Finance On Wheels

Accelerating Positive Cash Flow – The True Recession Beater

September 21, 2009 – 9:29 am

Hello,

One of the things that really fascinates me about the current recession in the US is the lack of basic financial literacy demonstrated by even the most respected “financial gurus”.

The Government has poured three trillion dollars into the economy by literally printing money. This money is not flowing through the economy; it is basically there to hold up the existing banks and other institutions by supporting the massive losses that occurred. Only if money moves does anything in the economy move. Cash flow is the action that makes everything “work”. Without that none of this money gets to benefit anyone except the institutions holding the money. Currency is what it means; it must be current or flowing to be valuable. If it does not flow, then nothing positive happens to normal working people. The only thing that is certain when money is printed in large quantities is a fall in the value of that money. Thus the dollar is falling in real value. Even if the stock market seems to be growing, the true value of stock is actually falling. Thus saving is the completely wrong thing to do. Your money will just shrink in value.

This situation has only been grasped by a very small number of people. Those that truly grasp it are cashing in on the situation by increasing their positive cash flow and making it accelerate faster than the value of the currency is reducing. If you increase positive cash flow, your money is always moving, and that means you have a far better chance of being in front of the inflation “bubble”.

The new rule of money is to leverage your borrowing ability by purchasing income generating assets, such as rental property and businesses. These generate cash flow and keep you ahead of the fall in value of the currency. Debt is not a dirty word as long as that debt supports an increase in positive cash flow.

Once people start to catch on, more and more money will flow in the economy and the actual value will cease to be as important. If positive cash flow exceeds the fall in currency value for even a short time, the Governments’ need to print money to support the economy will subside and the fall in value will tail off. If things get moving really fast, the reverse will start to happen as real value is built in the economy by a true growth in production.

You can begin this process by asking yourself “What action can I take today to increase my positive cash flow?”

I’d love to hear your answers.

Have a nice time!
Article by : Malcolm Guest author

Posted in Finance On Wheels, Financial Crisis |