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How Average Are You?

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  1. How Average Are You?

  2. How Average Are You? Believe God exists (80%) Larry, Mo, Curly (& Schemp) (89%) Legislative, Judicial, & Executive (20%) Does NOT have a college degree (65%) Take a bath or shower (10.4 minute shower, daily) Own stocks?( 50/50) Live in same state (60%) Have 2 children Eat 3 lb’s of PB per year Do NOT floss regularly (90%) Exercise once a week Recycle (50%) Shop At Walmart at least Annually (80%)

  3. Selected “Average” Statistics Drinks 55 gallons of soda a year Does not wash his hands properly after using public restrooms Throws away more than 100 lbs of food per year 25% of Americans over 18 abstain from alcohol for life 69% of Americans go to the movie theater at least annually

  4. The Average AmericanFederal Reserve Survey of Consumer Finance 2001 2004 2007 2009 Median Family Inc $42.2k $44.3k $50.2k $49.7k College Degree 34.0% 36.6% 35.3% Cred. Card Bal. 44.4% 46.2% 47.8% 43.2% Amount of Bal. $2.0k $2.4k $3.0k $3.3k Of those 45-54 Own Ret. Acct. 63.4% 57.7% 68% 68.2% Amount in it $51.1k $61.0k $81.4k $73k

  5. Percent of Workers by Total Amount of Retirement Savings 2011 Source: Employee Benefit Research Institute, HS Dent Research

  6. Percent of Workers and Retirees by Total Amount of Retirement Savings 2011 Source: Employee Benefit Research Institute, HS Dent Research

  7. Percent of Workers and Retirees by Total Amount of Retirement Savings 2011 Source: Employee Benefit Research Institute, HS Dent Research

  8. Business Development, An ‘S’ Curve Analysis

  9. The S-Curve Innovation Growth Maturity 100 90% 99% 99.9% 90 80 70 60 50 50% 40 30 20 10 1% .1% 10% 0 Percent Adoption

  10. The Industry Life Cycle

  11. The S-Curve in Cars Percent of Urban Households 1900 1907 1942 1921 1935 1914 1928 Assembly Line Installment Financing 90% Urban Adoption Cars only for the Rich Model T Design

  12. Mobile Phone S-Curve Innovation Growth Maturity 100 90 80 70 60 50 40 30 20 10 0 90% 86% 2007 82% 2006 73% 77% 2005 63% 2004 58% 50% 2003 Percent of Households 2002 47% 2000 13% 10% 1995 2% 1% 1990 2001 1994 2008 Time Source: Forrester, Census Bureau

  13. Internet S-Curve Innovation Growth Maturity 100 90 80 70 60 50 40 30 20 10 0 83% 74% 79% 2009 73% 2007 71% 2006 2005 67% 2004 66% 2003 61% 2002 50% 2001 Percent of Households 31% 1999 22% 1998 17% 10% 1997 2000 2007 1993 Time Source: Pew Internet

  14. Broadband S-Curve Innovation Growth Maturity 100 90 80 70 60 50 40 30 20 10 0 90% 91% 2009 80% 2007 63% 2006 50% Percent of Households 37% 2004 22% 2002 10% 2000.5 2008.5 2004.5 Time Source: Pew Internet

  15. Digital Camera S-Curve Innovation Growth Maturity 100 90 80 70 60 50 40 30 20 10 0 90% 77% 2009 62% 2007 60% 2005 Percent of Households 43% 2003 10% 1997 2004 2011 Time Source: Infotrends, Consumer Electronics Association

  16. High-Definition TV S-Curve Innovation Growth Maturity 100 90 80 70 60 50 40 30 20 10 0 90% 53% 2009 50% Percent of Households 35% 2008 23% 2007 10% 3% 2009 2005 2013 2001 Time Source: CTAM

  17. Car GPS Systems S-Curve Innovation Growth Maturity 100 90 80 70 60 50 40 30 20 10 0 90% 99% 50% Percent of Households 17% 3% 2009 10% 0.9% 1% 2003 2018 2008 2013 2002 2005 Time Source: Masterlink

  18. S-Curves Source: NY Times

  19. S-Curves Innovations follow a curved pattern of acceptance, or “lifecycle” Industry supplies on a different cycle Many innovations are moving through the second half of their growth phase, and will peak near the end of the decade Innovations tend to be developed by the young

  20. Inflation/Disinflation/Deflation

  21. Quantity of Money Formula for Inflation MV=PY M=Money Supply P=General Price Level V=Velocity Y=Real Income

  22. Inflation Indicator Source: U.S. Census Bureau and U.S. Bureau of Labor and Statistics

  23. U.S. InflationYear-Over-Year Change Source: Calculated Risk Blog

  24. Inflation Forecast 20 Year-Olds on a 3-Year Lag Minus 63 Year-Olds Inflation Annual Inflation (%) Annual Labor Force Growth Source: U.S. Census Bureau and U.S. Bureau of Labor and Statistics

  25. Inflation Inflation, in a stable financial system, is based on people and workforce growth Changes in labor force can be used to forecast inflationary pressures Tremendous changes are coming

  26. Inflation Fears Are MisguidedIt’s DEFLATION That Will Hurt! With the US government doubling the asset base at the Federal Reserve and pumping trillions of dollars into the economy, everyone is worried about inflation – too many dollars chasing too few goods. It’s understandable, but wrong. If the economy remained constant, this would make sense. But we are changing, and the changes will eventually mean deflation, not inflation. Unfortunately, deflation hurts a lot more!

  27. When the US Crashed, the “V” dropped dramatically MV=PY M=Money Supply P=General Price Level V=Velocity Y=Real Income Quantity of Money Formula for Inflation

  28. The Velocity of MoneyGDP to Adjusted Monetary Base Source: St. Louis Fed, US BEA

  29. The Value of “M” Is the Size of the Money Supply Get your arms around how money is created Printing press – the US Government creates out of thin air Lending – banks and other institutions create out of thin air through fractional reserve, short borrowing versus long lending

  30. The Fed Was Injecting Cash with “Quantitative Easing”, Increasing “M”

  31. The Added Money Was Offset By Less Velocity

  32. It Hasn’t Worked, So Now Fed Is Printing Dollars…Again! The Federal Reserve controls the printing presses of the US The Fed does NOT have a bank account. Any purchase they make (like of securities in the marketplace) is done with newly printed dollars The first $1.5 trillion didn’t restart economy, but it did cause dollar devaluation. The current $600 billion plan seems to be following suit.

  33. Tug of War Between The Forces of Money Creation Why is the sheer force of printing money not working to the level the govt wants? Because at the same time, we are busy destroying money in other places.

  34. Lending Dollars Into Existence(fractional reserve) Banks are required to hold a percentage of deposits (a fraction), they lend out the rest. If they do not lend, they do not collect interest and cannot pay their depositors. If a deposit is made for $1,000, the bank can lend $900, thereby “creating” $900 out of thin air. But the other side of the journal entry of the loan to the borrower, is the note that the borrower owes back to the bank.

  35. Total U.S. Debt - 2008 Government $14Trn Financial $17Trn Corporate $11Trn Consumer $14Trn Total: $56 Trn ! Source: Federal Reserve Flow of Funds Report

  36. Money “Creation” Works Both Ways But it is already taking place, just not at the Fed. When any debtor either pays back a loan created through fractional reserve, or has a loan canceled (foreclosure, modification, etc.) then money supply has been contracted. Go back to the $1,000 deposit with the $900 loan. Money supply went from $1,000 to $1,900 when counting both the deposit and the loan. If the borrower of the new $900 pays off the loan, then money supply shrinks back to just $1,000. This is going on at a rapid pace as we pay down debts and see massive liquidations, bankruptcies, and foreclosures.

  37. Change in U.S. Debt Outstanding 2000 - 2010 Source: Federal Reserve Flow of Funds Report (FRB Z1), including Domestic Financial Sector

  38. Consumer Debt Outstanding Trillions

  39. The Money Supply Fight The Fed Is Pouring Money In Amount of Money in the Economy While Borrowers and Lenders are Leaking Money Out

  40. The Business Cycle and Seasons of the Economy

  41. Combining Generational Spending Trends, Inflation, and Interest Rates 40 year generations Predictable consumer spending Workforce pressure on inflation Ebb & flow of interest rates

  42. Simple Four Season Economic CycleTwo Forty-Year Generation Boom/Bust Cycles Generation Spending Boom Stocks/ Economy Summer Spring Fall Winter

  43. Simple Four Season Economic CycleEighty Years in Modern Times Consumer Prices/ Inflation Generation Spending Boom Stocks/ Economy Summer Spring Fall Winter

  44. VIDEOChris Martenson, Crash CourseFuzzy Numbers

  45. Investing In Each SeasonWhat you are told vs. what really happens

  46. Efficient Frontier, 1970-2007 1970-2007 Source: Advisory World, HS Dent Source: Advisory World, HS Dent

  47. Efficient Frontier, 1970-2007and 1970s 1970-2007 1970s Source: Advisory World, HS Dent Source: Advisory World, HS Dent

  48. Efficient Frontier, 1970-2007and 1970s, 1980s 1980s 1970-2007 1970s Source: Advisory World, HS Dent Source: Advisory World, HS Dent

  49. Efficient Frontier, 1970-2007and 1970s, 1980s, 1990s 1990s 1980s 1970-2007 1970s Source: Advisory World, HS Dent Source: Advisory World, HS Dent

  50. Efficient Frontier, 1970-2007and 1970s, 1980s, 1990s, 2000s 1990s Return (%) 1980s 1970-2007 1970s 2000s Article #5 MPT/Markowitz Source: Advisory World, HS Dent Source: Advisory World, HS Dent