In the continuing review of last year’s Home Improvement Summit the next topic that was covered was the state of the economy and what is expected to occur in the next few years.
To present on this topic we had Dr. Robert Genetski, who is one of the nation’s premier interest rate forecasters and investment advisors, providing insights to economic, financial and investment matters. In the early 1980s, he correctly forecast that tax cuts would end the nation’s economic malaise by boosting productivity, reducing inflation and interest rates. Dr. Genetski has served as Senior Vice President and Chief Economist for a major Midwest bank and headed asset management, investment research and investment banking operations. He has taught economics at several major universities and served on numerous boards of directors.
The four primary doctrines of the economic theory he subscribes to, Classical Principles, are:
- Low tax rates
- Free markets
- Protecting individual property rights
- Stable prices
Over the next year he expects the following economic changes to take place:
- A sharp increase in total spending (6-8%)
- The recovery of the auto market (12-13 million units)
- A slow improvement in housing activity (800 units)
- The investment and commercial real estate sectors will remain weak
- There will be a scarcity of credit which will lead to further government borrowing
- There will be some credit relief as the economy recovers
In order to maximize the success of your business in 2010 and beyond, Dr. Genetski is recommending the following:
- Prepare for a recovery in sales in 2010
- Prepare for ongoing cost containment (higher taxes, rising energy costs, tight credit, etc.)
- Recognize potential future inflation
- Avoid bonds, fixed price contracts
- Develop close banking relationships
- Monitor the Fed’s behavior
Should you have any further questions for Dr. Genestski you can e-mail him directly.