Small Business Boomers

Jeff Thredgold has been an “economic futurist” for many years. He is an entertaining economist (sounds like an oxymoron) and a professional speaker and he spends his time writing and talking about economics. Sounds boring, but he’s not. He says he’s the only economist who is a CSP (Certified Speaking Professional). I talked with Jeff last week to ask him about the future of the market and how the current economic situation will affect baby boomers.

Jeff’s newsletter, The Tea Leaf, has lots of insights about the economic situation. He doesn’t give advice or tell you what to invest in; he provides information and lets you decide for yourself. In December Jeff wrote a Tea Leaf article about Baby Boomers and the future economic trends, titled The Big Three. The Big Three are the three guaranteed growth industries of the next 30-40 years, courtesy of us Baby Boomers: financial planning, health care, and leisure/travel. Jeff said Baby Boomers have not saved aggressively enough, and that we Boomers need to plan for the reality that our biggest monthly cost may not be our mortgages, but health care premiums.  There is more in his article, which you should read.

Here is what Jeff had to say in our conversation last week:

The Panic of 2008. He’s been speaking up about the effect the negative media has had over the last few months.  He said Fed Chairman Bernanke and Treasury Secretary Paulson were partly to blame for their “the sky is falling” overreacting, but he said the media negativity contributed to the worst holiday season in 40 years.  The “Panic of 2008″ might not have been so bad without the emotional declarations of policy leaders and the negativity of the press. Don’t be surprised to see the media turning around soon, saying,”this is a great time to buy, start, build….”

Main Street Recession. The current recession (which started at the end of 2007) is a consumer-led recession and some 40-43 states are in recession.  Over the next few months, we’ll see the effect of the $825 trillion dollar stimulus, and Republicans will be pushing for more tax cuts.

Inflation or Deflation? I asked Jeff about a recent column in which he said it’s difficult to tell whether we are going to be in an inflationary period or a deflationary period.  He said 2008 saw the lowest increase in the consumer price index since 1954 (a period of 54 years, by the way).  The Fed, he said, is more worried about deflation, which is the reason for the lowering of interest rates over the past few months  (I was told that you can get a home loan for 4% and a business startup loan for 6%. here in the Midwest)  Inflation would mean people are buying again, and it’s easier to deal with inflation than deflation.

Finally, Jeff said we are in a time of enormous challenge and enormous opportunity.  There is lots of opportunity in distressed real estate, for example.  He said over the next year there are people who will be seizing opportunities and doing very well.  I was encouraged by his optimism.

Check out Jeff’s website and sign up for The Tea Leaf.

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