Two-Headed Beast

So, what are readers saying about PROFIT CONFIDENTIAL now?

Some readers are critical of our commentaries, on occasion, but most offer support for our endeavors. Often, the responses reflect a reader’s personal experience regarding one of our editorials. We appreciate all the feedback we get from you.

Recently, it has been brought to our attention that a few readers have considered some of our efforts and musings a tad too political of late.

Our desire is to provide our readers with a financial viewpoint with some sort of benefit attached. Unfortunately, it is almost impossible to separate profit from politics! How we wish we could!

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Choices made by elected officials (be they from one party or the other… it makes no matter to us) can greatly affect the investment environment. Our legislators can cause a specific business to flourish and another to be squashed.

To ignore the implications of how the investment environment has been altered by the powers that be in Washington is foolhardy. You cannot separate one head from a two-headed beast and expect it to live.

As we pointed out in our first editorial of the New Year, this is an election year. Funny things can happen to our economy when the race is on.

To make our point that the beast’s heads cannot be separated, a brief glance at 2003 government borrowing should suffice. Often, the year before an election is critical to creating the right economic environment for re-election.

So, it comes as no real surprise that, combined with a flagging domestic economy, the nation’s debt grew at a rate not seen since the late 1980s. Our nation’s debt grew by $1.7 trillion and the Federal government accounted for 18% of it.

Economic stimulus cost us all a fortune, and very few of us really benefited from it. It doesn’t matter who applied the stimulus, just that it was applied. But the end result is greater debt. Debt that has become a time bomb. This time bomb will affect all our investments.

Debt can cripple an economy. In fact, the rate of debt growth we see now, as we saw in the 1980s, will lead to a recession, as it did then. When we have double-digit growth in debt, we have to wonder, as even Mr. Greenspan wondered last Tuesday, “Can market forces incrementally defuse a worrisome buildup in a nation’s current account deficit… before a crisis more abruptly does so?”

Whenever the crisis comes, know it is coming. Be sure it is coming. Will our investments and profit be affected? Certainly. If you’re prepared and seeing clearly, you can benefit.

Here at PROFIT CONFIDENTIAL, we hope to make all our readers aware of what both heads of the beast are doing. After all, not knowing what one is doing, while only paying attention to the other, can lead to some unsightly wounds.