Issue link: https://read.dmtmag.com/i/32232
36 • JUNE 2011 • WORLD FENCE NEWS I have been asked to take a look at the “ever-changing landscape” of our lives, whether business or personal, to see if we are on track to continue re- covery as we go through 2011. Are the “headwinds” so strong that we will stumble and retreat? A daunting ques- tion, to be sure, but allow me to ob- serve and perhaps offer a thought or two. On the domestic side, the first im- mediate hurdle of keeping the govern- ment from shutting down on a short-term basis has recently been averted; however, you can bet that there will be a more prolonged battle forthcoming when Congress goes to work on the 2012 budget. Issues of interest to both major po- litical parties, as well as the Tea Party, THE HUMAN LINK by Jim Lucci Management Motivational Associates A look at our ever-changing landscape will lead to some long battles as they attack budget cuts and attempt to take steps to close the huge deficit. But, first, there is the issue of needing to increase the nation’s $14.3 trillion debt ceiling to allow the gov- ernment to borrow money to fund the enormous deficits, targeted to be reached on May 16, 2011. (The press deadline for this month’s issue of World Fence News occurred before that date, so the outcome is known to you by the time you read this.) The Republicans are expected to demand concrete steps to slow the growth rate of entitlement spending in the future (i.e., Medicare, Medicaid, Social Security, education, etc). Un- fortunately, both sides will refer to needed “spending cuts” on entitle- ments, making the process harder. As I see it, the next major hurdle will be the addressing of the Federal Reserve program of buying Treasury Bonds (QE2) which is scheduled to end in June 2011. Has the economy improved enough that by removing the “crutch” the economy can continue to make steady improvement, or will the economy, particularly the housing market, turn soft and thus drag us back down into a recessionary atmosphere? Another issue, of course, is the continuing price increases in oil and gas, as well as food; not only is this in- flationary, it is a major deterrent to businesses in hiring people. Recently, many CFOs say that they will hire when revenues increase; about 50% of North American chief fi- nancial officers say it would take a 20% boost in their company’s rev- enues before they’d seriously think about hiring new employees, accord- ing to a survey by Deloitte. However, CFOs estimate that growth will top out at about 8% this year. There is a disconnect between many CFOs’ growth forecast and their hiring outlook, says Sanford Cockrell III, national managing partner of De- loitte’s CFO program. In addition, there also is the risk of a potential rise in interest rates, which could impact housing recovery, thus stalling the economy and possibly re- igniting a recession situation. On the global side, the Middle East and North African civil unrest is still a major consideration for us, de- spite lulls of front page news. Besides fighting wars in Iraq and Afghanistan, how long and to what extent is our in- volvement going to be in Libya and at what price? The cost of the aforementioned confrontations have a huge impact on our economy already and, quite obvi- ously at this point, as it stands right now, our grandchildren and our great- grandchildren are going to “reap” the cost for years to come. Then, there is the matter of the Eu- ropean Union raising interest rates and having to monitor countries such as Greece, Spain, Italy, Portugal and Ire- land, to see if they will require further assistance to keep their respective economies afloat along with others who might need assistance down the road. Superimposed on all of this is the tragedy in Japan. Aside from the earth- quake, its many aftershocks and the tsunami devastation, there is yet to be realized the long-term effects of the ra- diation release at the nuclear reactors in their devastated areas. The concern over radiation has al- ready affected some Japanese food ex- ports, and it is certainly something to be monitored. While at this time certain food- stuffs are considered safe, certain continued on page 38