Everybody is Lying - A New Opportunity

If you approach any given problem, politics, economic, medicine, education...  the problem is everyone is lying.  People know it, and no longer trust the hegemon, hence the outlier (pun?) candidates.

I was speaking with an int'l banker of a top-notch bank and to my question as to what degree negative interest rates affected his work, he replied in effect nothing compared to the fact everyone is lying.  The facts used as a basis for loans are lies, so making loans is hard.  Well, that same bank is now state's witness to avoid prosecution on gold price manipulation, a form of lying.

Back in the 1970s I was radicalized on medicine by my godfather, and MD, who kept pointing out the science was fraudulent on medicine.  What about the watchdog, the FDA?  Regulatory capture: the regulators are owned by the regulated. He is now deceased but this would not surprise him:

“It is simply no longer possible to believe much of the clinical research that is published, or to rely on the judgment of trusted physicians or authoritative medical guidelines. I take no pleasure in this conclusion, which I reached slowly and reluctantly over my two decades as an editor of the New England Journal of Medicine.”  – Dr. Marcia Angell, a physician and longtime editor-in-chief of the New England Medical Journal (NEMJ) (source)

and this...

“The case against science is straightforward: much of the scientific literature, perhaps half, may simply be untrue. Afflicted by studies with small sample sizes, tiny effects, invalid exploratory analyses, and flagrant conflicts of interest, together with an obsession for pursuing fashionable trends of dubious importance, science has taken a turn towards darkness.”  – Dr. Richard Horton, the current editor-in-chief of the Lancet – considered to be one of the most well respected peer-reviewed medical journals in the world. (source)

Yes, we are all on our own.  We are now living in chaos, and the only route out is to escape to anarchy. Self-employment is anarchy, properly understood, for you serve yourself best by serving others best.

So what is the opportunity? let me go back thirty years when I was pursuing a master of arts.  My program obliged me to take a statistics course, something to dread.   The professor announced the first day it was absurd that we would learn statistics in one semester, so instead of teaching us to do statistics,  he'd teach us to be consumers of statistics.  He teach us to test the study, spot failures, look for valid and reliable, in essence when it was science and when it was junk.

Now, at the time there was a database called ERIC, in which resided any educational research that mattered.  The term paper was to find an example of science in that database and test all of the elements of the study, demonstrating we students knew good work when we saw it.  Well! by the end of the course, I was into a dozen studies all of which quickly failed to meet the test, so I visited the professor with the complaint that I could not find any science, so far it was all junk.  He had the most wicked grin on his face.  He replied, "That's right, it's all junk. You passed."

I'd say another problem with lending credit is truth does not matter, since there is no rational limit to what you can "fund."  The hegemon can fund it all.

You win a gold medal by 2/10ths of a second.  In the next 40 years, the ability to spot BS will be a decisive factor, and the ability to spot science exponentially valuable.  If we return to benecredit (interest-free, asset-based vendor financing), you'll only be funded if you are accurate.

The professor who taught the class has long since retired.   I certainly cannot teach his course.  If anyone knows of a good stats teacher who wrote a book of teaches online, I'd be delighted to promote him on this blog.  If you are expert and want to deliver a course through schools noncredit, I'll send you a book on how to, gratis.

Prerequisites to business start-up:  Ogilvy on advertising and statistics as a consumer.



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The Right Interest Rate, Jews and Small Business Start-up

As a sideline I began teaching small business international trade in 1984, after a decade of working for others in the field.  My goal was actually to write a book, for two reasons; 1. To get down the essence of the work, 2. To make a record of what was important as we moved into (as anyone could see) big changes in the world.

Thirty years later, principles haven't changed, but we are now an impoverished nation, and no more aware of it than the Soviet Union was in 1989.  The biggest challenge for the USA, as it has been for the Russians, is too few know how to run a real business.  Anyone can get get loans and pretend to be in business for years if need be (serial "entrepreneurs") and our biggest companies have all been on life support for 40 years.  There has been no apprenticeship program that led to new masters in each field. We've lost three generations of entrepreneurs to F I R E.

Let me define terms again, first, there is mal-credit and bene-credit.  I recall bene-credit, when the vast majority of commerce worked neither on money nor credit-at-interest (usury) but at on credit at no interest.  Sure there has always been loan-sharking, but what was new starting in the mid-seventies was the fraud of lending credit with no assets backing the loan.  Loan sharks actually lent something and took a risk of loss.  But not banks, starting in the very early 1970s.

With no rational limit to what might be financed, astonishing misallocation and malinvestment followed.  Anything goes!  There has been no rational limit to what we can finance, so instead of alabaster cities we got wars, more wars, poverty, crumbling infrastructure, sports stadiums for billionaires, privatized profits and socialized losses.

What astonishes me is how all commentators look to interest rates as the nexus of the problem.  They agree the problem is to the degree the interest rate distorts the economy, we have problems.  They only argument is what is the correct interest rate, and in this case each specially pleads that someone else's ox  be gored, not their own.

So there is near 100% agreement the problem is interest rates, but the sturm-und-drang is over the right rate and how to achieve it.  What do we know?

1. For most of history, most commerce has been on asset-backed, interest-free credit as the basis for an economy.  Money (properly defined) is for special deals in which relational obligations are extinguished.  There is simply no need for and interest-based loan in commerce.  All needs can be met by other means.

2.  In this forty-five year experiment in asset-less credit lending, at interest, we have seen interest rates go from a few percent to 21% and now down to zero (and even negative, effectively.)  That range pretty much gives every interest advocate an empirical basis to stake a claim on the benefits of charging interest. Care to point out when, since 1970, the economy has been fruitful, prosperous, just, (name your standard)?  Show us your ox.

3. You might argue, well, at the current zero (effective) interest rate, is not the usury-free argument destroyed by the present dreadful economy?  Not at all, for the overwhelming factor is that presently the zero interest is with asset-free backing.  Even if you are not charging interest on cars, you've misallocated resources to make cars the "buyers" will not pay for, and you've "educated" students with content they will not use and student loans they will not repay.  Java coders re-educated to be roofers, roofers re-educated to be java-coders.

4. And finally we know the solution to the problem, de-legitimize (not criminalize) the charging of interest on loans.  If and when no judge will enforce the interest portion of a contract (like no judge will enforce a gambling debt) then the practice will dwindle and drift away, losing the force needed to maintain the fraud of any loan at interest at any amount for any duration.

There is no rational limit to how far this might go, the bankers simply keep probing further and deeper, without a clue, but always with a jet ready to flee to a paradise prepared elsewhere.  There is no rational limit to how far this can go, so when it comes crashing down, it will also be for some irrational reason.

(And as an aside, when I say "bankers" I don't mean Jews, I am not persuaded by the delusional argument "it's the Jews."  It's us, the Rockefellers, Morgans, Mellons and their protestant work ethic devotees. It's no coincidence that before this experiment in massive fraud the Chairmen of the Fed Reserve were WASPs, and starting in 1970 (that year again!) the Fed Chairmen have been Jews.  If you are going to risk your country's economic health for personal gain, make sure you have some Jews out front to take the blame. It always works. Jimmy Carter, my favorite president, appointed a goy in '79, in an attempt to get us back on track.  The guy lasted a couple of months.)

Stockman is doing a good job collecting and distributing commentary...  Buchanan on the Bush/Cheney/Rumsfeld criminal wars, how mal-credit made China a commodity giant, and now it has a giant usury problem.  Global Stock markets have lost ten trillion in the last three months.  Lost?  No, the valuations are just be adjusted and saps paying into pension plans are being gored.  One specific loser is a Chinese billionaire who made a bid to create a second Panama canal.  Oooops, he is down 90% on his tally, for no billionaire actually has any money, they have nominal tallies of what they have accumulated.  No one objected when they were told in 1998 their $200,000 house was worth $300,000 as interest rates (there it goes again, the heart of all of these problems, usury, charging money on loans) dropped from 9% to 6%.  But now that interest rates are near zero, and the house is nominally worth a million, and the household income has not gone up, but taxes are still a flat .006 on a million instead of $200k, and the debt on the house cannot be paid... oh ouch, once a millionaire and house rich, now a slave tied to a bank loan.

What is the policy answer?  More funny money, until it breaks.  if and when, watch out below!

A big unseen monster is global dollar fund shortage.  Well, yes and no. Yes, it is a symptom of a terrible  disintegration, but a disintegration of the false economy.  It has nothing to do with money, everything to do with currency as tallies and nominal valuations.  If you see syphilis dying out, you can relax.  Watching these problems, I am relaxing.  It's an economy dying, their economy, not mine.

Chinese containerized freight is down 30%...  bad for the big boys.  Good for me and my customers, my economy.  In their economy it is all lay-offs and cooking books.

USA Ag exports collapsing,  which is disastrous for the big boys, like Monsanto whose unnatural practices are catching up with them, stock down 25% this year.  At the same time, the food in my economy is enjoying growing exports.

None of this is secret, but what else can people do?  They just await the news, or play on facebook, a drug designed expressly for this time and place.

There is a solution, it is well known, but there is a problem with that.  A great idea can be had, but does anyone know how to market a product and develop a business?

Well, not enough people, and certainly no one learns "how to" in school.

They all learned false economy methods in which results do not count.

Let me give you one tiny insight that astonishes any student I teach under 40 years old (for they know no better.)  I deliver noncredit courses through colleges on small business international around the USA and Canada both online and in person.  The schools have learned online marketing is delusional.  To get enrollments, they must still mail out a catalog of course offerings, that is the offerings printed on paper and sent through the USMails.  Cost of acquisition of enrollments is about $7 each.  With online marketing, cost of acquisition is about $90 each.  (Divide the money spent by enrollments gained, learn the cost of acquisition by method.) Since most course fees are less than $90, schools avoid online marketing.  This is the problem for all online marketing, whatever the product, the cost of customer acquisition is more than the cost of what you are selling.  Yet, try to hire a marketer who is not trained to drain your company of all profitability, sooner or later.  (In 22 years of asking, I ask again, someone prove me wrong with evidence of online marketing working.)

On the other hand like paper catalogs of course mailed to homes, there are still principles and practices that actually work, although as perplexing as a slide rule to an engineer who is used to the TI-90.

But access to that cutting edge info is fast becoming lost. How come?  Usury again, charging anything on any loan at any amount for any length of time.  Student loans, crossing a trillion and a half, have nearly killed the market for continuing ed.  Burdened with useless information (as Drucker said, you can tell when info is obsolute, universities make it core curriculum) and crushing loan debt, people who would have gladly taken an improving noncredit course are wondering where the next meal is coming from.

This will come back to haunt university administrators, for it is well-established that continuing education is a prime recruiter for credit programs (degrees).

I've had two seminars cancelled for low enrollments, a first in 30 years of lecturing.  The time not lecturing will be spent on considering this development.  Often when I see something unexpected of perplexing in business, I look to the music industry as a model.  The seminars sell the books?  How about the books sell the seminar?  Back to correspondence school model?  hard to say, but I'll for a hypothesis and test it. I'll keep you updated...

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You Cannot Tax a Corporation

The talk of Buffett-financed Burger King tax evasion is desultory.  It is not possible to tax a corporation or business.

If a business is profitable, it has passed all paid taxes onto its customers.  If you buy a hershey bar, you have paid all of Herhsey's taxes.  The end-user refunds or prepays all taxes ever paid.  Nothing else is possible.

So why tax corporations at all?

1. Hide the tax from the ultimate payee.  Corporate taxes are stealth taxes that keep you from knowing you pay about 70% of what you earn in taxes.  (How do you think we "pay" for all these wars?)

2.  To disadvantage one business in favor of another, by hiding the fact you are harming one businesses customers.  Capitalism needs governments to pick winners and losers.  Tax codes reflect the decision of who proceeds and who is destroyed.  (The power to tax is the power to destroy - Chief Justice John Marshall, 1819)

For Obama to say

“I don’t care if it’s legal, it’s wrong.”

is ever so delusional, astonishing ignorance.  If it is wrong, why is it legal? (and this from the man who orders criminal invasions of other countries, and meets Tuesdays to pick who dies from a deck of cards.)   It's legal because it does not matter, but in any event, it is there on purpose.  Don't like it, change it.  That is what congress is for (although this "constitutional lawyer" seems ignorant.)

Pat Buchanan advises we lower the corporate taxes to be competitive.  Why not just eliminate the desultory taxes and show people what they really pay in taxes, since they are the ones who really pay the taxes?

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Fake Invoicing and China Trade

There are various reasons people will submit "fake invoices" when reporting trade to the authorities, such as noted here.

Inflated mainland export figures last year due to fake invoicing have led to slower growth rates in trade data this year, economists said, and that might cause Beijing to miss its full-year external trade growth target of 7.5 per cent.

Some reasons:

1. Avoid duties.  Buyers may ask sellers to falsify invoices where say the duty is 10%.  To claim $10,000 in goods is really $5,000 is to save $500 in duties.

2.  This is how it works. Investors create fake invoices for exports to Hong Kong. That allows them to bring cash back onshore, circumventing China’s capital controls, and allowing investors to benefit from higher Chinese interest rates. The extent of the practice is visible in the difference between China’s official exports to Hong Kong and Hong Kong’s much-lower record of imports from China.

In other words, either nothing was exported or $10,000 in sales is reported as $100,000 and so in any event the incoming payment is free of Chinese capital investment inflow controls.  There are also other export tax rebates etc that can be claimed.

And...

Another common reason manufacturers fake exports is that they are colluding with someone who wants to move foreign currency into China, perhaps to take advantage of the nation's red hot property market.
The nation's currency is tightly controlled, and foreign investors must jump through a daunting series of bureaucratic hoops to get money in. But partnering up with a factory owner who is willing to fake some export invoices is a much faster way of illicitly getting cash into China.
The wheeze works thus: the exporter sends the businessman a fake invoice for goods. The businessman pays the invoice by depositing dollars in the manufacturer's offshore bank account. The manufacturer then uses the export paperwork to get permission from his bank to convert the dollars into Chinese yuan. The factory owner may also get a fee from the investor, and can collect a VAT rebate on top.

I've been asked to falsify invoices as an exporter by customers.  I answer no.  That is the end of it.  There is enough good business out there to do without having to do funny business.  Never be so eager to do a deal that you will break the rules.  And keep in mind the person asking is rarely interested in capturing a few per cent savings, they are usually interested in capturing you.

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I Love Hong Kong

Hong Kong's credit rating is in debate with the governance question, and the people are taking to the streets over who would be their governor.  Beijing is saying Hong Kong will select a governor from a beauty pageant stacked by Beijing.  Li Ka Shing, the Hong Kong billionaire is diversifying his way out of Hong Kong.  Is this the beginning of the end?

No way.  Hong Kong is China's most reliable city, safest and most productive.  Li Ka Shing is a billionaire because at the time of the last riots, circa 1967,  this plastic flower maven bet that Hong Kong was not over and doubled down while the rich were getting out.  Today Li Ka Shing is the "rich getting out" and some hard, young Hakka businessman is doubling down on Hong Kong, praying for a S&P downgrade so his investments make all the more.

As to China offering a beauty pageant of politicians from which all Hong Kong can pick, England gave the people of Hong Kong no choice whatsoever for 250 years, and Hong Kong exceeded the UK on all measures.  Occupy Central is a very good thing, because people need to demonstrate their love for freedom or lose it, as in the USA.  Where we lost it.

I love Hong Kong because it was started at the same time as the USA, by the same heirs of freedom, both as a historical accident, and both were to remain small entities (hence 13 original colonies.)  Hamilton and his crew hijacked the confederation and engineered the deeply flawed constitution, and it was downhill for the USA from there.  When I am in Hong Kong, I am in what the USA ought to have been in 2014.  Among other things, private companies issue the currency.  They know what money is in Hong Kong.  In USA, we have agreed to lie to ourselves, since pretty much only the poor are hurt by the lying.

Another facet upon which I will bloviate is the problem of real property rights, meaning land ownership.  Such a problem in USA.  So much land, and already occupied.  (There is that word again.)  That would imply property rights.  How to handle it?  At first, when our numbers were small, we negotiated.  Later, with bigger numbers, and a capitalist regime, we murdered.

Now in Hong Kong, all arrivals found the land already occupied.  But by the King of England or the Manchu.  People tend to negotiate with the King of England rather than murder for a piece of land.  So for the 250 years of pre-China retention, no one could own land in Hong Kong.  Yet it grew to a premier city-state.  Nothing is new under the ChiComs, no one can own land (one exception, the Church of England owns a spread that the Chinese acknowledge.  Go figure.) And yet, some 3 of the top ten billionaires in Hong Kong made their money in real estate.  99 year leases, property development.

Imagine what we might have accomplished if we respected the Indians rights, and worked within what is ethical?  I know USA is just a corporation, but it is a corporation run by people, and people can decide to do the ethical thing.

A little existential tension makes for good when the comity is good.  I say the smart money is on Hong Kong.  What Beijing proposes is an improvement over what the Brits offered.  And always remember, USA is a democracy.  Do the people of Hong Kong really want to end up like us?

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Bringing Credit to the Poor

So what happens when you have a false premise:

 “There are lots of people who need access to credit in South Africa to improve their quality of life.”

And you add a definition of credit that is actually fraud, but in capitalism legal?

Kirkinis, 54, co-founded African Bank Investments Ltd. in 1999 and built it into the country’s largest maker of loans not backed by collateral.

Asset-less based loans, loaning air, not money.  And, loan out credit at... wait for it...

Styling himself a visionary for lending to South Africans ignored or deemed too risky by conventional banks, Kirkinis fueled profits making loans at annual interest rates as high as 60 percent.

Help poor people by lending air at 60% of putative value?  Well, as usual,

Holders of ordinary shares, preference shares and subordinated debt may lose everything, while senior debtholders stand to lose 10 cents on the rand.

What people need is property rights protected, and make predatory practices like "asset-free" financing not state protected.  Credit can be a good thing, but not when a bank is lending it.  Vendor financing at no interest is very common, and good.

He got greedy... you can make much more over longer time periods if you make interest rates "only" say 5 or 6%.  The income on 60% interest you can afford to be "independent" and flashy.  For a short while.  He has advanced financed degrees.  Did he not learn this?  Or maybe he did.

As a side note, the government bought the bad debt and will now collect from the people in arrears.  So the government will continue the abuse instead of letting the people who were making money off this abuse simply lose.

This is how it works:  Ponzi scheme is criminal, Ponzi tries it goes to prison.  The the state sets up its own ponzi scheme, social security.  Gambling is illegal.  People go to jail for running lotto games.  Then the state sets up its own lotto games.    Marijuana is illegal.  People go to jail for trading marijuana.  then the states get involved in marijuana.

Potheads rejoice when marijuana is legalized.  We need none of these things legalized, just de-criminalized.  A huge difference.  Legalized, the state forms a monopoly and the damage itself is advanced plus a black market grows due to state monopoly.  (A pothead I know says state ganja is $700/oz and street is $200/oz. )  Decriminalized competition minimizes the harm.

This fellow could charge the poor 60% because he had a state charter, usury was legalized.

No country lets its bankers lose.  Capitalism might end.

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Wine Fraud and Billionaires

Meanwhile, as the USA taxpayers pursue "weaponizing ebola" and ignoring human trials crimes in mad scientist experiments, some guy scamming "wine connoisseurs" gets ten years.

US District Judge Richard M. Berman said: "The public at large needs to know our food and drinks are safe and not some potentially unsafe homemade witch's brew.
"This was a very serious economic fraud, a manipulation of US and international markets."

Was the judge sleeping through the trial?  The trial was about fraud, not unsafe wine.  And further, by what stretch of the imagination could a court and a sentence in any way advance food security?

We once had a principle called caveat emptor.  If the idiot Koch is paying millions for a bottle of Two Buck Chuck, then the scammer deserves his millions.  What is it to you or me?  Why do we have to pay for a long trial and a long incarceration because Koch is a pretentious ass?  If he wants to prosecute someone, do it himself (in fact, for about the first 100 years of USA, if you wanted a prosecution, in fact you had to do it yourself.)

Wasn't the perp doing society a favor by wealth redistribution, taking fracking millions from Koch and blowing it on important things, like fast cars, girls looking for fun and well, good wine?  I hope this guy is on Obama's pardon list.

We have such better no-cost systems than the ones we pay for...

O well, who cares?   All law enforcement in USA is theatre anyway.  It's all run amok, so let's just play make believe.

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Microsoft Layoffs - Two Steps Forward, One Back

For Microsoft, a company of 180,000 to lay off 10% of its workforce is news.  But wait, 12.500 of those 18,000 come from the just-acquired Nokia company.

The cuts will begin with a first wave of 13,000, with the vast majority of employees whose jobs will be eliminated being notified over the next six months, according to a memo from CEO Satya Nadella.

Well, so in essence about 5500 Microsofters are actually out.  some will get rehired, some will start companies.  Those who start companies will benefit the rest of us as opposed to remaining redundant at Microsoft.

What strikes me as Human Resource Madness is to announce the jobs will be eliminated "over the next six months."  No!  You give people their severance checks at 4:59 pm Friday night, tell them to clear out their desks, take away their keys and have security escort them to the door.  Have a nice weekend!

Then at 5:01 pm you send out a press release.  Done!

I though Microsoft had world class human resources folks.

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The Powers That Be

InfoWars has blogged the attendees list at the next Bilderberg Conference.  As a secretive meeting of world leaders, it occasions much conspiracy theory.  Infowars apparently missed the best name on those lists of changing names, past and present: David Rockefeller.  Whether past or present, his name is highlighted as "Advisory."  I bet.  It is truly a meeting of the powers, but who knows if it is the powers-that-be.    I suspect it is a sub-committee for the powers that be, moderated by David Rockefeller.  But, so what?

I wanted to learn more about these agenda items (among a dozen or so), from the Bilderberg press release:

The key topics for discussion this year include:

• Is the economic recovery sustainable?

• Who will pay for the demographics?

When I went looking for that I saw this.

 In the context of a globalized world, it is hard to think of any issue in either Europe or North America that could be tackled unilaterally.

Now that is interesting locution.  Tentative.  Like when someone who knows better, but is proposing a lie. The fact of the matter is all just actions are unilateral, they need not be negotiated.  In short, as they say, "do the right thing." Negotiations among countries are only, strictly, to settle who wins and who loses.  Each side details how they will harm which constituency in their own country, in a complex series of quid pro quo.  USA: We'll target 2% inflation, benefitting this group group of Americans, harming that.  China: We will peg the RMB to the US$, benefitting this group of Chinese, harming that.  Policy is tweaked to get to some parity (and catalogued in the millions of pages of rules.).  Done! There are no exceptions to this.  Every negotiation results in winners and losers, decided for citizens by that country's representatives.  Afterwards, each side blames the other for each country's targeted losers woes. Symmetry!

So a priesthood of clerks then gets busy fanning out and taking temperatures to gather evidence of whether or not the agreement is doing the trick of making the rich richer and the poor poorer.

There is an alternative to all of this "multilateral" rigamarole, and that is unilateral policy setting.  Simply establish free trade, and we have peace, security and prosperity.    That is not going to happen because there are too many people who clamor to be oppressed, and there are enough people willing to give them oppression, good and hard.  It's called libido dominandi.

In the measure there is a free market, there is that peace, security and prosperity.  The best relative example extent today would be Hong Kong.  It was delightful to see Chile negotiate a free trade agreement with hong Kong.  Hong Kong did nothing, because it already had unilateral free trade with Chile.  Chile changed some rules on their side.   Both sides partied.

With a unilateral free trade program, we would have peace, prosperity and security.  But we would not have exceptional wealth.  Free trade has competition that keeps exceptional wealth from aggregating in few hands.  With free trade we would have a very wide assortment of division of labor, specialized goods and services that just about everyone could afford with their own resources.

The opposite of free trade, capitalism, concentrates wealth in an exceptionally few hands.  Capitalism is not going anywhere soon, for the majority keeps voting for their own oppression.  One form of assurance to the powers that be is masses dwell on perceived conspiracies and blaming others. That assures the powers that be they are safe.

Once anyone starts talking unilateral decision making, then the end is near for the powers that be.  So read this the way it is meant:

 it is hard to think of any issue ... that could be tackled unilaterally.

Yes, hard, as in "if we think along those lines, it is the end of us..." which would be hard, a difficult thing, such change.  As Milton noted, these people would rather rule in hell than serve in heaven.

So I found the page with the agenda, on a public website, marked "press release." from the Bilderberg press release:

At the bottom of the press release, we are told:

Editor's Note, not for publication

Wait, what?  A press release not for publication?  These guys are supposed to be controlling the world and they cannot get their act together on a press release?  That explains a lot.

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Defining False Economy

To define false economy, first we must define economy.  It comes from the Greek, meaning managing a household.

Managing a household necessarily means commerce in the market as well, and that would be voluntary association. Food, beverages, clothing, household goods, medicine, education, doctors, you name it.

In the measure associations are not voluntary, the economy is false.  If you are obliged to buy insurances, or your supply of whatever is distorted by subsidy or regulation, each equally deleterious, the economy is false.

That every major bank, at the ned of every work day, goes to the FED for yet another bailout for poor management, is proof of false economy, and how fundamental ours is.

False economies show malinvestment, often in the of misallocation in what is not needed or over-investment, yet another Real Estate office.

The locus of our false economy is the FIRE component, Finance, Investment and Real Estate.  Assets are so ill-assessed that farmers cannot make any money on the one hand, but can sell their land for a fortune, and do so.  When your food supply is unprofitable, you have a very risky economy.

Our GMO corn is highly subsidized and is unsustainable as a business model.  Our good food demands only people who agree to be poor.  The false economy is very dangerous, and demands land redistribution.

What is out system for this?  In capitalism, there is no mechanism.

Mish doesn't mention false economy, but he elucidates it here....

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Sampling and Licenses

On Mar 9, 2014, at 1:30 AM, T M wrote:

John:

Thank you for the sample contract.

I have two more question.
A. on the timing of registering the business entity
B. on meeting the Chinese

A. since it will be a few months before I have a sample in my hand, I am considering waiting until I get my first order before registering the business entity. I would paying fees for months with no income coming in. 

***right... of course...***

But this depends on a few factors:

1. If I contact the HK government office to ask for the names of the top suppliers of cast aluminum cookware, they might not take me seriously unless I show them that I have a registered company?  Will they check this or can I wing it?

***No one will ever ask...  no one cares...  your money talks...  and the focus will be on the retailers who said "it is a good idea and does not exist, " not on you....***

2. When I talk to the designers in USA and factory rep in HK, will they want proof that I have a registered company in order to give me factory references?

***Again,  the focus will be on the retailers who said "it is a good idea and does not exist, " not on you....***

By the time I have the first sample in my hand in San Francisco, I will need to have a wholesale license in order to negotiate with the buyers, and I would need this before I negotiate with sales reps in the USA.

*** I don't think so...negotiating and writing orders is not a business, selling goods (defined as placing on a common carrier against and order) is a business.  Orders are paperwork, and orders are not sales. Any license is a registration with tax collecting authorities.  No sales, not income to tax.  Wait until you have income to be taxed before applying for the privilege to be taxed.***

So this would be the time to register the business. 

***I don't think so... per above.***

I am wondering if I can wing it through the HK phase of development. 

***You need not wing anything when no one cares and it is not necessary.  What you cannot wing is what people care about, and that is market in USA.   The focus will be on the retailers who said "it is a good idea and does not exist, " not on you.... do what matters, forget about what does not matter and no one cares.***

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Courts Divert Tens of Millions From Charity

Ty Warner of Beany Baby fame got shaken down this week, on threat of jail time:

As part of his sentence, Kocoras also ordered Warner to do 500 hours of community service at local Chicago high schools. When he pleaded guilty, Warner agreed to pay $27 million in back taxes and interest, and a civil penalty of more than $53 million — one of the largest such penalties ever paid.

This multi-billionaire whose wit and skill turned a fad into a mania was bringing in so much cash he was buying resorts such as the Four Seasons hotel in NYC, and parking it where could.  Advisors of his put him in touch with UBS Bank, whose officers are now under indictment, to deposit some 25 million at one point, again, out of billions the man has earned.

When Warner discovered he had this relatively trifling amount in an ill-reported account in Switzerland, Warner directed his financial people to voluntarily reveal the error.  To qualify for an amnesty under these circumstances, you must admit guilt.  And once admitted, it is impossible to deny guilt, or change to the fact it was an error.

The government decided to make an exception out of Warner, the world's first self-employed billioniare.  They prosecuted him shook him down for nearly a hundred million upon threat of spending the rest of his life in prison.  He was giving most of it away, and that was undeniable, and the judge so noted.

So Warner escaped jail time, but the government picked up tens of millions that will not now make it to charity.

Prosecutors want a trophy, so they go after our best and brightest to prove they are ruthless and therefore of value ot the powers that be.  Milliken, Martha Stewart, Aaron Swartz driven to suicide, and now Ty Warner, all good people, our best and brightest, punished by a legal system that rewards headhunting.

The law is supposed to bring order, but it only brings chaos in USA.  Small businesses are routinely crushed, creative people are prosecuted, while bankers and others are bailed out in a low motion theft of  the fruits of those who actually produce something for a living.

We do have the ability to maintain order, and that is for juries to nullify the cases against prosecutors.  it is perfectly legal, and expected, for citizens to check the prosecutors by denying a conviction even if the prosecutors makes a case.  It is expressly the point of the jury, that the government must ultimately answer to private citizens.  If you ever are called to serve on a jury, know and expect to nullify the case. When you do, you are defending the constitution of the US against the prosecutors within who would violate the constitution.  Restore order!

Our economy is based on trillions in derivatives, not on productive capacity.  There is a tipping point when people realize there are no assets behind those derivatives, and there is not the productive capacity to support our country.  Then it will be escape to anarchy from the chaos.

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Lawlessness

From the West Virginia chemical spill:

"A lot of people are facing bad situations because of this," he said. "They're struggling. What I don't understand is how did this happen?"

Well, it happened like this.  For 800 years we had laws that were enforced that prevented these things.  Then came capitalism and the courts and legislatures began to defy natural laws and rule along might-makes-right lines.  Capitalism grew, as did pollution.

So then in the 1970s we got government agencies to regulate pollution.  But wait, if the state is lawless now, how will more state rules bring order and safety?

They did not obey the laws before, why would they obey new laws?  They don't!  It is all political theatre.

For a detailed history of how the courts and legislatures changed the rules to make things they way they are, read Horwitz on law:



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Car Exports Scam

China Daily needs to tighten up its fact checking.  It has a story on gray market luxury vehicles into China from USA:

"As wealth (in China) has increased, the volume of gray market" - or illegal - "luxury vehicle exports has increased," Tim Dunne, director of global automotive operations at California market-research firm JD Power and Associates, told China Daily in an interview. "It's a big business."

No it is not.  Nothing illegal there.  Gray market is not illegal. No crime committed.  And as I understand it JD Power is where the auto industry goes to buy the opinions it wants, they are not an independent source of information.

The schemes can cause big financial problems for US dealers, who are contractually prohibited from selling new vehicles to anyone who intends to export them and can be penalized by the automakers for doing so - even if they do so unwittingly, the automotive-industry news website reported.
Dealerships that sell to exporters may be forced to pay charge-backs, have incentives revoked and receive fewer vehicles from the factory in the future, according to an article on the website. Fraudulent registrations also hurt dealerships that do not sell to exporters because such registrations understate the dealerships' actual market shares, making it appear they are falling short of sales targets, the article said. That can affect bonuses paid by automakers as well as future allocations.

But causing inconvenience to others is not a crime.

Steps must be taken "to ensure that vehicles produced and equipped for the US market are sold to end consumers in the US and not operated in areas for which they were not designed or certified", she wrote.

This is a problem for the buyers, not for Mercedes benz.

Automakers place restrictions on where their vehicles can be sold so they can appropriately manage their regional production and distribution plans, protect their brand reputations, manage their pricing, and protect their dealer franchisees by guaranteeing them a sales territory that other dealers are not allowed to enter.

"Appropriately manage" contrary to customers demands.

Traders "play by different rules with a different set of responsibilities than dealers, and dealers are prohibited by their franchise agreements from playing the trader's game," he said.

How about Mercedes get in  the business of selling Mercedes?  Mercedes is complying with USA laws that benefit car dealers and harm car buyers.  Why doesn't Merecedes work to restore a free market in USA so they can make money the way these enterprising Chinese are making money?

"Dealers are the face-to-face conduit between the automaker's brand and the customer, so automakers depend on their dealers to satisfy customers in order to create good will, create repeat customers for the brand, and spread word-of-mouth recommendations about the brand," the analyst said. "Many authorized dealers get financially rewarded by automakers for keeping customers satisfied."

There is no crime here, just inconvenience to Mercedes exploiting USA enforcement of USA rules.  And enforcement, you will notice, you and I are oblige to fund.  Anyone who is successful in business gains envy from those in the same business who are not successful.  This is just envy talking.

Dunne said, "that traders don't meet the customers face-to-face, are not responsible for maintenance or repair vehicles when they need it, and are not responsible for making sure customers are happy if they have any problems with their vehicles".

And the buyers know this.

At the heart of the crime is an effort to prey on the craving by Chinese for automobiles that convey that the newly wealthy buyer has reached the pinnacle.

This is dishonest.  There is no crime here.  The Chinese buyers, the uber-wealthy, are hardly victims being preyed upon.  This is piling on advocacy.

The crimes committed have nothing to do with cars:

John Kacavas, the U.S. attorney for New Hampshire, recently announced that two California men pleaded guilty to federal mail fraud charges and violations of U.S. customs laws, in what officials say was the first successful prosecution of a major vehicle-exporting operation. The defendants admitted to scheming to export 93 vehicles worth more than $5.5 million that they and others bought in 16 states

Mail fraud is a crime, and falsifying export documents is a crime.  You can buy and sell cars on the gray market without committing these crimes.

Straw buyers are not committing fraud, since they cannot given their position.  The real buyers are not making any such representations, so they are not liable.  Wire fraud is a crime, so a but a fed prosecutor should not try to buyer fake crimes in a real crime.  If someone can get around the rules, change the rules if you can.  Don't punish people who comply with the rules as stated.

Here is a real crime in auto exporting:  a gang that stole cars, falsified papers and exported them.  In 10% of the thefts, the cars were acquired by carjacking!  Yikes... that is pretty violent.

The auto companies say:

Auto makers say their no-export provisions are needed to ensure that cars are sold with the proper equipment and warranties for the country where they'll be driven. And they say they are entitled to set prices differently in different markets.

Of course they are, but that does not mean people must not work around their price-fixing.  Price fixing is usually illegal, except in the auto industry, and this is a perfect example of the free market responding to manufacturers abusing their customers.

An auto dealer once told me that BMW closely watches the resale value of their cars in USA and exports used cars to Mexico to keep the resale value and brand image up in USA.

The U.S. alleges that Erxin Zhou and Yifan Kong used money from a tire business to fund the purchase and export of 2,000 luxury cars—worth more than $80 million in the U.S.—to China last year. Their goal for this year was 3,000, according to the government's complaint. The couple hasn't been charged with a crime, but some of their company's assets were seized in October by the U.S.

Of course they are not charged with a crime, because there is no crime.  Now, assets may have been seized in anticipation of finding some wire fraud or customs exdec violations,  but that is a different problem.

OK... now we get to the point:

The renewed focus on illicit export practices comes amid accusations in China of automakers jacking up prices and sowing discord between dealers and auto makers. In August, China's Ministry of Commerce said it would move to change rules governing vehicle sales in the world's largest auto market. A ministry spokesman said the move could include limiting automakers' power to demand a deposit from dealers, which would give local dealers more freedom over the vehicles they sell.
This week, China's auto lobby fiercely opposed a possible move by Beijing to ease restrictions on foreign ownership in the car industry, saying that the move would seriously weaken the position of indigenous carmakers.
Dong Yang, secretary general of the China Association of Automobile Manufacturers (CAAM), said that if foreign ownership rules were relaxed, Chinese carmakers would lose control of joint ventures they now own and run jointly with global automakers.

We have the Chinese automakers trying to install a managed market in China like we have in USA.  These prosecutions in USA are directed at a political end, as usual.  C'est la vie.

Now, let's look at the real story, by going stright to the raw trade numbers.  I am the only source ofr ten digit analysis, all of the paid services only analyze at the four or six digit level, which might offer some macro-trends, but we need nitty gritty info upon which to act... so ten digit Sch B numbers when analyzing exports....  so here is part of my new car export analysis, over 3000 cc and six or more cylinders...

Source Data - USITC - John Wiley Spiers Analysis

So these are all new, USA made luxury cars, prices ranging from 35K to 50K.  Do know that BMWs and Mercedes are made in USA as well, so exports thereof are exports of USA cars. That's the law.

And here is the same thing, but used cars:

Source Data - USITC - John Wiley Spiers Analysis

So what do you see?  USA exports of used cars to China bring a price that is the same as new cars,or even as much as 25% higher.  And then note, in used cars, Hong Kong shows up, of course, since Hong Kong is a great facilitator of getting things into China, but look a the prices...  Hong Kong traders always know how to get the best deals.  There are other factors I will not go into, but here is the hard facts.  (If you want me to send you the data analysis spread sheets here, email me with you preferecne as to pc or mac versions, or for that matter, .pdf version...

Also, remember the carjacking and export ring mentioned above?  Mostly exported to Africa.  See the prices on the used cars shipped to Nigeria?  All under $10,000 about 1/3rd the going rate?  These are the same luxury cars, but prices rather low?  I am guessing no one in law enforcement noticed this because no one looked.  Since the ringleader was arrest in 2012, it will be interesting to see what the exports to Nigeria look like in 2013.

Bottom line is if you want to arbitrage the price between a BMW in USA and China, do so and make your money, just do it legally by filling out the forms correctly and complying with the law.  You are not bound by maker-dealer agreements after you own the car.  Gray market is not illegal, it just fills a need where manufacturers get greedy.

Every business has its problems, but always comply with the rules.  The alternative is just not worth it.  Money is not that important.

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Perishable Agricultural Commodities Act of 1930

Lunching with a farmer's wife at a conference, she was commenting on the challenges of marketing produce.

 "Time to rethink PACA? "

"That moment has been awhile..."

 When I first encountered the Perishable Agricultural Commodities Act of 1930 twenty years ago, I was curious as to why fresh and frozen fruits and veggies would need its own set of rules for trade, and doubly suspicious that it was a government agency managing this program.

  From wiki:  The Perishable Agricultural Commodities Act (PACA) of 1930 — (P.L. 71-325 (June 10, 1930), as amended) regulates the buying and selling of fresh and frozen fruits and vegetables to prevent unfair trading practices and to assure that sellers will be paid promptly.

Well, who could argue with that?  We are all for fair trade practices and against unfair trade practices... apparently in 1930, as the depression dawned, there were sharp practices in the grocery business.  Along with PACA, there were programs such as burning crops and killing livestock to force the prices up to deal with the depression.  Never mind falling prices is the evidence the cure is happening, governments want prices only to go up, so their subjects are like the patient whose fever does not go away.  Control.

Both produce sellers and buyers must pay fees for a license in order to do business, and these license fees are the source of funding for a trust program that resolves disputes and protects sellers from non-payment when buyers become bankrupt.

Well, what makes greengrocers goods need a special venue?  Perishability? For all of the nuances of the lex mercatoria, upon which the UCC is based, it fails fruits and vegetables?  Sounds unlikely...

To be in the fruit and veggie business, on pain of civil prosecution, as noted above, players must

1. Pay a fee to join a club, in violation of the freedom of association clause in the Constitution, in order to do business,

2.  and fund a trust program that resolves disputes and protects sellers from nonpayment when buyers become bankrupt.

Where have we heard this before?  Ah yes, banking!  How has the same sort of set up worked out in banking?  Well, we get practices that ultimately take us from thousands of small and dozens of larger banks to hundreds of small and about four large banks.  We get collectivization.

I think the item 2 above is far more damaging than item 1, because I believe the market driven solutions to dispute resolution and bankruptcy are superior to any that can be reduced to a government program, and the flipside is a government program causes atrophy in people's natural inclination to protect what is theirs.  If the common pool will cover me when I play loose, I can play loose.

This is not theoretical supposition on my part. In the mid-1990s I consulted on export development with a couple of agricultural firms, one small and one huge.    The small firm was quick to respond to the prescriptions, so that was fast and easy.  The large firm farmed products under the PACA rules, and I could see the distortions caused by those rules throughout the company.  The general manager that hired me had been victim to a scam possible only due to the unique rules of PACA, and he did not want to get similarly burned on export sales.   It was my international trade specialty that allowed me to compare and contrast the two systems, and see clearly the disadvantage of trading under PACA rules domestically.

The aforementioned scam was made possible by PACA when some gangsters took over a small, very well respected grocery broker and quietly placed orders all over the country, full container loads, and directed they all be shipped to Mexico, leaving (if I recall directly) Labor Day weekend giving them a 3 day start before any rumors might feed back to the principals.  Mexico at the time was a no-problem destination since all of the responsible parties were USA members of the PACA program, of which the gangster-infested small broker was a member in good standing.

Once the containers were in Mexico, they would be quickly looted and distributed into untraceability, sold for cash, for a tidy sum, the only loss being the ownership of the small, respected trader for which they simply would stop making payments and forfeit ownership.  What do they care..?  No downside, all upside.

To this large corporate orchard, ten container loads at a good price from a respected dealer in USA was a cause for celebration.  What could go wrong..?  By Monday, enough truckers short of equipment, Customs officers at the border complaining of overwork, bragging rights among farmers revealing EVERYONE got a huge order from the small trader alerted first the brightest and eventually even those in denial to figure it out.  Scam!

Now recall this program is self-funding.  Who will have to make up the losses?  The people who lost, they themselves.  Also, the rules have a duty to mitigate, that is, if you know something is up, you have to do what you can to undo the damage being done.  That means, get the manifests and start tracking each container and see if it has crossed the border, if not, stop it, and call it back.  On your dime.

What a mess!  Maybe half made it into Mexico, and some were found as far away as on the USA side in Texas (from Washington State) since the scamsters caught on early Customs was noticing something as up and began redirecting the shipments to other border crossings.  (And then again, Customs wonders how come so many Washington apples are crossing at Laredo?)

Now keep in mind most apples and pears are packed to order.  The fruit is pre-sorted and then packed in 40 pound boxes to buyers specification.  To pack it ship it, then bring it back is to give the load a good beating, and then store it packed in hopes of a sale that matches the pack.  Ugggh... and then the paperwork to redirect goods back that you no longer legally own, whole lotta processing going on.

Now I surmise that one of the reasons we do not have as much fresh export as we could, or not as much for which there is demand, has to do with the PACA rules fostering an atrophy of natural inclinations to defend what is yours: your produce.  And without growers doing the exporting, necessarily they cannot get as much for their produce as they could.  They are price takers, not price makers.

So even if they got it all back (and they did not) the program is not much help in recovery, but facilitates loss.  Why tolerate it?

Say you a playing pro-football, and don't like the referees, and want a different set of referees.  The problem is to advocate change is dicey as long as the old referees are in charge.  They can make calls deleterious to your interest as long as they are still in control.

The big irony is while farmers may have an outsized reticence to exporting based on the atrophy attendant to the PACA regime, export agents live in a wild west world in which relationship is everything, and misbehaviour leads to catastrophic shunning. There is a gap between the regime in place domestically in USA which controls and informs farmers, and the natural real-world business in the export trade.  If the free market recourse works for perishable in int'l trade, why would it not work in domestic trade?

With so many Stalinist-inspired loopy government programs still in effect, why pick on PACA?  Well, PACA would be another candidate for cutting back on government and restoring freedom.  Just as the solution to the Post Office mess is to "corporatize' (not privatize) the USPO, so to with the PACA regime.  Announce the program loses its monopoly in 2 years, at which point al of the assets and liabilities of the program become owned by the workers, past and present, in the program, and association with the program becomes voluntary (see point one above.)

O!  All eyes on the suggestion box!  For the next two years the official folks populating PACAdom would be listening very closely to their target market, and bankers and insurance companies would be eyeing either competing with the voluntary-PACA or buying it from the new owners, the PACA workers.

 PACA is a problem, and as the farm-lady said, its time has come.  There is a way out in which everyone wins, and that is always the peaceful free market process.

What do you think?

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Contracts In International Trade

Back in the day, at the bottom of all contracts and title instruments on international trade paperwork was E&OE, Errors and Omissions Excepted.  Meaning, regarding this document, "you can rely on it, unless you can't."  The reason is that in international trade there is no recourse to the law.  The "law" of international trade, lex mercatoria, was private law, which meant that if sued, a defendant could show up or not.  Didn't matter.  This system worked extremely well.  Another example of anarchy not only in action, but clearly superior in practice.

The lesson is, never take your USA understanding of contracts, and its premise that any disputes can be taken to court, with you into international trade.

On Nov 13, 2013, at 5:01 PM, Anthony wrote:

I saw this posted in a forum on a familiar pay site.   So basically, I’m reporting to you what I read on another site with a few changes to protect the inoccent and avoid any copyright issues.  

The Importer is in the US.  The Supplier is a factory in India.   The Customer is a catalog mail order clothing company.

Customer places three purchase orders with the Importer.  

***So a USA company is doing business with a USA importer who is buying from India. Nothing unusual there.***

Shipment 1 arrived with several problems; labeling issues, fabric issues, and the amount came up short which was not reflected on the invoice or the packing list.

  The customer has already paid the importer not only for goods it did not receive but they also paid extra duties because the shipping documents show more goods than what was actually delivered.

***Prepaid the USA importer?!  No sympathy for the USA customer there.  When the shipment was actually received, was the shortage noted at that time?  If not, no sympathy for the customer.  If so, the customer has a legal claim, take it to small claims.  If so, there is duty drawback, if not the customer is SOL.***

Shipment 2  is sitting in Oakland, CA accumulating storage fees.   The goods cannot clear through customs until the Indian supplier sends the original Bill of Lading.   The Indian supplier refuses to do this until they get paid in full for Shipment 2.

***Demurrage fees are astronomical. This cannot end well.*** 

The customer wants a refund of $10,000 for the problems with the first shipment.  The Importer went after the Indian supplier for the refund but they refuse to refund anything and now don’t trust the importer. 

*** The customer screwed up, should have gotten what they paid for, paid for what they got.  No more, no less.  Relationship is everything in business. It seems they structured the deal which allowed for some risk, and then did not have a relationship that covered that.  Entrepreneurs***

The Indian supplier insists on getting paid in full.  The importer asked the customer to pay for Shipment 2 so the importer can pay the Indian supplier and get shipment 2 out of customs.   However, the customer insists on reducing the Shipment 2 payment by the $10,000 refund amount.  

***See how these things get screwed up?  Why did the Indian supplier not get paid in full before the goods left India?  That is normal.  

Here is where these things go wrong.  Since no one trusts each other in this deal (never did) the players ironically allowed gaps in the agreements.  By the Indian saying "I'll take payment upon delivery" he can ship crap and get paid before anyone figures it out.

At the same time the exporter is saying "I can ship crap" the importer is saying "he cannot ship crap, because he will not get paid."  Both sides are perfectly happy while maintaining mutually exclusive expectations.

Now the exporter will lose his money on shipment #2.  Or not.  He made so much on #1 he figured he could lose on #2, or bonus, hit the lottery if the obtuse players in USA actually paid for the 2nd shipment.  Or, in the alternative, after USCustoms seizes the goods and auctions them off to cover costs, the supplier overseas has a USA buddy buy the goods for pennies on the dollars at the auction.  I know a guy who did that.

There never was a shipment three contemplated.  Three card monte:  by getting the marks to consider three deals, they never expected to get nailed on deal one.

And of course, it is possible there is wailing and gnashing of teeth in India over the mess on the docks in USA and this exporter did his best work and was not up to snuff, and is in no position to make good for losses.  (And the example here is India, but trade with every single country on earth is exposed to these scenarios.)

In any scenario, the fundamental problem is the same: people opened gaps in the agreement in the measure necessary to fool themselves into believing this would work out.  There is a movie, either Grifters or House of Games, both about con artists, in which one of the con artists explains that it is not the mark's confidence in the con artist, but the mark's confidence in himself that makes the scam work.  

In int'l trade I see people weaken the deal in order to build enough confidence to proceed.  They scam themselves!

By weakening the deal, they fool themselves into believing there are enough checks to sort any problem out.  By weakening the deal, they can substitute due diligence with grey area, betting on grey area to save them.

Lesson # Three in international trade:  There is a first rate trader, that first rate trader can be known, there is no point in working with less than the first rate.

Now, for whatever reason, people decide not to step up to what it takes to be first rate.  To get the first rate to work with you, you must be first rate yourself.  But say your hope is to get rich quick in int'l trade, then you simply cannot do what is necessary within your definition of quick to get an agreement from a first rate supplier to work with you.  Therefore, you cut corners and go to second rate.

Anybody can do the first rate work necessary to work with the first rate suppliers.  But for most to work with the first rate the trade off is to do smaller deals necessarily since one's capacity to do first rate work is limited, and ability to do first rate may yield only say a $10,000 transaction, not a $100,000 transaction.

The funny thing is, a first rate $10,000 transaction gets repeated, so by the end of the year, Mr. $10,000 has done a million in sales, where Mr. $100,000 is hiding from creditors.

There are probably more deals like this than first rate trades.  Suppliers overseas are desperate to find people in USA who do first rate work.  Probably why first rate pays so much better.  As to this deal salvage what you can on order #1, lick your wounds, do it right next time.***

Shipment 3 is on the way and will also need the Bill of Lading in order to move through customs.  

***If I was the customer this would be of zero concern to me. Deal was off when shipment #1 was not in compliance.  If I was the importer, I would wonder if there was in fact a shipment 3.  Drucker said it first, and I believe he is absolutely right:  Entrepreneurs do not take risks.***

How would a student of John Spiers have avoided this situation?    

***Find the best supplier in the world AND get references. This was not done. The best supplier in the world would at once require first rate work, meaning the retailer and importer would have to step up their game, and then there would be no problem as to payment and QC.***

  How would John Spiers consult with the importer to resolve the current situation? 

***Don't throw good money after bad.  No doubt the goods are needed for 4th quarter sales, but you screwed up.  Buy them at customs auction in a month or so after Customs seizes them in Oakland.***

My knee jerk reaction is to protect the customer and refund him in full.   Then cut off the supplier unless he can fix the issues immediately.   And why didn’t the importer check references on their supplier first?     

*** Why didn't the customer check the references of the importer?  Why was anything paid for when it was not to spec?  The customer is the author of all these problems...  too little too late.  Start over.

John

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Von Mises Institute, Comfort to 'Shroom Dealers

FBI, TSA, DHS and so on cannot catch a Boston Bomber, let alone the Kenya Mall Ten, but they spare no expense at tracking down a Magic Mushroom dealer.  And they get some guilt by admiration:

Among them, according to the viewing history, was economics. In particular, Mr Ulbricht's account had "favourited" several clips from the Ludwig von Mises Institute, a renowned Austrian school of economics.

Now, little if any of this story sounds likely, and the use of English is atrocious, so it is probably a planted article, meant to show us all of this spying pays off.  All of that time, effort, creativity to track down very talented and smart people trading dope online.

I am much influenced by Austrian School of Economics, except for its tolerance of usury (no school has the whole picture) and a school that has no use for drug laws would of course be of interest to drug dealers.

We are being treated to 24/7 Government as Theatre in USA.  Nothing is believable.  We are in the Soviet System where we check in on the news to see what the "Line" is, and not what the facts are.

I can see no other way out except truth commissions.

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O Yes There Is!

It is pretty clear a missile, probably fired by the USNavy brought down TWA Fight 800 in 1996, killing all several hundred people onboard.  It is probably an accident, or sabotage, but a missile it was.

The counter argument is why would anyone cover up the truth and how could "they keep the truth a secret for eighteen years?  Well as to why cover up the truth, you'd have to ask those covering it up.  An independent investigation would arrive at that.  Not for us to say.  AS to keeping such a big thing secret for so long, well, it has not been a big secret for a long time, because people have been shouting what they saw all along.  The official version stank from the beginning.  It never went quiet.

One reoccurring theme is responsible parties are just now, upon retirement, coming out and speaking the truth, what with their pensions secured.    Waiting until there is no risk to them is despicable, but despicable is the best we get in people charged with securing our safety and rights.  There is the rare Bradley Manning and Edward Snowden, but see what happens to them.

The New York Times would like the evidence reviewed again, but is saddened there is no entity in Government which can be trusted to do the right thing.   Exactly, the New York Times is now speaking the truth as it prepares to shut down.  What have they go to lose? In the USA, there is no element in law enforcement that can any longer be trusted, from the local magistrate to the Supreme Court.

But there is a solution, the Truth Commissions.  Give people immunity for prosecution to tell the truth.  Now this is not possible since the Federal Government will punish anyone it likes on the most whimsical grounds, so we need a safe third party to provide the venue, say, compliments of American Defector Edward Joseph Snowden, Hong Kong, Moscow, Havana or Caracas.  We might have a place if we made Detroit and new Hong Kong, but there is no chance for truth to get out in USA as it is now.

People who have committed "crimes" can defect from the USA, give evidence, and be safe from retaliation.  We need a means to sort these things out, and truth commissions are the way.

Truth commissions, a workable alternative.

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Progressives and Farm Policy

Marx and Engels were dismissive of the peasant (farmer), and I was reminded of this while reading Lucien Bianco, The Origins of the Chinese Revolution, 1915-1949.  Together with Simon Leys' Chinese Shadows if you want a quick study of the Communist era in China, you'll do well to read those two books together.   Leys had to use a nom de plume to write his book because the truth of it about Maosim would have cost him his job.  It covers a time that seems impossible today.

Bianco's book describes some political arrangements that are not uncommon in USA today.  Sometimes you have to see it in play somewhere else to realize it is in play here.  But the most interesting part of the book is how Mao himself never really understood Marxism (or had no real use for it, actually comparing it to dog shit) and how he had to work around the Soviet advisors to advance a revolution that was peasant (farmer) when Marx and Engels in theory expected the liquidation of the peasant and Lenin and Stalin in practice were liquidating peasants.  We forget that central to the progressive world view is control through farm policy.

If there is one area where American's eyes glaze over it is farm policy.  If there was one area they should be most attentive, it would be farm policy.  I know myself I haven't been paying attention to a farm bill that is being debated.  If it is like any other bill, say immigration or romney/obamacare, it too is no doubt a mess.

I do know this, USA farm policy affects the rest of the world.  I do know that the small farmer is critical to any nations health, and that is why such countries as Japan and France so protect theirs, if by misguided means.  Small producers exporting allows them to expand production profitably, a capacity that may very well come in handy if the BigAg/BigGovt progressive policies do not work out, as they usually don't.

Read these two books to start...




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