Stockman on Fed Balance Sheet

David Stockman continues his run as the best explicator of what is going on financially in the world.

But here’s the point. If you are not wearing Keynesian blinders, it is self-evident that the $3.5 trillion expansion of the Fed’s balance sheet since September 2008 has all gone into the reflation of financial assets—a staggering gift to speculators and the small portion of households (10%) which own more than 80% of all financial assets. The reason for this diversion of the Fed’s vaunted “extraordinary accommodation” into windfall gifts to the 1% is that the historic “credit expansion channel” of monetary policy transmission is broken and done.

Pew reported the divide is getting wider between left and right, with the right getting the advantage.  Nice going, libs...!  Keynes in the German edition of his Magnus Opus noted Keynesianism would work best under Hitler.

You investment portfolio loses 50% or more and does not come back.  Then what?  The rest of the economy is doing poorly because the stock market is inflated.  When it busts, that mirage will be gone but the real problems remain.

Better start a business.

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Third World Politics

One feature of the third world is when its military shakes down business. The USA is exceptional in this regard, it does not happen here.

As the four-star general in charge of U.S. digital defenses, Keith Alexander warned repeatedly that the financial industry was among the likely targets of a major attack. Now he’s selling the message directly to the banks.
Joining a crowded field of cyber-consultants, the former National Security Agency chief is pitching his services for as much as $1 million a month. The audience is receptive: Under pressure from regulators, lawmakers and their customers, financial firms are pouring hundreds of millions of dollars into barriers against digital assaults.

OK, just this once.

Now you would think if such a threat was imminent, he might have done something while in the service to keep us safe.  Or if he was retired against his will, then surely his pension and a love of country would compel him to advice gratis, or for not more than expenses.  His pension and bennies are already makes him a millionaire.

But no, the whole thing is about money, shakedowns, let problems happen so your price goes up.  I grew up hearing about those godless communists, but the real problem is the godless capitalists.

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Kick the Can Across the Border - World Financial Deregulation

A crash is coming, and the powers that be know it, although they all swear none ever see a bubble forming.  How we know it is they are busily trying to avoid it, well, in USBanking style solution, keep the profits and pass the losses on to the taxpayers.  In 2008 they did this in USA.  They are preparing specific steps to pass their losses on to taxpayers worldwide in the coming debacle.

“The draft Financial Services Annex sets rules which would assist the expansion of financial multi-nationals – mainly headquartered in New York, London, Paris and Frankfurt – into other nations by preventing regulatory barriers,” WikiLeaks said in a statement. “The leaked draft also shows that the US is particularly keen on boosting cross-border data flow, which would allow uninhibited exchange of personal and financial data.”

Wikileaks has posted the item here, and it is amazing for its specificity, and the comprehensiveness of the range, and keep in mind this is only one chapter of the agreement.

As you read through it, recall all free trade is unilateral.  Any agreement necessarily contradicts free trade, so no trade agreement can ever result in "free trade."  Internal contradiction.

And this is why these odious events keep happening, because the people in the commanding heights putatively criticizing the acts mislead their students:

Dr. Patricia Ranald, a research associate at the University of Sydney and convener of the Australian Fair Trade and Investment Network, told the paper that the documents suggest the US wants to “tie the hands” of other governments, including allied ones, by way of sheer deregulation.

Dr. Ranald, how can something be a regulation and not a regulation at the same time?  Socrates 101.  By "criticizing" this as "deregulation," the facts are twisted to suggest the solution is re-regulation.  This is the Trotsky version of hegelian dialectic, where a bad thesis is countered with a false antithesis to derive a worse synthesis.  Nothing is being deregulated.  If any deregulation was going on, things would improve.  Different regulations are being instituted, and a whole lotta "policy laundering" going on.  The five years secrecy allows congress to auction off their votes in time to implement bad policies which will be foisted on all bankers in the agreement zone.

Good banks, like Beal Bank, which was prosecuted by the Feds for not doing the wrong other banks were doing, will get prosecuted as well until all are in line.  This will go on among all of the countries involved.

Of course this should be stopped, the names of the people involved collected, social security numbers noted, dismissed from government and otherwise be obliged to return to the semi-private sector.  These adventures should be frowned upon.

Remember, the governments are taking these steps because the know the system will come down.  The solution is to go the opposite direction.

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Merino Does It For Me

To develop the best product in its field, you must work with the best.  One of the people in New Zealand we are working with on our ski sweaters is world class wool-sorter Will Gibson.  His sentiments are exactly those needed to succeed at this - it's about lifestyle, not the money (although the money follows.)



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Credit is Gold?

China has a tradition of naming things poetically that tend to get lost in the translation.  But a bond entitled Credit Is Gold is clear enough.  Credit is not gold.  The bond had to be bailed out, but now China is cracking down on specious bonds, a bit....

Far from being China’s Bear Stearns it might simply be a sign that China has arched its eyebrow at the solar industry (and other private, vulnerable industries that lack political clout) and decided to stroll away… with its arm still draped around the shoulder of privileged enterprise.

Bonds are an unnecessary financial instrument, and unwise in any event.  They are also the easiest to go bad, and China will have a problem with these.  But in all financial crises, the question is, "relative to what?'  If the crash in USA is experienced as worse than in China, as both will crash at the same time, then the question is who crashes hardest.

Impossible to predict on numbers alone.

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Get Thee to a Trade Show

Forbes has a useful article on trade shows:

This week I had the pleasure of attending the New York International Gift Fair at the Javits Center in Manhattan. The show is one of the largest in the world, boasting 2,800 exhibitors and 35,000 attendees. 

I cut my teeth on gift shows, so this was fun to read.

Here are a few of the entrepreneurs I met, and some of the lessons they offered to companies considering exhibiting next year.

I'll make my comments after her.

Richard learned that his wholesale pricing had to be 50% of retail, which meant he had to double what he was originally selling the product  for on Etsy to make it work for retail chains. He also figured out that his minimum wholesale quantity had to be 20 instead of 10, because after a year of selling he found that people who ordered 10 came back a week later and ordered 10 more. That said, he was willing to work with smaller retailers at the show that approached him about testing the product at their shops.

Willing to work with small business?  They are 80% of your business!  If you read the article you can see that selling online did not cut it.... another important lesson.

Success: Richard told me that he made enough in sales to pay for his booth ($5,000+) on the first day of the show. He added that even if this had not been the case, he would still have considered the show a success because he landed accounts he would never have found anywhere else.

Yes, but....  do not go to a show without customers to meet...  take a show you think you can do, and then sell to that show.  Find likely customers before the show (I teach this in my classes...) and then share you expect to exhibit at that show.  Then the other orders you get are gravy.  There is so much work that can be done before a show to make a show a high-producing event, orders in hand.

Advice for others: “A friend of mine gave me great advice before the show. He said ‘Don’t waste your time with rude people, because in the end that means they will be a pain in the ass to deal with. They are the customers you do NOT want.”

Yes, there are plenty of people you do not want to trade with.  By executing a professional sales tactic you get rid of these people from your booth within about 10 seconds, and save yourself time and energy.  Sales is for professionals, but starting out you can learn enough to be effective, and even more important, to be a good consumer of sales talent.  The only correction I would make to the above statement is to say "they were never customers to begin with."

The article goes on to another exhibitor, who notes to get in front of a wide group of buyers gives you incalculable feedback:

Until now, his market has mostly been “white hipster kids” – so being at the gift show gave Chad a wider sense of his potential market.

Lessons learned by this exhibitor:

In addition, next year he will bring a screen that will show some of the great press they have received all over the country and the Web. He said a few buyers seem skeptical about the reception the product will get — so he wants to reassure them more persuasively that his is a proven product rather than an unknown risk.

A screen?  Unh...  avoid moving parts, things that need power.  Yes, just as a website should be feedback/testimonial rich, so should your booth.  Print off screenshots and laminate them so buyers can spend the 1/10th of one second noticing it instead of standing in front of a monitor waiting for the slideshow to happen.  And have articles already written in an envelope with ...  well, read how Patagonia got massive cover stories for a mere $500 a pop.  But yes, fill your booth with testimonials...

A most excellent version of this credibility effort I saw back in March at the ExpoWest show.  This was brilliant.

She goes on to a second exhibitor...

“Etsy is direct, but we want to be in retail. We want to grow the business to where it is not just made in our living room. That is different than Etsy.” The gift show seemed like a great place to get feedback from buyers as well as see how the products were received.

See a pattern? Online is not the place to run a business.  There may be some feedback to be gained, but what else are you hearing?  All of these people get their real and valuable start-up feedback at a trade show.

The feedback they got was that people really like the products but that they need to add more products to complete the line.

Always "what is next."  The first question out of every specialty store buyers mouth is "what is new?" Part of the sales process is "sell the company" that is to demonstrate you are the best source of the item. part of that selling is to make clear you are in for the long haul, and one concrete example of this is what you are working on next.

They also found that some of the props they brought — including seed bomb favors in burlap sachets and some of the reclaimed pallet wood shelves — were just as popular as the coffee bag beds. Based on this feedback, they are planning to add these to their product line in the future.

Once at a trade show we had some props made which were plywood blow-ups of images on ceramic serve-ware.  Everyone wanted a price on the props!  So we got into that business too.

For this third exhibitor, here are the money quotes:

“We got advice from a lot of people who have been through this process. They told us that a lot of the great orders will come in afterwards. It is all about the follow up.” In other words, don’t lose heart if your first gift show is not an instant success.

This is true, but you can do plenty of work to make sure the first one is more revenue than it cost you to exhibit.  Yes, make the show pay, and then also get that "unexpected order" pay-off.  It is all trade show booth management work.  To pre-seel is to create a better exhibit.

Their parting words of advice, “Put 110% into your product and your display. It makes a big difference. People can tell. People know quality and will respond to your best effort.”

Yes! People royally screw up booths.  Unless you can afford the $50,000 for a properly designed booth, less is more.  And make it about your customers, not about you.

Kimberly added, “Talk to everyone – even the exhibitors – anyone who walks through or near your booth. You have no idea who they are — buyers, distributors, magazine feature writers!... If you are not afraid, you can’t fail.”

Above I talked about how to be prepared for the press.  Also, how a professional sales approach is critical to sorting out buyers (ready, willing and able) from non-buyers.  Learn that sales process!  Approach (the booth has accomplished that step) Qualification Agreement on need Sell the company Fill the need Closing. Memorize it.  (I have a graph of this, email me if you'd like a copy.)

And fear is a constant so I am not sure you can be without that, I'd recast that "you fail only if you quit."  Now, key to that is to never waste time or money, so you get to where you are thriving faster, and have less pressure to quit.

As I have said elsewhere, people are learning anew what was passed on from generation to generation. As many have noted, we've lost two generations of entrepreneurs. The skillset for a properly executed trade show booth, preparation, execution and follow-up, for this there is a crying need.  $5000 is typical for a booth alone, then there are all the other costs.  There is nothing that so concentrates the mind in business as an upcoming trade show.  For these reasons I am now testing out the idea of "trade shows" as seminars."  The first one will be in November of this year, in Hong Kong. The 'all-in cost' of airfare, hotel, food, transfers, and booth cost ( booth on a shared basis) will be about $4100, with all of the pre and post assistance included.  $4100 all in in Hong Kong with worldwide exposure, vs $5000 for booth alone.  Start out with others! email me for full particulars, and here is a link to more info.

http://www.johnspiers.com/Export_Agriculture/Advanced.html

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Small Business Development Theatre

NPR was interviewing a dot.com founder on an upcoming meeting with the President, to discuss something to do with business development.  What I heard was along the lines of

We tell the story of the new product to the retailers.

Wait, retailers could care less about a story, what they want is to test out products on the only opinion that matters, and that is the customers.  So ever looking for changes and differences,  I looked up stories on The Grommet.  If you look at this on the 18th of June, you'll see in their home page splash the celebration with the White House.

Now, what we would expect is first and foremost success stories...  and what do we get, from the Q&A...

On The Grommet's US-made and eco-friendly focus, and why it's not being picked up by major retailers:We noticed five years ago that there was going to be a really strong interest in shopping by values. It was created by our disappointment with large institutions, whether dealing with an economic crisis or leaders who let us down. People were stepping back and saying "What am I participating in here when I purchase?" Even if not consciously, people understand it's the strongest way to take action—which businesses you support. There wasn't really a focus for it and we really invented the idea of overtly and easily shopping by values. You can decide on our site what your most important criteria is and shop that way. Big guys have a DNA, it's different. A large retailer might be leading with price or operations. If you're Fab you're leading with design, not with values. With Etsy you're leading with handcraft or vintage. We're leading with values and nobody else is doing that.

"We noticed ... there was going to be..."  How?  What was the objective data?  And of course big business does not want what they offer.  But small business is not going to want "stories" either, they want sales.

On sourcing vendors:It's half people submitting a product that's not their because they love it and want us to know about it; we look at everything they submit. And then it's half submitting their own product—there's a spot on the site with a gallery for it. We've received a lot of attention for our use of Pinterest, because we have a group board where we invite people to contribute and people suggest grommets there and it's a high yield place for us for great ideas. We're very active on the crowd-funding platforms and we partner directly with Indiegogo so we get involved early, even pre-production and do a little funding. We've launched probably 10 or 15 products off those platforms.

Signal to noise.  "A lot of interest..." " half the people..." "high yield..interest"  "very active.." "We've launched probably..."  how come no hard facts.  This is dot.com talk all over again. And then, how to process all of this as a business?

At this point the products we launched in 2009 that became big—Soda Stream, Alex & Ani, Bananagrams—those are products that many people know and you can find in major distribution.

Hang on, Soda Stream is a product invented in 1903, and has worldwide distribution, was bought by Israeli investors in 1998 who produce it controversially in the occupied territories.  Perhaps SodaStream used Grommet as yet another promotional venue as kickstarter is being used by well-funded companies, but to say Soda Stream was launched by Grommet is a bit of a stretch.  I mean a huuuuuuuge stretch.

What is the success rate, are they making money?

We have a perfect visibility on that because we've built such a great community that tells us within 24 hours of launching a product whether it will have high appeal commercially or socially. That data is our goal, and sharing it with new companies launching. It gives them a lot of credibility when they want to get further media or retail support, even manufacturing. They are all watching us like a hawk.

Doesn't Amazon do this far better?  And expect no fees?  And what is "high appeal socially?"  I think this may be what Ogilvy condemned, "eyeballs' vs "sales."

And this I can make no sense of...

I don't see us as a retailer; that's what retailers do. If they have a good idea they try to hide it, it's a competitive business. But they are human beings too and they do want to support these kinds of companies but you can't do it until some of the risk is taken out. Increasingly we've been working directly with larger retailers to let them know these companies can handle operationally what they are doing, they are proven, here's our experience with them. We're like the ambassador for these companies; it's meaningful. We're a weird company in that we cooperate. It's interesting to get into the economics of it. It protects the next little guy coming along. I like to affiliate with companies that change something and we've stuck with the same idea for a long time.

What little might make sense is alien to the reality on the ground, and I hope it is just bad journalism, not reflection of the thoughts of the founder.  But it sure sounds like more noise to signal.

She goes on to say she trademarked "citizen commerce."  Unh...  "let's make this for the people by introducing violence to the scenario."  What possible value does trademarking a slogan bring to the scenario?  And what does it mean?  As opposed to government contracts?

And it may not matter, the goal may have been achieved, because she sold a majority to Japan investors:

The news this week is that Lexington, MA-based Grommet has a new majority owner—Japanese e-commerce giant Rakuten—thanks to an unspecified new investment. Rakuten led the startup’s Series B round last September, and Grommet also has raised about $6 million in angel investment ($4.4 million paid in capital).
And next month, the startup—which has grown from 10 to 43 employees in the past year or so—will move into new digs right on the Cambridge-Somerville border, near Davis Square. Its new mailing address will be in Somerville to reflect “more of a hacker/maker community,” Pieri says.

More money, let's blow it.   They should have moved to Peoria.

And while Grommet’s mission hasn’t changed, it does need to serve its new master. “Our role in life is to discover and curate the best ideas and products out there, and help them scale,” Pieri says. “We de-risk them to help them move forward to Rakuten’s store” and other large retailers.

Two problems here and one surprise.

1. Curating is a fun buzz word, but that is too big of a job for one company.

2. De-risk is the work of the entrpreneur, essentially handled in design, and cannot be farmed out.

3.  Surprise: she has divined that entrepreneurs never take risks.

Rakuten is sometimes referred to as the “Amazon of Japan.” But it sells itself culturally as the opposite of Amazon. “Rakuten doesn’t undermine its partners,” Pieri says. “A lot of our vendors have a problem with Amazon.”

No they don't.  I've been a supplier to Amazon for a decade, and they have never undercut me or anyone else as far as I know.  So this is a false premise.  And she indicates her stable is a self-selected group of people who did not work well with Amazon.  Not sure that is the group you want.

Also, Japan's experience in retailing in USA is not stellar.

And then this:

 “Most of shopping isn’t transactional, it’s about discovery or connecting with the creator of a product. It’s about walking down that cool street in a town, it’s all about story and personal experience. Amazon can’t retrofit around that, that’s not its business.”

If you narrow the idea of shopping to browsing in specialty stores, then there is some of that walking down that cool street in town, but that is in specialty stores and galleries.  Online can bring nothing to this experience, but nonetheless, this is what the Grommet proposes.  Also, if amazon cared for this business, it need not "retrofit" it would simply step in and take it too.  With unlimited debt creation, it can do as it pleases.

The funny thing is, those cool streets  have gotten shorter as cities and the feds destroy the middle class and the architecture to support it.  We need a crash in commercial real estate so we can get back to rational rents and small business thrive again.  FED policy and tax laws are killing the middle class, and capitalism is over, it is just a matter of what event triggers the crash.  In the meantime, small businesses will be exponentially more valuable as they fill in.

This is people not succeeding, or at least extending a false economy, celebrating in the White House with people who want to crush small business.  It makes sense.

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Feds Eliminate Redskin's Trademark

What a wonderful opportunity!  Highlighting the whimsical and chaotic nature of government, a few clerks decided to end a "property right" most Americans believe to be absolute.  The Redskin's trademark is null and void. The government's idea is without a trademark, they will change it.

Yay!

Now, what the Redskins can prove is Trademarks are utterly unnecessary as a "intellectual property right."  What a rare opportunity. The Redskins response should be to continue with the logo and name, and market it like crazy, but now with traceability, instead of state violence.

Their sales and revenue will be the same, if not better.

1. The amount of fake Redskin merchandise will not increase.  Faking product is hard business, and the supply meets what demand there is.  "Piracy" will not change.

2. The Redskin logo will rise in value given the resistance image it has.   The term Redskin was already meant to denote implacable resolve on the gridiron, a tribute to American indians, and with its defiance of silly Government, it will join the Southern Cross and "don't tread on me" as iconic worldwide.

She added, “You’ve heard from the president of the United States, you’ve heard from the majority of the Senate, you’ve from some of us in the House. And I think what you’re going to find is what we find whenever a great human rights issue comes to the fore: You’re going to have more and more voices until it will become impossible for either the Trademark [Office] or [NFL Commissioner Roger] Goodell and [Washington Redskins owner Dan] Snyder to do anything but change the name.

No shame on you for worrying about the name of a sports team as the world burns and the USA economy dies.  A "great human rights issue."  Sheesh.

3. With traceability, people will be able to tell they are paying the premium price for the real goods, and then it will be a matter of Redskin marketing to take the franchise to its highest potential.  Who wants fake Harley Davidson logo items.  No one, demand for real Redskin goods will be massive.

Manage this opportunity well, fellas!  And strike a blow for freedom.

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China and Immigration

China has massive illegal immigration as well.

Only about 849,000 foreigners are staying in China legally, according to the 2014 Report on Chinese International Migration published by Wang's organization earlier this year.
Wang said the current migration policy discourages foreign talent from coming to study or work in China, adding that the country has only issued about 5,000 "green cards" to foreign applicants in the past 10 years since the permanent residency policy was introduced in 2003.

But how come China is not so worried about it?  Why no existential crisis, careers in the balance, vitriol and hatred, why is it not a problem.  The Chinese response is downright laconic:

China regards a skilled immigration policy as a strategic requirement for its development, he said.
The policy on skilled immigration will be designed to include a list of most-needed occupations to reflect the country's long-term and short-term needs, he added.
A points-based system can help to assess the eligibility of applicants in terms of their knowledge, skills, adaptability and contributions to the country, he added.

In other words, they'll get around to it.  But they see all this immigration as a good thing.

How come?  What is the big difference that China can be ho-hum about massive illegal immigration, and the USA it is such a controversy?  There is one element that is different:  In USA we offer welfare, in China they do not.  There is the difference.

Instantly people will either agree with me or object, and you'd both be wrong.  Let me explain:

I've picked apples with Mexican illegals, and met plenty of others all over this country.  There is not a single one of them who came to USA for the welfare.  They came here to work.  The welfare is money that has attracted the criminal element, because people who tend to welfare also tend to drugs, and welfare money is the heart of the drug trafficking world.

Welfare is pressed upon illegals, many who then take this "also" money and transmit it to Mexico, which helps keep Mexico docile.  This is not unintended.

No one illegally immigrates to China to exploit Chinese welfare system, either.  Sure China has a "welfare system" too, but it is, ahem, not very attractive.  China is far more reliant on mediating institutions, not state welfare to survive (except for party members, just like in USA).

Once illegally ensconced in China, there is no welfare system to exploit or burden, one must get to work.  So China has the policy USA needs, and that is no welfare and open borders.

But millions will starve in USA!  No, no one will starve, if we cut the welfare taxes collected to zero, and the Churches can get busy restoring their traditional role of a good word with a good meal or hospital stay.

Now here is another thing going on in China:

The country faces an imbalance in talent flow, as 9.34 million Chinese have migrated, including a considerable number of well-educated and skilled workers.

If China is so wonderful, why do some insiders clear out?  We have the same thing in USA.  If you are a well connected, elite member of society, you cannot break the rules without a risk of getting caught.  If you are a native, on the low level, you can expect the law to be harsh.  In both the USA and China, there is selective enforcement of rules against immigrants.  Especially at the small business level, the rules are so destructive it is almost necessary to be a immigrant to fly under the radar and build something good.

We need to change all this.  End welfare as we know it, roll back the crazy rent-seeking rules and regs, open the borders, and let USA get back to work.  And bring the troops home.

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China Uber Alles

So while Seattle government works as hard as it can to crush small business innovation, The Chinese plow ahead in USA.  Today they announced they will enter the USA market for crowdsourced rider-sharing.

China's version of Uber, the web-based minicab service, is planning to go after Chinese customers, especially travelers, in New York and San Francisco with Mandarin-speaking drivers.
Yongche.com — China's largest mobile-phone car-sharing service with a fleet of close to 50,000 vehicles and more than 2 million active users — plans to expand service from 57 cities to 150 by 2015, Zhou Hang, CEO and founder, told Bloomberg News. And New York City and San Francisco will be part of that expansion, he said.

Ridesharing is huge in China due to the relative freedom people have in China.  And entrepreneurs worldwide flee the chaos of the democracies to thrive in the relative anarchy of China.  Far more western innovation and small business development is happening in China than anywhere in the West, easily perceived by the progress China has made over the last two decades.  And then throw in Hong Kong, and wow.

Here in the USA it is a double challenge: the official, stated policy of "get big or get out" which leads to active acts of destruction of small business by government agencies. It is chaos for Seattle rideshare companies to be first face new laws designed to destroy them, and then later to find laws that they can live with.  What intervened?  Most likely, payola.    Seattle is particularly bad, and a great candidate for truth commissions.

Or just create a Hong Kong here in USA for those of us who can be free.

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Natural Fibre Ski Sweaters

Makkai & Spiers received the prototype of our ski sweater, we think the ultimate ski sweater.  We were at the right place at the right time when some naturally colored merino showed up in New Zealand, and we were talking to a manufacturer who knew the prize winning sorter, who knew this shepherd who had these sheep... etc... we are working with the prototype now.

The ultimate green garment;  no dye, and no sheep died.  The sheep grow wool by eating grass, fertilizing the fields, and moving on, coming back to that grass in a year, but not before giving up a coat of wool.  Then the wool goes straight to a great balance of machinery and talent that cannot be found anywhere else.  Obviously I have no problem going to China, but China cannot do this.

This will be an all New Zealand product.  Here our supplier is showing the raw material.  Check out the silver.  A silver ski sweater...  this is going to be very cool.  I mean hot, well, a lot warmer with maybe 1/3rd the weight.  Well, that is what we are measuring in the prototype, performance.



Another past participant emailed me with a concern regarding a inquiry for a very large but manageable deal from a top buyer.  The past participant was surprised.  When you are in business, things will happen.  If you do not start, they cannot happen.  You have to get started.

I teach on the side, and on the upper right of this blog are three links to classes available world wide.  Get going now!

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Indiegogo and Losing Stuff

Indiegogo is backing a new product that needs $20,000 and has gathered $160,000.  You thought of this product too, the personal item tracker.  An alarm goes off if your keys get more that ten feet from your wallet, or cell phone from your glasses, etc.

I imagine at some point they will build this into cell phones.

Observations:

1. People always say "that was my idea."  Yes, but a neat thing about indigogo is you can now test "your idea" as soon as you have it.  Since the first thing you need in business is a customer, not anything else, indigogo will finally silence those who grouse about their "idea being stolen" or whatever.  Now it is put up (literally) or, how to say this, shut up.

2. Also, watching people succeed, you can learn to stop being envious. I'd love $160K to develop a $20K item.  And I even thought of this (as did probably every single other person on earth with a cell phone and a wallet).   But, as the Bible says, be happy with your portion.  It was not my work to introduce that item, it was (and how!) the work of those who so very much succeeded on indiegogo.  So what is your portion?  What is not happening that should, because you are bellyaching about others while not doing your portion.  Is your idea too small?  One fellow emailed me this week telling me about his first deal and apologizing for it being so small.  Are you kidding?  He took the first step!  It is the step forward, not the stride.

3.  Vast swathes are happy to contribute to good ideas with no requirement of compensation.  Why usury?  Why IPR?  Obviously people are happy with an economy with none of the ugly stuff.

If you free your mind from capitalism, you can see the necessary and sufficient good that is done by free markets.  Business start-up has an element of self-improvement.  But you knew that, if you ever thought about starting a business, the impulse was toward self-improvement.

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Bitcoin Internal Contradiction

News comes out that which allows a little light on the scam known as bitcoin:

“We would never do anything to harm the Bitcoin economy; we believe in it. We have invested all our effort, time and money into the development of the Bitcoin economy. We agree that mining should be decentralized, but you cannot blame GHash.IO for being the #1 mining pool.”

Later the Federal Reserve Board had this to say...

“We would never do anything to harm the USA economy; we believe in it. We have invested all our effort, time and money into the development of the USA economy. We agree that currency should be decentralized, so we have 12 separate banks, but you cannot blame The Fed for being the #1 in currency.”

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Working on the Side - Go Back to College as an Instructor

As you start up, there are some challenges as to income occasionally.  I teach, write and consult on my topic, small business international trade. Colleges in USA are looking for instructors to teach noncredit classes.  You teach your expertise.  I teach an online course through Auburn University on this topic, which you can find more here.  I won't be teaching it again after this quarter, simply because I am too busy, so sign up soon if you want to learn about his opportunity.

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A Question of Taiwan Independence

Get Big or Get Out must be one of those things that emerges "because you can."

Taiwan has managed to maintain its independence in spite of the desire of the Communists to unify Taiwan with China.  Way back when an ardent young communist questioned me in China whether I did business with Taiwan as well as China (the State Department issued USA citizens a second passport to hide this from disapproving officials.)  I told the truth, yes, of course.  She grew very stern, "How can you trade with Taiwan, that renegade province?"  I said "Taiwan is a Chinese province, Taiwan and China are the same country." She stopped, considered this, and said "Your politics are very good."  Then both Beijing and Taipei agreed on this point: Taiwan and China are one country.

Now elements in Taiwan are having second thoughts.  And this angle is interesting...

"I believe as long as we consolidate opposition against 'Taiwan Independence,' adhere to the '1992 consensus' and uphold the one-China framework, cross-Strait relations will move on steadily," Yu added. ...

Zhang Zhijun, director of the State Council Taiwan Affairs Office, also said the mainland was willing to share its market opportunities with the Taiwan compatriots before anyone else.
In a speech at the forum, Zhang called for more support for small and medium-sized companies in cross-Strait cooperation and expansion of youth exchange activities.
In the March protest attended mainly by Taiwanese college students, one commonly filed accusation was that the pact was designed to favor large corporate interests but would bring losses to small and medium-sized companies and the self-employed. The agreement aims to open up 80 of the mainland's service sectors to Taiwan and 64 Taiwan sectors to the mainland.

So China's goal is to "consolidate opposition against Taiwan independence."  Whew...  double negative on a roller coaster... what is this restated positively?  Advance unification?  In the double negative expression, pro-independence is the problem.  In the second, unification is the problem.  Depending on how you state the case, the argument follows.

The very blandishment offered in the speech is internally contradictory.  First off, neighbors are already, worldwide, #1 trade partners. so there is no extra advantage to be obtained.  Next, any offer of managed trade (share market opportunities) is inimical to prosperity.  So no wonder the offer is questioned by some.

So who are the pro-independence folks?  Small and medium business, the self-employed.  If Taiwan unifies with China, then China can bring "get big or get out" to Taiwan.  So it appears Taiwan still has an entrepreneurial ethic still alive, quite aware of itself, it is quite sober in recognizing an existential threat, it ain't buying the notion that state "help" is help.

The idea that free markets are some Judeo-Christian gift to the world is nonsense, it is one of those universal, natural law things.  One thing is clear, capitalism, communism, fascism, all practice "get big or get out" because they cannot stand the freedom, peace and prosperity of the small business sector.

The USA has never been a reliable partner, especially to Taiwan, and Taiwan has to figure out how to deal with the Mother Ship.  Hong Kong provides some lessons, and so maybe does Sicily, which we think of as Italy, but not so either Italians or Sicilians, except for some vague hegemony.  Just as in the USA, and anywhere else on earth, a nation's freedom depends on its small businesses.  In Taiwan we have a clear instance of small business holding the cards, the team to beat when it comes to the unification question.  It will be fascinating to watch how they play the cards.

We (USA) need a Hong Kong, Sicily, Andorra, Taiwan option here in USA... a place where the seed corn of freedom can be stored while USA goes headlong into the insanity of debt-fueled war and welfare fascism.  (Russia may have this in the Crimea.)

A free market zone, surrounded by a Navy base to keep fleeing Americans out, but open to trade with the world.  Right now starting a business is a revolutionary act in the USA.  We need a place where that is not so.

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Gary North On Brat on Usury

I've learned a lot form the Christian anarchist Dr. Gary North, all the while aware of his anti-Catholic bias.  Brother Jimmy Swaggart has nothing but deconstruction for Catholicism, but he is one fine exegete.  When he talks, I listen.

North has also read and critiqued Brat, and although Brat neither mentions nor elucidates Catholic teaching, only Calvinist, and Brat and North both wholeheartedly agree usury (charging interest on a loan) is a good thing, North takes the opportunity to slam Catholic teaching and comes up very short. Let's take North apart:

Beginning in the late medieval period, the Catholic Church began to enforce laws against taking interest on loans. The justification for this officially was that the Old Testament prohibited interest on loans.

Actually usury was prohibited all along.  North is a historian, he can do better than this.

This was probably the single most serious exegetical error in history of Western Christianity. It was categorically wrong. It led to a strangling of capital investment. It led to a series of obvious pretenses that justified taking interest by means of work-around arguments. Interest was not called interest.

Ummm.. how about gnosticism, or the Albigensian heresy?  Come on, lighten up, Gary.  Kantianism, much? How did they build all of those fantastic Cathedrals, the googles, space programs and Apple Computers of the day, without usury?  It is possible usury is simply not needed, as proven throughout history?  Three hundred years later the triple part deal was introduced, but not in 1250.  And interest was not called interest, because the etymology of the term means "to take a loss" not "to take a gain."  Etymology is a subset of history, Dr. North, check it out.

The prohibition handed over a very nice monopoly to the Jews, since they were not under the restrictions that applied to the church. They freely lent money to Gentiles at high rates of interest. They had no legal competition. It gave them a comfortable monopoly.

Whew!  This is very wrong.  There is nothing comfortable in that which can easily be repudiated and occasionally got you executed in that which some might engage.  The expulsion of the Jews from England and Spain was hardly comfortable, and the horrors of Ghetto-isation maybe more so.  Jews were expulsed from England in 1290 by Edward the Confessor, and did not return until the mid-17th century.  The entire English renaissance, and a whole lotta finance going on was, as a Calvinist might put it, Juden-frei. No Jewish usury.  Sure enough Pepys et al stepped into the breach, but the fact is usury got you executed if caught, Jew or no.

The problem that the Catholic church had in 1250 is the problem that is still has. Technically, the prohibition still exists. It was never justified by the Bible, and it was always bad economic policy.

The prohibition has nothing technical about it.  It is absolute, and has never changed.  Vix Pervenit is the last official word, the prohibition is absolute and has not changed.  Well, how come then is usury so widely disregarded?  Well, how come the teaching on birth control is so widely disregarded?  Something like 94% rejection on birth control, 99% rejection on usury.  How about that, something taught even more rejected by Catholics than birth control! Selling of indulgences was widely practiced until Luther put an end to it.  Pope Adrian specifically wrote to Luther telling Luther he was right.  Bishops from Peter forward have often got things wrong and taught error.  What is new?  The teaching of faith and morals of the Catholic Church are infallible, the Bride of Christ is not to be abused, but bishops teaching faith and morals?  The pastor mustn't get too far ahead of his flock.

It took me from 1965 until about 1990 to figure out what the biblical position is. I discovered it as part of my project, an economic commentary on the Bible.
Here is the famous bottom line. The Mosaic law did impose a restriction on charitable loans. For charitable loans, it was illegal to collect interest payments of any kind. 

Famous in your own mind? All that time and still got it wrong, Gary.  Some serious anti-Catholicism and pride at work here.  All loans are charitable events.  There are no exceptions.  One reason Islam is hated is they have this right: all loans are charitable events, even though you are to be paid back.  If you are not paid back, certainly you are aggrieved, but Allah favors the compassionate, the idea being you forgive the debt.  As Jesus says too.  Investments are always skin in the game, not a guaranteed return.

The church enforced this prohibition. The state did not.

Correct! And for an anarchist to let slide the fact that the state was able to introduce something, under the rubric of a tendentious reading of Romans 13 (not North, but putative-Christian usury-queens), is astonishing.  Kings brought kingdoms to ruin by contracting usury,  while forbidding it to their subjects.  Good old-fashioned hypocrisy where the damage was limited to the King losing his head.  With the state-allowed usury, we get the horrors of mal-education, malnutrition, endless wars, subpar housing, medical malpractice, and so on ad nauseum.

Dr. North goes on..

Charitable loans were unique in ancient Israel. They were loans that were made by Jews to neighbors who had fallen into a crisis through no fault of their own. This included some non-Jews: resident aliens. These debtors were willing to agree to a specific penalty if they failed to repay the loan. They would go into slavery until the next sabbatical year. This term of slavery ended on the day that Jews today call Yom Kippur, but only at the beginning of the seventh year, also called the year of release. All non-commercial debts were canceled. Also, no planting of crops was allowed. It was part of the system of laws governing the land. This law was unique to Mosaic Israel.

Well, Israel was the first recorded instance, but not unique, proto-Hindus, indeed every major religion condemned it.  Chinese philosophers condemned it.   And I think I can quickly find a half dozen Rabbis that would take apart Dr. North's summary of the Old Testament in this regard.

With respect to commercial loans, there was no restriction on interest. If a person defaulted on one of these loans, he could be sold into servitude to pay the lender.

Note he does not cite the passage.    I think I know why, it is not there.  Next Dr. North goes too far:

Jesus specifically identified the taking of usury as legitimate in Matthew 25, the parable of the talents. 

So Jesus is the master in this parable?  If so, is Jesus the stupid, greedy person in  Luke 12 16-21?    Is Jesus the man who loses all in the face of stronger forces, in Mark 3 27?  In Luke 16:19–31 is Jesus the rich man who goes to hell and cannot be saved?  In  Luke 18:1-8 is Jesus the unjust judge?  In  Luke 18: 9-14, which one is Jesus?  The tax collector or the Pharisee?  Claiming a story about someone evil supports Jesus endorsement of doing evil is risky business for a Christian.  Contrary to North's tendentious reading of Matthew 25 is Luke 16 1-13, where  Jesus is expressly appreciative of debt forgiveness, and usury plays no role.    But there is more -

The point of the parable was this: whatever gifts you receive from God, you're responsible for increasing their net value as part of the process of kingdom expansion. But to get this idea across, Jesus used the example of the moneychangers. They were bankers. They lent at interest.

Wait.  What was Jesus' first act after being acclaimed King of Israel by the people?  He drove the moneychangers from the temple.  This brought out the old guard who confronted Jesus as to what authority Jesus had to do this, and set new rules against for the temple?  If anything got Jesus killed, it was his overthrow of the economic order.  That went too far for the powers that be. Apparently Dr. North stands with the Sanhedrin on this point.  Dr. North would have Jesus directly contradicting himself.

Or not...  look at two statements Dr. North makes in the same paragraph:

Jesus specifically identified the taking of usury as legitimate in Matthew 25, the parable of the talents.
...
That's a fairly clear statement in favor of usury.

Which is it Dr. North?
"Jesus specifically identified... taking of usury as legitimate..."
or
"..fairly clear... statement in favor of usury..."

Some serious backtracking going on.  I think deep down he knows this is anti-Catholic bias, not conviction.  Usury is like lying, you know it is wrong when you do it.  Like lying, the more you do it the easier it gets.  Dr. North has a conscience.

As to usury, referring to an article that does not mention Catholic teaching, speaking about a Calvinist trained seminarian, Dr. North offers -

The Catholic Church understood none of this. It has never has gone into exegetical detail on the supposed basis of the usury prohibition.

O dear.  The world over, Muslim and Christian alike, go to John Thomas Noonan, a Catholic lawyer and author who wrote the book on Catholic exegesis on usury in 1957.   Everyone cites Noonan, one way or another.  As a Greek and Latin scholar Noonan can read the originals of the vast Catholic exegetical details on usury, something North cannot do. As to this book, you cannot have a copy.  But you can find one at some libraries.  Noonan is now a Federal Judge, and I had lunch with him to discuss his book last year.  Few topics have been so thorough covered in Catholic exegesis as usury.  This statement is utterly ridiculous by Dr. North, and is I am sure just blind bigotry.  The funny thing is, North would be better off reading Noonan, who claims the Church changed its teachings on usury, a point the good judge and I disagree upon.  (I am right).  But Noonan makes his case, exegesis by exegesis, in language by language.  This comment by North is so wrong I'd imagine he would withdraw it.

There are a few screwball economic groups today that invoke the Catholic Church's position on usury, as of about 1250. These people have no training in economic thought. They are very often associated with the Greenback movement. Omni Press publishes these anti-usury Catholic books. Omni is a Greenback press.

I don't doubt this at all, and Dr. North is pitch perfect in his deconstruction of the greenbackers.  So I am happy to arrive back at admiration for Dr. North.  Greenbackers grab at any old straw to make their point, so Dr. North citing them is damning by association.  Don't drag clowns into the discussion.

https://2012patriot.files.wordpress.com/2011/10/debt-slaves-payments.jpg

The Acton Institute is another very good source on economics, but fails miserably when it comes to usury.  They cite apparently with approbation Brats essay. It was a delight to watch Sirico take Lapin apart on pre-emptive torture.  But no one has the whole picture, and almost no one has the picture on usury, except the immutable teaching of the Catholic Church on matters of faith and morals.  Usury is wrong because it does damage, not because anyone says so.

The law is really simple: all loans are charitable events.  Don't make money off of charity.  If you want to make money, invest your money.  It is called equity stake.  Loans at interest (aka usury) are utterly unnecessary in any economy.  But the ultimate end is always the same.




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