We are, it appears, experiencing the joys of an economic phenomenon known affectionately as a credit crunch. The banks who have made billions out of us over the last few years have lost a few dollars due to their over zealous greed for lending and making high returns on dubious loans – all very good while the sun shines, but not so good when it rains… and it’s raining at the moment… metaphorically speaking and of course physically.

Hay making - supplying natural resources
Scientists tell us the physical rain has been brought on by the massive carbon footprint that the developed nations seem to be delivering to whole world. Not to be outdone the developing nations also want to deliver their fair share to that carbon footprint and are consuming natural resources at an alarming rate. China’s appetite seems to be insatiable and consequently they are the new friends of many an African country who can help supply their thirst for resources… taking over where the Brits, French and Portuguese, et al finished many years ago. This consumption is also driving up the price of raw materials. There is a lot of hay making going on in China and Africa at the moment as well as other places where natural resources are in abundance.

Hay making – supplying fuel
For some reason OPEC wants to keep the price of oil high and therefore restrict production accordingly – perhaps they are worried that the Chinese will use too much… whatever their concerns, oil companies are making lots of hay at the moment and seem to be awash with cash… at the present prices of around $120 a barrel there’s a lot of hay making going on… however, it seems the demand for hay is increasing as some people, notably Goldman Sachs, are predicting that there may be a ‘super spike’ in the price of oil to at least $150 or maybe $200 a barrel within the next six to 24 months… talk about a long hot autumn!

Hay making – growing biofuel crops
It appears the autumn is just too long for some and therefore so as not to be so dependant on oil and to show their green credentials a number of the developed countries are looking for alternatives to carbon producing oil… and they found one… biofuel. Depressed farmers who have been brow beaten over the prices of their grain over the last few years see the biofuel craze as a way of making more hay. Field after field is being turned over to growing biofuel crops and farmers are getting good prices for their efforts. However, rain forests are also getting turned over to produce biofuel crops… the same rain forests that we need to absorb carbon monoxide and throw out oxygen in return… sort of good in reducing carbon footprints. You may have noticed a quadruple whammy with producing biofuel. First, there’s a debate about just how ‘green’ biofuel really is and that burning it has no discernable impact on reducing one’s carbon footprint. Secondly, carbon has to be burnt in the production of the fuel, so increasing carbon emission. Thirdly, as mentioned, rain forest is getting turned over and so increasing carbon footprint. And lastly, food production is giving way to fuel production and so increasing food shortages.

Hay making – cost of food
The problem with shortages, as OPEC knows only too well, is that it drives the price up. Shortages occur because demand outstrips supply. Supply of the basic foods is down because biofuels are taking over and crops are failing due to unfavourable weather brought about by too much carbon. Demand is increasing because the developing countries are developing so fast they are consuming huge volumes of resources, including food, and in return making a negative impact on the global carbon footprint… leading to more unfavourable weather and lower supply and therefore increased prices… and it seems it’s not only prices that have been on the increase… governments have been doing their own hay making by steadily increasing taxes.

Hay making - taxes
I’m not so clued up on other nations, but here in the UK us Brits are being taxed out of existence. The American’s have the stealth bomber and we have stealth taxes… both deadly and dangerous. Here in the UK, we are paying more in tax now than ever before. Sure, we have had higher personal tax rates, but the huge increase in indirect tax sucks more out of the economy than personal tax. For example, the amount of tax we pay on fuel is exorbitant. We have our government and OPEC taking more than their pound of flesh and it’s us the consumer that’ paying. Any goods or people that need moving will be paying more and therefore price of all goods go up… it’s a spiral effect.

Hay making – the banks
Talk about spirals… as mentioned above, the banks have had a poor harvest… they have lost billions in bad lending practices. They have swamped us with easy credit and now raise interest rates to make higher returns. They have cut back lending and because the inter-bank money rate is now higher than the base rate they are not cutting back the mortgage rates. The Bank of England has followed the American central bank and released funds to the banks to entice them to lend again. Our banks are keeping hold of the money to shore up their balance sheets… they like big balance sheets… why do they need to lend again; they have found an alternative way of making hay.

Hay making – what’s going to stop it
The man or women (the mention of women is a special reference for Jill Konrath) on the street is all important. The housing market is all important. Our economy has become reliant on a buoyant housing market. Less lending means less homes changing hands and therefore fewer taxes for the government which they need to make up elsewhere. Estate agents are closing. Removal firms are feeling the pinch. Equity release in homes has dried up. Taxes are high. Fuel costs are high. Food costs are high. There is less money going around. Consumer spending stops and everyone has hay fever and unable to harvest.

Hay making – your own harvest
Whatever happens to the economy, there will be hay makers out there. The depression in the 1920’s still had their own hay makers… luxury cars were still sold. Money will still be spent. You just need to make sure you know how to harvest. If what you are selling is considered a discretionary spend, then you need to be better at harvesting then all the others. They only way you are likely to get a customer to part with their money is to link what you are selling to improving their business. It has to be shown to be an integral part of their business survival. However, a strong need on its own is not enough as you also have to help make the business need an impetrative to be addressed now. You then have to show the value of doing business with you and your organisation. Finally, you are going to have to learn how to develop relationships across the customer’s organisation… you need these to develop the sales momentum for a ‘yes’ decision. The amount of hay you make will therefore depend on your ability to articulate the customer’s business imperative, your ability to show value and your ability to develop relationships. This is the formula for making hay while the sun shines on the economic credit crunch… and guess what?… it’s no different to what you should have been doing all along, it’s just this time there will be no easy harvest and if you don’t adopt now, then your harvest will fail.

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