One Reason Why Exporting Specialty Food is High Priority

Out of California comes good news/bad news.  Good news?  No evidence of water table contamination threat from fracking.

“Notably, most groundwater sampling studies do not even measure stimulation chemicals, partly because their full chemical composition and reaction products were unknown prior to this study,” the report said.
The lack of data also means that treated wastewater is not necessarily getting stripped of potentially harmful elements. “Treatment of produced water destined for reuse may not detect or remove chemicals associated with hydraulic fracturing and acid stimulation,” the report noted.

Bad news?  No one has studied the problem. That is how the game is played.  Do a study on "fracking risks" but don't look for the chemicals that do damage.  Like swimming pools and streams today, refuse to look for synthetic estrogen levels.  Wonder why there are two-headed frogs, but don't look for the obvious reason.

Fat in food is also satisfying, meaning you'll eat less.  Thus, less profits for the food processors, who own the FDA and it's pronouncements:

Recognizing this new evidence, the scientists on the 2015 Dietary Guidelines Advisory Committee, for the first time in 35 years have sent recommendations to the government without any upper limit on total fat. In addition, reduced-fat foods were specifically not recommended for obesity prevention. Instead, the committee encouraged consumption according to healthful food-based diet patterns.

Next, the truth is getting out on frankenfoods -

Perhaps predictably, an “outraged” Monsanto, the company that makes Roundup, has accused IARC of “agenda-driven bias” and “cherry-picking” data. “We disagree with their conclusions certainly. Our position is glyphosate is not a carcinogen,” insisted a Monsanto spokesman, although he added it had set up an “independent” body of scientists to examine IARC’s findings.

We desperately need people to export the good food made by small USA business so their demand and production will expand.



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Texas Gold Bank Delusion

Texas passed a law setting up their own gold and silver money bank (in then old sense of the word) and that is good in its own right.  But this is delusional:

Other experts also highlighted those effects. “Over time, as residents of the state use both Federal Reserve notes and silver and gold coins, the fact that the coins hold their value more than Federal Reserve notes do will lead to a ‘reverse Gresham’s Law’ effect, where good money (gold and silver coins) will drive out bad money (Federal Reserve notes),” explained constitutional-tender expert William Greene in a paper for the market-oriented Ludwig von Mises Institute.

Gold and silver is useful as money when relationships will not be formed, or they are being liquidated.  Otherwise, credit all the currency that is needed, that is to say vendors extended usury-free time to pay.

As recently as say 1975 the vast majority of transactions, food, housing, gas, clothes, medicine were all paid on time with no interest.  The banks were able to crowd out this good bene-credit with their mal-credit, the problem we have today.

Plus it is a state bank.  There is no role for the state in business or monetary matters, it is purely a private function.  This is true in places like Hong Kong where competing companies issue the currency, and in as a legal fiction in the USA where the Federal Reserve is a private company.

What we need is private banks, in the old style, with zero connection to nor regulation by the state.  Then we can begin to return to peace and prosperity.

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Are Trade Shows Relevant?

Of course, they are critical to success, but people have lost the art of working one...  this articles gets a bit at it, but then the comments really pay off -

1. if you expect to do business at a trade show, then book sales meetings in advance.  Don't expect the show to be a success based on traffic.

2. Confiscate all communication devices from staff while on the floor.

3. Sell properly - "approach, qualification, agreement on need, " etc.  If you have not determined within ten seconds whether you are speaking to someone who is ready willing and able to buy, then you are wasting your time at the trade show.

4. Small booths are the most interesting (because they have new product.)

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The Bo Xilai China Comeback

The Chinese authorities are making an absolute hash of the stock market fiasco, guaranteeing that when their interventions fail, the damage will be all the worse.  Like Deng Xiaoping, this will be an opportunity for Bo Xilai to come out of "reeducation" and lead the country of China out of this mess.  Here is a good view of the situation:

“On Sunday, the new graduates of Tsinghua University are set to gather in their smartest attire to celebrate degrees from one of China’s most prestigious institutions, a place that has fostered generations of political leaders. Just after the ceremony starts – according to a written agenda – the graduates must “follow the instruction and shout loudly the slogan,
‘revive the A shares, benefit the people; revive the A shares, benefit the people’.”

That is so 1960s communism, the kind of idiot chanting of the party line you hear in USA media, politicians and graduate students here.  This mess in China is "capitalism with an anglo face" and the authors are Chinese officials who were educated in the USA and UK.

Circa 2010 I had a conversation with a education official in Hong Kong of Chinese ancestry who had a masters and a phd from USA Ivy league schools.  He was bitter over his career having been arrested. His degrees gave him n initial meteoric rise when he returned, but given the 2008 "made in usa" econ disaster, his star had fallen.  Imagine what this next fiasco will do.

Bo Xilai need only offer "whateverism with a Chinese face."

The damage done is incalculable when interest payments are allowed into an economy, and overtake the natural zero-interest based economy, such as we enjoyed up until 1971.  It is not going to happen that we return to that, for war is a simpler and more desirable result for the powers that be.

On the other hand, there is nothing to keep individuals from "seceding in place" and operating one's own business independent of the destructive madness inherent in usury-plagued economy.

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Excellent News For Small Business

The hegemon and its false-economy regime is reeling, which means its players are in trouble.  Those who depend on that are feeling the effects, but this trio of stories is good news for the self-employment in the productive economy.  First come consumers who are not buying at retail as much as hoped.

 The fact that consumers, especially, had not experienced much if any recovery since the Great Recession more than five years ago already pushed toward an even more drastic downside likelihood. Combined, there are consumers whacked by no recovery and now again into what may be a mild recession, and all before the real and nasty stuff actually starts.

Now keep in mind this is those mal-credit based big box stores.  Small businesses are able to adjust better than the dinosaurs.

International trade is slowing in terms of dollars, but again that is big business, false economy unravelling.

Outside of monthly gains for petroleum components, negative signs sweep both the import and export columns with agricultural exports, at minus 1.5 percent in June, extending a deep run of declines. Year-on-year, agricultural export prices are down 16.7 percent in what is not good news for the nation’s farming sector. A look at finished goods categories shows no price strength anywhere with import prices for capital goods, at a year-on-year minus 1.7 percent, and export prices for consumer goods, at minus 1.9 percent, especially weak.

As I have demonstrated before, the drop is in Frankenfoods and other false economy, while specialty food, the bailiwick of small business is doing quite well.   Burger King NZ, owned by the smartest money people in the world (and heavily subsidized by the NZ taxpayers) is under water.  In a world of zero interest rates, it is having problems with financing.  No kidding?  It all gets back to malcredit, and deflation.

 The problems in China are also false economy events, but there is plenty of real economy deflation (what we badly need) going on as well.

Yes it is, which explains why, as we noted on Monday evening, commodity producers which levered up in anticipation of a perpetual bid from China are now buried under hundreds of billions in debt amid slumping prices and a global deflationary supply glut.
And while the country’s shifting economic model undercuts global trade, the sharp decline in Chinese stocks poses a threat to the country’s presumed new engine for growth: the consumer.

A void is being created as these false-economy monsters implode.  Since they are huge, even a little drop is massive opportunity for the small business.

But wait, you say, people do not go from buying McDonalds frankenfutter to the organic good food gourmet burgers.  Correct!  But enough do to support you and your family, small time to big time.

Get out of the dying false economy, and get into the growing creative economy.

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Fast Track Secession

The "free trade" agreements being fast-tracked are an appalling expansion of the horrible NAFTA and CAFTA sell-outs.  None of these agreements are remotely "free market" but lying is a government service.

The republicans did their part, passing romney-obamacare without reading the bill, and the payoff is for democrats to reciprocate with the TPP-etc without reading it.

The whole thing is so appalling that communities are beginning to secede in principle.   In time people will begin to secede in fact.

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Market Watching

An excellent article detailing where the problem is ...

1. Government intervention, effecting theft from market players to benefit the bankers:

The fact is that the market fully recovered to even higher levels the following week as the government banned short selling of financial stocks (much like China is doing more broadly at present). 

2. Retail investor naivete:

 Prechter describes the prevailing psychology of investors with the term “socioeconomic orientation,” and his observations on this, I think, are exactly correct:
“People keep asking, ‘What effect will the next central-bank plan have on the stock market’s behavior?’ This is the wrong question. The socioeconomic orientation turns the question around: ‘What effect will the next stock market move have on the central bank’s behavior?’ 

Among other problems...

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Bene-credit Then and Now

And there would be another splendid graph in response to this graph....



The blue line is what the banks generated in mal-credit valuation.  Before banking mal-credit, there was private bene-credit.

Note in 1981, the valuation was a delusional 2X the GDP (now an unconscionable some 10 times as much).  In 1981, there was still massive private, bene-credit.  How much?  What was personal wealth in 1981 v now?

Before 1971, everyone owed each other, friends, neighbors, employees, vendors, etc money.  Now we all owe the banks.  Before there was creative and unitive, now banks decide our lives.  And keep in mind gaining this power cost the banks nothing, for they lent credit, not money.

How much of that blue line represents bad investment crowding out good investment?

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What Happens If Greece Defaults?

Nothing.

In capitalism, it does not matter if the borrower is wholly unqualified, because what is being lent is literally nothing.   It costs nothing to lend nothing, but when the borrower defaults, his actual assets are forfeit, beyond the nothing he borrowed, whatever nominal valuation assigned.  This is one of the myriad ways in which usury concentrates power in ever fewer hands. There is no definition of capitalism that does not include charging interest on loans, a practice that is inherently evil in all places and times, at all rates and duration, on any amount.  (I use "evil" in the theological sense of "absence of good").

In a free market, interest agreements would simply be ignored, with impunity, just as gambling debts are ignored universally today.  Capitalists would go away, perhaps to Riga. Capitalism is far more the enemy of free markets than communism, which has had the decency to evaporate after admitting failure.  (Marxists always had the advantage of at least getting their facts straight.)

Lenders could care less if this group of nincompoops pays off or not, nonpayment yields no inconvenience.  And tomorrow there is yet another round of more "something for nothing" that ever invigorates capitalism.  No lottery payout today?  Well, we never bought a ticket anyway, and tomorrow there will be a payout, just as there was for thousands of days before, with never buying a ticket.

We all love a system that works for us, even if it doesn't, as long as we are told it does.

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Stupid Not To Buy?

Hi John,

Always a pleasure to read your in-depth and insightful thoughts about economic matters.

I live in the city of London. I'm 29 years old. Currently renting a small room for ₤500. I've been living like this for the past two years and it's a little frustrating.

Now I can afford to buy my own flat but I don't know if its the right decision to make right now - or whether I'm better of renting instead.

I'd rather live rough for a few more years if that means I can afford a better life in my middle thirties. My friends, who are all owners, are telling me I'm stupid not to buy.

Regards,
Jim

Hey Jim,

Your concerns are iconic. Working backwards they are the risk of failure to conform, whether forestalling now will yield better in the future (capitalism) and what to do at 29 about a little bit of frustration.

As to the failure to conform, you understand the only way to get ahead as an investor is contrarianism, and the stronger the pressure the more likely refusal to accede will pay off.  How strong is the pressure to follow the crowd?

I have only heard 3rd hand reports of the London market, and appreciate some of the subtle difference between USA and UK.  USA has regulation enforcement on imports, UK has importer compliance.  USA invades your office with guns and dogs and takes your computers away with you in handcuffs.  The UK calls to schedule an appointment where you visit and discuss options to get back into compliance, at your convenience. USA and UK by treaty have pretty much the same banking rules.  USA ignores them for the privileged set, UK ignores them for everyone.  Advantage UK.

But all this ignores the fundamentals: too much claim on too little productive capacity.  The valuation of the productive capacity among those who own it (billionaires and pensioners) is ridiculous, and no way everyone has what they think they have.  When this gets marked to market, there will be deflation, necessarily.  (The billionaires will be make whole on their notional value, the pensioners will have their nonexistent share "bailed-in" for their own good.)

Even with this heist, which is what happened the last four years in Greece, with the billionaire bankers off-loading Greek exposure onto euro-pensioners (and more created since no one objected) there is still all the ongoing obligations of national health, govt pensions, and programs to help homicidal juveniles to be nicer.  Now, there is no money for this, but there sure is more credit, as long as it can be demonstrated that paychecks, pensions and property can by ever more mulcted to borrow ever more.

Which brings us to the question: should you buy now that you can afford to?

You have a job (I am guessing) in a false economy and have saved up enough to make a down payment on a flat.  Interest rates are near a historical low (for a malicious reason) and the idea is real estate only goes up, as it appears to 29 years old.

May parents bought their home, which sells now for $1.25 million, for $10,000 in 1955.

It originally sold for $10,000 in the 1910s, went up to some $30,000 by the depression, and then there was no market at any price.  (The bottom of a market is not low prices, but no buyers.) After WWII the market returned, and my parents picked it up in 1955 for $10,000, as I said, By 1972 it was $30,000 again.  So it only took 42 years for the house to recover.    Your friends will see their prices return when they are in the 70s and 80s, after the next crash.

But that is not really how it works.    Even though the real estate prices crash, on the $500,000 flat upon which $100,000 was laid as a down, the $400,000 debt goes no where.  As the value of the property drops to $80,000 (on the way to no market), the debt on the 400K remains, as well and the "super low interest" which is constant, and is now more than you are earning in your new job. Bankruptcy!

We saw all this in rehearsal in 2008.  Next time it will be 10X worse.

So, let me answer you in all seriousness:

1. How do you define wealth?  Personal accumulation, or the degree to which you can access what goods and services you need with the money you earn?

2. I prefer the latter, and if you do, then you have a problem.  You go to the place where your seed corn (a home) is the cornerstone of your wealth, then that seed corn will need be eaten, by you or the State or both if you are lucky.  Think Ireland, corn laws.

So...

a. you will not get through what is coming with the resources needed to position yourself to get a flat.  The coming challenges will tax your physical, mental, spiritual capacities.  Physical: Quit your gym and join one of the fighting arts where your mistakes cost you physically: judo, kendo, jiu jitsu, boxing, greco-roman wrestling (and some aikido dojos) anywhere you can expect to get bloodied.  Mental: decide if you are platonic or aristotelian.  Get your head together.  Spiritual: Join the religion to which you are called.  What is coming will tax you on all levels, and we solve problems on levels different than we experience them.  Spiritual problems are solved mentally or physically, physical mentally or spiritually, mental problems spiritual or physically. Get fully rounded.

b.  Take your down payment and put it in cash and gold and start a business.  Follow your passion (suffering) through to the joy you find in solving the problem (suffer) you experience, the unbeatable combination in business.

c. Get married and have kids.  Now.  You waited too long. When all is said and done, nothing in life measures up to that experience.  Do it, but marry someone who wants a family and is on board with the correct definition of wealth, understands that self-employment is life-style, and wants to create a family, not acquire a consumer item (the modern family.)

"A flat" is too small of an ambition for a human. Bugger all and go for it all.  The bad guys will not lose,  but you do not have to become coliseum entertainment for them as you fight over dwindling resources in the public square, to their amusement.  And you'll be in a position to provide your friends, who now have flats, employment when the are homeless and hungry.

Well, you asked.

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