Saturday, August 30, 2014

Mish Gets Libertarian Advice Wrong

Of course I am no libertarian, but Mish entertained a question as to whether a "Trust Fund Baby", an adult whose family is supported by a trust fund and therefore no one works, prefers to spend time together (I wonder what that is like, spending all your time together), a libertarian, who finds under Romney/Obamacare he is legally entitled to $600 in welfare payments.

Two points jump out:

1. Two teens still at home.

2. "The trust fund makes the money, not him."

Mish turns to a mentor, Pater Tenebrarum (Father Darkness?) who in turn cites Ayn Rand.  Eeeew! And the advice is in essence, take the money and run.  You paid in, so take out what you can get.

It's not that simple.  People and corporations ought pay in as little as possible, do everything within the law, like Boeing and Apple and Google, to pay no taxes whatsoever, because there are no instances when taxes are used to do good.  In every instance taxes go malinvestment which in turn distorts the market and leads to the terrible uneven distribution we see daily.

On the other hand it is foolish to run afoul of the tax laws, however wrong, even Jesus paid his taxes, although he performed a miracle to do so.  The lesson is if you pay taxes, it is another example of a miracle.

So to navigate whether to take government money, we first need to understand only end-users, consumers, pay taxes.  Business cannot pay taxes.  When you buy a Hershey chocolate bar, you have paid all of Hershey's taxes (as well as all of their expenses).  All costs including taxes are paid by end users.  (If a company goes bankrupt, the taxes it paid borne by the end-users, the receivers of the bankrupt firm).  In this case paying as little as possible becomes a competitive advantage, you lose unless you play.    All of this talk of "business paying their fair share" is pointless drivel.

The point is to wherever you find yourself in the flow of funds, you leverage it to the good. Let's look at some examples.

Now, taxing government payrolls is too a pointless exercise (why not just pay them net?) until we come to the business tax laws.  Your average federal paycheck is about $80k, and taxes may be about $20K, so $60K net say.  In that case that funny money $20k could be pre-tax dollars to invest.... instead of giving it to Uncle Sam in taxes, use $20K to start a business, and reduce your income to the Same $60k take-home anyway.  Of course your taxes are now based on $60K, not $80K, so maybe now you have $13K in taxes, but you make have built untaxed equity in a business in excess of the $13K in taxes.  Consult a CPA about where that sweet spot is for you ($80k is average, half make above that, so $200K is nothing special for mid-level ministers of funny walks, etc.)

Of particular interest to me is the "marketing dollars" the Feds distribute to businesses looking to build export markets.  Now this is money taken in taxes and then given back to businesses that are building markets worldwide.  Here is the problem in this instance:

1. It is directed to a very specific activity - essentially advertising.

2. It is putatively for all USA business but as a practical matter designed only for large USA business.

So here is the deal, if you do not use the money, it will be used by big business.  You can only use the money on market-building.  Here is the problem, as a practical matter it can only be used by big business, but  I F ,   if, you know how the game is played, you can work the program to where legally you can take advantage of it.  In this instance, you are building your business and starving evil big business of the limited funds.  But it is like Odysseus sailing past the Sirens, you have to be strapped to the mast during a certain phase or the programs will drive you mad and your business will crash.  One reason I teach is to show people how to get this money, and most importantly, when, and how to leverage it properly.

There are programs that are just hoaxes, like Foreign Trade Zones which get you nothing except paperwork, and payroll work subsidies that get you headaches.  yes some programs you ought to just steer clear of.

But now to the Trust Fund Baby.  We are all trust fund babies, we fly in planes in an industry that has never turned a profit since the Wright Brothers got that bicycle to launch.  A classic example of socializing costs and privatizing "profits" the airline industry is an example of convention, not markets.  Not to pick on the airline industry, just one example of countless instances of which we are "heirs" to investments we do not paid for, we did not earn.  Indeed, USA borrows half of what it spends, so we are all welfare queens as well.

Mish takes Father Darkness's lead in pointing out all taxation is theft, so any and all restitution is acceptable.  Take the money and run.  Fair enough analysis. Except...  we are all also thieves.  So grab from the booty and run?  The USA economy, and imperial economy depends on our ability to terrorize others who cannot be bribed into paying us tribute.  That is imperialism.  We cannot get away from the reality is little girls are set on fire overseas so we can have free junk here.  We call it collateral damage, or "the price we pay" but it is not rare, Madeleine Albright said expressly a half million dead Iraqi children is worth it.  (Razia did not die after being set on fire by USA troops.)  We invaded their countries on a false pretense, but with the express goal of having them pay for their occupation and our hegemony.  This hegemony is the basis for Chinese loans to us, that we can credible repay from imperialism what we borrow form the Chinese so we can have pointless junk that crowds out a more authentic life.  We are all as guilty as hell of that, and there is probably not less than 100, not 50, not ten here who are not guilty.

So as I pointed out above, the salient points are trust fund, no work, two teens...  free "money."  Well, the trust fund is a state creation to achieve a stable cadre of regime-adherents.  The fund is strictly limited as to in what it can invest.  One gets trapped into a pas-de-deux with the regime.  Next, managing assets would be work in its own right, but here again, expressly forbidden by the regime rules.  So the funds in the trust are as solid as the state (in fact support the regime goals) and at the same time deny us the good of the beneficiary being obliged to come out and compete with the rest of us.  The kids of these adults will never know from example of what it is to struggle and produce. The Trust Fund is an evil government entity.

So the $600 a month in welfare payment to an independently wealthy family is indeed odd.  The money comes from imperial oppression, if not taken it will likely end up in the war profiteers accounts, so what to do?

We are all trust fund babies in some sense and we will all be "getting" social security at some point. Social Security is a welfare payment to a trust fund baby when you get it, so we are all faced with the fellow to which Mish refers.

So what to do?  For my part, I have decided I will take the money, but not "run" with it.  Since these payments all rely on USA imperialism, I've targeted the funds to a group that removes UXO around the world, particularly Vietnam.

I tried to find a charity that does this, but charities (NGOs) are government chartered entities that usually end up doing far more damage than good (see "Africa").  Eventually I found a private company that can sally forth with $10,000 to remove mines, ex-minelayers who repent of their evil.  This is serious work, not for starlets and princesses, fronting NGOs, who more often simply, as Father Darkness advises, take the money and run.  So my social security checks will go to the UXO removal company, which actually removes UXO, by people who are healed by removing UXO.  I rather dig ditches for rice and beans in Mexico than accept USA welfare.  (I am assuming the ditches are not far from the ocean, and there is beer with the rice and beans.)

What is left is working at building what is good, directing what targeted funds are around you to good rather than let it go to bad, and direct "untargeted funds" to the people upon whom we've imposed for the provision of the money in the first place (say, Laotian farmers.)  Then you are closer to the free market, and are closer to surviving come what may.

And also, along these lines, it pleases me to no end to see the poor using their EBT cards in the most upscale grocery stores, buying the finest free range meats and organic produce.  the last thing they should be buying is Cheetos and Coke, and in so buying upscale they support the small farms in their effort to recover farming in USA.  Smile encouragingly when you see the mom with the screaming kid stocking up on pate and paying with her EBT card.  Offer to carry out her bags (not to worry, the store has plenty of help for that.)

The bottom line is entrepreneurs never take risks. Whatever your circumstances, work with it.  There are no times in history when things were just right.  Previous generations left us work for us to do.  We've got to get out of imperialism, and each of us can work in a relatively free market, by our practices.

Feel free to forward this by email to three of your friends.


PLA Headquarter Hong Kong

China wants to replace USA, but sometimes goes too far.  Word is they are moving armored personnel carriers into Hong Kong, a city virtually weapon-free among the citizens (although it is not uncommon to see Sikhs and Gurkhas casually carrying shotguns here and there.)  Fellas, don't worry, the people of Hong Kong will demonstrate at the drop of a hat, because they love freedom, but they are not about to overthrow anyone or anything.  Don't be like USA.  USA needs to get back to being like Hong Kong.

This all comes to mind at the mention of the PLA headquarters, a rather unusual building.  Look how the base is constricted.  it was built for the British Navy, and is still popularly called the Prince of Wales  Building.

Wikipedia
Crossing Hong Kong harbor in circa 1979 my jaw dropped to see the building, long before the PLA had occupied it.  It was after a fashion a copy of a Seattle bank building, the Rainier bank building, previous NB 0f C bank which had upgraded its image given the fact USA went off the gold standard and there was no rational limit to lending credit on the most whimsical business propositions.  There was also no rational limit to consolidation through junk bonds either, and Rainier Bank got bought by Security Pacific which got bought by ... ad nauseum.

http://commons.wikimedia.org/wiki/File:Rainier_Tower_in_Seattle.jpg
The building is now called "Rainier Square" and it was completed in 1977, two years before the Prince of Wales Building.  Note the same constricted bottom, apparently only two of these worldwide.  the joke in Seattle at the time is the architects had read the blueprints upside down.  Anyway, at the time Hong Kong was a copier instead of an innovator.  And now they are an innovator.

feng shui school sharon hay
http://www.canadianfengshui.ca/hongkong.htm
For example where else in the world do they delete six stories to make room for dragons to fly through?

As a side note the fellow who designed the Rainier Tower had previously designed the IBM building across the street...

Ibm building in seattle.jpg
http://en.wikipedia.org/wiki/IBM_Building_(Seattle)
and if that looks familiar it is because shortly thereafter he was commissioned to design the twin towers of the NYC WTC, of sad memory, which was virtually a quintupled height and doubled version of the Seattle building (Rockefellers did not want to spend on architects, or for that matter, ideas.)
http://en.wikipedia.org/wiki/One_World_Trade_Center
So there is the connection between the PLA headquarters in Hong Kong and the World Trade Center in New York, of sad memory.  China, don't follow USA too closely!  Be more "China!"

Feel free to forward this by email to three of your friends.


Friday, August 29, 2014

What I Read This Summer

Finally got through a remarkable book on tolerance by A J Conyers.  It traces the history of the idea of tolerance, and its move from a definition grounded in Christianity to a state definition.  The shift is a fascinating read, and although I've never heard of Conyers, he is a heavyweight theologian.  The side exegesis on the Trinity and its role in modelling community is new.  The Long Truce: How Toleration Made the World Safe for Power and Profit , by A J Conyers.




 I tried to blog as I read Tombstone, The Great Chinese Famine by Yang Ji Sheng, but the point came out relentlessly.  The human toll when too much power is concentrated in too few hands is staggering.  Thirty Six Million people starved to death, that is got to death, not to mention those who suffered up to death but survived.  Communists keep pretty good records at one level if not another, so the role of the players is clear.  The point that relentlessly came out to me was point by point, we have latent every weakness China exhibited as it experienced this colossal state failure.  That is to say, it can happen here.
Tombstone: The Great Chinese Famine, 1958-1962




Yosef Hayim Yerushalmi gave a few lectures on Judaism and Zakhor, the biblical imperative to remember.  Instructive.  The Jews wrote The History, and then stopped writing history, and after living under Moslem rules, picked up the sciences, including history writing, about 500 years ago. Is history linear or circular?  What if it is faith/infidelity?  A  mind-altering way of looking at life.  Zakhor, Jewish History and Jewish Memory, Yosef Hayim Yerushalmi.
Zakhor: Jewish History and Jewish Memory (The Samuel and Althea Stroum Lectures in Jewish Studies)



 Another great group for record keeping was renaissance Florence.  Orson Wells notes that the 400 years of the Italian renaissance were times of famine, plague, civil war, economic trials and what not, and at the same time it produced Dante, Michaelangelo, Bellini, Titian, DaVinci, Fibonacci only to name a few. The same 400 years the Swiss had peace and security and they produced the cuckoo clock.  May we live in interesting times...  Gene Brucker sifts through court records from Renaissance Florence and shows us what life was like then and there from the iaring of dirty laundry, The Society of Renaissance Florence.
The Society of Renaissance Florence: A Documentary Study (Harper Torchbooks, Tb 1607)

Uber-translator of Chinese lit, maven David Hinton hikes the Mountain behind his house and ruminates on the Chinese language.  I don't speak Chinese, I barely speak English, but his fluency in Chinese art and culture will improve any China Hand.  He takes 2 dozen Chinese characters back to the roots and forward and helps explicate the Chinese character.  (He adds some Darwinism in there that is oddly jarring, tossing the academy a bone?)  He uses the Wade-Giles system instead of pinyin, which is fairly old school, and the CE and BCE (Christian Era and Before Christian Era) instead of BC and AD.  Go figure.  But I jumped from my chair when he relates the image for friends come from an image for cowrie shells, which some archeologists mistake for money but are clearly tallies.  Tallies are of who owes whom what, that is to say credit, and that the image for friends would be the means for keeping tally would be telling etymology.  Hunger Mountain, David Hinton.Hunger Mountain: A Field Guide to Mind and Landscape



 I wish I could say who turned me on to "Usury, The Destroyer of Nations" by S C Mooney, but at any rate, Mooney carefully and systematically takes on the pro-usury arguments of the Calvinists.  (Calvin is essentially the godfather of modern usury practice, although just as you cannot blame Hitler on Darwin, you can't blame the FED on Calvin.)  Mooney has read the classics and Rushdoony and North, and they get direct refutation.  Mooney is qualified to proceed from theological grounds, and his argument is based on the premise that usury is wrong because God forbid it.  My premise is more Catholic, it is wrong because it does harm, but so subtly that God was obliged to expressly forbid it, and expressly repeated by Jesus.  Of course we people learn the rules and then devote the rest of our lives searching for personal exemptions.  Mooney takes a twist that I cannot follow but it is astonishing.  one argument is usury is just rent of money, just like rent of say a horse.  Well, this can be refuted quite easily, but Mooney grants it as accurate, then goes on the say the bible forbids rentals as well as usury.  The bad guys try to make usury acceptable by analogizing it to rent, to which the repsonse is to deny the parity, easy enough.  But Mooney accepts their assertion of parity, and then says "rentals are forbidden too!  Mooney's argument I think fails on this point, but it is a remarkable bit of work to read.  This you can get free online....

I've read a lot of minor papers too, but this prolegomenous 30 pages on tontines by Kent McKeever is useful regarding non-predatory finance and insurance.  Reading the history of tontines it is at least one example of where a wicked government program was adapted by the populace and turned into a good things.  Usually policy is based on wicked public practice that is adopted by the state and made legal and far worse (ponzi scheme to social security.)  As our system comes down, we'll need to rediscover robust means of economic development.  Free, caution, opens as a .pdf.

Feel free to forward this by email to three of your friends.


Ferguson: What Goes Around Comes Around

With our criminal invasion of Iraq, the people who did the actual deed are coming back and becoming police officers.  Condign punishment - what goes around comes around.

Iraq Occupation:





Ferguson Occupation:





What policing once was:

Outraged citizens with guns on state capital steps circa 1970.  Police response?

http://depts.washington.edu/civilr/elmer_dixon.htm
One bored cop (by the pillar, talking to the reporter ... (NB - the cop is not gassing the reporter.)  .

When you invade countries on false pretenses, but to steal their resources to keep your welfare state going, things change.  We could work for, and produce what we need, but it is easier for the powers that be to steal them as long as there are enough people who benefit from the theft.  USA citizens are not safe as long as we have state welfare, corporate or otherwise.

All that pentagon war equipment used in Ferguson, well, if police do not deploy the military equipment against citizens within one year of receipt, the Pentagon will take it back.  Those are the rules.

Feel free to forward this by email to three of your friends.


Applicability?

On Aug 26, 2014, at 3:36 PM, Jason wrote:

Hi John,

... I currently do not export any products but it would be a field that is interesting.  Do you think the class works for students that might want to export products from another country besides the USA?  I assume the philosophy is the same but maybe it would require different resources for finding out the data.  

Thanks for your time and writing your blog.

Best, Jason
Hey Jason,

The courses teach tools tactics and attitudes which are fairly universal.  We also address what YOU should trade in.  Living in USA and trading from second to third countries is rather advanced, best to be in either a market or source country starting out.

JOhn

Feel free to forward this by email to three of your friends.


Thursday, August 28, 2014

Help From SCORE


On Aug 27, 2014, at 6:12 AM, Sam wrote:
Hi John:

Having been interested in international trade for a long time now I have been reading your blog and find it informative.  I live upstate (wine country) but have not been able to focus in on a product.  
***I am working on a pre-requisite explanation video to assist people in gaining focus.  it is a very common concern...***
While food/wine seems interesting I wonder if there are other areas where volume/margins are better??? 
***there is a categorical error here...  volumes and margins have nothing to do with whether you should trade in an item...***
Do you cover focusing in on other sectors or do you more or less focus on food sectors?
***I have the general import/export class and the specific food export class.***
I am trying to learn how to identify products/markets  and function as a middle man.
*** This I teach: the most important thing in business is the customer, the hardest thing is getting the product or service right.  And the customer is the only judge if the product or service is right.  There is no other source for information on that.  Research on where those customers are, once you focus, is part of the work***
 I had reached out to SCORE in the past but the two advisors I spoke to, who had been involved in international trade, were very negative and repeatedly stated there is no place for a middle man in international trade in todays world! Any thoughts?
***SCORE stands for Service Corps of Retired Executives.  That accurately reflects the help, that is executives, managers in established business.  Great info if you have problems with an ongoing business.  It is not the "Service Corps of Retired Entrepreneurs."  Entrepreneurs do not retire.  The retirement plan for entrepreneurs is to grab the chest and drop dead mid-sentence.  Score is a great place to talk over problems in established businesses, but not for entrepreneurial work.

Having said that, how do you define "middle man?"  Perhaps he was rejecting your definition of one, and I very well might agree.  But there is plenty of work to be done getting ice cream produced in Oregon on the shelves in shops in Hong Kong.  You do not get there by becoming an middle man, you get there by becoming ice cream.  You are the product.
I am originally from (overseas) but have not been able to target in on markets. 
***There are two parts, regardless of your origin:  the product (you) and the customer.  I teach finding both...***

John

Feel free to forward this by email to three of your friends.


Wine Sales Into China

How do small Hong Kong businesses land sales in China?  MOQ FOB.  Exactly how the extremely few people in USA who are succeeding at small business international trade do it...
Hong Kong-based CEO Wine Cellar, a wine trading firm set up in 2008, also found success during the recent Style Hong Kong Changsha Show.
“Customers bought in bulk, splashing about Rmb10,000 per purchase,” said George Chan, General Manager of CEO Wine Cellar. The company took part in several Style Hong Kong shows, including in Xian, Harbin, Nanning and Qingdao. 
Bulk? RMB 10K is about US$1650.  Splash?  How about drop?    USA wineries are advised to "go big or go home" and put massive resources into huge presence and preparation. Go for big lawyer-mediated full container loads. And after all that, be happy with "trade leads."

That is just wrong.  MOQ FOB, $1650 orders are where it is at.  Search and learn.  Not the biggest order possible, the smallest order rational.

Feel free to forward this by email to three of your friends.


O Rats!

An intriguing movie came out in the 1960s about the experience of James Clavell as a prisoner of war in Changi, called King Rat.  he went on to write the Taipan and Shogun novels (as well as "To Sir with Love")

It appears rat is back on the menu...
Popularly considered a disease-carrying nuisance in many societies, the rice field rats, Rattus argentiventer, of this small South-East Asian nation are considered a healthy delicacy due to their free-range lifestyle and largely organic diet.

Feel free to forward this by email to three of your friends.


Wednesday, August 27, 2014

Bringing Credit to the Poor

So what happens when you have a false premise:
 “There are lots of people who need access to credit in South Africa to improve their quality of life.”
And you add a definition of credit that is actually fraud, but in capitalism legal?
Kirkinis, 54, co-founded African Bank Investments Ltd. in 1999 and built it into the country’s largest maker of loans not backed by collateral.
Asset-less based loans, loaning air, not money.  And, loan out credit at... wait for it...
Styling himself a visionary for lending to South Africans ignored or deemed too risky by conventional banks, Kirkinis fueled profits making loans at annual interest rates as high as 60 percent.
Help poor people by lending air at 60% of putative value?  Well, as usual,
Holders of ordinary shares, preference shares and subordinated debt may lose everything, while senior debtholders stand to lose 10 cents on the rand.
What people need is property rights protected, and make predatory practices like "asset-free" financing not state protected.  Credit can be a good thing, but not when a bank is lending it.  Vendor financing at no interest is very common, and good.

He got greedy... you can make much more over longer time periods if you make interest rates "only" say 5 or 6%.  The income on 60% interest you can afford to be "independent" and flashy.  For a short while.  He has advanced financed degrees.  Did he not learn this?  Or maybe he did.

As a side note, the government bought the bad debt and will now collect from the people in arrears.  So the government will continue the abuse instead of letting the people who were making money off this abuse simply lose.

This is how it works:  Ponzi scheme is criminal, Ponzi tries it goes to prison.  The the state sets up its own ponzi scheme, social security.  Gambling is illegal.  People go to jail for running lotto games.  Then the state sets up its own lotto games.    Marijuana is illegal.  People go to jail for trading marijuana.  then the states get involved in marijuana.

Potheads rejoice when marijuana is legalized.  We need none of these things legalized, just de-criminalized.  A huge difference.  Legalized, the state forms a monopoly and the damage itself is advanced plus a black market grows due to state monopoly.  (A pothead I know says state ganja is $700/oz and street is $200/oz. )  Decriminalized competition minimizes the harm.

This fellow could charge the poor 60% because he had a state charter, usury was legalized.

No country lets its bankers lose.  Capitalism might end.

Feel free to forward this by email to three of your friends.


Farrakhan: USA's Best Orator

And probably the smartest man in USA.  Here he is addressing a group noting, as Jesus and Pogo did, the problem is us.  I've read the classic orators, listed to MLK and others, nobody comes near him for wit and delivery.   Listen to his riff on Jesse Jackson's embarrassing comment about being glad the footfalls behind him were white kids, not black kids.  The delivery is riveting, he's upset his audience, and then he goes in for a brilliant plot twist.  And of course is is generally right. The guy is absolutely the best.




Excerpts form this speech are being selectively highlighted on racist websites.



Feel free to forward this by email to three of your friends.