Shot with my Flip camera and edited by my friend Matt Lipscomb with big assists from Steve Goyette, Steve O’Keefe, and Chuck Perkins.

You can’t control the outcome of anything 100%.

But what you can control 100% is to have heart. And dedication. And loyalty. And that sums up New Orleans people to a “t.”

Four and a half years ago, their city was nearly obliterated by the biggest engineering failure in American history. Scorned by the ignorant and bigoted, they were blamed for their own misfortune.

Media pundits and Congressmen alike had the gall to suggest the city be bulldozed. Government promises of help didn’t come when they were needed and all this time later, few have been fulfilled.

But New Orleans people came back and amidst frightening, gut-churning wreckage rebuilt their homes and neighborhoods and businesses one nail at a time.

You can’t always control the outcome of things, but you can control what you do.

Finish strong.

As long as you’re alive, there is always hope.

Go Saints! Go New Orleans!

And God bless all the brave people in this world who fight to the end against all odds.

One school of economic thought, the Keynesian School, think that’s a great idea.

(Before you attribute Keynesian manipulation to the “right” or the “left,” understand that they ALL do it. It was Ronald Reagan who kicked off the bubble that’s dominated the US economy since 1980.)

The other school of economic thought thought, the Austrian School, says the government should stay the heck out of manipulating the money supply.

Why?

Because it doesn’t work in the long run. The piper always has to be paid and in the meantime, the waste and excess that is spawned during bubble times is not good for society or real wealth building.

I’m in the Austrian school, all the way.

Who cares?

Does the broader economy matter to the individual entrepreneur?

Does a bear s*** in the woods?

True, during a bubble time, the state of the economy might not matter that much. In fact, a lot of loony ventures that wouldn’t work in normal times, thrive during bubbles. Ignorance can be bliss – and profitable.

But when the bubble goes the other way and things tighten up, intelligence (i.e. being interested in the wider world around you) pays obvious dividends again.

First, the little question

Let’s take care of the little question first…Is the recovery real?

To quote a sage friend of mine: “This recovery has everything going for it – except customers.”

Sorry to be the bearer of bad news, but there is no recovery. Bogus pyrotechnics on the stock market does not mean that the marketplace – the place where real people buy and sell – is in good shape.

Sure some businesses are flourishing. Well run, well positioned business, in “fortunate” niches are doing great, but the vast majority of of business activity – and buying – is down across the board.

…And the problem is structural: heavy debt overhang taken on when blue skies looked like they were going on for ever and ever.

If you get your business news from CNBC, you’re going to argue with me on this point. OK, I give up. Larry Kudrow and Jim Kramer are financial geniuses. You win.

The real question

The real question is will the insane excesses of recent years lead us to inflation (or hyperinflation) or deflation (price crashes.)

The average thinking person assumes that the bailouts are inflationary. It’s a reasonable position to take – unless you include one variable: scale.

Here’s what I mean…

If someone turns on a garden hose and just sprays water in the air all day and night, that would seem pretty wasteful, wouldn’t it?

But step back and look at the bigger picture.

What if that same person is spraying his garden hose in an attempt to fill up Lake Mead after Hoover Dam has collapsed? (Thanks Robert Prechter for this analogy.)

Now a completely different picture emerges.

It won’t work

Yes, it’s a shame to waste all that good water AND it’s nowhere near enough water to work.

Yes, it’s obscene that first Bush and then Obama have been shoveling untold trillions of dollars down a black hole trying to “shore up” the banking system AND as big as these bailout numbers are, they are absolutely dwarfed by the size of the problem.

The problem: Money is disappearing from the economy faster than it can be replaced. Where is it going?

Well, a $1 million house in Miami is now worth say $395,000. $695,000 in value just went up in smoke. No one else made it. It’s just gone. Poof!

The bank that made a loan based on the $1 million valuation counted on getting its money back some day and with a profit no less. The owner counted on being able to sell the property and capture the profit or borrow against it.

No more.

Multiply that by tens of thousands of properties in Florida, mix with fifty states, throw in commercial real estate, and a countless number of enterprises that are selling less, earning less and therefore worth less and you’ve got a massive exit of dollars from the economy that even reckless bailouts can’t fill.

It’s all supply and demand.

A dollar shortage means cash is more valuable, NOT less. When cash gains in value, prices go down. Inflation is the opposite. Dollars become less valuable so the prices people demand go up.

The 1980’s, 1990’s, and 2000’s were a massively inflationary period – in real estate, in stock prices, in commodities, in business valuations – now we’re coming down the other side.

Why you’ll never hear this on TV

This is not simple stuff which is why most people get it wrong.

You’ll rarely hear this scenario being discussed intelligently or in depth.

Why?

It’s not profitable for TV channels to talk about it.

Take CNBC as an example (please). It sells its airtime to one-million-and-one financial services companies, all of whom want you to turn your cash into their financial products.

Even if the smartest thing in the world right now (and for the time being it is), is to keep your cash in US dollars and in safe places, CNBC will NEVER tell you that because its advertisers would have a fit.

They’re pitching, not reporting or teaching

Speaking of “fits,” notice that CNBC’s stock picking rock star Jim Kramer tells people to BUY-BUY-BUY and SELL-SELL-SELL, but he never tells us about the third option which is to go to and stay in cash until things blow over. And you know what, he never will.

To translate this into practical advice: Don’t borrow to buy things at TODAY’S prices and only make big purchases (like real estate) if you absolutely have to – and you don’t, you can always rent.

If you continue to “play” the market – and anybody who owns stock is “playing the market” even if it’s in a conservative mutual fund – it’s best to realize you’re playing with a grenade whose pin has been pulled. Play if you must, but be ready to move fast or face an unpleasant outcome.

If you own a business, tighten up. If you can expand without taking on obligations, go for it, but the theme of the day is batten down the hatches. Get smart. If you’re going to invest, invest in improving your game.

The good news is that flexible, well run, marketing-savvy enterprises are going to be the best place to be.

Guiding lights

I’ve mentioned before that my guide to these times is Robert Prechter. (Not-so-coincidentally, you will see my name on the cover of the latest edition of his prophetic book “Conquering the Crash.”)

I’m also a big fan of Hugh Hendry, a hedge fund manager from the UK who was not fooled by the bubble and not only survived the 2008-2009 crash, but made money during it.

This is not simple stuff, but when you wrap your mind around it – and you can if you want to – you’ll be living in totally different (and better) world than people who are getting their info from CNBC and other totally unreliable sources.

It’s worth taking the time to get it right because fortunes will be made by people who get this right.

This video which I found on YouTube explains it as well as I’ve seen it explained anywhere (and after you watch the video, take advantage of the free report link at the bottom of this article.)

- Ken McCarthy

P.S. If you’re still following this, you’re probably interested in turning all this into some practical advice. Last summer I wrote and gave away something called the Independence Day Blueprint.

I was motivated to write it because I noticed that a lot of my successful students were spending like there was no tomorrow. Others were doing “smart” things with their money like piling it up in mutual funds. Ouch!

So long before the crash starting in 2005, I started beating the drum and warning about the coming inevitable credit contraction.

Some listened, some didn’t. Those that did were happy, I know at least three families that saved multiple six figures because they considered what I was saying seriously, told their broker to stuff it, and put all their money in cash (cash money market funds, treasury bills, savings accounts in highly rated banks.)

This summer I put all my ideas into the Independence Day Blueprint and planned to give it away on the 4th of July to anyone who asked for it. I did – for that one day. Then I took it down and planned to come back later and market it.

Then the reality of my schedule hit me. I’m never going to find the time to market this report for what it’s worth.

So rather than have it sit in my digital filing cabinet where it won’t do anybody any good, I’m making it available to anyone who wants it for free.

But this is it. Get it, read it, use it.

To get your free copy:

Click here for Independence Day Blueprint

This entertaining – and informative – video explains the two major theories of modern economics.

One, Keynesian, says when you run into trouble, print more money. The other position, Austrian, championed by Friedrich Hayek, says “not so fast.”

I live as if the Austrians are right and, if you ask me, I recommend that you do too.

No answers, but it’s good to know the questions.

- Ken McCarthy

P.S. Today (January 31, 2009) is the last day for the early bird tuition special for System Seminar 2010.

I’m the only person – in the world – who’s taught practical online marketing before the boom…during the dotcom boom…during the dotcom crash…during the Bubble of the 2000s…and during the present crisis. Sixteen years in all.

I always bake economic reality and sobriety into every course.

Could be why our enrollment is way up this year over last while the rest of the so-called competition is fading.

Details: The System Seminar 2010 – Chicago, IL

It was an honorable, hard-fought game. I won’t gloat in victory.

Either team could have easily won.

I’m not going to say the best team won, but it is true that the team that got the points on the scoreboard first when it mattered did – and there’s a giant lesson right there, and three related bonus ones for good measure:

=== Uber-Lesson ===

Great team, great plan, great productivity etc. don’t mean a thing if you’re not putting points on the board – in a TIMELY way

Football – and business – is not about having the best stats.

It’s about having the best business and that’s calculated in sales made, profits earned and taking money off the table (wealth, also known by the boring old word “savings.”)

Three more related lessons:

1. Protect the quarterback

The Vikings did a pretty good job of that. The Saints did a GREAT job. It made all the difference in the world.

In business, this translates to “protect the boss.” In other words, if you work for somebody, WORK for them. If you’re the boss, expect respect and loyalty.

I see a whole lot of otherwise great leaders make this mistake. They put their staff’s well being first (good), they give their staff’s credit (good), but they’re too lenient and tolerate less-than-stellar performance from employees.

This is bad for all kinds of reasons, but here’s the key one: Yes, business and football are team efforts, but neither is going anywhere without a quarterback who is protected so he can do what he (or she) can uniquely do.

Three kinds of people

There are three kinds of people in the world: 1) people who know how to be respectful and loyal, 2) people who are learning, and 3) people who don’t know, don’t care and/or are genetically incapable of things like honesty, integrity, and loyalty.

My advice as soon as you get the first whiff that someone is in the third category, out they go, preferably head first. (This includes “little” things like showing up late and not honoring simple commitments.)

As for folks in the second category (they’re learning), make a clear decision as to whether you want to invest your time and effort in mentoring them to become fully functional human beings. It will be expensive, even it you’re successful.

My take on this is? Let someone else teach them.

There are plenty of people who automatically and reflexively “protect the quarterback.” Why on earth have anyone else on your team?

2. Doing everything right “most” of the time is not good enough

Once you “get” the fundamentals and make applying them a reflex, the next thing is to be on guard against mistakes. The Vikings did everything right, except for a few bone-headed beginners’ mistakes that cost them the game.

Top performers in the high-stakes business of commodity trading will tell you: making money trading is not just about racking up huge profits. It’s also about being relentlessly vigilant and not accidentally giving away the farm through careless blunders.

Sales-oriented entrepreneurs often fail to learn this lesson.

They’re so focused on their great plays, they never look up at the scoreboard and see that they’re actually losing because they’re not paying strict attention to all the boring – but absolutely essential – parts of business that keep things on track and in the black.

3. Don’t be good, be great

If you’re going to go through the effort of tackling somebody, why not take the small extra step of trying to force a fumble?

The Saints did this and enough of their attempts succeeded that it won them the game. Extra energy expended? Just a little thought and consistency.

It’s the same in business.

Too many folks just go through the motions and do everything “right,” but fail to apply that little bit of extra tactical effort that can turn a commonplace interaction into a game changing one.

It’s the fine points relentlessly applied that can make all the difference.

Summary

1. If you’ve got a good leader, respect and protect him. If you are a good leader, expect the same from your staff.

2. Do things right and pay at least equal attention to not doing things wrong

3. Why settle for being good when a little extra thought and execution can make you great?

- Ken

P.S. As promised, to celebrate last night’s historic win, I’m giving Saints fans – and all other smart business owners – a one-time chance to join us at System 2010 at a super price.

For two days only, January 25 and 26, we’re rolling back tuition to the 2009 level.

in sixteen years, we have NEVER done anything like this before and since the Saints are never going to Super Bowl again for the first time, don’t count on it happening twice.

This truly once in a lifetime sale expires midnight January 26, 2010.

Details:

http://www.thesystemseminar.com/register.html

All day this Monday and Tuesday, we’ll be rolling back tuition for System 2010 to 2009 levels to celebrate the Saints making it to the Super Bowl.

Four and a half years after the federal levee failures – forty-three years after the start of the franchise – and New Orleans is headed to the Super Bowl.

Who dat say dey gonna beat dem Saints!

The two-day sale is on now: click here

Even if you don’t like football, you should watch this. If you’re a fan, this will blow your mind.

If you’re wondering how Drew Brees got so good watch all the way through to the end.

If Drew Brees were an Internet marketer, he’d be on the System 2010 faculty.

He’s our kind of guy: hard working, modest, and as good at it gets.

- Ken

P.S. Here’s the deal: If the Saints win, we’re going to roll back the end-of-the-year tuition for System 2010 for 48 hours for anyone who missed the deal (it was a sweet one.)

The game starts this Sunday at 6:45 PM.

P.P.S. If the Saints win…no make then WHEN they win…the sale will go on for all day Monday and Tuesday of next week. Watch the video – be amazed – Go Saints!

http://www.TheSystemSeminar.com

I asked him some pointed questions to focus him on the things that matter and directed him to another friend who knows his industry very well and might be able to give him some pointers.

Then I recommended he have a laugh. Something we can all use more of.

The future of social media… (click on the image to start the video)

“…I am not sure about pursuing more complexity or automation of tweets.

Twitter seems to be strengthening their position against those methods of use.

Here are the current rules:

http://twitter.zendesk.com/forums/26257/entries/18311

Here’s an excerpt:

http://help.twitter.com/forums/10713/entries/42646

Best Practices

The Twitter Rules explain what behaviors are permitted on Twitter. In addition to these rules, we’ve included some tips below to keep your content relevant (and listed in Twitter search). We caution against aggressive behaviors and suggest that you stay away from:

* Repeatedly posting duplicate or near-duplicate content (links or tweets)

* Abusing trending topics or hashtags (topic words with a # sign)

* Sending automated tweets or replies

* Using bots or applications to post similar messages based on keywords

* Posting similar messages over multiple accounts

* Aggressively following and un-following people

Twitter may automatically remove accounts engaging in these behaviors from search (or even suspend in some cases) in order to ensure the best experience for everyone.

Ken, most of the things in the list above are things that socialoomph was created to do. Even hootsuite can be used to do some of them. I wonder if Twitter will at some point simply ban all twitter accounts that use these applications… do you think they might?

My answer:

Maybe not in the near future, but in the long run, if Twitter perceives this behavior as hurting their business, they might take a closer look at Twitter accounts using these tools and if their algorithm finds even innocent behavior that looks suspect they might, like Google, start pushing the delete button on accounts.

The fact that they are continuously clarifying their guidelines means they are seeing certain behaviors as problematic.

I think the answer is not to get so Twitter-obsessed that you need all kinds of crazy tools to use it.

Spend the vast majority of your promotion time marketing, not networking.

Marketing will kick up all the networking opportunities you can handle and make you money.

Networking, in contrast, may or may not lead to marketing results. Something you do to enhance your marketing, not a substitute for it. It’s the gravy of marketing. Not the meat.