Financial consultants offer
warnings, hope about economy
By dick metzgar
Staff Writer
Though painting a gloomy picture of the country’s current economy, two financial experts did leave a glimmer of hope and optimism for the future at a presentation March 27.
The presentation, given by George Taber and Peter Grandich, was sponsored by the Western Monmouth Chamber of Commerce at its Broad Street headquarters in Freehold.
"It is very hard to talk about the economy with the war going on," Taber said. "It’s like the ‘deer in the headlights’ situation — suspended animation caused by fear."
Taber is the founder and president of NJBIZ, a weekly business newspaper. He is also the daily business commentator for WKXW-FM, New Jersey 101.5 radio, and a correspondent, reporter and business editor with Time magazine.
Taber said the economy is in the "hangover stage" from Y2K when it was feared disastrous glitches would appear in the nation’s electronic infrastructure as a result of the date change in 2000.
"A lot of money was spent to see Y2K didn’t happen," Taber said. "Since then, however, the economy has been very sluggish. Because of concerns about terrorism, and now the war, businesses have been very cautious about investing. Businesses have been playing defense, and we know that basketball teams that play strictly defense usually lose."
Despite the sluggish corporate economy, consumer spending continues to be high, Taber said.
"Consumers are finding ways to get money to spend," Taber said. "Many people are refinancing their homes."
Grandich said he saw a trend for Americans to live beyond their means.
"I urged people that I thought the new millennium would cause a decline in the economy," Grandich said. "My philosophy is that, in the United States, we are robbing Paul to pay Peter. We have, as a whole, become a nation of ‘debt junkies.’ "
Grandich is a strategic adviser to the NOAH group of mutual funds and founder of Trinity Funds, Sports and Entertainment Management Co., Millstone Township.
"On the economic side of things, I don’t see the ability to generate revenue to continue living the way we have been," Grandich said. "We’re having record mortgage foreclosures in the country."
Grandich said he believes the aging population will create an economic crisis in the future. "We are going to have one of three Americans over the age of 65," he said. "As people get older, they also become more conservative in their spending habits."
Taber said that given the country’s track record in financial matters, there is some hope for the future. "That’s because of the resilience of the U.S. economy over the years. Some of our nation’s biggest companies were founded during recessions, including the Great Depression in the 1930s," he said.
Finding sound investments at this time is difficult, both experts agreed.
"Years ago the one word in buying was ‘plastic’ because of the development of plastic items after World War II," Taber said. "I think that now the operational word is ‘security.’ Because of the fear of terrorism, a lot of money is being spent on security systems and products, from corporate America to individual homeowners, as well as government."