No one creates wealth by putting money under the mattress. That’s the whole premise of business and investing, send your extra butter to the segments that are growing and you may find the butter change into icing. It’s a game of risk and reward, with the best informed decision makers leading.
Unfortunately for us, our familiar hands haven’t proven holistically sustainable in the long run. The array of corporate scandal coupled with the effects felt by the everyday consumer of the world economy demonstrates that we must change the way we invest and manage our companies.
14 million of our countrymen in the United States of America are unemployed. Our House of Representatives recently approved a 2.1 trillion-dollar bill to buy us more time to pay back our debts. 10.7 million households nationwide are underwater on their mortgages. They owe more than their home is now worth. The real estate market is so bad in California, that a bank demolished 16 nearly completed homes because it was cheaper to knock them down, than to finish them.
An American corporation (Apple) has more liquid cash than the United States Government. Growth in the U.S. market has been stagnant at best, our economy has grown approximately 4.8% in the last five years (with no net growth over the last 3) combined (The World Bank, 2011). How long will this last? Can one administration change it? Is it their fault?
Europe has not fared much better.
Greece, Portugal and Ireland are on life support. Italy and Spain are exhibiting worrying symptoms. Germany and France, supposedly the stable ones, are suffering from an economic scare. The European Union recently passed a measure to increase capacity for the “European Financial Stability Fund” to buy European nations’ domestic bonds. The 440 billion euro fund will have the authority to buy sovereign debt in the secondary market, meaning it could absorb discounted government bonds from banks and investors. The indication is that the European National Bank has bought so many government bonds that buying more has a negligible impact.
The “developed” economies are imploding, where do we go from here?
Our generation will be defined either by following the trend of non-resilient investing and plundering our remaining share of the earth, or by creatively breaking out of our profit centered vacuum and pioneering sustainable, resilient development for profit and people.
Thankfully for me and my future children, there is still icing to be had in this world, and I want to have it the right way. Starting in Panama.
Panama is classified by the World Bank as an upper-middle income economy.
|Year||Panama’s Real GDP Growth %|
|2009||3.2- Global Economic downturn|
The detailed numbers pitch for Panama comes later; the general pitch is simple, to my peers:
We still have an opportunity to grow the right way. Look at your business, do you really want to build another Wal-Mart? Investors, do you really want to fund companies that do not clearly have a plan for sustainability?
America is on life support because of our traditional way of conducting business. Can your business processes deliver a strong profit and autonomously operate in harmony with the community you live in? The World is asking.