Small Business Blog from Atlantic Canada

We are living in one of the most unsettling periods in human history. Businesses are being nationalized. William Gale, an economist at the Brookings Institute, along with Fed Chairman Ben Bernanke suggests that while the recession might end by the end of the year, sustainable recovery may take a while. Perhaps the greatest economic lesson we will learn is that we cannot spend our way out of a recession. People cannot spend what they do not have. And this goes for governments too. Speaking of people, when they find themselves on path to poverty losing everything they have worked for all their lives, I guess rationality goes out of the window.

If a risk has already occurred in your business and you are looking at solutions (i.e.; reacting to the risk), then it is an “issue” - a “problem”. It is no longer a risk. Risk is the possibility that something good or bad is likely to happen in the future. So when a risk has occurred, there is no such thing as probability then – the risk has turned into an event. Risk management is a continuous and iterative process in which you are constantly evaluating your good and bad risks, its probability of occurring and plan what you would do if the risk occurs. If you have not thought about a particular risk and it occurs, then you will immediately switch into a reactive mode and take decisions that you have not thought through. Risk management is all about being proactive. But do not undertake a risk management strategy exercise without a strategic plan in place.

Who is John Galt? If you recognize the question, you have no doubt read Ayn Rand’s Atlas Shrugged. This question portrays a sense of helplessness and despair in her novel. With each passing day, did you not notice the things that are being done in the interest of the “public”. Are we traveling down the same path as mentioned in Rand’s book? The similarities are striking. New Brunswick seems to understand that where the Premier Shawn Graham promises to lower personal income taxes to 9% and 12%. I say abolish taxes totally with immediate effect.

How would you react when you notice a bunch of sharks keeping their distance from a bloodied meal? Imagine in your mind’s eye: speculators and hedge funds (sharks) circling around the meat (the US dollar), but still apprehensive to go in for the kill. After all we are talking about the world’s largest economy, albeit a one on crutches. Why haven’t we seen a hammering of the US dollar as we have seen in past crisis across the globe? Being the vehicle currency, the US dollar enjoys dominant share in central banks’ reserve portfolio worldwide. While there are some countries who have reduced their exposure to the US dollar, no country has given up trading in the US dollar altogether.