Monday, January 4, 2010

Gold will be the next bubble if we don't learn our lesson

The best feeling in the beginning of the year - this feeling of infinite possibilities that it brings. Nearly all have plans. We are all going to quit diving and swimming. Or pay debts and find a new job.

In general, these aspirations can be divided into two categories: things that we did and now want to stop doing, and those things that we did not do and want to start.

A cursory review of the last decade provides enough material in the "don'ts" in the business. After several years of existence of bubbles, excessive borrowing, weak monetary policy, the failure of management and banking crises, suggest a few New Year's decisions that, if we look more than a month, can be prepared for all of us a more stable financially and economically productive future.

Politics: spend less time on new laws and more to think about the best ways of spending taxpayers' money (remember: it means finding ways to improve efficiency, rather than increasing costs).

Regulators: do not invent new rules without careful analysis of their subsequent impact on small and large business.

Consumers: before you take the new debts, you must plan their actions in the case of a sharp rise in interest rates or unemployment.

Chief Financial Officer: before you borrow, think about how to deal with payments in a sharp rise in interest rates and reduction of reserves.

Fund Manager: If you see that the company pays too many, makes stupid acquisitions or should a dangerous strategy - talking about it and vote accordingly.

Executives of banks: it is necessary to draw conclusions about why all of you are angry. Need to perceive the words of the report on financial stability, the Bank of England ( "If your own costs would be 20% less between 2000 and 2008, the banks would create a £ 75 billion of additional capital, even more than was allocated for public sector period of crisis "). So it should address the issue of compensation, rather than wait until the policy will take further action.

Accounting: work for the benefit not only employers, but also investors who are trying to understand the data they provide.

Investors: If the reports seem too good to be true - so probably is.

The lessons we should learn, will be felt for some time. However, the existent and the danger from the influence of false conclusions: for the shares seems to have been detrimental decade, but this means that traditional forms of savings, such as gold, may be the next soap bubbles.

Speaking of bubbles, I was pleased to see that sales of champagne in some supermarkets rose by nearly 50% in December compared with last year. I think that we are entering a new year on a positive note, despite the recession. This is encouraging news, and I have just emerged a new promise: this year I'm going to drink more champagne. If the constraints on the budget will allow, it will Prosecco. Be Healthy!



Telegraph
January 3

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