We can use the pandemic as a great teacher of economics. Around the world and within every country different approaches have been used to deal with the virus. This gives us an unique opportunity to examine the impact of government intervention on business.

Topic 1: What Happened? -governments seek power and use fear and dependence to gain it -government policy is double-entry bookkeeping: for every addition to -government power has a corresponding reduction in individual freedom -government views people in two groups - independent and dependent; take -from the independent to give to dependent until there are more more horses in the wagon than pulling it -in business there is no Pause in costs, just revenue

Economics were not created or discovered. Adam Smith was the first to analyze it in a systematic way and called it capitalism. Other than a few local examples, most countries were involved in some form of mercantilism where exporting was good and importing bad because of the transfer of wealth.

Topic Two: Development of Economic Models

-Adam Smith was a philosopher first and an economist second -First work was on the morality of markets -social order is based on freedom - how do 'good' societies act vs bad -three basic economic models: market, command, and mixed

Exactly what is the invisible hand? It is the unseen forces that move market based economies. Through individual self-interest and freedom of production and consumption, the best interest of the great society is fulfilled because bad actors are nullified.

Topic 3: Market Based Economies

-behavior based, not intentions -voluntary transactions require accurately and timely information - price: the interaction between supply and demand -governments role: system structured to penalize lying, use of force, and failure to honor contracts -intervention beyond here (mixed economy) leads to short-term inefficiencies and long-term destruction

Topic 4: Command & Mixed Economies central government makes all economic decisions; usually supply based and price is cost plus good at removing inequities by leveling down (except for government) creative destruction or even continuous improvements impossible; monopolies cannot heal themselves Mixed Economies represent less hubris of the elite, but its still there

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Topic 1: The Business Cycle Expansion / Recovery Boom (Positive Bubble) Recession / Cleansing Depression (Negative Bubble)

Staying at sea the transition between expanding and contracting waves are called troughs and crests. At the end of a contraction the economy is in the trough and at its lowest point, the crest represents the economy's highest point. The other issue is understanding why troughs and crests happen - we will discuss the formation of bubbles and the corresponding inflection points in Segment Three.

Topic Two: Expansions & Contractions

• Prices and Demand have changed direction
• Producer Price Index (PPI) and Consume Price Index (CPI) has changed direction
• Availability of Credit has changed
• Employment is a trailing indicator

Topic 3: Inflection Points & Bubbles Price < Value (the value of the product / service) - beginning of expansions Price = Value - expansion midpoint and the beginning of the positive bubble Price > Value - expansion is exhausted and contract is about to start - the bubble has burst Price = Value - the lack of demand during the contracting drives down prices to low margin, break even, or even a loss - the beginning of the negative bubble

Topic 4: Reading the Tea Leaves Stock Market Performance - which sectors are smart investments? Availability of Credit PPI and CPI

EPISODE 9: INFLECTION POINT AND BIZ CYCLE STAGE OF EXPANSIONS Based on Episodes / Podcasts 6 & 7, we are starting at the darkest point in an economy. Nobody is sure if the worst is over or is there more disgust. It is critical for the Biz Owner to have the courage to move early before everybody else.

Topics Inflection Point - The Trough - lowest point of previous cycle and starting point for the next cycle Biz Cycle Stage - #1 New Opportunities

Topics Supply Exceeds Demand Suppressing Inventories and Price Jobless Rate declines / Labor Participation bottoms out PPI (Produce Price Index) begins to increase CPI (Consumer Price Index) bottoms out / CCI (Consumer Confidence Index) has bottomed out Inflation has bottomed out / Credit begins to become available

(1) Existing Market with Current Offer,

(2) New (Adjacent) Market with Current Offer,

(3) Existing Market with New Offer, and

(4) New Market with New Offer. Given you are starting early on the expansion - go after your market first.

Topics

​Existing Customers

Share of Wallet with the current mix of products and services? Can we increase share of wallet with our current offer? Do we have to upgrade our current offer (product & service improvements) to increase share of wallet? Do we have to introduce new products and services to increase share of wallet?

New Customers (within Existing Markets)

What new customers (like our best customers) should we pursue with our current offer? What new customers should we pursue with an upgraded offer? ​What new customers should we pursue with a new offer?

Your decision to move now is both courageous and enlightened. Everybody is flat on their backsides or out of business. Grow what business you have left, get customers back you lost, claim the orphans, and then take business from the competition - happy hunting.

Topics Anticipate Demand and Expand into Current Markets with Current Offer

The purpose of this show was to present a method of understanding what is happening in the economy and series of steps to ensure survival over the next 9 weeks. We are your single, one stop source for business success, period, end of story.

Midpoint – True Value = Market Price: Supply Equals Demand with Rising Inventories and Fair Price. This location shows expansion has reached stasis – Demand and Supply are in rough balance, the current market price for a product or service represents fair value. Up to now the price / value proposition was unbalanced with products and services undervalued or not commanding a price that represents true value because of excess supply / low demand. However that is changing. Quickly Demand will Exceed Supply and drive up prices. This leads to inflation and diminished buying power of the currency.

Additionally the market begins its bubble phase because the higher prices will be interpreted as a signal to make more and soon supply will exceed demand. We worry about that later.

Topics Inflection Point - The Midpoint - Halfway though the Expansion

Topics Supply & Demand are in Balance with Rising Prices Jobless Rate declines / Labor Participation increases PPI (Producer Price Index) is increasing at an accelerated rate CPI (Consumer Price Index) is increasing / CCI (Consumer Confidence Index) is reaching or exceeding previous expansion levels Inflation is in check / Credit is affordable and available

EPISODE 15: BUSINESS OPPORTUNITIES AT MIDPOINT Last show we covered the four options for increasing business, here is a quick review: (1) Existing Market with Current Offer, (2) New (Adjacent) Market with Current Offer, (3) Existing Market with New Offer, and (4) New Market with New Offer. Given you are starting early on the expansion opportunities - go after your market first.

Topics YOUR MOVE BEFORE SUPPLY = DEMAND - Anticipate Demand and Expand into New Markets with Current Offer.​ You are expanding into adjacent markets and increasing the size of your customer base. YOUR MOVE WHEN DEMAND EXCEEDS SUPPLY - Meet the Demand and Expand into Current Markets (all of your customers old & new) with a New Offer. Understanding new needs generated by the increased prosperity, expand your offer to increase market share and share of wallet.

Topics YOUR MOVE BEFORE SUPPLY = DEMAND - Anticipate Demand and Expand into New Markets with Current Offer.​ You are expanding into adjacent markets and increasing the size of your customer base. YOUR MOVE WHEN DEMAND EXCEEDS SUPPLY - Meet the Demand and Expand into Current Markets (all of your customers old & new) with a New Offer. Understanding new needs generated by the increased prosperity, expand your offer to increase market share and share of wallet.

You are at the beginning of the danger zone. Very soon demand will exceed supply driving of prices and bringing new competitors into the market. This is your opportunity to improve / upgrade / enhance your offer and fill in the missing elements. Act fast to gain market share for the new offer and then shift focus on consolidating this as the new base. You know this is the beginning of a bubble and like all bubbles they burst. The art is knowing when to take your money off the table.

Topics New (Adjacent) Market with Current Offer You have now regained all of your previous lost customers, regained share of wallet with current customers, and replaced weakened businesses with their customers - expanded your current market Now is the time, or earlier, to move into adjacent (new) markets where the customers are similar and so is the offer Existing Market with New Offer What new customers (like our best customers) should we pursue with our current offer? Based on decisions made during the contraction, role out your new offer.

At The Top – True Value < Market Price Supply Exceeds Demand with Excess Inventories and Inflated Price. This is the opposite of absolute bottom, the economic cycle has reached its peak and now the weight of the wave exceeds its ability to maintain momentum. All the signs are there, soaring prices, inflated money, easy credit, expanding inventories, and many new competitors – the wise realize the party is about to be over – the bubble is about to burst. As a business owner it is time to leave the table, cash in your chips, and get ready for heavy seas.

Topics How long to stay in the game?

Topics What factors should gain my attention? What actions should I initiate? Make Managing Cash Flow #1 Priority before the Crest Analyze all spending decisions from the expansion and eliminate the nonessentials Focus on minimizing fixed costs Get a Line of Credit and don't use it or get it down to zero Get clean with Accounts Payable and renegotiate terms Bring all Accounts Receivable under 30 days, factor the accounts, or offer terms to close out delinquent accounts

Topics Pigs Get Fed, Hogs Get Slaughtered

Topics Make Managing Cash Flow #1 Priority after the Crest Review accounts with customers to improve the relationship ​Lean up the operation - reduce variable costs, reduce your cycle times to design>build>deliver Pass on cost savings to customers

EPISODE 21: WHAT DOES THE LAST UR-RAH LOOK LIKE? At The Top – True Value < Market Price - Supply Exceeds Demand with Excess Inventories and Inflated Price. This is the opposite of absolute bottom, the economic cycle has reached its peak and now the weight of the wave exceeds its ability to maintain momentum. All the signs are there, soaring prices, inflated money, easy credit, expanding inventories, and many new competitors – the wise realize the party is about to be over – the bubble is about to burst. As a business owner it is time to leave the table, cash in your chips, and get ready for heavy seas.

Topics Never forget the reason why this will get out of hand is 2 fold; (1) government intervention in the market, and (2) the time lag between customer demand and the ability to build supply.

Topics Make Managing Cash Flow #1 Priority before the Crest Make Managing Cash Flow #1 Priority after the Crest ​When the recession becomes obvious - Sliding Down the Wave

Topics Getting everybody ready by negotiating earlier for the deals you'll need to survive

Topics

YOUR DESTRESS MOVE – Focus on Cash Flow Management, Lean Up the Organization by Reducing Fixed Costs. YOUR NEXT NEXT MOVE – Focus on Cash Flow Management, Lean Up the Operation by Reducing Variable Costs and Lower Prices to Existing Customers with the Cost Savings.

Topics Assessing your fragility

Topics What does bursting bubble look like?

Topics Fixed Costs - Inventory, Accounts Payable, Cost Saving Initiatives

Topics Variable Costs - Materials, Labor, Defects, Time, Cost Saving Initiatives

Topics GDP (Gross Domestic Production) - World up, US down IP (Industrial Production) - World/US down

Topics CPI (Consumer Price Index) - World/US up Core CPI Inflation - World/US up PPI (Producer Price Index) - World/US up

Topics US Exports - World/US down US Imports - World/US down

Topics NER (Nominal Exchange Rates) - World/US slightly up Real CPI Exchange Rates - World/US down Real PPI Exchange Rates - World/US slightly down Real CCI (Consumer Confidence Index) Expectancy - World/US slightly up