Stage 18 – Cycle of Productive Innovation Resumes

The eighteenth stage of America’s Financial Endgame™ will occur when the nation resumes a cycle of innovation and productive growth resumes. Stage 18 This will be a critical stage of the recovery toward a sustainable financial future.  One of the trends that is almost certain to drive this cycle is a migration toward cities and regions that are friendly to business and innovative thinking.

This progression is a highly important part of the recovery path from America’s financial endgame toward a sustainable, and prosperous future.  It is critical to understand that every crisis creates opportunity.  Each economic calamity creates chances to realize significant gains to people who have the ability to see superior value in the midst of financial panic.  This requires two critical elements … The first is the ability to accurately view the financial situation, and the second is the ability to calmly act on these rational insights.

However, it is important to understand that capitalizing on this opportunity sometimes requires moving to where the opportunity exists.

An example of this phenomenon is found in comparing the net movement of people in / out of Detroit, and Houston.  Stage 18cThere is a distinctive contrast between these market areas that is very important to understand.  Detroit has a very long history of burdening the business community with heavy regulations and stifling taxes.  Alliances between major corporate interests, government entities, and labor unions have forced many of the business minded people in the area to move.  This is demonstrated by the migration diagram showing the net outflow of people from Detroit to other cities.

In contrast to this, the city of Houston has experienced a tremendous amount of in-migration from people seeking employment opportunities.  Further, the out-migration from Houston has primarily been to counties located nearby, representing moves out to the suburbs vs. complete relocation.  This is an important insight, because Houston has a well known reputation as a business friendly city.  The economy of Houston is also much more diversified than in prior decades.  The energy industry still plays a major role in Houston’s economy, but other sectors such as health care and medical research.Stage 18e

What this shows us is that prosperity is similar to real estate in that it’s local.  What this means to many people is that the path to growth will involve moving toward opportunity.  It is not certain where this opportunity will emerge in the future, but it is certain that it will show up somewhere.  As astute individuals and investors, we must always be willing to change our mindset to accommodate changing realities in the marketplace.  Our ability to adapt to these changes is what will make the difference between our riding the wave of the future, or being overwhelmed by it.

In the next segment of America’s Financial Endgame™ we will be examining how stable money and prices will keep the economy on a sustainable growth path.

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