Do Not Buy Gold or Silver. Sell What You Have.

The powers that be pushed it too far.  Like the old Soviet Union, it is too big to manage any longer, too much under control for anyone to keep it together.  Like the Soviet Union, there will be some pain in the disintegration.  Russia is still the Soviet Union, just with less communism, and so USA will just be with more communism.  No big deal.

As to gold and silver, if it gets bad they will seize it.  They did it before in USA.

Your means of production, your bread baking machine or rolodex, they do not want.

So spend your gold on the means of production, and be self-employed.  Your specialization, your division of labor, protects you.  Then you can ride out any storm.

You extend credit to your customers.  The longer they take to pay in this deflationary cycle, the harder the dollars with which they pay.   And never charge interest, for this gives you an advantage over big biz.

Better than gold is accounts receivable, which are worthless to the powers that be, and explicitly only valuable to you.  To much work to steal your receivable from you.  They will just get you at tax time.

But, taxes are on net, not gross.  You spend your net on your lifestyle, and the work is your lifestyle.

The next thirty years are going to be woncerful for small business.

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It Does Not Take Much Design to Compete On Design

I've had tailors from Hong Kong visit Ms. Yang's boutique and express amazement at her entrepreneurial acumen.

Her self-named store on Fourth Avenue in downtown Seattle, which sells her evening and bridal designs, opened in 2000. Since then, Yang's designs have earned her a successful business and recognition. She has been named Best Couture Dress Designer by Seattle Bride Magazine for twelve consecutive years and was awarded Nellie Cashman's Women Business Owner of the Year award.
Although Seattle is not known as a fashion mecca, Yang decided to start her fashion career in the city where she grew up and lives with her family.

Her "offer" is surprisingly simple, and I won't spill the beans, but the lesson is eternal: it does not take much to achieve "unique" and compete on design, not price.

Don't overthink your offer, and test it as soon as possible with customers.

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China Online Sales Reported at 10% of All Sales

But it is slowing down, and that figure is both B2B and C2C.

Using data from Chinese market research firm iResearch, China internet business news site China Internet Watch reported that total transactions from China’s online shopping market reached 628.76 billion yuan (US$101.58 billion). This includes a combination of business-to-consumer (B2C) and consumer-to-consumer (C2C) transactions. This is the first time online shopping has crossed the 10 percent threshold of total transactions, and the rate is expected to rise in the coming years.

So a internet business pure play is to still miss 90% of your Chinese customers.

Watch Costco, they are getting hundreds of millions in free metadata from Taobao.  Watch what that data tells them to do.


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USA Economy Booming! (Or Busting?)

That is what the stock market tells us.  But the businesses into which people are pouring their savings which make up the stock market are doing very poorly.  Amazingly poor.  So whom do you believe?

Read more at Mish.

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Your Credit Score & Credit Deflation

Usury is predatory, and your credit score is a reflection on how well you play the game.  High credit score, this means you are consider reliable in paying back loans (at interest, aka usury).  Is that a bad thing?

Well, yes.  The credit score is an assessment of how you play the game.  Do you take loans and then leverage them into payback?  Have you amassed enough personal wealth to be "good for it?"

Have you by insight or survivorship bias gained exceptional wealth through:

Wealth #1  Finance

Wealth # 2  Investment

Wealth #3  Real Estate

( F I R E )

All this is based on FED policy, and the FED has now run out of options, what we see is something new.  A mechanical reaction, credit deflation, largely misunderstood, to credit inflation, known perfectly well.

Low credit score means either you are not a good risk, or there is no history (because you neither take not make loans at interest.)  Is this a bad thing?  Well, no.

You just no better, and preferred not to get in the game.  Those who made money with F I R E are going to find the game no longer works as it did...  when that exceptional wealth evaporates, then what?

Watch credit deflation.  It's a fascinating new development.

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USA/UK Violate Minsk Agreement

And intensify their aggression in the Ukraine.

Point 10 of the Minsk II Agreement clearly mandates:
10. Withdrawal of all foreign armed formations, military equipment, as well as mercenaries from the territory of Ukraine under monitoring of the OSCE. Disarmament of all illegal groups.
Yet today we read the announcement that the Washington is sending US troops to Ukraine ostensibly to provide combat medical training to the Kiev forces.
And today we read the surprise announcement that the UK government is sending its armed forces into Ukraine to provide training — including war-fighting training — to the Kiev government. 

Veep Joe Biden has a son who was thrown out of a cushy Navy job for being a cokehead, and is now, given his assumed world-class energy business skills, a director in a Ukrainian oil company.

Part of the reason why we are risking WWIII is so politicians cokehead kids can have jobs.

There is nothing we can do about it.  To be a great president, you must preside over a war.  Hillary wants to be a great president.  There is nothing we can do about this, except maybe sack cloth and ashes.

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China Hot Money Flows

  China may be the #1 exporter in the world, or not...  China trade statisitics

The latest suspicions about the accuracy of the trade figures follow similar questions over September data, meaning net exports likely gave less of a lift to third quarter economic growth than reported figures suggest. It also adds to persistent signs of fragility in the world's second-biggest economy.
The September data showed a substantial gap between what China said it exported to Hong Kong and what Hong Kong said it imported from the mainland. Economists say signs of hot money inflows suggest firms may be trying to evade capital controls by over-invoicing sales of items such as precious metal sales.
In the October figures, customs data showed China's exports of precious metals and jewelry rose 187 percent from a year earlier, although the pace eased from a 678 percent jump in September.

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Four Horsemen Documentary Critique

Here is a edifying 2011 video, although I have my reservations. It is a good survey of the problems we face.  It is an oddity: progressives recommending the gold standard!  Two million views and 19 world wide film  awards.



I'd say all of these people are of good will, but here is the problem, each is a progressive. Several are ex-IMF, certainly a facilitator of world economic degradation.  Although John Perkins, the econ hit man is interviewed, there are no confessions of who did what.  I would settle for their prescriptions, which are no good, but vastly better than where we are now.  But here is the problem, not a single one of these people, renowned all, has not already sold out, in the pursuit of becoming renown.  Nor is there a single self-employed interviewed. Is there not a single progressive on earth who has not sold out for a sinecure?  Would it not be foolish to expect the leopard to change sports?

They present the false dichotomy of classical and neo classical economics… there is more under the sun than is dreamt of in their philosophy.  They all claim to be capitalists, but I suspect just a progressive version of that.

About 1/2 way through, in fact, they identify the outlook as progressive, and by then had already hinted at maluthisian and darwinian outlooks.

Does this not sound like "hire me, I know the problems, and want more sinecure mouthing platitudes"?  We all love a system that works for us, even if only in the role of jester.

They call for worker ownership of mean of production, good, if you have a model.  Better to have co-ops, which are customer owned?  Who wants employees in charge of anything?

The speak of "regulation fantasies… deregulation"  Wait, nothing was deregulated, regulations were merely changed.  before the change, the regulations had one set of winners and losers, after the change in regulations, another set of winner and losers were picked.  Those complaining about deregulation are simply the new losers.  The problem is regulations, not "which set."

The topic of consumption tax over income tax... But wait, why have any tax? And income redistribution?  O dear, who decides?  More winners and losers…

Instead, how abut de-legalize usury? And watch income redistribute, with land, along meritocratic lines.

They make the claim that the medium of change is freedom of the internet.  Are they kidding?  It is 98% intel gig.    If you think the net will contribute to freedom, you don't know your spooks.

No one will ever try the unknown. They regret income inequality, hint at property redistribution, but those path lead to blood.  Better to de-legitimize (not illegalize) usury, and watch the land be pitch perfect redistributed.

But know, rather be on board on the side of the next Mao, eat drink and be merry, while criticizing the hand that fed them.

And here again, the analysis labors under the mis-definition of money.  They cannot get to better from there.

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Exporting Specialty Food Seminar

If your task is to find markets overseas for USA produced specialty foods, then your the shortest distance between where you are now and sales is to take the Exporting Food seminar at UCBerkeley on 27 April 2015, in San Francisco,  8:30 to 5pm.  It is an intense, hands-on seminar at which during the day you are equipped with the tools, tactics and attitude to search and learn new customers.

Student feedback is strongly favorable.  It is worth flying in the Sunday (or earlier) before to take the all day Monday seminar, and if not having your employer pay for it, check out the IRS write-off rules for education.

Sign up here now to assure you have a place.  Look forward to seeing you there.

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World Trade In Services

The world of domestic service is rough trade, and here is an example of among others, a lawyer going into private law to do good while doing well.  And, of course, they are based in Hong Kong.

Now, a lawyer and ethics professor, an accountant, and a newly minted MBA grad hope to disrupt this system. Their start-up, Fair Employment Agency (FEA), is a Hong Kong-based company that places domestic workers without forcing them to pay placement fees. FEA is registered as a charity, but the founders’ goal is to turn the company’s placement operations into a sustainable business, allowing it to expand through Southeast Asia, then perhaps the Middle East and beyond.

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Powerpoint Rangers

Apple developed PowerPoint and dropped it as a net negative in the world of communication.  Naturally, Microsoft snapped it up.

I recall reading probably 20 years ago mid-level military officers were abandoning their career in droves and the most common reason cited was powerpoint.  I wish I could find that citation.  Apparently days full of meetings watching powerpoint presentations drove people away.

Now comes this, powerpoint is so hated it drives officers to dereliction of duty, or refusal to follow orders.

Similar issues occur when reporting the maintenance and accountability of equipment, the completion of evaluation reports for lower-ranking officers, and even combat situations in Iraq and Afghanistan, the professors found. Junior leaders were required to develop a PowerPoint narrative of events in a unit while deployed, and avoided doing so, one senior officer told Wong and Gerras.
“Every contact with the enemy required a storyboard,” the senior officer said, according to the paper. “People did not report enemy contact because they knew the storyboard was useless and they didn’t want to go through the hassle.”

I have an MA in education, and when I first encountered Powerpoint, I arrived at the same conclusion Apple did: powerpoint is not a legitimate educational technology.  There is no pedagogy supporting it. It is distraction for content-free meetings.

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An Alternative Model to "Intellectual" "Property" "Rights"

The internet has only lowered the cost and widened access to information, which is profound in its own right, but people rather believe an alternative, that it makes selling lower cost.  Nonsense.

But IPR ( "Intellectual" "Property" "Rights") is all about control in the absence of quick information, thus the trade mark.  But quick verification by traceability trumps trade mark.

IBM is the # 1 patent holder in USA, and they are busy open-sourcing their patents, for there is far more money in consulting on ideas than controlling ideas.

Since Apple follows copyright law, few people yet understand what Jobs did: he owned the best delivery of music download, not the music.  Copyrights are pointless, but go ahead, complement peoples' ignorance.  It costs too much to explain how you are helping.  Just help.  Let them believe what they want.

Now comes this amazing and delightful invention.  Flow Hive Honey. They have raised $2.5 million of their $70,000 goal, a 3,600% oversubscription on indiegogo.



So note this point:

MANUFACTURING: We are working closely with a manufacturer who has been able to produce our Flow frames at a high quality so we have already resolved some of the manufacturing challenges. However to produce on a larger scale will require increased tooling and production equipment and this is where some delay could occur.

Instead of having one ("a") manufacturer, why not have the specs loaded up on the website for any and all manufacturers in the world to produce this?  Open source it.

Next, for some nominal voluntary fee, say $20 per hive, the manufacturers get two benefits:

1. Qualification to use the Flow Hive Honey label on each hive the manufacturer makes, with the QR traceability code. That code rings in at Flow Hive Honey HQ website so Flow Hive Honey may verify the hive being bought is a qualified hive.

2. Since all manufacturers all over the world will be reporting feedback on design, logistics, use and so on, all factors leading to redesign, then Flow Hive Honey will be the collect and distribute central for all innovation on the newest models making that $20 fee above extremely valuable.

Then, instead of a model in which producers are mired into rent-seeking lawsuits ad nauseum, the owners instead visit all over the world verifying and QCing individual producers to spec, or training a team to do so.  No shortage of young engineers who would travel the world at expenses plus to verify production QC.  Good experience right out of school, or summer intern work.

Exactly what the fee should be ($20) would be subject to trial and error, or price discovery, a talent lost since two generations of entrepreneurs were wasted by FIRE (finance, investment, real estate) false economy.  Time to relearn this free market skill.

Part of the recovery of free markets will be to delegitimize "Intellectual" "Property" "Rights" making them unenforceable, so we can have peace, prosperity and economic justice, instead of violence-backed capitalism.

And since capitalism is based on usury, an essentially violent act, all capitalism is imbued with violence.
Time to move on from that model, especially since it has failed anyway.  Let the dead bury the dead.

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Reading For Deflation

The economic policy of the last 40 or so years has been disastrous, and terribly destructive.  We are at a turning point, so we now begin to see the damage.

The turning point is from inflation as a policy to deflation as a reality.  What was once programmed, the opposite is now out of control. For every action there is an equal and opposite reaction?  In physics maybe, but in economics there is regression to the mean, which says you will overrun average, stable.

Inflation is when you create too much so it takes more to buy the same.  If there is 1000 units of currency today, and a loaf of bread is 1 unit, then you print another 1000 for a total of 2000 the next day, then a loaf of bread will cost 2 units.  That is the basic idea, but of course why do it?  Time.  It takes time for the extra 1000 to spread out, the first get the new 1000, whose job is to spread it, govt and banks, win by getting rid of debts priced at 1 before the bread gets priced at 2.  Larry Lunchbucket gets a tax he never voted on.

What they discovered in the late 1970s was you could also inflate credit, that is nothing.  Whereas someone might assess Chase Manhattan to be viable at 100 billion in credit, Chase might lend out 200 billion, off the books.  And completely legal.  I have the handbook explaining how and giving permission.

Mish Shedlock's contribution is to point out this matters, it behaves just like currency inflation.

Everyone else is largely mystified as to what is happening in the economy, but not those who have figured out we are in deflation.  Those who are noticing it are mystified, unless they have read Mish.

Insurers have made 4% promises but long-term bonds yield close to zero. 
Benjamin Serra, senior credit officer at Moody’s said "They are increasingly constrained by the high level of guarantees sold in the past." 2015 will be a “pivotal and challenging year” for Germany’s life assurance industry. Moody's maintained a “negative outlook” for the sector.
As of Friday, 10-year German bonds yield 0.39%. Five-year German bonds yield -0.07%.
Recall that the ECB pledged on January 22 to buy 60 billion euros ($68 billion) of assets a month for at least 19 months in its inane pledge to avert deflation. Buy from where?

Indeed!

"If we were to sell bonds, we would make huge capital gains, but we will then have to reinvest that money at a yield of 0.5 percent, set against liabilities at 3.50-3.75 (percent)," said Bart de Smet, the CEO of Belgian insurer Ageas.
RBS strategists see a 40 percent chance that ECB purchases would help turn German 10-year Bund yields negative this year.

So now even if your pension is fully funded, and it is not, it cannot make enough to pay you your annuity.  Deflation is now a mechanical thing, policy cannot do anything about it.

So what is deflation?  It too is a monetary event, in the loosest sense, wherein if there are 2000 units of currency today, and a loaf of bread is 2 units, then you destroy 1000 for a total of 1000 the next day, then a loaf of bread will cost 1 unit.  And what is the operative issue?  Time.  Here Larry Lunchbucket wins.  And now it is out of control.

You business strategy is twofold:

1. Stop borrowing at interest.  This will get easier for a long while, as less credit goes looking for worse terms.  People will be happy to just get their money back.  Impossible?  Read the snippet from Mish below.

2. Extend credit to your customers, with no interest.  The longer they take to pay, the harder the currency with which you are paid.  It will take awhile for your competitors to figure out you are making money at this, as their customers gravitate toward you.

3. Go cash.  Keep as much out of the banks as possible, keep as much in circulation or in your safe as possible.  Pay your suppliers cash if you can.  if you have excess cash, loan it out at no interest with maturities dated to match your need, with such places as Kiva Zip and Community Sourced Capital.

4.  Manage the lowering of your prices as your costs go down...  costs will fall faster than you need to cut prices, meaning the money needed to start-up is financed by your customers.  You are not competing on price, because you will still be much higher than the commodity prices, and those will be falling too.

5. Personal taxes will go up massively.  In Greece this is called austerity, less services for more money. Your only defense is self-employment, since as usual, it is the wage earners who will get nailed.  The longshoremen have solid economists on their side of the table. They see where this is going.  I can't wait to see if the agreement gets passed, and what it says.  it no doubt anticipates this.

So now what two generations thought is true, the opposite is in play.  Pay cash, even for a house, because even at zero interest rate, you are losing.  Housing prices will drift down as they drifted up.  Dump the credit (and debit) cards.  There will be more to reflect upon, but that is it for now.

I think the next forty is going to be much better for small business than the last forty.  The pendulum is swinging back.

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Exporting Food Now!

On farm lease income falling, and grain prices plummeting, here is this:

Many rent payments – which vary from a few thousand dollars for a tiny farm to millions for a major operation – are due on March 1, just weeks after the U.S. Department of Agriculture (USDA) estimated net farm income, which peaked at $129 billion in 2013, could slide by almost a third this year to $74 billion.
The costs of inputs, such as fertilizer and seeds, are remaining stubbornly high, the strong dollar is souring exports and grain prices are expected to stay low.

Fertilizer and seeds?  You mean all that Monsanto linked "inputs"?  Yet another example of, regardless of the science, the economic madness of concentrating so much power in so few hands?

Food producers need to go up-market, create specialty everything, build domestic market, and export into the markets where USA Big Ag is, and will be, failing. Export freight rates are dirt cheap.  Tomorrow night I start another online series on exporting food as a small business.

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Gold and Prosperity

You get a visceral reaction when you hear "gold standard" and "gold is money" that is decidedly negative.  The powers that be socially conditioned you to this.  There is much confusion about the role of gold, and much misunderstanding about the role of credit, vs money.

Money is rarely used in a just, prosperous and peaceful society.  Usually credit is used, or a asset backed currency.

When it's a just, prosperous and peaceful society. Credit (loans) is never at interest.

When it is a just, prosperous and peaceful society, currency, dollars and cents, is asset backed, usually by silver and gold.  You may not have any yourself, but you have "warehouse receipts" (silver and gold certificates in your pockets) which represent gold and silver in the bank on your account.  It is called currency because you use it for your current accounts.  Your coins may be silver, but otherwise you pay off your debts at the end of the month with currency, not gold coins.  None of us needs to own gold coins, but we do depend on the banks to issue asset backed currency, and we can never trust a government to do this.  Did you know for the first 150 years of USA, this was a huge fight that went back and forth?  Guess when USA was prosperous, and when it was in bust?  To this day in Hong Kong private companies, three right now in that small place, issue currencies.  At that rate USA should have at least 150 separate private companies issuing their own currency, all competing to be the best.  Once upon a time in USA, it was thus.  But now it is a crime to be a sound banker.

If this is silly, how come gold is so important to central banks worldwide, as I have shown in the last week?

The USA economy and peace, justice and prosperity went off the rails when USA went off the gold standard (lite).  At that moment, the hegemon no longer had any rational check on its actions.  War!  Injustice (war on drugs)! Poverty (war on the poor)!  And Kaching for the 1%.

This is of course capitalism, and free markets are free of force and fraud.  But you know that.

Now comes Tyler Durden with some very interesting graphs and short essay, click here.

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Year of the Goat

Coincidentally, the year of the goat is supposed to be tough on business (goats eat grass and roots) and the hard data suggests the long delayed bust will be all the bigger for delays.

Instead, we are in the crack-up phase of the two decades long central bank driven credit boom that has literally engulfed the planet. The resulting tidal wave of deflation owing to massive overinvestment and malinvestment in the worlds’ resource, manufacturing, transportation and distribution sectors will drive worldwide prices, profits and wages in a southward direction as excess supply slams up against inadequate demand.

But this is excellent for small business.  All that malinvestment and misallocation will dry up, opening opportunity for new businesses willing to search and learn for natural market.  Get going now!

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Lacy Hunt and Debt

Below is a very valuable 40 minute lecture on the current situation. The expert talking is a bond dealer, and he knows his stuff.  When Clinton was elected president, full of delusions of grandeur, he summoned the political leaders, the majority leader, the speaker of the house and others, to Arkansas to tell them how it was going to be.  The photos show a beaming Clinton welcoming his guests.  The next set of photos showed a somber Clinton at a farewell to these advisors.  (If anyone can find these..)

What happened at that meeting?

 At a meeting in Little Rock, Arkansas, Rubin and several other members of Clinton's economic team persuaded him to renege on this campaign pledge in favor of deficit reduction. They argued that tackling the deficit, which was then running at close to 5 percent of G.D.P., would impress the bond market, bring down long-term interest rates, and allow the Federal Reserve to cut short-term rates, all of which would boost investment and make the economy healthier. As Bob Woodward reported in his 1993 book, The Agenda, Clinton was initially skeptical of this argument. His face turned red with anger and disbelief. "You mean to tell me that the success of my program and my reelection hinges on the Federal Reserve and a bunch of fucking bond traders?" he said.

Yes, USA economy depends on debt, and debt dealers are commonly referred to in USA as #%çi#g bond traders.

Some capitalists will say the regime is abused and we get malinvestment and misallocation when the state picks winners and losers, by manipulating interest rates, lending credit when it is not backed by assets, and inflating the currency by printing too much. To be sure, all bad things, but they do not note the heart of capitalism which is irredeemably evil: charging interest on a loan.  All versions of capitalism depend on this one constant.

The problem with charging interest is the simple fact it is the perennial means of concentrating ever more economic power in ever fewer hands.  Now, no one denies this, the problem is just about everyone aspires to this.  Nothing new under the sun, most of us want to wield the whip, not take the stripes, fearing a false dichotomy.

Poor Michael Lewis, writing an expose´ on the heart of Wall Street, Liar's Poker, with a view to warning off the next generation from this casino of greed and economic abuse, was overwhelmed by Ivy League graduates all pleading for help getting a job doing what Lewis decried.

The communists noted the great threat of capitalism is when the system fails, as it inevitably does, the capitalists merely start a war, wipe out all of the malinvest and misallocation by bombing it to the stone age, then start over.  Not a bad observation.  And note the capitalists (as well as the communists) call all of this the free market.

Now, a pox on both their houses, the communists and capitalists.  For those of us trying to live genuinely productive lives, there are free markets, free from force and fraud, free to contract.  Free, free free! Would I outlaw usury (charging any rate of interest on any loan)?  No.  I would simply delegitimize it, meaning, should anyone who agreed to pay interest at any time could with impunity not pay it.  Like no court in USA will enforce a gambling debt. As a way to make money, it would shrivel up.

But without concentrating ever more power in ever fewer hands, we'd never have the iPhone!  You do not know that, nor do you see anything better that might be.

Businesses depend on credit!  True, it can be asset backed and private, or asset-less backed and public. The former is good, the latter is bad.  I recall when private asset backed credit came with no interest.  But once banks were allowed to lend asset-less backed credit, credit inflation was a powerful vacuum into which people could pay cash for a hamburger today, or buy a meal tens times as expensive today, and pay only the cost of the hamburger at the end of the month.  Yes, a debt at interest was created, but that is for the future.  Once this proved to be viable, banks in the 1970s began mass mailing live credit cards loaded with $500 limits.  At on point I have about 75 credit cards, for airlines, department stores, bank cards, AEX.  I just managed the balances.  Today people have maybe five, for the powers that be have consolidated banking and lending into ever fewer hands, concentrating power to the point it takes extremely few people to call the shots.  Now we manage the balances on five, instead of 75.  Capitalism marches on!

This expansion of credit, and Mish is one of the first and only to note it, caused credit inflation, a version of the monetary event that occurs when you print too much currency.  Rothbard notes inflation benefits the first to get the excess money, and by analogy this is true of credit.

We are not any longer in credit inflation, we are in credit deflation.  This is news only to people in government, those outside are quite well aware of this.

So what makes the video below very important is, the first time I've heard it said, that deflation of asset-less backed credit has the reverse effect of inflationary asset-less backed credit.  This guy would know: PhD Temple, worked for Rockefeller at Chase, headed up HSBC economics dept when HSBC was the largest bank in the world, and so on... now managed $6 billion in bonds for pensions out of his home in Texas.

Here is his big point:  When deflation is 2%, and the bond yield is 2%, you are netting 4%.  To chase yield by buying junkier bonds at 4% is delusional since those two points are not covering the risk premium.  Even at 2 + 4 = 6 what's available is junk.  (Guess what you pension is loaded up with.)   But but but, it's all rated triple A!  (So you are falling for the bought-off rating agencies scam AGAIN?!) (And as a bond dealer he has nothing to say about equities, currently a fools game.)  You are being scammed into buying junk by dealers who point out the nominal rates, not noting the structural rates.  But so what, those who invest in bonds deserve what they get, the more useful info to we in small business is his other points:

1. The winner in deflation is the opposite of the inflation winner: the last person to get paid is paid in harder dollars.

2. The lowest actors can deal in harder assets (gold instead of currency, currency instead of credit) and benefit the most.  Mr. Hunt notes businesses will rather keep their cash receipts in the safe and pay workers cash from the vault, than keep money in the bank, just like when I was a kid.

So what you need to listen to is his explication of how deflation works, now that we are in it.

In essence, what I have been advocating, extending non-usury credit at retail and wholesale to customers, as an ethical matter, means now in deflation when you do get paid in 30 days, while we are in deflation, you are getting paid later in harder dollars.  The rule of 72 in operative: at 2% deflation, your wealth (the float as accounts receivable) has doubled doing nothing over your career, say 36 years.

Going back to pay packets instead of paychecks is not only a good thing, it is smart money management.

And think about it: more customers will prefer to simply sign for their goods than put it on an interest bearing loan card. They think you are doing them a favor, and you are making 2%, and not losing all those card fees.

Yes, you then have to manage credit, but when I was a kid "blackballed" and "86'd" were common terms.  I recall being asked while entering a shop by a bystander if I would buy something for the fellow, who offered the cash to do so, at the store since he was "blackballed."   Managing credit is a community thing, not a Washington/Wall Street axis of evil thing.

One minor point, Mr. Hunt says:

Three Problem Types of Debt  

1. Borrowing to finance daily living needs

1. Debt that leads to bankruptcy

1. Worst type of debt is where excess debt creation inflates asset prices.  And that only leads to economic instability.

"Good debt" to Lacy is debt that yields an income stream sufficient to pay back principal and interest.

The best debt is the non-interest bearing debt that undergirds all peaceful, prosperous and just comities, that is debt with no "income stream" attached.

Detroit is presently being bailed out in advance of the next crash by the extension of EZ auto credit to unqualified "buyers."

Student loan debt has surpassed credit card debt in USA, student loan debt is not bankruptable.  We lost 4-8 years of productivity while people went to school to learn skills they will never use and pile up debt they lived on and can never pay back.

Turns out those hundreds of billions banks risked to bail out countries has quietly been sold to European pensions.  (Note in the graph it says the banks create money to buy bonds from financial institutions.  Here again is where language has to be abused, for if this was stated accurately, it would reveal the delusion.  Accurate:  "Banks create credit, to buy credit."  If described accurately, it makes no sense, highlighting the delusional basis your pension is funded.  When your pension is useless, you cannot complain, because you wittingly bought into the delusion.

The hard part here is to go with the better unseen than the clearly malicious seen.

Check out this video, hat tip to Mish... it's a 40 minute seminar....



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IMF Advises Islam to Extinguish Itself

The IMF, that destroyer of peace and prosperity, now offers this tidbit:

IMF: Islamic banks access to small businesses and do not have bank accounts
February 21 2015
Dubai, United Arab Emirates - a study issued by the International Monetary Fund, said that Islamic banks need to make adjustments in the structure of its work to improve its ability to reach consumers, pointing to the need to link their products to the segment of the population that do not currently own bank accounts, to by small and medium-sized companies.

Apparently they have never heard of hawaladar.  And why should they know anything good to come out of Islam adapted by Europeans?  Keynesianism is deleterious, and when one side is busy drilling holes in the hull and the other is bailing out the water one gets too busy to look up.  But it is very important work, to be sure, bailing out.  When your economics say "make work." Anyway, the IMF is busy spending taxpayer money solving problems that don't exist.  A hat tip to Kevin...

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USA Economic Policy: Sue Your Customers

The USA solar industry depends on taxpayer subsidies.  Who knows what might have happened without those subsidies, but we do know that as the hegemon-picked winners and losers, the only ones that survived now depend on hand-outs.  Even with the Solyndras going down in flames and taking half-billion taxpayer bailouts with them, any solid business has been crowded out.

What is left are products we cannot even pay people to buy.

US financing promised for renewable energy projects in India using American equipment has found no takers, since many project developers turn to cheaper goods from China and South-East Asia. India and the US are also battling at the World Trade Organization (WTO) over domestic content requirements in India’s solar energy projects.

Free USA taxpayer money to buy USA products, and no one is interested?  But they have to buy from us, we are the best!  USA USA USA!

So let's sue our customers.

Interestingly, a WTO dispute settlement panel on 3 February started hearing US complaints against India’s domestic content requirements on procurement of solar cells and modules under the Jawaharlal Nehru National Solar Mission programme.

There you go.  When all else fails, sue your customers.

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