Volume 11, Issue 31
This weeks economic indicators, as reported by Bloomberg and other national business news networks, are in conflict at the worst, and confusing at the best. In these times, the head of a household or the head of a small business is like the captain of a ship caught on a stormy sea where the signs of weather are signaling conflicting predictions of the direction for clear sailing.
The number one concern among small business owners, according to the National Federation of Independent Business (NFIB), is finding employees. The current unemployment rate is 3.6%. Yet, about 3.5 million workers are missing from the workforce. This problem is worsening even though wages continue to rise, increasing at an annual rate of 4.4%. 5.8 million people are slow to return to work. In the past two decades, the number one problem facing small businesses has been access to capital. Employees were normally recruitable with higher pay. Now COVID relief expenditures appear to have distorted the equation and people’s emotions.
Global inflation continues but, at least in the United States, it is decreasing. As late as three weeks ago, the Federal Reserve was predicting recession. Now they are predicting no recession and a soft landing from the pandemic. The United States government is currently borrowing $5 billion a day. This impacts interest rates which in turn impacts inflation. This is of course inconsistent with overall government policy to reduce inflation.
Regional banks remain stable. Yet withdrawals and movement of money has not subsided. Commercial real estate loans in peril have yet to be restructured. One can find credible economic forecasters espousing on podcasts everything from dire cataclysmic predictions to the economy is back to business as usual. Investment managers advise everything from buy gold only to trust the stock market long term.
What do all of these conflicting signals mean? No one knows for sure.
The most interesting indicator is that China is now in deflation while the rest of the world is still dealing with inflation. If true, this stretches the imagination of economic theorists. The world GDP today is estimated to be $105 trillion. The United States’ GDP represents $26.9 trillion. China’s GDP represents $19.4 trillion. These two countries represent nearly half of the world’s GDP. It is incongruous, if not impossible, that, in a global economy, the two largest economic sectors would be moving in different directions on pricing. The United States consumes 50% of what China produces. This much trade between two countries that dominate the world economy should dictate that prices reflect harmony in the corresponding world marketplace. China is the only country not experiencing inflation. Something else is happening. China’s command economy is out of step with the rest of the world’s free enterprise system, resulting in the Chinese yuan being overvalued and in a state of depreciation.
Given this economic consternation, what is a person to do? Build relationships.
Communities must become connected through individual families, churches, small businesses, not-for-profit organizations, and elected officials. A planning process should be implemented wherein cities are able to provide critical needs for an extended period of time based upon each person’s and organization’s ability to participate. In other words, communities must come together through individuals trusting each other to share abundance as needed. All of this begins with families as the building block of the community.
Like a fire drill to execute an evacuation plan for your family if the house catches on fire, everyone knows what to do to survive and mitigate damages. With the uncertainty for future economic events, a similar plan should be in place. It begins by networking with like-minded individuals and organizations.
The captain on a ship at sea, too far from port to return to safe harbor, must make the best decisions he can with the information in hand weighed by his experience. Somewhere in preparation, there will be an action step to “batten down the hatches.” The storm may be in the distance, but its direction is not clear. The chaos may be unavoidable. Or, the threat may pass. If the swells become precarious, the plan is in place to manage the ship in navigation whatever the storms may bring.
The good news is that the United States is likely to be the strongest nation to face any conditions of the coming economic storm. North America contains 40% of the world’s fresh water. Flowing rivers aid in distribution. Even under stress, the U.S. banking system is the soundest and most resilient financial services industry in the world. The average American family has enough food and critical supplies in their cabinets to last a few weeks. One-third of the world’s population struggles to find enough food to eat on a daily basis.
As the most prosperous society on the face of the planet, America may be required to lead a world economic recovery in facilitating and sharing resources for the restructuring of a new economic order. Given the good fortune that we Americans have been afforded, we should joyously embrace this responsibility.
A nation of faith believes and has confidence that the existence of life has an ordained purpose. That eternal directive may be as simple as “love one another and love your neighbor as yourself.” Start with your own family and extend the instinctive love to your community.
The number one concern among small business owners, according to the National Federation of Independent Business (NFIB), is finding employees. The current unemployment rate is 3.6%. Yet, about 3.5 million workers are missing from the workforce. This problem is worsening even though wages continue to rise, increasing at an annual rate of 4.4%. 5.8 million people are slow to return to work. In the past two decades, the number one problem facing small businesses has been access to capital. Employees were normally recruitable with higher pay. Now COVID relief expenditures appear to have distorted the equation and people’s emotions.
Global inflation continues but, at least in the United States, it is decreasing. As late as three weeks ago, the Federal Reserve was predicting recession. Now they are predicting no recession and a soft landing from the pandemic. The United States government is currently borrowing $5 billion a day. This impacts interest rates which in turn impacts inflation. This is of course inconsistent with overall government policy to reduce inflation.
Regional banks remain stable. Yet withdrawals and movement of money has not subsided. Commercial real estate loans in peril have yet to be restructured. One can find credible economic forecasters espousing on podcasts everything from dire cataclysmic predictions to the economy is back to business as usual. Investment managers advise everything from buy gold only to trust the stock market long term.
What do all of these conflicting signals mean? No one knows for sure.
The most interesting indicator is that China is now in deflation while the rest of the world is still dealing with inflation. If true, this stretches the imagination of economic theorists. The world GDP today is estimated to be $105 trillion. The United States’ GDP represents $26.9 trillion. China’s GDP represents $19.4 trillion. These two countries represent nearly half of the world’s GDP. It is incongruous, if not impossible, that, in a global economy, the two largest economic sectors would be moving in different directions on pricing. The United States consumes 50% of what China produces. This much trade between two countries that dominate the world economy should dictate that prices reflect harmony in the corresponding world marketplace. China is the only country not experiencing inflation. Something else is happening. China’s command economy is out of step with the rest of the world’s free enterprise system, resulting in the Chinese yuan being overvalued and in a state of depreciation.
Given this economic consternation, what is a person to do? Build relationships.
Communities must become connected through individual families, churches, small businesses, not-for-profit organizations, and elected officials. A planning process should be implemented wherein cities are able to provide critical needs for an extended period of time based upon each person’s and organization’s ability to participate. In other words, communities must come together through individuals trusting each other to share abundance as needed. All of this begins with families as the building block of the community.
Like a fire drill to execute an evacuation plan for your family if the house catches on fire, everyone knows what to do to survive and mitigate damages. With the uncertainty for future economic events, a similar plan should be in place. It begins by networking with like-minded individuals and organizations.
The captain on a ship at sea, too far from port to return to safe harbor, must make the best decisions he can with the information in hand weighed by his experience. Somewhere in preparation, there will be an action step to “batten down the hatches.” The storm may be in the distance, but its direction is not clear. The chaos may be unavoidable. Or, the threat may pass. If the swells become precarious, the plan is in place to manage the ship in navigation whatever the storms may bring.
The good news is that the United States is likely to be the strongest nation to face any conditions of the coming economic storm. North America contains 40% of the world’s fresh water. Flowing rivers aid in distribution. Even under stress, the U.S. banking system is the soundest and most resilient financial services industry in the world. The average American family has enough food and critical supplies in their cabinets to last a few weeks. One-third of the world’s population struggles to find enough food to eat on a daily basis.
As the most prosperous society on the face of the planet, America may be required to lead a world economic recovery in facilitating and sharing resources for the restructuring of a new economic order. Given the good fortune that we Americans have been afforded, we should joyously embrace this responsibility.
A nation of faith believes and has confidence that the existence of life has an ordained purpose. That eternal directive may be as simple as “love one another and love your neighbor as yourself.” Start with your own family and extend the instinctive love to your community.
Lead on these imperatives. Relying on the higher calling of one’s faith, pursuant to the blended composite of one’s moral perspective, we each can find the peace of ineffable order in these times by …
Praying for the best and preparing for the worst through building relationships.
My name is Marc Nuttle and this is what I believe.
What do you believe?