The only important factor in increasing productivity is the desire for people to work, create, and take risk. When attitudes change such that we demand compensation in excess of output, the inflation spiral begins, and if these attitudes persist, real economic growth can become negative. The interesting point here, is that this subjective factor, the most important to real productivity gains, can not be measured.
Are attitudes changing, do you and I demand more wages for the same, or less, work? It is interesting that as strong as the economy is, there is an increasing bearish attitude, and not just about the stock market. I hear speculation of an imminent recession nearly everyday now.
So you have to ask yourself, why is AG raising rates? To combat inflation and prevent a recession, or to attack the psychology of envy? After all, people typically do not demand an increase in compensation when facing a possible recession.
The latter question is an important consideration when deciding whether you should be invested in CNXT. In an environment of rising interest rates in a strong economy, where do you want to put your money? I want to be in companies growing 40% to 100% a year, in sectors that are growing at the same rate or faster. As bubble headed as this may sound, this means telecommunication and Internet related companies.
(The above doesn't mean that cash won't be taken out on occasion as the fool public bids the price of good companies to insane levels.) |
