e. debt) is the single largest financial market on the face of the earth with aggregate global obligations in the neighborhood of $100 Trillion. (Yes … Trillion)
Thus, as informed investors it makes sense for us to understand how bonds work and what they tell us.
With the global population currently in excess of 7 billion people, it has re-invigorated the arguments made by some that the world population is on an unsustainable trajectory that will deplete the planet’s resources and result in mass starvation. A This is a viewpoint shared by many in the political and intellectual class. Naturally, the upshot of all this analysis inevitably points to a larger and more prominent role for government and ‘experts’ in determining the course of people’s lives.
It is not hard to see where the fervor for such a viewpoint comes from. After all, the world population is growing quickly. When that growing population is multiplied by the average resources consumed per person, it creates what looks like an unsustainable situation. And of course, the solutions supported by the politicians and intellectuals just happens to be the one that results in them acquiring more power. Quite a coincidence …
Tags: Edith Penrose, environment, Harvard Business School, innovation, mind, Mouth, new, population, represent, resources, uths, world, World population
Many people have heard the popular phrase “climbing the corporate ladder” in reference to the development of a person’s career. This conjures up mental images of pushing people out of the way to claw your way up to the top. This hyper-competitive view of the world has created a dour image of professional success in the minds of many people.
It is most certainly true that there is an element of “dog eat dog” competition when it comes to careers, but it is also true that there are many people who build highly productive, highly constructive professional careers. Ultimately, this is the goal that we strive for … to achieve professional success in a constructive manner that is compatible with a highly rewarding personal life.
Categories: Career Insights
Tags: business, Career, decisions, employment, entrepreneur, impact, important, leadership, life, people, skill, value, work, Working time, Workweek and weekend