Saturday, January 24, 2015

USA FTZ v China FTZ

There is a difference in the terms, in China FTZ means Free Trade Zone and in USA FTZ means Foreign Trade Zone.

In both the idea is to facilitate international trade outside of the rules and regulations of the sovereign state, by order of the sovereign state.

In the USA a Foreign Trade Zone is designed to assist a Boeing and its customers in escaping duties related to international trade.

In China a Free Trade Zone is designed to compartmentalize experiments in financial matters independent of ChiCom rules and regs.    Makes for safer experimenting.

Many blogs are tracking SGE withdrawals currently, using it as the yardstick for Chinese wholesale gold demand. While partially true, I would like to emphasize this yardstick has become elastic.
Before the SGE’s subsidiary, the Shanghai International Gold Exchange (SGEI), was launched total SGE withdrawals provided us a clear view on Chinese wholesale gold demand, as the SGE is the exchange where all import and domestically mined gold is required to be sold first (in addition to scrap) before entering the Chinese domestic market. This clear view is now blurred.
The SGEI facilitates gold trading in the Shanghai Free Trade Zone (FTZ). Physical gold trading in the FTZ is completely separated form the Chinese domestic gold market, which is a closed market; bullion exports are prohibited and only 15 banks are licensed to import bullion. 

So the difference is in USA the FTZ exists to keep zombie companies on life support by privatizing profits and socializing losses, while in China the FTZ is designed to experiment in new ways of producing value.

It bugs me when we are losing out to competitors because zombies own the policy-machine.

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Since No One Went To Prison For NAFTA, Now TPP

NAFTA is a massive bipartisan fraud on the citizens of North America, which has directly precipitated civil war, and since it has gone unprosecuted, the usual suspects are back at it:
“It is incomprehensible to me that leaders of major corporate interests who stand to gain enormous financial benefits from this agreement are actively involved in the writing of the TPP, while at the same time, the elected officials of this country, representing the American people, have little or no knowledge of what’s in it,” wrote U.S. Sen. Bernie Sanders, I-Vt., in a letter to Froman earlier this month. 
O come on Bernie, you know how the game is played.  We set up rules and regulations and policies that benefit big government/big business, then call it free trade.

Expect more poverty and war of this passes.

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Friday, January 23, 2015

If Gold Doesn't Matter....

Then how come the top people spend so much time secretly talking about it.  It does matter, in fact it fundamental, at the macroeconomic level.

If we have free markets in the USA, when people are discussing how to operate independently of the USA, how come they must differentiate their actions as "free market" as opposed to capitalism?  Well. because free markets and capitalism are diametrically opposed.

Of course the bad guys call what they do "free markets"... that is just setting up the ability to blame the disease on the cure.

Note in these secret discussions, from the 1970s, wikileaked, how the USA counters it will manage the free market (a contradiction in terms.

But notwithstanding the importance of gold at the macro level, it is credit at the micro level that matters.  And not credit from banks at interest, but non-interest bearing asset-based credit extended among small business in a countries economy.  This lack is the source of so much USA economic malaise - unemployment, high costs, low wages, dearth of anti-fascist labor movement (govt labor unions are pro-fascist, just like the North Korean and Soviet labor unions)... if we can return to small business credit, we can recover no matter what happens on Wall Street or in Washington.

It was not long ago, maybe 40 years, when you could walk down any street and see a small business with a "help wanted" sign for a business in which you could advance quickly.  Retailers gave their customers (end users) time to pay, wholesalers gave retailers time, manufacturers gave wholesalers time, extractors gave manufacturers time, as did truckers and so on...  a huge part of the economy did not work on money, but credit, with no interest.

The credit card, with EZ credit and some interest wiped out sober credit at no interest.  Lightweights could crowd in and offer cheaper in the market, wiping out quality, but going out of business themselves anyway.  Enron is a failed effort at this.  Ikea is a successful effort at this. So far.

Now, there will be some younger folk, socially conditioned in recent years, unaware there was life before they were born, who will object that charging interest is necessary, that it is a essential means of making money, and preserving wealth.  If so, why during most of history and especially economically stable times, usury was negligible?  it is certainly A means of making money, but not a legitimate means.  it has always been outlawed because it does damage.  Any and all worthwhile entrepreneurial efforts can be attained without interest being involved.  If we want.

EZ credit is running out.  The answer is not gold coins, but recovery of community based financed.  Deregulate banking now.   Regulations protect the zombies, who are killing living businesses.

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China's Winning Tactic

Capitalism suggests by inflating currencies and charging interest on cheap asset-less credit you can rule the world.  You can create some amazing flash, but it is not sustainable.

In regards to China, the inside joke among the capitalists in the 1980s and 1990s was China would make things for us and China would have to buy USA bonds to keep their profits safe.  In essence they would be trapped, enslaved by capitalism, every communist's fear.

Observing from afar, it was clear enough early on there were alternatives to the USA scenario.  I mention it here among many other times, and now comes the ChiCom big shots saying precisely the same thing.
“Except for US Treasuries, what can you hold ? US Treasuries are the safe haven. For everyone, including China, it is the only option.. Once you [Americans] start issuing $1 trillion – $2 trillion.. we know the dollar is going to depreciate, so we hate you guys but there is nothing much we can do.”
–       Luo Ping, official at the China Banking Regulatory Commission, addressing an audience in New York in early 2009.
“This is a big change and it cannot happen too quickly, but we want to use our reserves more constructively by investing in development projects around the world rather than just reflexively buying US Treasuries. In any case, we usually lose money on Treasuries, so we need to find ways to improve our return on investment.”
–       Unnamed senior Chinese official, cited in an FT article, ‘Turning away from the dollar’, 10th December 2014.
Since China slipped the capitalists' noose, we'll now expand our practice of calling the Chinese bad names.  I hope as China reconstructs the world economy on a solid rational basis, away from the baleful results of capitalism worldwide, USA does not decide war is the best response.

Tine to bring our troops home and reform our economy.

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Thursday, January 22, 2015

2015 Agenda - Deo Volente

Stepping away from blogging helped give me some perspective - plus time to prepare another book.  Books are funny things, not like a pregnancy where you can get pretty close to a due date, but like a Frankenstein, not sure when it will work, and not sure what you will get.  I do believe, and am driven by, it will be the right book at the right time for anyone engaging in small business in USA today.  I am finished writing, now I am editing, and there is much more to do.  So to answer the question, when?, all I can say, is when it is finished.

As to blogging, this blog anyway, I've decided to focus where I am unique, and I have three agenda items to work on this year in blogging: 1. Money and credit.  2. Small Biz int'l trade. 3. A New Hong Kong in USA.

If it does not relate to these three, I won't write on it... and anyway there are better sources who cover other important topics - may I recommend -

David Stockman

Mish

Pepe Escobar

China Daily

Cobden Center

Lew Rockwell

If it is important, these guys are talking about it.

Now, these people are commenting on news from their perspective. If you are developing a business, you need to be doing the same thing.  You need to create your own news roundup - collect and distribute original content.  In so doing, you will emerge as a leader on your topic (your business).  How?

Well, here is a short video on how to do this.



I'll be reading those sources linked above too, and where I disagree, I'll blog on what they say, sometimes.  But on to my agenda:

1. Money and credit.  Our problems are arising from ahem, "errors" in our economic system, the patterns and practices that we have selected and we call "capitalism."  In the raging debate, a pox on both houses, the left and right wing.  There is a well documented alternative, called free markets, but almost no discussion on the topic for the simple fact the bad guys on both sides of the debate will not (or cannot) define terms correctly.  As Pynchon noted, all you have to do is get them to ask the wrong question, then their answer does not matter.  Define the terms incorrectly, and you cannot even formulate the right question.  It is an unlucky world in which it falls to me to be the one who defines terms correctly and asks the right questions.  But it is the biggest problem out there.

2. Small business international trade in general and food in particular.  This is my main topic, and I teach write and consult on this on the side, as in this blog, as well as trade on my own account (self-employed, or as I prefer, customer-employed).  As lecturing, I don't have to work much on this since the only thing I have to do to prepare for a lecture is to check my zipper. As to food, the pendulum is swinging back from "get big or get out" to "small is beautiful" so my small efforts have outsized results when I help food traders.  As a part of this, I'll emphasize selling, something of a lost art. Again, all small business int'l trade as usual, just a side-emphasis on food as well.

3. Truth Commissions.  There is so much criminality at every level of the USA we need some means of wholesale rectification.  Truth commissions, in which the defendant is immune as long as they confess all before they are indicted, is a good way to get it all out on the table and let the delusional see how their country actually works.  Gotta start with the truth, and even include capital crimes.

4. Trade shows.  I did not realize until attending a few trade shows recently in other peoples' booths how far down we have come regarding creating and working trade shows.  Such waste and wasted opportunity.  I'll present corrections.

5. A New Hong Kong in USA.  Hong Kong and USA were formed at the same time with the same idea.  Hong Kong pretty much stayed the course, USA has veered wildly off into totalitarianism in general and fascism in particular. That may sound provocative, but the proper academic term for big business and big government being one is fascism.  And see those brass icons to the left and the right of the flag?  Those are adopted from the Roman Senate, they are called Fasces, a bundle of rods around an battle ax.  Bound tightly together, it cannot be broken.  We don't need fascism, let's get at least part of the USA territory back to its roots.  Radical comes from the word meaning root.  Yes, I guess that makes me an American radical.



Who knows how come but I received a last minute contract to present on small business food exporting to the Indian Agricultural Council (as in American Indian) in Las Vegas in mid-December.  Vegas terrifies me, but the seminar was delightful.  I have long imagined that if capitalist USA is to ever have its own Hong Kong, just as communist China has Hong Kong, then an Indian reservation would be the place, and almost necessarily a port city.  Well there is one, the Puyallup own most of the Port of Tacoma, or enough to take it over.  Their reservation is technically huge, and would include McChord Air Force base, given them their own international airport as well.  The Indians across the country are rethinking their relationship to Uncle Sam, and Uncle Sam would do well to give its biggest critics an opportunity to escape to anarchy, as did Communist China: a Hong Kong.

President Hillary Clinton will be the kind of leader who would negotiate such a treaty, so she could have a freer hand to do what she needs to do.  Jeb will run only to keep the people yearning for the Bush family leadership, being groomed for the 2024 elections.

Go Hillary!



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