Here is an interesting section of a newsletter I received from cozahost.com that I thought was worth sharing here.
It is a fact that the global economy is in a nose dive. Hundreds of thousands of people will loose their jobs worldwide. Everybody is saying so. It must be true. The end of the world is nigh.
So, what are we to do? Duck our heads, huddle together and point our backs to the wind the way penguins do in a snow storm? Stoically plod through our daily lives until, at last, the bell tolls for us?
The financial equivalent of the penguin strategy is to save: Cut costs. Close factories. Fire staff. Put money in the bank. Cut advertising budgets. Shut down your web site. Close shops. Crawl under the bed.
In other words: duck. Like a penguin. Excuse the non-pun.
Now, to all the readers of penguin persuasion, I mean no disrespect. I understand that, given the fact penguins have no hands, no tools, no language and little intellect, ducking is probably the most sensible strategy available. Us humans on the other hand, have a little more going for us...not least of which is a brain that can be used for thinking. (Most of us anyway)
Consider this: A bank in the USA (Lehman Brothers) goes belly up because it took bad risks by lending money to people who could not afford it - people living today with tomorrow`s money. Simply put: the world consumed too much for too long.
Because that bank owed money to other banks, who owed other banks, it had a domino effect and all of a sudden we were on the brink of a financial system melt down. Remember: we are talking about banks and companies with more assets than all the products and services produced in South Africa in a YEAR.
However: none of this crisis exists in the real world. No cities were blown up. No factories exploded. No people died. An apple is still an apple. The world is still the same.
It is the global financial SYSTEM that is in big danger. Not the world itself.
Penguins do not defeat the storm when they huddle down - they wait it out. If the storm goes on long enough all of them will die.
Huddling down is only a viable strategy if you know for sure you can outlast the storm.
This financial system failure is the same. Instead of a gradual correction over a few years, it became an overnight crisis because everyone went into penguin mode: Nobody wants to borrow money. Nobody wants to lend money. Nobody wants to trade. Nobody wants to invest in production capacity. Everybody wants to huddle. We have an instant, global, financial ice age...and companies are starting to freeze to death.
So, gentle intrepid reader, what are we to do?
The SYSTEM was (and is) flawed. A correction was (and is) inevitable, inescapable. But you and I, we are not multi billion dollar companies - and yet we are still directly affected by the problem. Ordinary people loose their jobs. Demand for products and services decline rapidly.
Remember: the world did not change: we still have to mow our lawns, cut our hair, brush our teeth, eat a couple of times a day. Life goes on.
So, what does this mean?
It is our ability to produce things that guarantee our financial survival. The formula is still simple: make things people want and sell them at a profit.
The better, faster and cheaper we can produce the products (and services) people need, the more successful we will be. While the rest of the world is huddling and praying they can outlast the storm, we must invest in our ability to produce. We can search out new markets. We can invent new products and services. We can realize that the world is still the same, but the rules changed. The landscape is different. Working for a US$ 600 billion company does not guarantee your financial security: your ability to produce does.
Now is the time to invest your time, your energy and your money into your ability to weather this storm and to surface on the other side leaner, meaner and fighting fit - ready to take advantage when this storm passes, as it surely will.
For us, this is an opportunity.
But for the penguins...this is an extinction event.
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