Holistic Survival
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6 Ways the Economy is Changing

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* Our thanks to BusinessInsider.com for some of the meat that went into the following article

We don’t want to give you the impression that we run around all day claiming that the sky is falling – except when it is. There are generally three camps you can fall into when it comes to analyzing the the near future of the global economy, and how you assess your chances for surviving it. Are a realist, idealist, or alarmist? An idealist believes that somehow the innate goodness and wisdom of our leaders will prevail in the end and everything will be okay. The alarmist has been jumping at shadows so long his vertical leap is off the chart.

Then there’s the realist, which is where we at Holistic Survival like to dwell. A realist takes a hard look at what is actually going on in the world and tries to figure out how to set himself up best to survive and thrive in the future. Here are some things we’re looking at now that are bound to have an impact on life as we know it. The Big Picture is this. The world went looking for cheap labor at the end of the 1970’s and found it in Asia, but now that Asia is booming, placing a serious demand on global natural resources, what’s next? They want the same stuff the middle class around the rest of the world has and they’re going to work hard to get it.

1. Global workforce – Back then there were about two billion people working on planet earth. Today that number has doubled but the number of jobs has not. Oops! Seems like that’s a spot of trouble waiting to erupt.

2. Consumption – It used to be that one billion people consumed three-quarters of earth’s natural resources. With consumption rising conspicuously in Asia, there’s going to be a shortage of something, somewhere, for someone.

3. Natural Resources – What used to be plentiful is now becoming scarce. Gas prices anyone? Actually, that’s a not a very good example, since that problem is one of distribution rather than supply. Where you’re really going to notice the price of natural resources increase is in the raw materials needed by the construction industry.

4. Commodity Prices – Related to reason #3, food prices have been in an upward spiral for a while now. World population continues to increase while production remains the same. People gotta eat, ya know! What happens when the price of basic food stocks consume a middle class family’s budget? Can you say anarchy?

5. Government Intervention – Back then President Ronald Reagan built a legacy on getting government out of the economy. Today, the Obama administration is taking an approach that is the polar opposite of that. Regardless of the ideological arguments, how long can we, as a nation, continue to rack up debt and drive down the value of our currency without paying a severe price somewhere down the road?

6. Investments – Gone are the days when we had market stability, negligible inflation, and investors unafraid to take a chance on riskier assets and innovation. These days it’s more of a bunker mentality. The stock market is stuck in a wild swinging pattern, while the middle class investor flees to certificate’s of deposit and t-bills. Memo to the government. Nobody ever got rich on those types of assets.

After reading this list you might be ready to stick a fork in our way of life, but not so fast. We’re realists, remember, not pessimists. There’s a good chance the the emergence of Asia and Africa as developing areas will also hold the key to economic opportunity for American companies. After all, no emerging middle class will be satisfied until they have an iPad in every bedroom and McDonald’s on every street corner.

Also keep in mind that it has traditionally been the American way to make technological leaps when it is most sorely needed. Anyone remember the H bombs? The technology and energy sectors are going to be pushed hard to innovate on an impressive scale, and there’s a good chance they just might do it. As a closing point, we’d like to suggest that we need a game changer to shake us out of this prolonged period of inflation and economic stagnation. Maybe the emergence of new markets around the world will be the catalyst.

In the meantime, we suggest you focus your investment efforts on income properties in the areas of the country that make sense right now. Real estate has historically been the best investment and nothing is going to change that. The stock market investor makes the noise but the real estate investor make the money.

The Holistic Survival Team





(Flickr / DonkeyHotey)


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