The High Cost of Cheap Labor: Workers’ Rights Abuses Plaguing the Electronics Industry in China

In the past decades, China has risen as a giant of manufacturing as more and more foreign businesses moved their factories in favor of more relaxed labor laws. As a result, many ethical issues have come to light as an increasing number of reports highlighting the deplorable working conditions in the factories of China.

Attention has been especially drawn in the past couple of years to the labor rights violations of electronics and technology companies who have committed some especially egregious abuses such as dangerous working conditions, inadequate pay, and multiple hours of uncompensated overtime. The primary culprits: Apple, Samsung, IBM, Dell, and other household names.

The High Cost of Cheap Labor
Approaching the Boiling Point

In the early months of 2014 alone, the number of protests and strikes has risen by 31% when compared to the previous year. This amounts to approximately 202 incidents of protest or strike in the past four months. The strikes are almost exclusively concentrated in the southeast region of the country with the industrial city of Guangdong alone accounting for a full 55%  of the incidents occurring this year.

While each company is dealing with the growing number of strikes and protests in its own way, it is becoming increasingly apparent that the Chinese populace is no longer willing to be exploited as a source of cheap labor. These companies will have to start addressing worker grievances in a meaningful way or risk scandal and loss of business.

Apple and the Most Recent Claims against this Repeat Offender

Apple has come under scrutiny a few times in the past as factory working conditions and employee contracts continue to be reported as unhealthy or inhumane. In the most recent case, undercover investigations by a New York based NGO advocacy group for Chinese workers known as China Labor Watch resulted in allegations of at least $8.3 million in unpaid working hours per year among other violations.

These unpaid hours consist primarily of overtime work which is not paid at the legal overtime rate. The report also uncovered regular incidences of fraud regarding the under reporting of employee’s working hours. Furthermore, overtime hours are made mandatory and often exceed 100 hours of overtime per month—a number which exceeds both Apple’s own regulations as well as China’s national labor policies.

While Apple spends a fairly hefty amount on the actual parts necessary to build the iPhone (at least $191 per unit), it pays just $8 per phone for labor bringing the total production cost to just under $200. If the company were to hypothetically move manufacturing to the United States—where they would be under more pressure to pay fair wages and provide fair working conditions—they would only have to spend an additional $4 per phone for labor.

Of course, a major deterrent to manufacturing in the United States is the corporate income tax which would amount to substantially more (approximately $3.6 billion per year) than the increased labor costs. But with these figures in mind, it becomes clear that Apple could easily afford to offer its Chinese workers fair wages and better working conditions without substantially affecting its profit margins. A cost increase from $200 to $204 on a product which retails for well over $500 is not that dramatic. Furthermore, Apple’s customer base would likely be more than willing to absorb the additional $4 per unit for the assurance that the device they are using was not manufactured in inhumane conditions should Apple be wholly unwilling to see its profit margins changed.

The Human Cost of Producing Consumer Electronics

As Apple is the most publicized case of human and labor rights abuses in China, it’s profit-driven,exploitative practices are the most thoroughly analyzed. With manufacturing costs representing just 2% of the total production cost of an iPhone and profit margins at 51% per device, it is easy to imagine a scenario where Apple doubles the wages of its factory employees without suffering any substantial loss to profit.

Similarly, for Samsung, manufacturing costs (which includes labor costs as well as electricity and other essentials to processing) amount to 3% of the total cost to produce the phone. After production costs are accounted for, Samsung pulls in about $394 in profit per phone which translates to a profit margin of more than 60%. Doubling wages for its factory workers, then, would do almost nothing to its ability to compete in the marketplace.

A breakdown of profits and labor costs is more difficult to find for companies like IBM and Dell which rarely come into the spotlight for their labor rights violations and, therefore, are less susceptible to close analysis of their finances.

While the companies respective responses to the allegations of labor violations vary (with some being far more proactive and concerned than others), it is clear that the electronic industry as a whole should be held to stricter standards by the Chinese government as well as by the private sector itself.

The recent surge in strikes and protests among Chinese factory workers will hopefully result in meaningful policy changes within each company as well as at the national level.

The Russian Economy Part 2 : Loans-for-Shares and the Creation of the Russian Oilgarchy

The Russian economy of the late 1980’s and early 1990’s was in the beginning of a freefall that would take nearly three decades to recover from.  The lack of innovation, demoralized workforce and poor levels of foreign investment left them well behind the West.  The U.S.S.R. was breaking up and many of the newly freed countries sought alliances with the West and the adoption of its economic philosophies.

Meanwhile, back at the ranch Moscow had large bills and little ability to right the ship under the existing system.  In a way they were back in 1917, trying to figure out a way to quickly jump start a moribund economy and a dejected citizenry.

The Russian Economy
Mikhail Gorbachev was gone, replaced by Boris Yeltsin, who somehow had to pilot Russia towards democracy.  In 1994, he was approached by officials at oneksim Bank, the only Russian financial institution to be accredited by the Swiss Central Bank.  Russia needed cash and wanted to transition most state-owned business to private hands.  Oneksim led a consortium of banks that would lend Moscow money in exchange for “temporary” shares in those companies.  Pay off the loans and no harm no foul, but failure to pay them meant the banks got to keep their shares.  This became known as “loans -for-shares” (LFS).

LFS was rigged from the start.  There was no way the Russian government could pay back these loans and the banks knew it, so when the loans came due and the money was not there, a few lucky Russians became owners of the dominant entities in many sectors of the Russian economy.  The LFS banks involved in the program were well-connected to the Kremlin and had the clout to help a shaky government survive the looming presidential elections.

The LFS banks organized “auctions” for the prime pieces of the Russian economy and the results were laughable.  The very banks which organized the auctions won many of them, paying just over the opening bid in some cases.  Foreign investors were shut out of the bidding for the prime assets and the organizers would identify the smallest of infractions to disqualify competing bids.  In one case Oneksim Bank, the brainchild behind the entire LFS program, refused to accept a bid from a rival bank because the paperwork was supposedly late and for the reason that part of the rival bid was secured by treasury bills. Oneksim walked away with 38 percent of Norilsk Nickel for half of their rival’s disqualified bid, one that exceeded the minimum asking price by only $100,000.  This one sale cost the Kremlin $171 million.

Other bargains included oil giants Lukos and Lukoil, two others names that will come up again soon enough.  When the tab was paid, Moscow received barely half of the $2 billion they expected at the outset of the auctions.

The president of Oneksim at the time was one of the big beneficiaries of the auctions. Vladimir Potaninwould soon become a billionaire, and as of last spring was the seventh richest Russian with a net worth of $14.3 billion.  He had a head start over many of the others on the list, as he was born into the communist hierarchy.  After graduating from university he got hired by the Russian Ministry of Foreign Trade.  Together with some comrades from the ministry, he started a trading company that succeeded because of the support of many different sectors of the Communist Party as well as the Foreign Ministry.

In the wake of the success of the trading company, Mr. Potanin started two banks, Oneksim and MFK.  They immediately benefited from deposits from many of the state industries.  At the same time he teamed up with Mikhail Prokhorov to create Interros, one of the largest Russian private investment firms.

The aftermath of LFS saw Potanin and Prokhorov with control of Norilsk and oil company Sidanco.  The last five years has seen him shed some assets, including a portion of Norilsk, Polyus Gold, and ProfMedia, Russia’s biggest private media holding company, to Gazprom.  Mr. Potanin was tapped by Vladimir Putin to build Rosa Khutor, the Russian ski resort which hosted skiing and snowboarding at the Sochi Games.  The tab was $2.6 billion.

Now we all know how Sochi was a breeding ground for corruption, and how it nearly perfectly illustrates how corruption results in disaster. Obviously, the Russian oligarchs got their money, reporters got plenty of good stories, Russia looked a little silly and Putin took the opportunity to invade Ukraine while all eyes were already on him. Does that mean everybody’s a winner? It’s hard to say, but it was a strange time indeed. It gets weirder the deeper down the rabbit hole you go. Check out the next installment for a near-comprehensive list of Russia’s lesser known oligarchs and their arguably undue influence in this powerful country. It will be a good time, guaranteed.

Pierco Management Offers Some Interesting Information On The Subject Of Gold

As a technical foundation, here’s what the average person should know about gold – the element: gold is a chemical element with the symbol Au (which come from the Latin: aurum “gold”). It has been a highly sought-after precious metal for coinage, jewelry, and other arts since the beginning of recorded history. As a native metal it occurs as nuggets or grains in rocks, in veins or vein structures and in alluvial deposits. Much less commonly, it occurs in minerals as gold compounds, usually with tellurium. As metals go, gold is very dense, soft, shiny and the most malleable and ductile pure metal known to man. Pure gold has a bright yellow color and luster traditionally considered attractive, which it maintains without oxidizing in air or water.

Most obvious to most of us, gold is one of the metals and has served as a symbol of wealth and a store of value throughout history. It also has been linked to a variety of symbolisms and ideologies.

The calendar year 2008 was an easy year to remember, as it marked a major economic shift everyone across the globe. In September of that year the global markets were on a path to what many analysts believed to be the brink of a meltdown. Not so coincidentally, before the September crash, the price of gold was on the rise achieving a nominal high of US$1,004.38.

Gold has long been a valuable commodity. It has been used throughout history as money by the Europeans in the later part of the 19th century, and also by the United States until 1971. As the U.S. system has now transitioned away from being backed by gold to a fiat currency (money that has value only because of government regulation or law), gold has assumed the role of the protector. When money is printed in times of economic uncertainty, the overall value of money is devalued as it floods the system. The reason gold is so valuable in these times is that is represents tangible asset, thus making it a hedge against inflation, deflation, or currency devaluation.

What makes gold unique to other commodities is the role that speculation plays in its market value. Unlike other commodities, the annual production is very low compared to the available quantity that is stored above ground. According to the World Gold Council, of the 2,500 tonnes of gold mined over the last few years, about 2,000 tonnes goes into jewelry / dental production, and the rest goes to retail investor and exchange traded gold funds. Even with this limited production, the price of gold rose 30 percent just over 2010, an example of how changes in public sentiment affect the price much more than annual production.

For those of us who aren’t seasoned economists and market analysts, we can look at the trend of gold in the market to gain an overall perspective on how people are feeling about the future in economic terms. Generally, we have seen that when gold increases in value, there is a feeling of unease. Conversely, as gold trends downward, it often coincides with a perceived return to stability in the market.

Canadians Lose Footing on Internet Freedom

We’ve long known of Canada as one of the “five eyes,” those nations in the Anglo-sphere that so willingly cooperate when spying on each other’s and their own citizens. It was when Edward Snowden leaked a treasure trove of information about the NSA and PRISM that the scales fell from our eyes and most of us lost that naïve sense that we had a relationship of mutual trust with our respective governments.
But now Canada wants to expand their police presence online? Maybe I’m just proud or can’t shake that lingering wisp of nationalism, but I always thought of Canada as a stalwart bastion of liberty and democracy. But she is now proving to be swayed by fear-based rhetoric, convinced to discard (just this once, of course) the due process of democracy when it comes to the Internet.

It all started with the failed Bill C-30, which was defeated, in part, by the over 150,000 citizens’ signatures collected by openmedia.ca. Now, Conservative Justice Peter MacKay (Nova Scotia) is introducing C-30 with a makeover, calling it C-13, or the “Protecting Canadians from Online Crime Act.” The spin is that C-13 is meant to put a stop to cyberbullying once and for all, when if fact, only five out of roughly 70 pages in the bill cover cyberbullying. The rest of the bill sets forth provisions for types of warrants that are very easy to obtain and allow police to monitor and collect online data about any Canadian resident or citizen. It also grants ISPs immunity from lawsuits or prosecution if and when they do surrender private data.

The “repackage and spin” of unpopular bills is nothing at all new to the Western political process. In the U.S., when Americans initially rejected a bill that would form their central banking institution, the Federal Reserve, Republican Senator Nelson Aldrich simply repackaged the bill, passed it on to a couple of Democrats and spun it as a bill to heavily regulate (and punish) America’s banks, who were almost universally blamed for the periodic economic downswings common at the time. Well, that bill was possibly the greatest boon to America’s—or even the world’s—banks to date. Perhaps a more relatable example is the American online regulation bills known as SOPA, PIPA, CISPA or the half dozen or so others than keep getting thrown up by Congress and defeated by public outcry.

MacKay and his fellow MPs all know that the whole cyberbullying thing is a ruse. MacKay has even been called out on it publicly during a debate over whether or not to push C-13 through Parliament with a motion to allocate a time limit of two days for a vote. Clearly MacKay was attempting to suppress democratic debate on the bill, just wanting to get it through as quickly as possible without the fussy back-and-fort of any possible dissenting voices.

During the debate, NDP Justice Ève Péclet said: “I would like to remind the minister that only five pages of his 70-page bill deal with cyberbullying. This bill goes much further than just addressing cyberbullying. I would like to remind the minister that we have already asked him to divide the bill so that we can pass a bill on cyberbullying. He knows full well that he is talking through his hat when he says that the opposition is against measures to address cyberbullying.”

Péclet  then asked, referring to the fact that very few representatives had been allowed to speak on the bill, if MacKay and the government planned to reform their entire view of what is and what is not a democracy or a democratic debate. MacKay replied (straight-faced I’m assuming): “If it means saving lives, yes.”

MacKay makes it seem like 9/11 all over again. Canada needs a Patriot Act! But what lives is he talking about?

Most likely, we’re rehashing the cases of Amanda Todd and Rehteah Parsons, those victims of “revenge porn” who committed suicide after naked photos of them were posted online, and are now the postmortem figureheads of the decline of Internet freedom in Canada.

It’s all moot anyway. During the same debate, MacKay let it slip (what would Freud think?) what C-13 is really all about, saying: “What we are doing in essence is empowering police to investigate and police the Internet.”

Of course, this revelation opens him up to criticism and rebuke, to which MacKay quickly refers to the “judicial oversight” written into the bill. What does this mean? MacKay is presumably referring to the vague wording in the bill that requires police get a warrant from a judge before embarking on an online investigation. However, all that is required to obtain said warrant is “reasonable grounds for suspicion.” It’s almost meaningless and so obtuse and nonspecific that nearly anything could fall under the umbrella of “reasonable grounds for suspicion.”

Steve Anderson, Executive Director of OpenMedia.ca—who led the campaign to defeat C-30—said, “Justice Minister Peter MacKay is trying to cover the government’s online spying tracks by pushing a bill through Parliament that will actually provide immunity to telecom companies who have shared your sensitive private data without a warrant.”

What does that mean to you? Anderson goes on:

“… if you are the victim of cyber criminals, identity theft, or even wrongly targeted by police because your Internet or cell phone provider handed over your information without cause you will have little recourse. In fact, you probably won’t even be notified if you private data has been breached. This irresponsible legislation clearly shouldn’t go forward.”

An admirable, rational reason to rallying against C-13 indeed. I, however, would like to offer a bit more of a nationalistic, emotional response: Let’s let Internet freedom, online privacy and net neutrality be yet another one of those things in which we Canadians proudly separate ourselves from our neighbors to the South. While they muzzle the voices of their citizens, restrict the economic, artistic and technological benefits of the Internet, Canada must take a different, better path, the sunny, well-lit path of freedom and liberty and prudence. What do you say?

Pierco Management Offers Some Interesting Information

The Subject of Gold

As a technical foundation, here’s what the average person should know about gold – the element: gold is a chemical element with the symbol Au (which come from the Latin: aurum “gold”). It has been a highly sought-after precious metal for coinage, jewelry, and other arts since the beginning of recorded history. As a native metal it occurs as nuggets or grains in rocks, in veins or vein structures and in alluvial deposits. Much less commonly, it occurs in minerals as gold compounds, usually with tellurium. As metals go, gold is very dense, soft, shiny and the most malleable and ductile pure metal known to man. Pure gold has a bright yellow color and luster traditionally considered attractive, which it maintains without oxidizing in air or water.

Most obvious to most of us, gold is one of the metals and has served as a symbol of wealth and a store of value throughout history. It also has been linked to a variety of symbolisms and ideologies.

The calendar year 2008 was an easy year to remember, as it marked a major economic shift everyone across the globe. In September of that year the global markets were on a path to what many analysts believed to be the brink of a meltdown. Not so coincidentally, before the September crash, the price of gold was on the rise achieving a nominal high of US$1,004.38.

Gold has long been a valuable commodity. It has been used throughout history as money by the Europeans in the later part of the 19th century, and also by the United States until 1971. As the U.S. system has now transitioned away from being backed by gold to a fiat currency (money that has value only because of government regulation or law), gold has assumed the role of the protector. When money is printed in times of economic uncertainty, the overall value of money is devalued as it floods the system. The reason gold is so valuable in these times is that is represents tangible asset, thus making it a hedge against inflation, deflation, or currency devaluation.

What makes gold unique to other commodities is the role that speculation plays in its market value. Unlike other commodities, the annual production is very low compared to the available quantity that is stored above ground. According to the World Gold Council, of the 2,500 tonnes of gold mined over the last few years, about 2,000 tonnes goes into jewelry / dental production, and the rest goes to retail investor and exchange traded gold funds. Even with this limited production, the price of gold rose 30 percent just over 2010, an example of how changes in public sentiment affect the price much more than annual production.

For those of us who aren’t seasoned economists and market analysts, we can look at the trend of gold in the market to gain an overall perspective on how people are feeling about the future in economic terms. Generally, we have seen that when gold increases in value, there is a feeling of unease. Conversely, as gold trends downward, it often coincides with a perceived return to stability in the market.

The High Cost of Cheap Labor

Workers’ Rights Abuses Plaguing the Electronics Industry in China

In the past decades, China has risen as a giant of manufacturing as more and more foreign businesses moved their factories in favor of more relaxed labor laws. As a result, many ethical issues have come to light as an increasing number of reports highlighting the deplorable working conditions in the factories of China.

Attention has been especially drawn in the past couple of years to the labor rights violations of electronics and technology companies who have committed some especially egregious abuses such as dangerous working conditions, inadequate pay, and multiple hours of uncompensated overtime. The primary culprits: Apple, Samsung, IBM, Dell, and other household names.

The High Cost of Cheap Labor
Approaching the Boiling Point

In the early months of 2014 alone, the number of protests and strikes has risen by 31% when compared to the previous year. This amounts to approximately 202 incidents of protest or strike in the past four months. The strikes are almost exclusively concentrated in the southeast region of the country with the industrial city of Guangdong alone accounting for a full 55%  of the incidents occurring this year.

While each company is dealing with the growing number of strikes and protests in its own way, it is becoming increasingly apparent that the Chinese populace is no longer willing to be exploited as a source of cheap labor. These companies will have to start addressing worker grievances in a meaningful way or risk scandal and loss of business.

Apple and the Most Recent Claims against this Repeat Offender

Apple has come under scrutiny a few times in the past as factory working conditions and employee contracts continue to be reported as unhealthy or inhumane. In the most recent case, undercover investigations by a New York based NGO advocacy group for Chinese workers known as China Labor Watch resulted in allegations of at least $8.3 million in unpaid working hours per year among other violations.

These unpaid hours consist primarily of overtime work which is not paid at the legal overtime rate. The report also uncovered regular incidences of fraud regarding the under reporting of employee’s working hours. Furthermore, overtime hours are made mandatory and often exceed 100 hours of overtime per month—a number which exceeds both Apple’s own regulations as well as China’s national labor policies.

While Apple spends a fairly hefty amount on the actual parts necessary to build the iPhone (at least $191 per unit), it pays just $8 per phone for labor bringing the total production cost to just under $200. If the company were to hypothetically move manufacturing to the United States—where they would be under more pressure to pay fair wages and provide fair working conditions—they would only have to spend an additional $4 per phone for labor.

Of course, a major deterrent to manufacturing in the United States is the corporate income tax which would amount to substantially more (approximately $3.6 billion per year) than the increased labor costs. But with these figures in mind, it becomes clear that Apple could easily afford to offer its Chinese workers fair wages and better working conditions without substantially affecting its profit margins. A cost increase from $200 to $204 on a product which retails for well over $500 is not that dramatic. Furthermore, Apple’s customer base would likely be more than willing to absorb the additional $4 per unit for the assurance that the device they are using was not manufactured in inhumane conditions should Apple be wholly unwilling to see its profit margins changed.

The Human Cost of Producing Consumer Electronics

As Apple is the most publicized case of human and labor rights abuses in China, it’s profit-driven,exploitative practices are the most thoroughly analyzed. With manufacturing costs representing just 2% of the total production cost of an iPhone and profit margins at 51% per device, it is easy to imagine a scenario where Apple doubles the wages of its factory employees without suffering any substantial loss to profit.

Similarly, for Samsung, manufacturing costs (which includes labor costs as well as electricity and other essentials to processing) amount to 3% of the total cost to produce the phone. After production costs are accounted for, Samsung pulls in about $394 in profit per phone which translates to a profit margin of more than 60%. Doubling wages for its factory workers, then, would do almost nothing to its ability to compete in the marketplace.

A breakdown of profits and labor costs is more difficult to find for companies like IBM and Dell which rarely come into the spotlight for their labor rights violations and, therefore, are less susceptible to close analysis of their finances.

While the companies respective responses to the allegations of labor violations vary (with some being far more proactive and concerned than others), it is clear that the electronic industry as a whole should be held to stricter standards by the Chinese government as well as by the private sector itself.

The recent surge in strikes and protests among Chinese factory workers will hopefully result in meaningful policy changes within each company as well as at the national level.

The Russian Economy | The Origins of the System

The U.S.S.R. was fortunate to begin when it did.  Starting with the Russian Revolution in 1917, its leaders capitalized on a national discontent with the Russian monarchy to institute a political system which was supposed to be more responsive to the people.  In essentially removing private enterprise, people were to be equals, with no classes to keep people down while allowing others to accumulate wealth.

Farms and factories were collectivized, with the idea being the individual would work for the common good.  The problem was that the Russian system (which was exported as the U.S.S.R. expanded) was a top-down one where the workers had no emotional investment or ownership over their work and therefore little resonating incentive to produce.  This would lead to problems in the ensuing decades.The Russian Economy The U.S.S.R. also benefited from World War II in the sense that it was a gift for their highly-industrialized economy.  Factory production soared and workers were kept busy.

With the world’s focus on central and Western Europe, Joseph Stalin was left on his own to create a brutally oppressive regime, one that hardly looked like the one people hoped for earlier in the century.

The West needed Stalin’s help in the war effort and in return it was hoped his aspirations would be contained.  Your opinion may vary depending on which side of the Iron Curtain you were looking at, but Communism’s influence was kept from reaching further west at the expense of the eastern countries it gobbled up.

In the years after World War II, the Cold War heated up.  The Korean War and Vietnam, along with a Cuban near miss, attracted an America that was opposed to the spread of Communism.  That gave both sides an enemy to focus on, which came in handy when the economy was not performing so well.

But when there was no enemy and the economy is tanking, things do not look so good.  During his period of leadership Mikhail Gorbachev saw that the Soviet economy was in trouble, so he rushed a series of reforms including Glasnost (openness), Perestroika (restructuring), Demokratizatsiya (democratization) and Uskoreniye (increased pace of economic development).  Gorbachev saw the Soviet Union falling behind the West in productivity, innovation, per capita outputs and other measure which together show the economic health of a country.  It made more sense to partner with the West as that would be the U.S.S.R.’s fastest path to a healthier economy.

In hindsight it is easy to see why the Soviet Union failed when one looks through the lens of common human motivation and behavior.  When he assumed leadership in 1929, Joseph Stalin stated his country would have a decade to overcome a century’s worth of ineptitude if it hoped to survive.

Stalin placed Russia on a path of rapid industrialization with an intensive focus on capital outputs which would benefit the military at the expense of consumer goods and housing which hurt the average person.  To make this work the central government had to exert tight control over most industries, including their personnel moves.  People quickly learned that the safest path to job security meant not questioning orders, and keeping one’s creativity and ingenuity to one’s self.

Industrial managers had their performance assessed by how well they met targets laid out in the Five Year Plans.  Meeting targets for production meant significant bonuses for managers.  Exceeding them meant trouble, for the subsequent target would be that much higher while not meeting them eventually meant dismissal.  To make sure targets would not be exceeded; managers would deliberately slow production for a significant portion of the assessment period before picking it up, hopefully, just in time to meet the targets.  Innovation was a gamble whether it succeeded or failed, because failure meant unmet targets while success equated to more pressure from higher targets in the next period.

These were only a few of the circumstances which conspired to create a weakened Soviet economy in the late twentieth century.  There were many more.  Managers regularly asked for drastically overinflated and unrealistic budgets which led to the central government allowing massive overproduction and purchasing more than it could afford.  Factories also grew large and inefficient.  When the government had to pull back, they stopped cold turkey and left half-completed projects all over the place, some never to be completed.

Government administration made it worse.  There were targets and plans for everything starting at the top.  At each level, they were continually broken down until a production and resource allocation target was in place for up to 60,000 products, with a one-year plan stretching to 12,000 pages.  Everything was forecast, with nothing left to chance, including normal market fluctuations and geopolitics.

Gold Predictions Who Got it Right and Who Didn’t

When it comes to investments, there are a vast number of voices clamoring with advice and predictions. Many of these voices have vast resources with which to sift through all of the various global economic factors that should enable at least an educated forecast of the conditions to come. The question is just how accurate are these economic sages? This is a good question, as investors are continually wary of where they invest their funds. This is especially true when it comes to gold.

Brent Pierce talks about the Importance of a Financial Analysis

For a start-up company, a financial analysis will help you lay out just how well your business plan is going to work or is currently working in the competitive market. The goal is to acquire investors and make a profit so your business can establish itself among businesses related to your product or service. A financial analysis is designed to take a thorough look at your expenses verses your revenue related to your business. This will help you understand your financial situation and if your business is going to be successful.

Acquiring Investors

People decide to invest in a business because they trust that business to give them the results they desire. If your business is not financially stable, potential investors will stay clear of your business and choose one of your competitors. Since start-up companies are not as established as other more popular companies, it is crucial that you have a financial analysis performed for your business. If there is a flaw in the financial aspect of your business plan, action can be taken to fix the problem before it becomes a serious problem for you.

Success of Your Business

The financial situation of your business is directly related to how successful it will be. If you are unaware of how much you are spending in relation to how much you plan to make, a financial analysis will help you make educated financial decisions about your business. Since it is just starting out, it is important to have a financial plan right from the start to make sure you are gaining enough revenue to not only cover business expenses but to pay yourself and other staff.