This Needs Reading

I've updated this post, and it needs to be read.  So I link to it.

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Depends on What You Mean by Great

The reaction to Trump is largely narcissistic, either way a plea "but what about me?"  The USA economy is so based on freebies, to either left or right, that the focus is on what we can get instead of what we can earn.

Any human being has a limited capacity any given day to move, speak, think, consume, decide and so on, that is to say human action, which leads to given results.  The results are cumulative and can be either beneficial or deleterious.  There are people who want to keep things going the way they were. There are people who want change. Either way, it gets down to choice. Your choice.

U S A !  U S A !  U S A !

While the USA Ex Nihilo Credit regime, a regime with degenerate results, is dying off, and people clamor for more free stuff, the Chinese are busy taking their time to move, speak, think, consume, decide and so on, to build the Belt and Road economic zone.

This zone was last activated in the Early Tang Dynasty, which became China's Golden Age.  President Xi knows what he is doing.

You can be deliberate as well.  If you are in the San Francisco area,

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Trump Change

As the Donald is sworn in, the only real change is likely to be a curbing of the excess intel regime, a victory for the Total Information Awareness claque and a defeat of the cloak and dagger mischief makers.  With those expensive, murderous, pointless, counterproductive rogue elements liquidated, what is left is the economy.

Before the Soviet Union fell, Noam Chomsky wrote this:

When the world’s two great propaganda systems agree on some doctrine, it requires some intellectual effort to escape its shackles. One such doctrine is that the society created by Lenin and Trotsky and moulded further by Stalin and his successors has some relation to socialism in some meaningful or historically accurate sense of this concept. In fact, if there is a relation, it is the relation of contradiction.

If you watch Chomsky you'll note he is not about to be pinned down as to labels, but he is probably essentially an anarchist.  He certainly defends socialism, to the point he criticized the Soviet Union for failing at socialism, and his criticism was in the form of comparison to the USA.  Again, what I like about Marxists is they get their facts straight, and Chomsky sure gets his facts straight.

It is clear enough why both major propaganda systems insist upon this fantasy. Since its origins, the Soviet State has attempted to harness the energies of its own population and oppressed people elsewhere in the service of the men who took advantage of the popular ferment in Russia in 1917 to seize State power. One major ideological weapon employed to this end has been the claim that the State managers are leading their own society and the world towards the socialist ideal; an impossibility, as any socialist — surely any serious Marxist — should have understood at once (many did), and a lie of mammoth proportions as history has revealed since the earliest days of the Bolshevik regime. The taskmasters have attempted to gain legitimacy and support by exploiting the aura of socialist ideals and the respect that is rightly accorded them, to conceal their own ritual practice as they destroyed every vestige of socialism.

Now,  as Trump is inauGREATed, the above could be edited thus, so perfectly matched is the Soviet Union and the USA in hypocrisy and corruption of ideals:

It is clear enough why both major propaganda systems insist upon this fantasy. Since its origins, the American State has attempted to harness the energies of its own population and oppressed people elsewhere in the service of the men who took advantage of the popular ferment in America in 1776 to seize State power. One major ideological weapon employed to this end has been the claim that the State managers are leading their own society and the world towards the American ideal; an impossibility, as any free marketer — surely any serious liberal — should have understood at once (many did), and a lie of mammoth proportions as history has revealed since the earliest days of the American regime. The taskmasters have attempted to gain legitimacy and support by exploiting the aura of American ideals and the respect that is rightly accorded them, to conceal their own ritual practice as they destroyed every vestige of freedom.

In 1986 Chmosky noted the similarities.  Nothing is changing.  The real change coming is the continued disintegration and death is the ex nihilo credit regime. Who gets hurt and how at this point is mere aesthetics. It is what is is, the world can be a wicked place and that is good to know. You may pledge allegiance to all the hoopla, or you can get to work creating your own freedom.  No matter what happens in Washington or Wall Street you can innovate and create customers, that is create your own peace and prosperity.

If you'd prefer to build a business than debate politics, there are links to online courses on the upper right of this blog, and a list of my upcoming seminars here...

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My Supplier is Visiting!

On Jan 12, 2017, at 10:10 AM, JJ wrote:

Greetings ...

The company I do business with in China is coming into San Francisco to see me and would like your thoughts on how I should entertain them.  I know nothing of Chinese culture and I want to learn quick and be a good host. 

***First off keep in mind they want to experience USA culture, so no Chinese restaurants. You are their customer, so they love you no matter what.***

Should I pick them up at airport, show them around or merely set up a meeting?

*** Ask them if there is anything you can do to help make their visit a success.  Then they will name what they want.  You can subtly limit things by asking "when should we meet?"  When you know their plans, you can advise accordingly...  "Big Sur is beautiful this time of year, but the road just washed out... on the other hand, Carmel is worth the trip... ***

 Should I offer to pay the dinners and such?  My view is that we are truly business partners, when I succeed they succeed so in a since they are my most important piece of the puzzle and want to treat them as such. 

***Have they hosted you over there?  if so, you have a template:  any less and you are insulting, any more and you embarrass them.  And either way, you'd be modulating the relationship.  Think in terms of where you want the relationship to go?

In any event, say just that to them during meets "You are the most important piece in the puzzle..."

Also, never take them to your house (unless years from now you are truly friends) , that is too obliging...*** 

There are many ... companies in China but I have stuck with one company faithfully and want to continue to do so.  Any thoughts would be appreciated. 

***So figure a budget you intend to spend, and then when they signal their intentions, you spread that budget over the time alloted...

If they want a wine country experience,  depending on the balance, you can either put them on a bus at your expense, or arrange a booking at their expense... or escort them yourself...  all depends...

As to gifts, simple...  like UC Berkeley sweatshirts (the ones that just say "Cal" are good) so they can be cool back in China...

But remember, don't go much more than they go for you over there.... that's the rule of thumb.

John

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REITS: How Cops Teachers Firefighter Pensions Get Robbed

The low hanging fruit to be plucked in a downturn is the pensions of the public service workers.  Here is how it goes.  First, this is paid article placement, in the Washington Post:

Maybe that’s why so many retirement plans—like those for teachers, firefighters, and more—use REITs as part of their investment strategy. In fact, you may be invested in REITs right now through your retirement plan and not even know it.
For America, REITs have helped revitalize both large and small downtowns and redeveloped old and new suburbs across the country, and helped foster innovation in communications, health care and more.

As I noted here, investment advisors flog reits to the public service workers.

Now, when all that ex nihilo credit is directed to build a pointless mall, such as this $190 million mall built in 2005 (last in, first out?) and the debt cannot be serviced, what happens?

The 1.1 million square foot mall, once valued at $190 million after being opened in 2005, sold at a foreclosure auction this morning for $100 (yes, not million...just $100).  According to CBS Pittsburgh, the mall was purchased by its lender, Wells Fargo, which credit bid it's $143 million loan balance, which was originated in 2006, to acquire the property.

So Wells Fargo, which has a license to create ex nihilo credit, did so to the tune of $143 mil way back when, and are still owed, under capitalism.  So they "bid" their $143 mil debt paper, plus another one hundred dollars, and won the auction.

Well, so what, now they have a money losing property on their hands. It appraised for 11 million last summer.  The mall itself is a waste. What did they win?

They own the leases on the 55% of the mall that is occupied.  Then there is this:

So it's probably safe to keep buying those mall REITs...afterall those 3% dividend yields are amazing alternatives to Treasuries and you're basically taking the same risk...assuming you overlook the billions of property-level debt that ranks senior to your equity position. 

They tap into the equity funneled into the projects by the REITS, and Wells Fargo has first call on that now.  Your pension moves over to the bank, you get ...well... nothing.

The hegemon is stage managing the economy until the fall of 2017, when the Trump regime is well-settled, and then comes the big crash, and with that the Donald has the team and time to manage the economic correction necessary for regime maintenance.

Who pays for the excesses of the ex nihilo credit regime?  Check your 401K to see how much you'll be charged.

Better start a business.

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Export Food Small Business Start-up

This is why, in addition to my general small business international trade start-up courses I teach a a specific class on food export.  The information offered everywhere except from me is not only bad, it is downright harmful.  The harm in these articles is people contemplating export expansion say "If that is what it takes, then I cannot do it." Well, what is described in the article is not what it takes. What is described in the article is a whole lotta waste.  The way it is done worldwide is not at all like this article describes.

Someone has to present what really happens in small business international trade.

This article is an example, and start out with a claim that is rather wrong.

While food giants such as P&G, Nestle and Unilever have long operated with a global footprint, it’s only recently that small- to mid-sized companies have been able to effectively tackle these markets.

Small businesses have been exporting food from the United States all along, nothing has changed in recent years, the tools tactics and attitude necessary have been there all along.  Yet the story will tell us about a "pioneer" in this field.

One of those food retail pioneers is Kontos Foods, a mid-sized New Jersey-based manufacturer and distributor of traditional artisan breads and Mediterranean specialty foods. A little over three years ago Kontos began a vigorous overseas expansion program, and now ships its products globally, to a wide range of locations, including Singapore, Indonesia, the Caribbean, Panama, Bahrain, Saudi Arabia, and Dubai.

I've never heard of Kontos Foods, and I am sure they are a fine company.  But what bothers me with these perennial articles telling us about "pioneers" is they never mention cost/benefit...  I can get sales into all of those countries pretty quick too...  at a cost.  The trick is to have sales and maintain a profit, at least as good as what you would have if you expanded domestically.  If Kontos is New Jersey based, then export orders ought to be no more difficult (or costly to acquire) and every bit as profitable as a domestic sale.  And alongside testing the overseas market, one would be obliged to test expanding domestically to compare with the overseas opportunities.

Now, recall the opening false claim that biggies like Nestle and Unilever were the only possible players before.  And who is making this claim?

Before Kontos, I worked at Unilever and my colleague, Kontos Foods’ Global Sales Director Doug Werts, is formerly of Nestle. Combined, we’ve lived and worked in different markets around the world, including the Netherlands, Brazil, and the U.K.
At Unilever, for instance, I spent significant time and resources building market share in Europe and South America. Those experiences, along with our current Kontos research about consumer shopping habits, provided us with the deep consumer insight we needed to target the right products and packaging to shoppers.

So to help a small or mid-sized company break into export markets, the process is the same as for Unilever and Nestle?  This is an internal contradiction: "nothing has changed, things are now different."

Now notice the valentine-to-self slipped in there, "my experience and my time spent on the Kontos dime travelling gives ME deep consumer insights."  Bull$#!+.  Since valid and reliable market information costs tens of millions, any other "experience or insight" is mere anecdote, and the plural of anecdote is not science.  There is a way to test market with spending tens of millions, and getting solid results.  It is search and learn, a process where you discover customers not otherwise discoverable.  But the tool tactic and attitude is utterly contrary to all of the elements this article proffers.  In short:

1. The tool - LCL MOQ FOB ...  if you have specialty, overseas buyers are looking to test this in their market.  They want and need that smallest order rational, not the largest order possible.  They want a pallet load to test, not a 40' container. It is FOB because you will be prepaid before anything rolls out of your warehouse destined for overseas.

2. The tactic:  Your export offer is one-size fits the entire world.  You ship overseas what you ship domestically. All "localization" for the export market is up to the importer overseas.  No good deed goes unpunished, so you never help your buyer by doing localization.  Recall we are talking a one pallet load shipment, and as a tst possibly several of these in sequence.  Why would you foot the cost of "localization" for a test order, in which most test will come up nil?  Don' worry, your importer overseas knows how to localize on the spot if necessary.  I am also an importer, and have had to "localize' many shipments on the spot in which customs has found fault.  it's a small shipment, no sweat.

3.  The attitude:  I came here to sell, why are you here?  At the trade shows, every buyer ought to place an order for your LCL MOQ FOB.  If not, why not?  If the person you are speaking to is not a buyer, end the conversation and move on to a buyer.  If the buyer says no to your one-size-fits-all worldwide offer, then find out why not.  Start a matrix of objections to see if any changes wold be worthwhile in your offer.  This is science, something sorely lacking among those who go to trade shows happy to settle for "trade leads."

What exporting gets down to is a test of the product by the importer overseas to whom you sell.  This article has a lot of moving parts, but bottom line is you find an importer overseas who wants to test your product.  On the one hand all of the rigamarole laid out in this article nets no advantage, and on the other hand you can achieve the same results with none of the rigamarole.

Then on this this:

The problem, however, is that overseas research isn’t cheap: Attending one trade show could cost upwards of $15,000-$20,000. There are nonprofit and government programs to help assist with companies as a means of trying to boost overseas trade. We found FoodExport NorthEast, a non-profit organization that supports international commerce. The organization is designed to help American food and beverage manufacturers attendforeign trade shows, connect with potential customers and learn about consumer trends.

Sigh. It could cost that much, but you can achieve the same results at a fraction of the cost.  Here is the funny thing, it could cost that much if you take the help those orgs offer, because their help is in the form of rebating half your costs if you do things their way, which "could cost upwards of $15 -20K..."

OK, so you spend $15,000 on a trade show and get $7500 back.  And their way is not the optimal way.  And I can do an optimal version the same thing all in for about $5000.   Now what kind of leverage is it when you net net you spent too much to do largely the wrong thing?

With the assistance of FoodExport, we started hitting the global trade-show circuit. They provide exploratory tours to help retailers discover whether a particular market is right for them. These tours offer crucial learning time, where retailers, manufacturers and distributors can quickly learn which regions are worth pursuing. When you’re on one of these tours, I recommend maximizing every minute of your research gathering.
For instance, while in Shanghai for a trade show tour, I learned that people in Northern China prefer bread much more so than their southern countrymen. This helped steer Kontos’ sales efforts to the correct part of the country, saving time and money.  

Any any Chinese food importer would already know this.  Why not just find a competent Chinese importer and have them test your product and provide feedback?  If and when something developes, then you might go visit China.  All this travel and time is expensive.

The international export business is on an upward trajectory. If you plan to join in on an overseas expansion program, gather an experienced team, do your homework and get your passport ready. People are now enjoying Kontos flatbread in Bahrain, Singapore, South Korea, Saudi Arabia and Dubai. Who would have dreamed that three years ago?

As I started out this post asking, where is the cost benefit, I am pretty sure Kontos has gone well into the hole getting those export orders.  The question is when, if ever, it will proven to have been profitable.  For overseas expansion, you need no more talent than a good Freight Forwarder and a solid importer, who may be discovered without ever leaving your office.

Because these articles claiming "small businesses can export just like Nestle now" have been coming out the last 40 years, I offer a corrective course.  No nonsense, the tool, tactic and attitude to find export business no more difficult and every bit as profitable, from the first sale and onward.  You may read about the course here, and enroll now and pay later at the same site.

Tuesday 1/24 - 2/14/2017   Four Sessions

Section One ~ 6 PM to 7 PM Pacific Time

(This would be 7 PM to 8 PM Mountain, 8 PM to 9 PM Central, 9 PM to 10 PM Eastern)

This work can be done either as a proprietor producing food, or an agent representing a food producer.

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President Trump, Build Up That Wall!

How can a free market anarchist call for Trump to build the wall?

Depends on the wall.

Now keep in mind the law, passed by democrats in 2006, requires the president to build that wall. So Trump is simply enforcing the law.

Again, depends on the wall.

To be politically correct, since walls are so Soviet-like (and we a soooo anti-communist) it is called the build the "fence " act...  of course the fence being a high tech surveillance full-employment act, with anyone crossing anywhere being picked up by sensors and then intercepted at Border Patrol's leisure.

But Trump campaigned on the politically incorrect "wall" meme.  This is good.

So what would the wall look like?  Well first, it should be about 20 miles wide, and 2000 miles long, covering the entire USA/Mexico border.

What's inside this 20 mile by 2000 mile wall?  Well, in essence, a 40,000 square mile free trade zone, Hong Kong like. No one owns the land, all real estate is on a 99 year lease system.   Anyone can enter this zone from Mexico freely, and anyone can enter from USA freely.  So this means anyone: tourists, medical patients,  refugees, asylum seekers, criminals, shoppers, vacationers and anyone else who can find an invitation to access anyone's property in this zone.  

Of course anyone leaving by land route would need to clear Mexican or USA Customs, respectively to get into those countries.  But otherwise the zone is free access.  All you need is a hotel reservation if you are staying overnight.

The optimum permanent population would be about 7 million people;  it needs an international airport, and a seaport at the point where the Rio Grande meets the Golfo de Mexico.

OK.. so where to start?  One mustn't just decide to have a free trade zone ala Hong Kong running for 2000 miles.  One needs to ease into this, people cannot handle freedom.  So start with a test pilot, and I have just the place:

 Though only 75 miles runs along the Mexican border, the reservation is about 2.8 million acres or roughly the size of Connecticut and has about 30,000 members. The tribe’s official website says that nine of its communities are located in Mexico and they are separated by the United States/Mexico border. “In fact, the U.S.-Mexico border has become an artificial barrier to the freedom of the Tohono O’odham,” the tribe claims. “On countless occasions, the U.S. Border Patrol has detained and deported members of the Tohono O’odham Nation who were simply traveling through their own traditional lands, practicing migratory traditions essential to their religion, economy and culture. Similarly, on many occasions U.S. Customs have prevented Tohono O’odham from transporting raw materials and goods essential for their spirituality, economy and traditional culture. Border officials are also reported to have confiscated cultural and religious items, such as feathers of common birds, pine leaves or sweet grass.”

But that is a drug transfer point!  Well, it is a drug transfer point not allowed by the hegemon, who controls the drug trade.  And otherwise, the Indians are only permitted to engage in vices, - gambling, cheap booze and cigarettes, fireworks.  Aside from that, the Indians have had their loaf of bread taken away and are invited to apply for a grant of crumbs.

But in a free trade zone, the Indians could be sponsoring the finest of everything in the world, by not having subsidies and monopolies.  The could be like the Scottish royals, have no property, but in charge.  They set the (anarchistic) rules, and they otherwise work at what they love alongside all other people in the territory. 

Once this has proven successful, the wall can be extended from the Pacific Ocean to the Golfo de Mexico.

Why not?  It's just a matter of honoring the treaties with the Indians.

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Happy Martin Luther King Day

There was a trial that found there was a conspiracy to murder Martin Luther King, and it took over 30 years to get that far.

After four weeks of testimony and over 70 witnesses in a civil trial in Memphis, Tennessee, twelve jurors reached a unanimous verdict on December 8, 1999 after about an hour of deliberations that Dr. Martin Luther King, Jr. was assassinated as a result of a conspiracy. In a press statement held the following day in Atlanta, Mrs. Coretta Scott King welcomed the verdict, saying , “There is abundant evidence of a major high level conspiracy in the assassination of my husband, Martin Luther King, Jr. And the civil court's unanimous verdict has validated our belief.

It is an interesting case with lots of interesting findings.  Such as the fact there were two active duty military units observing the assassination, an intel unit apparently filing it and a sniper team.

How come they were there? Neither liberals nor conservators when in power have ever inquired into this.  Well, because they want a fake MLKing to honor, not the real one.

The real one said the USA was the greatest purveyor of violence in the world.  A year to the day that he said that, he was dead.  An open court found it was a high level conspiracy.

I've blogged on this before...

http://hbhblog.blogspot.com/search?q=martin+luther+king

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Trump Victory: Cleaning the Stables

As I have said, the real problem is when Trump delivers no improvements.  A productive core in the USA got Obama elected, hoping for change from the warmongering Bailout Bushes.  They got burned by Obama. That same core that got Obama elected just elected Trump.  There will be trouble when yet again there is no change.

The hegemon does seem to be interested in reining in the intel world, an out-of-hand independent nation causes havoc to the Hegemon.  Just as the donors to the Cinton foundation, such as the people in the Norway government who donated a half billion to them for personal advantage, a whole lotta payback goin' on.

Here is an interesting example:

Mr Steele, who friends say fears for his safety, has gone into hiding while the veracity of the claims made in his dossier, and his own reputation, continue to be fiercely debated.

Forget the specifics of his story.  Although as a secret agent, he was unlikely to be much of a secret to the "enemy, " now that he has been officially outed, his network of contacts and beneficiaries worldwide are now in trouble.

Think about the lesson here, share info with the FBI or USA intel, and your life is in danger.

After 9-11 800 new "intelligence" agencies were created, along with the "full employment act" TSA. USA can afford neither, both in money and counterproductive results.  Before the necessary crackdown on USA, in USA, any possible rogue agencies must be eliminated.

We will all cheer this process of elimination, the collectivization of intel in USA.  Like he Ukrainians who cheered both the Soviet overthrow of the Tsar and the nazi overthrow of the Soviets.

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India Currency Woes: Policy Laundering

Policy laundering is running a program through another country first, and then presenting it where otherwise it would have an ice cubes chance in hell of being adopted.  "Even India has gotten rid of cash, we should too." Here is an eye-opener regarding the hell India is going through with this experiment in cashless society.  Guess who is behind it?

Austrian economists are academics, so they debate along hypothetical lines, and work within the narratives to which they all ascribe.  Problems such as this arise, as noted in the article:

 No one and no state can secede, and no one can structure business deals apart from government without their having a ready currency at hand. Barter is out of the question. If a state attempted to secede, the federal government could squeeze them monetarily through sanctions and cutting them off from the payments system. There must be alternatives in place or that can be quickly expanded for any such independence movement to succeed.

In spite of being the best, by far, school of economics, their "apodictic" assumption of interest rates on loans forbids the obvious answer: credit is the universal currency, and it may be privately issued.  It is necessary and sufficient to a free market.  Add 100% reserve gold backed actual currency, something else government cannot or will not do, and who needs the hegemon?

There is nothing to keep anyone or any polity from seceding immediately at any time.  As they say, just do it.

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QR Code Update: Even the Dead Can Use Them

In reply to a post yesterday on QR codes, a past participant in my seminars who trades gravemarkers emailed me this note...

On Jan 12, 2017, at 8:06 AM, LR wrote:

HI John,

 

Hope your new year is going good.  I read your blog every day ...  Several monument companies have jumped on the QR code idea without much success.  They give the QR code and charge a lifetime charge for the website but my customers just are not buying into the idea,  The last one I did I have a company make a QR code that liked to a Facebook site and the customer liked that and cost was only $45.00 for a QR reader.  Who knows how it will all go in the future.

 

Samuel

You'd think people would be dying to have a QR code on a gravestone.  (hahaha... what a wag am I!) So you can LIKE the dead guy on Facebook?  Does a dead guy care what we think? Well, who cares, if it is what he wants.

This is a main reason for teaching, the things you hear about...

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Entrepreneurs Do Not Take Risks

When I first read that back in the mid-1980s, written by Drucker, I was astonished.  How could he say such a thing?  All I ever heard was entrepreneurs and risk were one of the same.  Then I began to reflect on what I had learned so far in business, and realized he was correct. Everyone with whom I was familiar and was successful never took risks, they worked to eliminate risks in the business process. Entrepreneurs do not take risks.

So how come we all hear "entrepreneurs take risks"?  At the risk of achieving sic passim, believe it or not the idea only got started with, guess what, ex nihilo credit in the 1970s.  How come?   Well, once you set up an ex nihilo credit regime, there is no rational limit to what can be lent, because literally nothing is being lent.  Only debt is being agreed to...  well, with a limitless supply of debt on offer, at zero cost to the lenders, well, how do you lend all of it out?

First you must socially condition people to borrow more than they need, and to do so you must overcome their natural prudence and common human sympathies.  What worked was to socially condition through media, schools, entertainment and government the idea that entrepreneurs take risks.  Borrowing from banks (who had "risk capital") was step one in an entrepreneurs saga.

According to Merriam Webster, the term "risk capital" first shows up in 1944.  Since business start-up has been around since Cain settled down after bumping off Abel, is it not a little odd the idea of "risk capital' does not show up until 1944?  These are early abuses of the term, and meanings change as people grab an emerging use to apply to an urgent need.

Let's look at some etymologies -

risk (n.) 

1660s, risque, from French risque (16c.), from Italian risco, riscio (modern rischio), from riscare "run into danger," of uncertain origin. The Englished spelling first recorded 1728. Spanish riesgo and German Risiko are Italian loan-words. With run (v.) from 1660s. Risk aversion is recorded from 1942; risk factor from 1906; risk management from 1963; risk taker from 1892.

So the word risk itself is fairly new, in light of how long we've been doing business on earth.

risk (v.) 

1680s, from risk (n.), or from French risquer, from Italian riscare, rischaire, from the noun. Related: Risked;risks; risking.

Etymology[edit]

From earlier risque, from Middle French risque, from Italian risco ("risk"; > Modern Italian rischio) andrischiare ("to run into danger"). Most dictionaries consider the etymology of these Italian terms uncertain, but some suggest they perhaps come from Latin *resicum ‎(“that which cuts, rock, crag”) (> Medieval Latinresicu), from Latin resecō ‎(“cut off, loose, curtail”, verb), in the sense of that which is a danger to boating or shipping; or from Ancient Greek ῥιζικόν ‎(rhizikón, “root, radical, hazard”).

A few dictionaries express more certainty. Collins says the Italian risco comes from Ancient Greek ῥίζα‎(rhíza, “cliff”) due to the hazards of sailing along rocky coasts. The American Heritage says it probably comes from Byzantine Greek ῥιζικό, ριζικό ‎(rhizikó, rizikó, “sustenance obtained by a soldier through his own initiative, fortune”), from Arabic رِزْق ‎(rizq, “sustenance, that which God allots”), from Syriac [script needed]‎(ruziqā, “daily bread”), from Middle Persian [script needed] ‎(rōčig), from Middle Persian [script needed] ‎(rōč,“day”), from Old Persian [script needed] ‎(*raučah-), from Proto-Indo-European *lewk-.

Cognate with Spanish riesgo, Portuguese risco

The word is a good one, but notice it has more to do with logistics than with business dealings; as to the soldier taking risks, well, war is hardly business, and from the beginning soldiers have had to over run their opponents to gain the necessities to fight.  Rebels assault the armory.  Again an ancient idea, but not business, not trade.  In logistics, oh yes indeed, there are risks, but here again, and expressly, entrepreneurs since the Phoenicians ruled the waves have mitigated risks.  Marine insurance is arguably charity, not insurance, since those whose goods go overboard are made whole by those whose goods did not, thus arguably even halal, especially since the relationship ends with the docking of the vessel.

More here...

So to move from risk in logistics, the problems of time space and matter and botlenecks, and move the idea over to human action took some doing.  But they did it.  How?  Social conditioning, just like today when your smart phone tells you what to think, what to like, where to go, what to do.  (Yesterday a cabbie became perplexed when google maps told him to go one way, and Garmin another...)

Check this bit of research out...

A look at Google Ngram – a search engine tool that allows you to see how often a given word is used across books, newspapers and magazines through time – shows that the usage of “Risk” was fairly stagnant from 1800 to the early 1960s. The frequency with which it appeared during this 160 year stretch ran from 0.002% to 0.004%, about as often as words like “Poverty” or “dog”. Starting in 1970, however, “Risk” became a hot topic. The frequency of its usage increased by over 3.5x, peaking in 2006 at 0.015%. That may not sound like a lot, but the word “Risk” now appears in print four times more often in English-language press than the word “Weather”, according to Ngram. And you know how popular the weather is…Source:Nicholas Colas, chief market strategist at Convergex, a global brokerage company based in New York.Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.

Well, there it is.  After 1971, when Nixon went off the gold standard (lite), the hegemon got to work flogging the idea of risk as central to business.  We've always had fake news and state controlled press, and they did their work.  A term normally associated with logistics is hijacked and applied to human action, business, in order to get their cannon fodder to soak up as much of this ex nihilo credit as possible, and enslave them.

Terms do not just show up universally adopted one day.  They need time to incubate.  You can study such incubation of any given word at the Oxford English Dictionary site, and see how at high levels (academia) the idea of risk and investment begins to emerge even 100 years ago or more, with the dates and works in which a term was used.  This demonstrates how slowly a critical mass forms as more an more people address the idea in their own works.  Certainly before Nixon's move there were people referring to risk in investing.  There had also began the implicit criticism of NOT taking risks, with the term risk-averse first showing up in 1961, and the illiterate version of risk-adverse showing up in 1969.

Just as it takes time for a term to solidify, and the idea behind it, it takes time for the idea to have its intended effect.  The point of misinforming entrepreneurs was to get them to take risk in the form of borrowing ex nihilo credit.  Although it was in 1971 that Nixon made lending ex nihilo credit lending possible, bankers needed proof this would not backfire on them.  Two entities that massively borrowed ex nihilo credit when Nixon changed the rules, Chrysler and Penn Central, went bankrupt, Uncle Sam bailed them out.  Bankers then understood.  In the ex nihilo credit regime, profits are privatized and the losses are socialized.  All that was left was how to carry ex nihilo credit loans on the books?

I have in hand a 1983 seminar manual for bankers, "conducted throughout the country", in which bankers are instructed to lend credit instead of money.  (Note bankers know the difference, even if you are not allowed to know the difference.) How?  There is the problem for bankers of reserve requirement and the bank balance sheet liability of such action.  The solution is clever.  Put the ex nihilo credit loans under Standby Letters of Credit, which at once have no reserve requirement and is off balance-sheet financial statement category.  Sound familiar?  The idea was so evil and contrary to sound banking, that the manual carried a sign letter of endorsement from a regulator for the Governors of the Federal Reserve System.

(As a side note, this scam is also the basis for gold leasing, specifically mentioned in the manual, and a matter of great concern worldwide, with Germans and Italians, etc, demanding that gold supposedly in USA for safekeeping be sent back to Germany, Italy etc..  Problem is, the gold may be in China, and legally so, for apparently people did rash things under "gold leasing.")

As each banking disaster occurred, and taxpayers picked up the tab, the practice got worse.  S&L Crisis in the early 80s, the the 87 crash, the 97 crash, the dot com bust, 2008... not to mention the countless individual disasters.  In every instance, the banks get bailed out.  We are now at total saturation. When Boeing builds a jet, ExImBank creates ex nihilo credit for India to buy it, it costs nothing for India to be a customer of Boeing.  The USA taxpayer is on the hook for any default.  Boeing takes the profits.  When an unemployed 18 year old stops off at a gas station and pays for two corn dogs and a supersize drink with his EBT card, the ex nihilo credit is created at that moment.  Again, it it added to the taxpayers tab. What appears to be happening is this regime is over.  The beneficiaries of this boom can no longer get any benefit.

Airlines are dying for too many airplanes.  I flew Seattle Paris round trip at Christmas holidays, $650 (about $400 taxes, $250 to the airlines).  McDonalds can't find anymore victims.  Sorts Authority cannot find enough people who want more junk.  The dinosaurs are dying.

We all love a system that works for us, even if it doesn't.  What Busby Berkeley learned in the 1930s is you could make a lot of money showing unemployed people movies about rich people living it up (We're in the money!)  Hope is a theological virtue, but it can be hijacked by bankers, and affixed to nothing, giving false hopes.  It is cruel, but the victims are all willing accomplices.

By the way, tell me, what is the primary job of the United States Secret Service?  Do you know?

Here is some more reading, which only bolsters my argument.  These open as .pdfs, and here.  That last one, if viewed in terms of promotion of ex nihilo credit, is devastating to modern economics.  Out of the mouth of babes!

Entrepreneurs do not take risks.  The regime that was based on that is dying off.  What always was and will always be is customers.  You need customers, not finance.  Find customers, and you'll succeed.  And I teach how to find customers first.

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Are QR Codes Over?

No.  Never really got started.  Small businesses need to incorporate this tech and leverage it for our own purposes. Another example of eMarketers trying to justify their worth by charging too much to do too much. QR codes are simply speed dial, making it easy to connect a smart phone to a URL, which ends up being an ad for the product or service in question.  The real benefit is anyone making contact is also offering up info as to the time and place and maybe more of the scan-event itself, great marketing info.  It can offer product assurance, anti-"piracy"benefit, obviating the need for trademark.   Also, it is generally open-sourced technology, another example of someone succeeding by NOT availing of hegemon-sponsored monopoly.  QR codes are free.  You can generate your own online.

 There is this:

HubSpot’s Lindsay Kolowich illustrates that dichotomy when she compares the results of a consumer survey versus those of a marketer survey. In those surveys, 97 percent of consumers reported they didn’t know what a QR code was; however, 65 percent of marketers said QR codes are effective. Are we to believe that marketers continue to invest in QR code technology when only 3 percent of all consumers even use it?

If those numbers are true, it is not about the 65% of marketers, it is about which 3% of 100 who use QR codes. Whatever the limits, the numbers can provide valuable info, much bang for the buck. Next, here is Xerox, noting how to do it right, B2C.

Bar Keeper’s Friend: The QR Code, glued right to the top of the can to cover the pour holes, led to multiple short, mobile-optimized videos showing uses for the product and comparing it to competitors’ products in the same category. The videos were not expensive or high production, just a woman cleaning things in a studio. Not only did they show the product’s performance against its competitors, but they also showed other uses for the product that I might not have thought of.  I have all those problems in my house, so clearly, I need to buy another can — or three.

Next, this round-up...

When we look at the compiled data over time, there are some clear trends that we see:

• Adoption has been hovering around 30% of cellphone users.

• Marketers indicate that their use of QR Codes is — not on the decline as so many people would have you believe — but on the rise.

• While more men are still scanning than women, it’s much a more balanced environment than it has been in the past. The percentages are now much closer to 50/50.

• The demographic of the typical QR Code scanner is getting older. The majority of scanners are now 35+ years old (as opposed to 18-34 years old, as it has been in the past).

• Scanning continues to dominate in retailing, where people are scanning for product information and discounts.

• Growth in mobile payments via QR Codes is significant and rising.

Next... contrary opinion...

The big question we should all be asking is, why hasn’t something as promising as the QR code gained more traction in the 10 years of its existence? Below are five reasons I see that prevented this fairly simple technology from living up to its promise...

5. Even when a QR code is done right (link to mobile-optimized site, available connectivity, clear call-to-action), it’s hard to convince oneself that the minute it takes to pull out your phone, open up a scan-friendly app (assuming one had been downloaded), scan the QR code and then wait for the experience to load, is worth it. 

OK, cited are examples of poor execution, not a summary of the use of the technology.  Good things to keep in mind when deploying the tech yourself.  Xerox flogs QR codes, and here is their list of do's and don'ts.  Here is a critic a few years back who seems to offer an internal contradiction argument, and offers alternative tech that seems too complicated and expensive.

QR codes are no cost, serve a limited but powerful purpose, and ought to integrated into packaging especially when exporting.  It reaches a demographic you want to reach, you want to track.

Can they be hacked?  Yes!  People can either fake a product and put your QR code on it or slap a fake QR code label over yours on a package of the real thing, and either way attempt to hijack your info flow.  Random serial numbers on your product can help thwart this as users can verify whether a give package is from your list of serial numbers on your website.  This slight inconvenience to hackers suggests they pick on easier prey.

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Business Trip

Self-employment is about lifestyle, not accumulation.  Paris, 2017.



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Small Business Optimism Huge With Trump

Actually, it matters nothing what happens on Wall Street or in Washington, it is always a great time to start a business when you have customers.  As I have blogged here countless times before, entrepreneurs take no risks, and mainly because we find our customers first.  To achieve customers first takes a process, which I each in my seminars.  But to the news:

“We haven’t seen numbers like this in a long time,” Juanita Duggan, president and chief executive of the NFIB, said in a statement. “Small business is ready for a breakout, and that can only mean very good things for the U.S. economy. Business owners are feeling better about taking risks and making investments.”

Feelings canot trump reality for very long, what is the basis for this optimism?

The share of business owners who say now is a good time to expand is three times the average of the current expansion, according to the NFIB’s data. More companies also said they plan to increase investment and keep hiring, which reflects optimism surrounding President-elect Donald Trump’s plans of spurring the economy through deregulation, tax reform and infrastructure spending.

OK... if The Donald does all of those things, and there is zero reason to think he will, that could be good.  Far more interesting is if he gets rid of the FED, and we finish off what is dying anyway, the ex-nihilo credit regime.  And that is the big source of optimism (note not mentioned in the article), the fact that the the dinosaur retailers created by the ex nihilo credit boom, concentrating the family life small businesses into one family's life, such as the Waltons.  Into that vacuum much demand and thus opportunity beckons.  That fact has nothing to do with who won the election, plus there is nothing any politician can do about the fact that economic regime is near dead.

So now the work for all businesses is to adjust to he new regime, and small business is always the small quick agile British Fleet against the Spanish Armada.  We win.

You just need to know how to approach this.  That is what I teach in my seminars, how o launch a small business international trade company.  The current rundown of courses available, both online and in-person, may be found here...  if you have any questions, you can email me from the link on that page.

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Dangers of Import - Retail

The problem here is two-part, one is import/retailing, and the other is not competing on design:

At the small business level, we enter the market at the place of the void, products are solutions to problems, and there are no solutions you cannot improve upon.

Your own designs are a solution to a problem not yet addressed, so you'll own that market. You never need compete on price.  Off the shelf is a solution already established, so you cannot own that market.  You are obliged to compete on price.

A retailer is better off to buy from importer who designs his own products.  As the designer, the importer has come up with new-market-tested items, still rare enough to make a retail store exciting, plus acceptable to USCustoms.

A retailer trying to gain savings by cutting out middleman causes losses...

Swope had another smaller shipment en route from Morocco and could see more difficulties ahead. Ornate wooden jewelry boxes with some Mother-of-Pearl inlay were part of the Moroccan shipment and Swope learned that Mother of Pearl qualified as a “wild product.” 
“One of the most unpleasant parts about this whole thing is that I felt like a criminal. I felt like I was in violation. I was just feeling awful,” he said. “They were holding all my merchandise and I couldn’t talk to them.”
Sorting through the mess was time consuming and Swope estimated it cost him more than $20,000. 

A common retail tactic is to "stack 'em high, watch 'em fly" ...  that is to buy a bulk order and use it as a loss leader...  that is great with a product off the shelf overseas where you can get bulk prices, and a known commodity, but exceptions prove the rule.  That works.  but not buying small quantities of known off the shelf, or buying any quantity of unknown off the shelf.

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"He griped."

After 25 years a small eatery shuts down in NYC, crushed by rules and regs.  As Reagan quipped, first tax it, if it keeps moving regulate it, if it quits moving, subsidize it.

So New York City's response to government charging too much to do too much is to create a new layer to pay for, a layer to help out with the crushing layers.

Wu cited one regulation where the restaurant was required to provide an on-site break room for workers despite its limited space. And he blamed the amount of paperwork now required — an increasingly difficult task for a non-chain businesses.
“In a one-restaurant operation like ours, you’re spending more time on paperwork than you are trying to run your business,” he griped.
Increases in the minimum wage, health insurance and insurance added to a list of 10 issues provided by Wu. “And I haven’t even gone into the Health Department rules and regulations,” he added.

He griped.  Reducing the experience of death by a thousand cuts to a gripe.  These people who destroy small business for a living are collectivists, doing for Chinese restaurants in NYC what the Cheka did for small farmers in the Ukraine.  Destroy them!

And now that they have laid waste all before them, they are worried about what is next.

"People don't know what to believe, and they're in a state of uneasiness," said Witold Skwierczynski, a Catonsville man and the head of the American Federation of Government Employees council that oversees Social Security Administration field offices. "That's the feeling I hear. People are unsettled."

Yes, they may be sent to the front lines, as a robot maintenance worker at some new "great again" USA auto plant.  Ouch!  You should have thought about that before you began to destroy small businesses.

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Unemployed PhDs

For over 30 years I have taught on the side, in live classroom settings and online.

This avocation has added feathers to my hat, developing a product, setting up a market distribution channel, written a book, aside from the fact I work when I want, where I want, for what I want, and teach what I want.  This is a second career (a double major?), when most people are lucky to have a single career.

I have no tenure so I never had to falsify science or suppress truths I know to get a position.  I bring money to the school, the school does not have to pay me out of taxpayers subsidies.  It's not that I cannot be fired, it is just they don't want to cut off what money I bring them (out of which they pay me some.)

The point if this is when people say "I have a PhD and can't find work in education..." well, I say, you aren't trying.  Like everywhere else in the world, there may be no jobs, but there is plenty of work.  Just because the ex-nihilo credit regime distorts markets to the point no one needs you IN THAT REGIME does not mean no one needs you.  Look outside that regime.  Get creative.

Here is a book I wrote on this...  Kindle version... paperback version...

It does not matter what happens on Wall Street or in Washington, what matters is what we do.  It ain't what we think that makes us happy or unhappy, it's what we do...

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Guaranteed Income

Finland is finally catching up with US, offering every citizen a basic income regardless of whether they work or not.  USA has had this since the 1930s.  We call it social security, SS.  (Why is SS so often associated with evil plans?)  Actually USA guarantees all people in USA guaranteed income, we just means-test it.   In Finland,

"A universal basic income would provide a much more secure income base in an age of deepening economic and social insecurity and unpredictable work patterns," economists Howard Reed and Stewart Lansley said in a report on basic income published in May last year.

Never mind what else it does, or who has to pay for it, or how it distorts the economy by paying for something without a signal.  In the USA they made it universal with the arbitrary 62 year old retirement age.  In this way it is self-selecting for those are to be harmed by the hegemon for trusting government.

It makes no difference to say "all Finns whether working or not" of "all people over 62 years old working or not" the program itself does damage.  When we pass off human requirements onto third parties, efficacy diminishes.  Yes, sometimes skilled charities need to intervene, especially in disasters, but neither "Being Finnish" nor over 62 in USA a cause for intervention.

We need strict separation of charity and state.

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Where Brick and Mortar Pure Play Beats eCommerce

Now if you ever talk about any given business, even with audited statements, you really cannot tell very much.  And even if a single example is valid, then question the is, is it reliable?  Will it work for anyone else?

I've been in Paris the last couple of weeks, and was introduced to a brick and mortar retailer specializing in sporting goods.  The tactic is pure contra-eCommerce, something I have yet to see, a "brick and mortar pure play" to reverse the jargon of the 1990s.

The natives tell me this fellow spotted the flaw in the eCommerce conceit, and devised a way to best the internet.  But first, let's review.  There are two insurmountables in eCommerce -

1. It costs more to gain a customer marketing online than you can make off what you sell to that customer.  eCommerce is a money pit.

2. The "last mile" is the most expensive part of logistics.

And what is the big advantage of the internet?  If you know what you want, the best version at the best price, the internet is the place to go.  (Fantasy, of course, but that is the world we live in now.)  knowing reality, you may then proceed to make money.

Dealing with reality, this fellow has rented out many small storefronts in one section of Paris, called the Latin Quarter.  Take a look at their website (and scroll down to see a map for a visual of how many stores he has in this one area, and only this area.)  Twenty years so far and still ticking.

Each boutique is dedicated to one sport.  There is the sailing boutique.  The rock climbing boutique.  The whitewater kayaking boutique.  The skiing boutique.  The bicycling boutique.  In each the has the the best brands, the best models and sizes at persuasive prices.  In this way he kills the internet competition.   He has what you want, in your size, at the right price and you can have it right now (which means the last mile is handled by you taking it home.)

Not only has he conquered Paris for sporting goods, he has repeated this pattern in ten other French cities.

Yes, you can order online.  Sort of.  But pay by check is preferred, mail it in.  But over 800 euros, they want a bank transfer. Yes, you can pay by credit card or debit card, but they make that difficult, not easy.  In essence this is just the way you'd pay thirty years ago from a mail order catalog,

Indeed, their stores hand out free-of-charge a huge 500 page paper catalog, for today, as 30 years ago, you have to have a paper catalog for effective retail.  The internet is strictly self-service checkout.

It has a website, with all of the social media buttons, so it is not short of organic materials for being ranked high in search engine searches.  But guess what?  The number one retailer of sporting goods in Paris shows up not until page three on a google search for "Paris sporing goods."  But then, who cares about what a google search gets you?

Another sporting goods store, REI, has proven to be internet-competition-proof as well.   In this instance the store is a co-op, that is it is owned by its customers, so it is not another example as a test of the hypothesis.

How did he figure this out?  First of course, ignore the hype, deal with reality. Was a Starbucks on every corner an inspiration?  Who knows?  But as the dinosaur retailers die, and a small business renaissance fills in the vacuum, examples of how to do it right will be valuable.  If this example is valid, now it needs to be tested for reliability.

The title of this post is disingenuous.  eCommerce is a non-starter, so brick-and-mortar is already the winner.  The internet is about self-service check-out.

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