Stimulus Package Predictions: What Does Your Business Spidey Sense Tell You?
While reading blogs today I ran across many sites talking about the stimulus package. Here is a good one. But it got me thinking. What is one of the most important things a business person must learn to do? I’ll tell you. Observe and evaluate data, apply knowledge, and predict the future.
A successful business person is going to be able to predict their demand, hedge their costs, and make sound investments. So you are the president and CEO of your favorite company, and now here comes an extra 300 bucks in all your customers’ pockets. What do you do? Here are two opposing opinions:
“This money is going to help Americans offset the high prices we’re seeing at the gas pump, at the grocery store, and will also give our economy a boost to help us pull out of this economic slowdown.”
Mr. Keiser at Huffington Post:
“This is why America’s debt problems won’t go away. Every dollar spent adds debt and spawns more fiat currency issuance which has the effect of decreasing the purchasing power of the U.S. dollars in your pocket. Bush tries to make up the difference by borrowing even more.”
I suppose the question is, what do you think will happen? If you are a retail store, do you increase your inventory starting in May for a surge of retail? Do you invest in your favorite REIT to benefit from increased mortgage payments? Or, do you stick the money in a savings account expecting interest rates to rise after the rebounding economy?
My opinion: business as usual here. The stock market is going to go up the first, maybe even 2nd and 3rd weeks of the packaged deployment, but gas prices will remain the same, food prices will rise, and all will be back to normal by June. If I was running a business, this wouldn’t change a thing because of this “stimulus package.” What would you do?
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Tags: Investment, Money
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April 29th, 2008 at 6:46 am
Bring that check on– I’m investing in my car