Future

Cliff Beacham CPA | email cliffbeacham@cpa.com | California | Tel: (949) 813-1349

The answer seems to emerge as: One of the benefits of the USA was/is its middle class – the US’s own market was so huge that growth was inherent to the economy China's answer is to develop its own Middle class so that they can take up their own production. They could do this by the government floating (or printing) bonds to finance the purchases. The middle class will probably force a change in the governmental style of the country which the Politburo will resist. BUT, for China, democracy is on its way – they just don't know it yet During the next 7 years China will experince a decreasing rate of growth (following the Japanese pattern). Massive bankrupcies will take place as losses accumulate. By the year 2023 China will have a +/- 2% growth. There will be little opportunity for invertment and capital will outflow (most probably to the US as it is still the best place to invest) A pessimistic view includes: 1. Debt increase 2. Property price bubble 3. Equity ie stock prices will be restrained by their social policies An optimistic view sees imperfections in: 1. prices (not open market) 2. capital allocations in terms of political motives 3. ineffectiveness in resources and productivity (based in under utilized labor) So, China has a great need to restructure their economy, their Government and their country The UK will align its trade and industry with the USA whose market is huge and the Trump/May meeting started this (perhaps) Teresa May said “Our winning of the Cold War has enabled the emerging countries to start to challenge us - the people who led the fight for freedom - in ways that do not recognize what we have achieved by the fight for freedom - now they feel they can fight us, their benefactors” Both the US and the UK will develop their own robotic factories to meet the cost requirements at home. Work will be provided by: (i) workers 'supervising' robots (ii) looking after the elderly, the sick, the disabled (iii) providing services A certain number will be involved in the Construction industry. Factories will be established according to criteria not previously considered (Stakeholders instead of owners). Entertainment and tourism will increase in importance USA. The Government has recently shown that it will intervene to 'save' industries in the interests of the nation (Chrysler, GM). New industries will be built for strategic reasons rather than just economic. Only Government has the power to manage this effort. It seems that a form of cooperative national central planning has to be used to guide the economy. Government has to protect the country from threats foreign and domestic – economic as well as military threats. It's not that much of a stretch! An example of strategic industry is the South African SASOL which was established to produce oil from coal as an effort to combat sanctions against South Africa. It was not, at that time, an economic proposition but now it is a large international company manufacturing chemicals from coal Free Capitalism has to be modified. It does not have to be ominous – it's not fascist although it will be accused of it. The extremes of Right and Left wings have to come together in a cooperative way to solve the problem of balance. Extremes do not work; ideologies cannot dominate; there has to be compromise America also does not have an aging population – mostly due to the growth of their Latino population that are growing up to be American

Money hungry? Or wider goals?

Money cannot be the overriding objective - a balance has to achieved – a company has to fulfill a balance between the goals of its stakeholders. Companies look at themselves (unofficially) as families of workers/employees – this will expand. While profit should remain a goal there are other goals that should also be attained – a happy workforce, the continued survival of the company and stability for the future. Compromise has been sought between workers unions and management – this is just the forerunner of the future which will expand this philosophy countrywide, nationwide. We are not yet ready for Worldwide!

Robotics

Customers for the robot-manufactured products would be the 3^rd world countries – financed by the IMF or governments. This finance might be difficult for consumer goods

Future economy/society

It would help a lot if the US had a system of formal training in technical and mechanical careers – like plumbing, electrical and construction. This might add to the stability of the workforce through structure and regulation Informality and laisse fair has run its course and the result is the mess that we now have. Planning and control towards a happier, more contented life for ALL now has to be our goal - as a nation, as a world. We need government by the people for the people Chinese threat?: China has a capability strength and no place to put it! The US may encourage other emerging countries that will become China’s competitors Thank you for listening! PS The fourth world people just want to be left alone – they have lived like they do for thousands of years and do not seek to join in the bun-fight we call civilization. Eg: The Kurds, the Bushman, Kymer people living in the rice fields of Cambodia (also China), Tribal people generally, - they reject jobs, taxes, mortgages, cars, planes and farms, factories and office life. They have their own stresses!

Call Cliff at Tel: (949) 813-1349

The Future?