#OWNR.LIFE with William Eastman

Given our episodes today, we hit on different aspects of price, the supply chain is another place to look because of the supply / demand issue.

Price, if we strip out all of the government distortion, is nothing more than a balance point between demand (people wanting to buy) and supply (how much of it is available).

Here are 4 things to track to determine the supply chains impact on prices.

Topics:

• Freight Costs
• Integrated Logistical Systems
• Congestion at the Pinch points
• Does JIT (Just In Time) really work or is it back to JIC (Just in Case)

Given our opening statement about the misuse of credit - making the cost of borrowing too low and hiding the moral hazard of taking on debt, inflation was built into their policies. This is also the major cause of economic bubbles.

So what happens when inflation gets out of control? The standard response and one of several tools is to raise the cost of borrowing. By raising rates you make the borrower think smarter about the hazard of the loan especially if the market is contraction. This logical response harms a number of individuals and industries as unintended consequences. It destroys the housing industry: construction, real estate, etc. and the home owner. Suddenly your home is worth less and the number you can buy it shrinks because it is now outside their budget.

In the United States we have raised the interbank rate to 3.75% and will increase it in 2023 to 5-6%. Now add the usual 3% margin banks place on top of what they pay you have interest rates at 8 to 10%. And that is for the best customers, imagine the impact credit card rates?

The forecast for 2023 is the global interbank interest rates will stabilize around 4.25-4.5%. This is a world-wide number and what will happen in your country will be different.

There are many ways of computing inflation, but the universal metric is a mixture of PPI, CPI, CCI, and employment.

The PPI is the Producer Price Index and it is a measure of the costs producers are paying to deliver the products and services the sell. Another valid metric is the PMI - the Purchasing Managers Index. It measures their confidence in purchasing more raw materials (production) based upon purchase orders they are receiving. Both is these are leading indicators - what will happen.

The CPI is the Consumer Price Index and measures what consumers are paying. It is based on a basket of goods and services and measures how each item changes over time. This is a real time indicator - what is happening. A companion to this metric is the CCI. It measures how confident are consumers, based on the CPI, they are about the future. It has a direct impact on their willingness to purchase anything beyond the necessities.

Unemployment is a trailing indicator and measures the impact of a downturn in manufacturing and series - if you don't have the work, you don't the employees. The reason most companies are reluctant to start here because of the costs of layoffs even though it is tempting to start here. Labor makes up about 30% of your costs and a controllable expense.

The global forecast is inflation will continue until 1st or 2nd QTR of 2023 before beginning a decline. But that assumes the government and their central banks make the right moves.

The last Economic Show we did was on November 11th and we discussed how government intervention distorts economies. The focus there was for any market economy to operate it has to have accurate information on price. The government's intervention distorts price and therefore making all of the decisions businesses and consumers make wrong - the creation of disastrous bubbles. Today's show will focus on what we can expect in 2023. We don't have a crystal ball or claim the power of prophecy. Rather we look at past behaviors of the people and institutions that shape economies and assume these approaches will continue. Never forget the past predictor of future behaviors is the past.

EPISODE 25 - THE GLOBAL ECONOMY The outlook is gloomy. Given the policies that have been put into place since the last recession, 2008-2010, world governments have kept interest rates almost at zero. That is the interbank leading rates which means if they place a traditional 3% margin on top of the loan, most business loans were artifically low. This meant credit was too cheap.

Also, because of excessive spending and building unsustainable sovereign debt, this contraction was inevitable. All of the factors are present for a recession: rising prices, unemployment, and declining GDP.

The only question is will be there a world-wide recession or isolated recessions bringing growth down.

Today I am wearing only the E hat - Executive.

Since I started on this journey over 43 years ago, the first 2/3's of my career was consulting with the C Suite (CEO, COO, etc.) on building a sustainable organization that could also achieve rapid growth. S11 E5 The Self Managed Organization

Once a business gets to a certain size these two objectives seem to be mutually exclusive. Based on that experience I built a collection of business rules that when combined created high performing, fast growth companies that had long futures. This is my story.

I have a different view of things than traditional media and consulting. The lessons we learned turning around a small radio station taught me two things: I love the industry, and it has no future. Loving the industry satisfied a need that was decades old. Answering the question of how do we bring corporate consulting to where it will have the greatest impact - small business? It was obvious the medium of audio, broadcasted globally, could reach the 375 million small business owners employing 57% of everyone in the private sector. Finally, after years of working on finding a business model and delivery method, I had the answer.

Radio, AM in particular, is a bandwidth without a profit model. The last 3 decades of syndicating political speech and automating radio stations were spent. What if we used the radio spectrum and the internet to niche the market and provide insights and tools critical to starting, growing, and exiting a business?

What if the radio was the plumbing bringing water to your house, and the water was consulting? This different approach is instilled in everything we do at IBGR. Our principles are to provide entrepreneurs with everything they need to build generational wealth and create jobs regardless of their geographic location.

Everything we do is demand-based; what is required to start fast and successfully, what is required to scale the business with growth that can be sustained, how does the owner achieve their end game. As serial entrepreneurs, we understand owners need to feel connected. All of us want feedback and control. We want instant response to decisions and the agility to implement. We want the ability to deploy resources efficiently and accelerate momentum to create quick wins.

At IBGR, we understand the relationship between the owner and their business, their investment and risks in this act of creation.

1. Clarity on the End Game. The Vision, Mission, and Values of the company are clear and enjoy universal commitment from the workforce. The real end game is what culture are you trying to create?

2. Line of Sight to Business Objectives. The yearly business Plan This is where your use of MBO is critical. Managing By Objectives requires everyone has a piece of the action, an expressed part of this periods business objectives.

3. Ongoing Feedback on Performance and Results Although on occasion this is feedback delivered by an immediate supervisor, to make this work feedback on their performance (progress and/or results) needs to be delivered by the system. Consider the 80/20 rule as a great place to start.

4. Scheduling and Performance Autonomy By emphasizing skill mastery and providing real time data, we expect people to act before being told. Because we know the individual or work group is competence and has accurate data to react on, we have minimize risk of uncoordinated activities.

5. Pay4Performance The only true measure of business performance is profitability, not revenue. It doesn’t matter how much money flows in; it is all about what is left in the cigar box. If it is true about you as the owner why should it be different with anybody else. Tie all of your compensation to how people impacted the amount of money left in the bank.

6. Share the load Get everybody into the game, the great game of business. Most people work in environments where they are forced to bowl with a sheet over the lanes. Imagine the only feedback you receive is noise without knowing how many pins were knocked down or where? And where do you throw the second ball? Why are you the only person losing sleep at night because the company is not performing?

7. Who Should Work There? I will make the case that an organization that has self-management as a goal taps into the natural yearnings of people; there is nothing unnatural here. Everybody, well almost everybody, wants to be successful and perceived as competent. This is driven by a hierarchy of needs that once met (not completely satisfied - just enough) the individual moves to a higher level - exactly what we are trying to do with the business.

8. What Is The Payoff The payoff is simple, to create the systems and processes to make self-management possible forces extreme levels of clarity and executives who can focus on their role - the long term health of the business.

Dominic Daniels Regional Vice President, NMLS & PrimeAmerica https://www.primerica.com/dddaniels&origin=customInvest

Segment 1 Dominic covers his journey from an enlisted airman in the USAF to becoming a wealth manager of individuals and business owners as well a successful business owner running a major investment practice

Dominic Daniels Regional Vice President, NMLS & PrimeAmerica https://www.primerica.com/dddaniels&origin=customInvest Segment 2 Dominic discusses his lessons learned from the early stages of being in business and lessons he learned growing his operation.