Saturday, October 18, 2014

Negotiation to Limit Access to Medicine by the Poor

In a country transfixed by the death of one and infection of two to ebola, yet where some 30,000 a year die of flu, you have to wonder at secret negotiations regarding limiting access to medicine.
As the latest round of talks for the Trans-Pacific Partnership agreement begins in Australia next week, negotiators will be discussing revisions in a key document that consumer advocacy groups say would strengthen patent rights for drug makers at the expense of patients in poor countries.
The 77-page document, which was obtained by WikiLeaks and reviewed by The Wall Street Journal, contains proposals made at the last round of talks in May, according to people familiar with the document. The TPP is a trade agreement that is under negotiation to lower tariffs and open markets by 12 countries in the Asia and Pacific regions.
Why do we have to rely on Wikileaks to find out what trade negosiators are up to?  Why is Assamge fear for his well-being?

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Ex Im Bank Finances Terror

Terrified, villagers have backed off and accepted relocation after an activist disappeared pursuant to an Ex Im Bank financed overseas boondoggle.
Sudarshan Rajak disappeared under suspicious circumstances after protesting the relocation of families for Reliance Power's 4,000-megawatt Sasan coal project in Singrauli, India. Some of his neighbors believe he was in his house when it wasbulldozed by Reliance. Krishna Das Saha's home was destroyed in the middle of the night -- while his family was still living in it -- to make way for Sasan's coal ash pond. And when Sati Prasad challenged Reliance's refusal to hire local workers, he was dragged out of his home and beaten by the police.
These are just a few people who have met violence and intimidation at the hands of Reliance Power. This aggression is subsidized U.S. tax dollars in the form of over $900 million in financing from the U.S. Export-Import Bank (Ex-Im). Indian groups have documented these and other abuses in Sasan Ultra Mega Power Project, Singrauli, Madhya Pradesh: A Brief Report.
This is nothing new.  The ExIm Bank got its start financing the Soviet regime, and the deaths and disappearances pursuant to those loans are uncountable.

History: EIBW established under DC charter by EO 6581, February 2, 1934, to assist in financing U.S. trade with the Soviet Union.

Today the employees of the ExImbank try to hide their past and present activity, but hey, it's capitalism, so it is all good.  Republicans have come up with a plan to keep it going for another five years.

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Friday, October 17, 2014

Peace Prosperity and Property Rights

"We look to Scotland for all our ideas of civilization."  Voltaire

Hong Kong and the USA were started at the same time and the same people with the same weltanshauung, Scotsmen who were heir to laissez-faire French philosophes who took what the Spanish scholastics had picked up from Islam before they were tossed from Iberia.

Both HK & USA have dubious beginnings and whimsical borders with curious anomalies within any given borders at any time, but one difference is like Canada, Hong Kong remained loyal to the British Crown, an office occupied by whatever hapless German upon which the Anglos placed a funny hat.

Property rights are created when you mix your labor with either homesteaded real estate or property otherwise consensually acquired.  We think of land when we say property, but the land itself needs to be developed to bear any fruit.

Our history with the natives is spotty, but it became horrendous after the USA Civil War.  As Sheridan noted, the only good Indian was a dead Indian, given the challenges of property rights and development on land already occupied.

In spite of a Papal ban on disrespecting natives rights (which neither Catholic let alone protestant obeyed) owning the land was deemed existentially fundamental, so began the Indian long trail of sorrows which continues to this day.

In Hong Kong, the British Crown already owned all land (except for the Anglican Cathedral in time) and so at no time could anyone own any.  As Hong Kong territory expanded, it did so by taking leases form the Chinese, hence the 99 year lease time -up for most of Hong Kong in 1997.  Without most of Hong Kong, the UK arranged, for consideration, to give up Kowloon & Hong Kong Island as well, which had been deeded into perpetuity.  And now the ChiComs own the land, and the USA is funding destabilization of a comity in Chinese-owned territory against an agreement settled in law in which the ChiComs are in no way violating.  Why not?  All of our other efforts are working out so well around the world.  (I hope the Hong Kong students are making note of the fate of the Kurds, the beneficiaries du jour of USA assistance.)

But I vent, so to return - with no one allowed to own land as long as Hong Kong has been, and to this day, Hong Kong has managed to grow from a pirates' watering hole to a city-state superior in all categories to any capitalist regime.  And where the USA hides behind the "too many minorities" keep our averages down, Hong Kong is a polyglot of refugees and expats from the world over, and by all accounts overpopulated, but few want out and countless want in.

It is a model of anarchy, for free markets, and that is real estate may not be owned.  Why should it?  With 99 years leases (to whom?) we have a valid experiment in peace and prosperity, and that is Hong Kong, one even the ChiComs can appreciate (and communism by design expects its apotheosis in anarchy).

Sure, under such a regime cutting leases with a Nakota Chief to lay down tracks with the understanding the buffalo may roam might have taken time, but time is only more expensive, not too expensive.  In any case, one must not claim to have the best system or a just system when there is clearly something better and with patience more just.

It's one thing to lay tracks, it is another to frack.   I've conversed with a petroleum engineer of global reputation who told me "of course fracking can be done cleanly, but it is not....  of course you can burn coal cleanly, but we do not."  And why, because once you can "own land" then you can do what you will with it, because it is yours.  And in time, courts can be bought off to allow pollution on others property, a process explicit traced in USA jurispridence by Morton Horvitz, a fine Marxist historian laboring at Harvard, who book is necessary if you wish to ever be considered educated about the USA.

The Transformation of American Law, 1780-1860 (Studies in Legal History)



 States are cracking up, splitting up, and it is the 1750s all over again.  We are the "me" generation in the formula "apres moi, le deluge...".  I do so hope we see a few examples of the happy accident of Hong Kong, where people figure out you can have peace and prosperity without actual ownership of the dirt beneath the ground.  It may cost more, but not too much, it may take more time, but not too much time.

Strong men will emerge to lead us.  In anarchy, you are the strong man you've been waiting for.  Lead yourself.

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UK Advice Every Bit As Bad

We need a strict separation of business and state, especially in the USA where fascism, by definition, is rampant.  The UK has no such excuse for peddling bad advice to start-ups, but they do...
1. Exporting helps businesses grow
With speakers from UK Trade and Investment and UK Export Finance, there was a clear push to make exporting simpler for SMEs. They pointed out that exporting is beneficial to both individual businesses and the UK as a whole.
It's extremely simple now.  The most important thing is customers, and the hardest thing is getting the product right.  The MOQ is the right tactic and FOB is the right tool to prove both.  Once proven, logistics and payments can be turned over to clerks.  To hold a conference and then not talk about what matters, but an area in which there is no real problem, well...
2. Research the local culture
Throughout the event, speakers emphasised the importance of learning about the culture of the target country and the usefulness of knowing other languages as an exporting entrepreneur.
Wrong and wrong.  At the small business level the challenges of the target country are the problem of the buyer to whom you sell, not your problem. English is the language of trade, and while knowing foreign languages is a fundamental in being liberally educated, English is the default trade language.
6. Take care to protect your brand abroad
The steps you take to secure your company in the UK should be replicated in the country you export to.
If you are as a small business "protecting your brand" in the home country shame on you.  Traceability is necessary and sufficient to the task.

There is no reason for the UK to be giving bad advice to SMEs, unless it is simply more poodleism, like the following the USA into Iraq.  Does the UK government follow the USA's "get big or get out" imperative? The Scots should reconsider the No vote, but this time put freedom on the agenda.

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Pay With EBT, Ship the Food To Caribbean

This is old news, but with Costco studying the China market, there may be a twist.
“Everybody does it,” said a worker at an Associated Supermarket in Prospect Lefferts Gardens, Brooklyn. “They pay for it any way they can. A lot of people pay with EBT.”
Customers pay cash for the barrels, usually about $40, and typically ship them filled with $500 to $2,000 worth of rice, beans, pasta, canned milk and sausages.
Workers at the Pioneer Supermarket on Parkside Avenue and the Key Food on Flatbush Avenue confirmed the practice.
They said food-stamp recipients typically take home their barrels and fill them gradually over time with food bought with EBT cards.
When the tubs are full, the welfare users call a shipping company to pick them up and send them to the Caribbean for about $70. The shipments take about three weeks.
All immigrant groups rock the welfare payments (you think they come here because of our freedom?)  There may have been a time pre-1964 "Great Society" welfare regimes when people came here to work and look for freedom, but now we cannot know if it is 'freedom" or "Free $#)*."

Whatever, but USA sent $522 million last year to the Caribbean in Foreign aid.  This goes to the Harvard educated elites to keep these satellites in poverty and dependent on USA.  This EBT card scam also helps.  USA food processors, the biggies, get the profits, the taxpayers take the loss, and the Islands never develop a domestic retail trade, nor do they bother to grow a domestic retail trade commensurate with their potential when they can get food "free" from the USA.  The elites then compliment USA Imperialism by repeating the mantra "our people are culturally inferior."  Break his legs then criticize him for not walking.

Costco is getting a handle on sales of its Kirkland brand to China.  In doing so, Costco will figure out what percent is EBT-scam based (the amount of China sales that does not originate in China after it is easier to buy in China) and this will be private trade data, information no one in government policy making will have.  Not that it would matter, since get big or get out, the USA policy imperative, either way General Foods, General Mills, and other Big Food companies products are being moved and taxpayers are subsidizing their profits.

WE are not going to get rid of the EBT cards, or the welfare state, these things cannot be backed away from.  Empires just fall and become fond memories and whimsical lapdogs to the next empire, like the UK.  Not bad, but delusional.  Or they may become somewhat dignified like Italy.

It ain't the hand you are dealt, it's how you play the cards...  and there is no judging a man for how he plays his cards.  But we can say, "hmmm... instead of buying Fritos and Pepsi and Kentucky Fried Chicken (yes allowed) with your EBT, why not buy Foie de gras, raw milk sour cream, organic lemons, caviar, all products no Big Ag makes, only small AG products, and then improve your health as you starve the beast?"  This will divert money meant for big ag to the struggling small ag that is specifically targeted for avowed destruction by the USDA in particular and the federal government in general.

Smile at that single mom with the screaming kid checking out in your upscale grocery paying for excellent foods with an EBT, and offer to help her with her groceries.  Make them most welcome, they would be revolutionaries.

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Thursday, October 16, 2014

UK MOQ FOB

In the UK food producers are finding exporting food remarkable potent line of trade:
“When the German company contacted me I was delighted. Having a company suddenly contact me out of the blue was the most incredible opportunity. I am still quite a small business in east Sussex, so was genuinely amazed that they had even heard about my products. But that is the power of the internet and being able to search and source from anywhere in the world fairly easily.”
But instead of enduring the problems this out of the blue contact precipitated, better to anticipate the problems and solve them before the contact emerges.  Every question the foreign buyer has may be answered in advance with the MOQ FOB.  The tool is MOQ FOB, the tactic is MOQ, the attitude is you are selling a test. This is how small businesses create solid, profitable export business.

Bad advice:
SMEs thinking of exporting can contact their local UK Trade and Investment office to arrange a meeting with an international trade adviser.
No, work with a freight forwarder.  They know what they are talking about and a FF will not advise you along deleterious lines, but government advice is rife with political nonsense that costs you.

I have online seminars accessible from around the world on this topic.  See the link on the upper right.

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Polished Diamond Trade Increases

The diamond business worldwide is largely small business, but the reports come in ...
Belgium's polished diamond exports rose 15 percent year on year to $1.572 billion in September, while the volume of goods increased 8.8 percent to 615,218 carats, according to data collected by the Antwerp World Diamond Centre. Polished imports improved 10.4 percent to $1.523 billion, leaving next exports  of $49.5 million compared with a polished export deficit of $12.7 million in September 2013.
Someone in the biz would know what this means...where is the emerging market?   Are people investing because they fear a crack-up?  Diamonds are a refugee's wealth secreting medium.

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Leveraging Trade Show Invites

The Canton Fair, which I've attended since the 1970s, has a promotional scheme for exhibitors:
Regular buyers are also rewarded through the "i-Share" scheme. Those who send out a total of 30 invitational mails within three successive sessions (starting from the 114th Fair) can redeem one Canton Fair Food & Beverage Coupon (maximum five coupon redemptions per session). For every 150 invitational mails sent, buyers are able to visit the Canton Fair VIP lounge. All rewards can be redeemed against the trading coupon generated by the BEST platform.
If hosting a booth at a show, certainly you ought to have clients who are visiting lined up, and might as well pick up a coffee while at it.  Funny this is reported by TASS, the name for the once Soviet News Agency.  Sanctions is causing info to bypass Western channels.

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MacWorld No More

Good bye Mac trade show...
Then, IDG World Expo General Manager Paul Kent, who headed up the conference, decided to host a different kind of annual confab in 2010 called Macworld/iWorld, with an emphasis on the Apple mobile market. While MW/IW struggled at first, it seemed to be gaining some traction over time. But evidently not enough. And now, it too, is going away — at least for the upcoming year.
It is odd that in an industry depending on innovation, never came up with specialty stores for computer tech.  There was Sharper Image, but it was gadgetry and got into other problems, like relying on hyped products like air ionizers.

Eventually Apple opened up the Saks of computer stores, and went from manufacturing to retail...  and to this day there is a woeful shortage of upscale electronics stores.

Given the PC model of business, price was everything, so a proper balance of innovator and conservator was never set.  And to this day the VC model still dominates, which is far more about tax avoidance and profit laundering than about beneficial products.

Well, a break dow is upon us, and maybe some people will begin to introduce some balance as prices fall on rents.

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Wednesday, October 15, 2014

Compete on Design Not Price: Do Better than eBay

Callum sends in an article which is fairly common experience, and aligns with what I teach, Plan A.  Everyone seems to thing importing is about Plan B, just buy something from overseas and sell it here. No, you have to design your own.  Here is an example...
But a lot of what McGrath sells is just what he thinks can be profitable — like remote-controlled boats, which he used to buy from an importer in Long Beach at around $14 and could resell on Amazon for $34.95.
So far, the usual start-up.  But then he finds two problems, there is always someone who will charge less than you, so you will always lose at the game.  next, taxpayer subsidize the freight rates to the advantage of the Chinese.
But as Chinese companies began logging on to Web marketplaces like eBay, Amazon, and Alibaba, they started taking advantage of the shipping deal to sell directly to American consumers. And so it’s never been easier to get something cheap and Chinese delivered to your door for a startlingly low price: $4.64 for a digital alarm clock; $2.50 for a folding knife; $1.88 for aniPhone cable — all with shipping included....All this should be a reminder that any trade deal has winners and losers and unintended consequences. 
Yes.  This is what governments do, pick winners and losers.  Simple solution, deregulation.  And corporatize the USPS.  Take away its monopolies.  But unintended consequences.  how can you know exactly what will happen then claim the result was unintended.  how can you say "I had no idea if I let go of the pencil it would drop.  I really thought it would rise up."  You get more of anything you subsidize.  Econ 101.  Sigh.

But anyway, The fellow goes on, and what is his reaction?  To go to plan A...

To insulate his business from foreign competition, McGrath has tried different ways of making his products stand out. He likes to tell people to sell what you’re passionate about, and McGrath loves indoor pistol shooting. Recently he designed his own kind of mattress holster, which hangs a gun and a flashlight from the side of the bed for easy nighttime access. He contracted a company to manufacture the holsters, and they are shipped out in bulk from — where else? — China.

This is what I learned 40 years ago working while working ten years for others, and went on my own since then.  It is what I teach and write.  Last Saturday in at Cal Poly someone asked me if what I teach makes people successful.  No, they make themselves successful. what I teach saves time adn money.  Everyone does plan B and wastes times and money.  Eventually they get to Plan A.  I teach start there.

Coming up I have live seminars in Portland Oregon October 25 and in the San Francisco Bay Area November 1.  I also started online seminar last week, in which you can still enroll and get caught up.

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Costco & Alibaba?

Say it ain't so...
"The Tmall platform allows foreign brands to reach Chinese consumers without a physical presence, while also allowing them to preserve their unique identity and merchandising strategies. This low capital entry will give (Costco) a good look at the Chinese opportunity with nominal capital investment. (Costco) will initially sell food and healthcare products along with private-label Kirkland Signature products," Strasser wrote in a research note provided to China Daily.
I am suspicious of alibaba, and find it curious Costco is not quoted in this article, but a Seattle Times article does.

I like how Costco is using the TMall to test market its Kirkland lines, and no doubt hey will get massive amounts of information from Alibaba's big data.

At what cost to Alibaba's shareholders is this deal happening.  I expect the Costco folks are getting massive benefit for little cost.  And for a place where Walmart and others have failed, Costco's wise to measure twice cut once.

Next, is online in China profitable?  Is there anyway to know?  We know in USA marketing online, overall, is a money loser.  It seems to me, Costco is smartly taking advantage of what a mess the various economies are in, and studying what products they should be stocking in brick and mortar stores in China, with shareholders paying the tab. OK, tradable.

Costco has many surprising elements, such as an MOQ FOB export program.

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Anti-Russian Sanction Insanity

After the USA destabilized the Ukraine so badly the Crimea seceded, the USA led a sanctions Regime on Russia of "invading the Ukraine."  Bizarre behaviour.  Now comes the effect of the sanctions:
The tree nuts market in Russia had been expanding rapidly over the past couple of years, with the US being the largest supplier of tree nuts. According to the US Department of Agriculture, the US provided more than half of Russia’s total tree nut imports in 2013, but more than 95% of Russia’s total almond imports.
The Russians can and are looking at what is popular in USA, and with a land mass larger and more diverse than USA, and opportunities in agriculture improving, they will "import-substitute."  Expect to lose the market for good, and then...
Therefore the US will look for other import markets to supply to.
Of course they will.. the price to them will fall faster then perceived value, widening profits as they sell for less, but hammering the USA crop for decades, or perhaps forever.  This is how empires fall.

But in the meantime, larger volume, lower prices, "get big or get out" is still the guiding diktat in USA trade.
Higher supply in the export destinations is likely to lead to lower prices and higher demand, giving the US more export opportunity in the future.
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Ex IM Bank Breakthrough

Whew, that was a cliffhanger!  So come the news:
A pair of senior lawmakers are proposing the first bipartisan legislation in the House this year to reauthorize the Export-Import Bank and impose new requirements intended to protect taxpayers.
Wait, what?  That is the problem?  Waste fraud abuse?  Just fix that, and then it is OK?  And wait, I thought it turned in hundreds of millions back to taxpayers...  how could there be any risk to taxpayers? Which is it?
“This legislation contains a responsible set of reforms that we believe will strengthen the Export-Import Bank and lay the groundwork for a bipartisan agreement that extends the bank’s charter over the long term,” Ms. Waters said in a statement.
Because in the past 90 years, the ExIMBank has had an irresponsible set of rules, which will now, for the first time, be fixed.  Never mind the harm done buy having billions with which to pick winners and ruin losers.  The problem has been in accounting and loss reserve itssues (again, if it only makes money, why the loss reserve?)
It’s not clear whether the lawmakers’ proposed changes to the bank would be enough to win over its fiercest critics in Congress. Many conservative Republicans, including the panel’s chairman, Rep. Jeb Hensarling of Texas, want to wind down the bank, saying it interferes in the free market and exposes taxpayers to too much risk.
Yes, the fiercest ctitics.  Whose only concern is whether they have something which which to horse trade when the deal gets to their hobby horse.  Thank goodness the republicans will take over the seante next time.  We can always count on them to curb democrat waste and abuse!
The bank would also have to evaluate how well it is equipped to deal with employee misconduct and develop a policy for reporting fraud or corruption
Yes, finally, we can ask the bank to rate itself on handling corruption.  That will work out well.
“The Export-Import Bank’s support of U.S. businesses is an example of how our government can facilitate job growth without adding to the national debt,” Mr. Miller said. In fiscal year 2014, the bank sent $675 million to the U.S. Treasury, money it earned from interest and fees.
So says the Republican defending small business, freedom blah yada blah against democrat tax-and-spend liberalism yada blah yada.

Why I pick on ExIm Bank is because it is so small and the issues so clear that there is no mistaking what is going on.  It is corrupt, it picks winners and losers, it loses money at a breathtaking rate, and it exists to pick winners and losers, reward friends and punish enemies.  The fact that even the benighted USA airlines cannot make a dent in it proves there is nothing evil in government that can be ameliorated.  The USA will end before the ExIM bank ends.  Because of the Ex Im bank, the USA will end. No wonder so many peoples on earth so fear democracy and capitalism. It is love of money, the root of all evil.

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Shostak Explains False Economy

You cannot do better then Dr. Frank Shostak for explanations of what is going on financially.  This report pulls it together, read the whole thing.
These individuals are now engaging in the exchange of nothing for something. (Individuals that are engage in bubble activities don’t produce any meaningful real wealth they however by means of the pumped money take a slice from the pool of real wealth. Again note that these individuals are contributing nothing to this pool).
Now bubble activities like any non-bubble activity also require tools and machinery i.e. capital goods. So various capital goods generated for these activities is in fact a waste of real wealth. Since the tools and machinery that are generated here are going to be employed in the production of goods and services that without the monetary pumping of the central bank would never emerge.  (Wrong infrastructure has emerged).
These activities do not add to the pool of real wealth, they are in fact draining it. (This amounts to economic impoverishment). The more aggressive the central bank’s loose monetary stance is the more drainage of real wealth takes place and the less real wealth left at the disposal of true wealth generators. If such policy persists for too long this could slow or even shrink the pool of real wealth and set in motion a severe economic crisis.
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Tuesday, October 14, 2014

Dollar Hegemony: You Owe Me

Is the dollar about to lose its place in the world?  Does it matter?

“Such a bank would be able to exchange money between the two sides using rials and rubles and put aside dollars, euros and pounds,” he added.
Unilateral sanctions imposed on Iran’s banking sector by the US and the European Union over Tehran’s nuclear energy program and the recent Western bans against Russia over Ukraine have prompted the two countries’ trade officials to boost economic cooperation.

Mish probably has the right take, and I would only point out that this is not money that is being traded, just tallies.  The significance here is two part:

1. Trade that might not have otherwise occurred without the sanctions will now occur.  No USA involved.

2. The tally of who owes whom what (not money, but credit) will be noted in rials and roubles, not in dollars.  The big deal here is only that USA will not know what those tallies are, since it no longer will be keeping them.

It's no big deal as far as keeping tallies go, it just means USA gets less trade.  And when the USA provokes Russia with economic shenanigans, the Russians can react.  We should work on making good things happen and stop trying to interfere in other countries business.

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Russia and China Ink Railway Deal

As the USA concentrates on tracking "boots through ebola" Russia and China are building trade infrastructure worldwide.

China will take a decisive stake in the next stage of Russia's transportation development, with Chinese companies building the country's first high-speed rail line. The agreement formed part of joint deals worth $10 billion being signed on Monday.
Chinese firms and their Russian partners will hold talks on design, financing, supplying facilities and construction of a 770-km high-speed line connecting Moscow and Kazan, an important metropolis on the Volga River.

In his Confessions of an Economic Hit Man, John Perkins (book highlighted on left) noted how the USA would build overbuild dams or railways for third world countries and then when the projects dod not pay for themselves, the country would be bankrupted into USA dependency.  Victory through capitalism.

Now we have China and Russia cooperating in building world trade infrastructure between equals.  Infrastructure matters, and it seems the communists are better at selecting projects and cooperating right now.  We build bases that get over-run by out "enemies" and they build railways between newly emerging trading partners.  Newly emerging as the old lines are too beset by tax and regulation.  People are working around the USA.

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Monday, October 13, 2014

Extinguishing Debt

You walk into a Starbucks and order a coffee, pay $4 and they owe you a coffee.  They make it to your order.  Until the deliver it, Starbucks is indebted to you.  When they hand you the coffee, their debt is extinguished.

After church Sunday morning, they offer you coffee at the fellowship hour.  They say the coffee is free,  but there is a price to be paid, hang out and talk to other people while you have coffee.  After say ten minutes your "debt" is extinguished.

Either way, debts are formed and extinguished.

Now of course you could be driving through God-fearing country some Sunday morning and find no Starbucks open, and you cannot love the morning until you've had your cup of Joe.  You spot a church letting out, and so you pull in and head into the social hall and there it is: the coffee.  You head up to the coffee and some guy with a "Hi My name is Buford" tag on his shirt give you a big grin and offers you a hand and says "I don't believe we've met!"

And you can say "No brother we have not, but I cannot love the morning without coffee, but I am in a rush.  I can't stick around, but can I kick in $5 to help the pastor continue his good work here and take a cup of the coffee to go?"  So you an convert one kind of debt to another, but in most instances of human action, debts are formed and extinguished.

There are instances where debts are not extinguished, and we call that charity.

There are trade imbalances that matter not.    Whether China sells more to USA than USA sells to China does not matter.    Trader Joes has sold far more to me than I have to Trader Joes, in fact, I've never sold trader Joe's anything.  So we have a massive Trade deficit.  No one is harmed, because debts are extinguished.  On the other hand, countless people buy from me knowing full well I will never buy form them.

To a large degree the act of extinguishing debt can be delayed.  Amazon pays me at the end of the month following the month where sales took place, meaning never less than 30 and never more than 60 days.  They form a debt when I deliver my product for them to stock, they extinguish the debt when the pay.

Unless a payment is in gold or silver, pretty much, money never enters into this.  Amazon has tallies in its bank accounts, I have tallies in mine, computers move tallies of "currency" around and on any given day these are changing.  People commonly call this money, but since few if any of the people who use the term money can not define money or agree on a definition of money, it ain't money, it is something else (it is tallies.)

We used to run tallies all oven the place and extinguish them at the end of the month.  Your performance of creating and extinguishing debt gave people the sum total of experience with you, and on this nitty gritty level people knew each other, this built community.

All gone now, but this new system is destructive, distorting, generating massive malinvestment.  It is already failing, so no need ot overthrow it.  It is just time to start rebuilding, by extending credit in your business.

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Sunday, October 12, 2014

The Letter

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