Navigating business and entrepreneurship has becone increasingly difficult. Not only do businesses have to be vigilent about disruptive technologies and market shifts that fundamentally change business landscapes, but now they must negotiate protectinist state policies, sanctiins and conflict.
There is a lot to process if you are a business owner or entrepreneur--or even a chief executive. Quite frankly the rules of engagement are changing right under our noses. But in a way, that is good. I am not suggesring the contingencies and conflicts are good. Rather, these massive changes unearth and uncover the actual.mechanism of our world system
They bring to our notice the discrepancies and inequities we formerly assumed were built-in and natural. Kind if like the invisible corrective hand we were all taught about in economics classes. Yeah, that was trash. Including the dubious concept of financial education. We are starting to see that interest rates are actually controlled by middle aged men with security clearances and preschool-aged grandchildren.
The contradictions of wealth and revenue become even more stark as we venture beyond the "developed world" into the trenches of emerging econonies that have been emerging for decades. Exactly when are they going to emerge? Generally, they are crushed under massive IMF and World Bank loans that set suicidal monetary policies. Oddly enough, many of these states are often the most endowed with natural wealth, human resources and room to grow. Yet they don't. Take Kenya for example, its IMF loan is set to obliterate average citizens and throw its economy (and society) into havoc. Yet Kenya, has a debt to GDP ratio at 68 percent, which lower than the EU average at 88 percent and only four points higher than Germany, which is at 64 percent. In fact, states must have a GDP to debt ratio of 60 percent to obtain EU membership, yet the IMF has set Kenya's benchmark at 55 percent, according to a Reuters report. How? Why? Maybe states like Kenya need financial education? Or maybe they are already very financially literate and that is precisely why they rejected the Finance Bill 2024. I am pretty sure it was the latter.
Just recently the IMF dispensed $175 million loan to Moldova, Interfax reports. A former Soviet state that has ambitions to join the EU. The irony of the loan, which promises to shore up the nation's budget is that it will be issued from the European Union which has an average debt to GDP ratio of 88 percent. Moldova currently has a debt to GDP ratio of 37 percent. While Greece, Italy, and France have ballooned out of control at 161 percent, 137 percent and 110.6 percent respectively, EUROSTAT repoted. Incidentally, Japan has a 264 percent debt to GDP ratio and aparently it is promising to invest in Africa.
...We live in exciting times.
The reason people needs financial literacy is because the numbers really don't make sense. One truly needs an entire course to explain why 1×1 is actually 2. Money is being made by people who have nothing, while those who have natursl resources, talent or manufacturing are left scraping up crumbs.
Case and point: Recently, Volkswagen partnered with EV carmaker Rivian, to the tune of $5 bilion. It is a company which has never made a profit since its inception. How does Rivian access "capital" to scale a business model that doesn't earn a profit? Venture capitalist fund companies with fiat, to win markets, without proven revenue models. Government contracts are awarded to only a handful of local businesses because of cronyism and the terms are too complicated or costly, preventing capital from circulating through the business community. And quite frankly, the terms of business loans require a pound of flesh for repayment.
Despite the massive EU and US debt, Business Insider Africa reports Egypt, Angola, Kenya and Ghana carry the top IMF Debt in the region. Perhaps developing countries aren't mired in debt traps as much as they are ensnared in monetary policy traps that send their economies into a cyclical tailspin. And if you will remember, Kenya's Debt to GDP ratio is only 68% compared to the Eurozone average of nearly 90 percent..
It's clear that there is quite another reality at play when it comes to business and wealth. And finally we can see it. Suddenly we understand what sanctions, monetary policy, and free market really means. A brief look at the Democratic Republic of Congo reveals a land rich in everything accept wealthy citizens. It's the same way in Latin America, Southeast Asia, West Asia and parts of Eastern Europe.
It is not that people in these regions do not understand money or wealth. It is that they do not have enough to do anything meaningful with it. It is that monetary policy, business law and opportunity is not engineered in their favor. They are also always nailed between regime changes, conflicts and predatory loan terms. Monetary policy can depress a country far longer than an $2 billion debt. The US itself has a $34 trillion debt coupled with a debt to GDP ratio of 129 percent, according to World Population Review figures. Poverty for these states vs "rich states" is man-made, like the paper fiat we exchange. Yes, their poverty is literally manufactured. So too is the wealth, built on specious ideas that leverage real land, resources and products from the hands of producers and into the hands of pretty printed-paper billionaires.
You can prove this theory in less than 60 seconds. Visit a forex website and check the daily rate. If my money is "worth" more than your money, then poverty is baked into the very currency you use. The money system and markets are making you poor. You can, (and probably should) be angry at the grumpy old men at your central bank for pushing decimal points around and printing money, because they participate in a wealth and money system that devalues your fiat and by extension everything in your country, including your labor.
For example, if my currency is worth 75% of a US dollar and yours is worth 50% of a US dollar, even if we work the same amount of hours at the exact same kind of job, I will always be 25% richer than you. If I invest at the same rate as you, I am still 25% richer. You're not failing because you need financial literacy, but because our currency is rigged. Could it be that stepping outside of a poorly engineered system might mean increased wealth as we see with Russia. It has just been upgraded to a high earning nation by the World Bank.
So, this ties into business. Business is not rocket science. But it does require a degree of pragmatism and diligence. But no amount of diligence and pragmatism can save a man whose worthy business is nested in an econonically depressed community or stagnant economy. He can have the product, the supply chain and the demand. But a consumer base in abject poverty cannot help him grow. The margins of success are anorexic. Longevity and scalability become a Hunger Games qambit. He must resort to subterfuge and corruption just to turn a profit.
By now it should be apparent. We live in a manufactured economy. The poor are engineered in the same way food scarcity has become a crisis--particularly in a world where farmers pour out milk and wine and burn bumper cereal crops by the ton.
But I do think we must get beyond the point of calling people stupid or lazy for not understanding an obviously rigged ponzi scheme. Many business and investment markets are the same; with local businesses trying to scale for years on end. When an old man can change the value of the currency in your hand, that is when you know it's time to change the game.
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