Trends

Rhein Watch Trends for 2006:
1. Economy:
Dangers : A. An already overleveraged society might not be able to pay increased interest costs, local taxes, pump and burner prices and continue to fuel the economy by buying stuff B. Housing sales softening could cause manufacturing and construction sectors to suffer. (Job market watch out). C. Our over reliance on high priced energy could cut into profit margins and cause a significant decline in productivity and GNP (national debt and imbalance of trade watch out) . D. Should the "New Fed" continue to bump up interest rates it would put further downward pressure on the boom. E. State and local taxes are sapping consumer resources at alarming rates and causing migrations to low tax states as well dislocations in purchasing patterns. F. Corporations may not be able to absorb the increases in labor, material, insurance, legal liability, transportation, propery taxes etc., etc. etc. without raising prices to protect their franchises. G. Politicians, refusing to accept the supply side principles that have given us such a resillient business scenario, might attempt to raise taxes on the "wealthy" (Noose the Goose) by letting the sun set on the Bush tax cuts. If successful there will be a temporary increase in quickly be dissapated revenues, followed by a period of stagflation.
The Bright Side: A. The stock market is still undervalued. B. Our economy is the strongest in the world. C. We have managed to inflict wounds on the terrorist establishment, and tightened our security, so far successfully. C. We have made more of our citizenry self reliant, and less dependent on welfare government.

Society: A. More citizens are pushing for ways to increase civility, values and creative leadership. B. More confusion awaits the medicare drug plan. C. Look for Increasing costs of medicines in order to cover litigation demands and research.

2. Ethics:
A. Most people see politicians as corrupt or coruptable (just part of the package and consequently not of too much concern)...look for legislation and rules changes in an attempt to win public confidence (we feel little can be done to affect change in this perception). B. The public has a hard time, in general, accepting the large salaries and bonuses paid to top executives. They compare these outlays to their own comparitively low incomes. Little attention is being paid to the responsibility held and sacrifices made by those in senior positions. This is dangerous thinking and could ignite the flames of socialism. It already has in some key areas in South America, and we expect this trend to continue. C. Corporate corruption is perceived to be a bigger problem than it actually is, but for the public, image is everything.
3. Keep your Eyes On:
A. Terrorists and their sponsors could (easily) bring down the world's economic infrastructure B. Iran, Russia, Saudi Arabia, Syria, China and North Korea are threats to economic and social stability in diverse ways. The picture changes with each turn of the kaleidescope. Read the hues in the news. C. Piracy is becoming an increasing problem in the Far East. D. The Israeli Palistinian situation will continue to be disruptive. E. The ASEAN economic bloc and its alure for U.S. business operations will continue to bring blessings and curses F. Our treatment of entitlement programs for Baby Boomers will become an increasingly sensitive issue, and will need to be addressed soon. G. The rapidly growing reliance on the Internet for more and more of our information and commercial needs will affect the way we live, do business and educate our people.