Notes From The ACG Annual Economic Forecast as Presented by My Favorite and Trusted Economist Alan Beaulieu
Alan Beaulieu is a principal and the President of ITR Economics. He has consulted with companies throughout the U.S., Europe, and Asia on how to forecast, plan, and increase profits based on business cycle trend analysis. He is also the Senior Economic Advisor to NAW, Contributing Editor for Industry Week, and the Chief Economist for HARDI. In short, he is one of the country’s most informed and well respected economists.
I have been a member of Vistage for three years now so I was lucky enough to be able to attend his ACG Annual Economic Forecast when he visited St. Louis recently on January 18th. During the course of his presentation, I compiled a list of notes which I would like to share with you because this information is a great portrait of what the economic landscape looks like today, as well as what it will look like years into the future.
The first thing Beaulieu mentioned was that he sees another minor depression happening in 2014, then a MAJOR depression occurring in 2019. Noting this, he strongly encouraged people to borrow, borrow, borrow, specifically stating, “How much? Borrow until you can’t sleep at night and back off.” He said it will become harder to borrow tomorrow, so do it NOW!
He also talked about how the copper market is being driven by China right now. Therefore the zinc and cobalt markets will also go up in 2013. He foresaw consumer spending decreasing in the 3rd quarter of 2013 due to the rising price of oil around that time. Along these same lines, it’s important to note that India and China are both buying oil from Iran using gold. What?
He went on to speak about how the Germans will eventually overtake Greece, peacefully of course, through economical means. Greece is essentially broke right now so Beaulieu sees this as an inevitability. He also sees Germany eventually gaining financial control of all of Europe by the end of the decade without a single shot being fired. His advice in the light of these events is to buy Spanish companies as they are at rock bottom and are surely going to see a major turnaround in the coming years. Italy is also poised to reverse course since it finally passed a law allowing businesses to terminate employees and creating a state sponsored “unemployment program”.
He went on to discuss how over the next couple of years taxes will rise, less cash will be on hand, there will be more creativity, competition will be fierce, and margins will get thinner over time. He GUARANTEED each of these things will happen. He also joked, “The only way to fix healthcare is to start a war involving only old people.” A joke, yes, but interesting.
As for Missouri, he stated that the population is not growing, St. Louis construction is not following other parts of the nation (it’s trending down 50%), and the U.S. is on track to energy independence due to fracking. Also, North Dakota may have the same amount of energy reserves as Saudi Arabia which Beaulieu commented on by joking, “They finally have a reason to exist.”
Beaulieu expects business-to-business growth until late 2013, around September sometime, the bull market ending in June, and building permits to go up in St. Louis. Housing prices are still plummeting so he suggests buying rental property because vacancy rates are going down and rental is going up.
He finished by stating that he expects a HUGE depression around the year 2030, much like The Great Depression of the 1930s. Unemployment will be up, business failures will be prevalent, but we will have enough technology to be able to figure out where the food is being handed out.
Here is a list of ACTION ITEMS for Business Leaders entering into 2013:
- Add key sales people.
- Invest in training programs.
- Lock in cost with long-term vendors.
- Expand credits.
- Gain competitive advantage. (we can help with this)
- Improve efficiencies. (we can help with this)
- Spend money on marketing and advertising. (that is where we come in.)
- Work on what’s next.
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