The New Economy – A Brief Outlook

Preventing Destructive Competition

Most important Rule : “Never allow your customers to compare apple to apple, you will create destructive competition and will erode your profits until you cannot survive.”

You need to identify what is “Horizontal competition” and “Vertical Competition”.

Horizontal competition is having a common product like ice cream but based on different brands, different pricing, and different flavors to separate yourself from the competition.

Vertical competition is destructive competition where the customer cannot identify your product from your competitor’s causing you to lose control which will result in loss of pricing.

The highest ROI can be achieved from determining Demand before Supply, where with today’s high rent and manpower costs, nobody wants to use the traditional methods of manufacture of producing an oversupply and causing a loss of price, not maximising resources.

Fishing in the New Economy

The New Economy is a Knowledge Based Economy, where survival means you need the knowledge of the markets, a lifelong learning experience for education and never stop trying to achieve success.

It does not matter if you need to follow the traditional path of getting a University Degree, what matters is you learn a skill to make a living, and be equiped with the knowledge of markets to ensure your survival.

Never go in blindly without doing a bit of research, find out the costs of acquiring the skill, the potential of it’s marketshare or earning potential, that is the basic skills of an entrepreuner.

Always find out from the competition and it pays to diffentiate your products or services within a radius of about 2 km, the consumer will always buy from the lowest cost unless it is a service you provide.

First mover advantage. Normally those who start a trade early will have an advantage based on location, never go head to head with destructive competition, you will always lose in the end.

In business profit is always the basic motivation factor and if you can sell less to earn more, why will a manufacturer favour another who have to sell even higher quantity to earn the same profits you earn.

It is always connections or Kuan Si that will get you favourable terms with your expertise. If not why would someone will give you business and let you earn money? Unless of course you got a lot of money.

Gone are the days where only profits or money is the only motivating factor, there are social causes as well. Others maybe the connections it brings, without a knowledge of the markets, you can forget about Fishing in the New Economy.

Information on local demographics, lifestyle and Incomes are the Big Data of the New Economy. You can get great insights by looking at financial data or statistics or sampling, it will give you great advantage over identifying trends before the full impact is felt by others.

Determining Demand Before Supply

Nobody use the traditional methods of manufacture which will cause an oversupply and a drop in price.

Every manufacturer will now determine Demand first by taking orders based on a selling price which would have factored in his costs before Supplying the goods at a predetermined future date.

Therefore Demand will meet Supply to meet the highest ROI possible. Characteristics will be smaller orders at a more frequency but profits will not be eroded.

This helps the Global Economy as profits are guaranteed and many people will be willing to invest. Indirectly it will also create jobs for many people and there will be increments in salary when more profits are re-invested.

Knowing Market Dynamics

The entire global economy is like musical chairs, each country sitting on a chair with a role until it upgrades itself to another seat.

Understanding Macro and Micro Economics, can you tell the difference between domestic markets and overseas markets?

How interbank interest rates affect currency markets and the cost of money?

Hot money inflows will always goes to the most transparent economies which gives the highest ROI.

Domestic and Foreign markets, it is still Location, Location and Location

That is why you must be very familiar with the local demographics, the population, their lifestyle and their habits so as to identify the Demand and Supply of any goods or services.

It will teach you why within a certain walking distance of eg 2km if you start another shop selling the same goods and services, chances is you will not make any decent profits unless you are able to create horizontal competition.

Can you differentiate the same hairdressing services? An Indian shop charging $8 per haircut, a Fashion saloon charging $16, a Haircut chain charging $10 and another charging $3.90? What will happen to this location when correction occurs?

The Framework of Problem Solving

A person can only buy 2 homes in his lifetime, 1 to stay, another to rent out. Beyond that, he will have to pay increased capital gain tax. Rich people who can buy numerous homes should put them in a Holding company, and enjoy Tax consessions.

There should be a compulsary contribution from your salary to your retirement fund like CPF, which can be utilised for housing and healthcare.

Affordable healthcare can be achieved with insurance, and the separation of the business of providing advice and the dispensing of medication to get the lowest cost possible.

Insurance is a business of pooling of resources to solve a need. Money collected is pooled, excess monies are reinvested to get higher returns, where mortality rates and statistics determine the claims, so even expensive healthcare can be even covered if the public participates.

Retail Banking should be separated from Investment Banking based on Risk Taking to ensure stability of the Banking System where deposits are guaranteed but not risk taking.

The New Economy is a Knowledge Economy and everyone should be taught the pathway to success.

A lifelong learning experience is necessary which means you do not necessary have to get a University Education to succeed, and in your lifetime you may change your job but do not have to worry about finding a new job.

There should be Social Enterprise and Non Profit to give a helping hand on retraining and those who falls through the cracks, and the government’s responsbilty to contribute towards it.

As every country is a member of the United Nations, there will be funds from World Bank/IMF especially on Social engineering and Non Profit where every dollar contributed by governments will be matched without repayment based on needs.

But first every country needs to first endorse it and every country needs to have equal rights to have their voices heard, the end of wars and weapons of mass destruction, then peace and prosperity will prevail.

The Creation of Digital Money

Money have to be backed by Gold, or it will become Banana money, and massive inflation will cause it to lose it’s value very quickly because of loss of confidence.

QE is a temporary fix for the domestic economy as it depegs the value of the currency to Gold, causing a devaluation of the currency due to the printing of money.

The effect will be the a drop in currency value which will translate to cheaper exports but more expensive imports. It should not be used as a permanent fix as long term it will affect the debts market and your bond yield will start dropping in price until nobody wants to buy your debts.

The mechanics of Present and Future money. Inflation will help fuel asset appreciation and over the long term, money will depreciate in value but assets will appreciate. 

Due to wages not able to keep up with inflation, your future earnings to buy assets will be greatly reduced. Something needs to be done to address this issue for the salaried worker. Our children needs a future where their purchase of their homes need to be calibrated for affordability according to their future income.

Based on inflation of 2% yearly your home will increase in price by 200% in a hundred years but the increase is more acute. Do you think your children’s salary will increase by the same amount? Sadly No.

Everybody needs Oil now for energy and do you think Oil will last forever? At about US$100 per barrel will it raise to US$500 in fifty years time? Nobody can then afford it for cars anymore but aircrafts. By then we will develop Nuclear Fusion energy.

Money is used as a Tool to efficiently allocate resources. Do we need physical money in future? No. We can create Virtual money. Sometime in the future when we reached a Perfect Economy we can even have Virtual money, then No money at all when we do not need to allocate resources anymore with God as our supplier of all our needs.

Before you start clamouring to buy your house now consider this fact: Can you afford to pay your mortgage with your future earnings? What have you done to protect your future earnings?

You need to create the Climate and the Environment for Investments. If everyone in the Global economy perceives that there will not be a recovery or growth will we have future investments?

In a New Initiative without the Federal Reserve printing money, there will not be inflation or hyper-inflation, there will not be a depression or a recession, because the New World uses Digital money backed by God’s Technologies so we can use as much as we want without Governments suffering the ill effects of over printing money. The entire world will be run by the United Nations with Jesus controlling it.

So there is no Shortcut to Success. We need to solve all the problems of the Old Economy, institude reforms and bring confidence back again.

Live within your means. Never overspend.

In order to achieve Financial Success in future, you got to live within your means and never overspend. You need to have a percentage of your Income which you can save monthly to invest in yourself to get passive income. If you are living from paycheck to paycheck you are locked in the poverty cycle and can never improve your lifestyle.

Author: Gilbert Tan TS

IT expert with more than 20 years experience in Multiple OS, Security, Data & Internet , Interests include AI and Big Data, Internet and multimedia. An experienced Real Estate agent, Insurance agent, and a Futures trader. I am capable of finding any answers in the world you want as long as there are reports available online for me to do my own research to bring you closest to all the unsolved mysteries in this world, because I can find all the paths to the Truth, and what the Future holds. All I need is to observe, test and probe to research on anything I want, what you need to do will take months to achieve, all I need is a few hours.​

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