THE UNITED STATES: CRITICAL TIMES, CRITICAL CHOICES

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WE MUST EITHER ANTICIPATE THE FUTURE OR CREATE IT OURSELVES.

Dear Friends:

I have chosen to dedicate this space to an article about the United States... The nation where I grew up (arguably), dreamed my first dreams, and have lived most of my life. A country often regarded as the "Leader Of All Nations," and the "Land Of Opportunity." My grandfather came to this country from Russia expecting to find the streets paved with gold.

At this moment, the United States is a nation at the crossroads, and is exhibiting an increasing dichotomy between its celebrated "American Way," and the harsh realities of 1) how it is now perceived by its own population, and 2) how it is now regarded by the rest of the world. The US is going through a trying period of very painful introspection and intense scrutiny by the other nations which inhabit its neighborhood on the planet.

For the US, these are critical times which demand critical choices...both by those of us who make our geological homes here, and by those of us who are outside of its physical borders. Troubled times create great opportunities for intelligent, enterprising individuals, as well as for pirates, unimpeded by conscience.

Whichever category that you have chosen to occupy, I present you with some information. Each of us has: Things to ponder. Plans to make. Actions to take.

1. A ZERO-GRAVITY DECISIONMAKING ENVIRONMENT.

We must do our thinking with the understanding that even the process of our observation, or even our inaction, will have an effect on the circumstances. Remember the Heisenberg Uncertainty Principle? Whether we idly wait or act decisively and precipitously, our personal circumstances will be changed because of our choices. My favorite example is the case of the "ultimate conservative," who leaves his currency in his house safe while he "waits for things to stabilize." This poor fellow (probably living in Arkansas) is losing money daily, while he waits for stability -- and stability, despite its definition, is always temporary. There are actions to take, regardless of instability. We must hedge against domestic inflation, the declining value of the US Dollar, and the tempestuous credit markets. If the world is changing and we choose to hold still, we are being moved anyway.

Questions:

Because economies move in waves and cycles, at which point are we on the curve? What will the amplitude of the cycle be? How long will the cycle last? [We Economists like to quietly guess, and then cook up an explanation after the fact].

How do we best incorporate some form of "Chaos Cushioning" into all of our planning.? We must chart a course, but we must constantly monitor it, and be prepared to engage in evasive maneuvers. The whole notion of "Steady State" is a temporal illusion.

How do we avoid the very Human instinctual protection of denial, and dispassionately accept reality and the challenge of change? Our long-held beliefs, if proven unfounded, serve only to hinder and encumber us.

WHOM DO WE TRUST?

Every day we are inundated with information. It may be news radio, RSS feeds, newspapers, magazines, professional advisors, or political (or government agency) speeches. There is a great deal of information available -- so much so, that it has begun to sound like background noise. In this age of information overload, it has become increasingly difficult to 1) get anyone's attention, and 2) determine what we should focus on and what we should ignore. Going further, we must determine (through an increasingly ingrained facility of "sensorial triage") who to listen to [competence criterion] and if who to believe [the matter of trust]. We are constantly posed with the dilemma of judging the veracity of the message by judging the integrity of the messenger.

Knowing this, we have to develop the ability to selectively screen out the conflicted and avaricious self-promoters and purveyors of hidden agandas, and find human resources whom we can trust. They are rare. People in the United States are disenfranchised and disillusioned...they believe, by and large that lying is part of what should be expected of politicians, corporate CEOs and even publishers.

In his Laws Of Relationship Capital, publisher and author Adam J. Kovitz (THE NATIONAL NETWORKER) speaks about an individual's trustworthiness being one of the key variables which enters into the computation of that person's Relationship Capital value.

Author Jay Goldberg, in his critically-acclaimed book, HOW TO GET, KEEP AND BE WELL PAID IN A JOB (Outskirts Press) , invests almost a quarter of the text on dealing with ethical dilemmas in the workplace. Most of the means of dealing responsibly and ethically with the workplace situations addressed by Mr. Goldberg in his book would have seemed obvious to most Americans twenty years ago. I am obligated to report that the conventional wisdom of twenty years ago now has to be codified in a procedure manual. Twenty years ago, this book would not have found an adult market -- today, it is a secular bible. You can get direct information aout this book at http://outskirtspress.com/webpage.php?ISBN=9781432725297 . It's worth reading for any prospective employer as well as for any employee entering or re-entering the work force.

One of the most important investments of time which Americans (and, for that matter, everyone and anyone anywhere) can make is in choosing whom to trust. The persons and business entities which will successfully differentiate themselves from the chattering throng of persistent competitors for our attention and our money will be those who:

• Have proven their trustworthiness and integrity (character);
• Have a unique and fascinating way of presenting themselves, their products and their services (innovation/creativity); and
• Have something to offer which is of great utility and exceptional quality (superiority).

The three simple points above comprise the foundation of branding. Trust is becoming an increasingly significant differentiator in the building of a brand.

In a world of so many choices, where things are bought and sold by and from strangers to strangers through the Internet, and where everything seems so accessible...trust is becoming a critical component in decisionmaking. This is a belated return to a time where one person would say to another, "My word is my bond," and mean it...when a person's reputation for integrity was truly prized. A good reputation was worth earning and defending -- sometimes in a duel.

In sum, Americans would like to know that if someone speaks to them of the threat of "Weapons Of Mass Destruction (just an example, folks)," that those weapons really exist, and that the threat is genuinely imminent. People are certainly jaded, but there is societal sea change in the direction of trust. I am glad about it.

While nations engender and even promote distrust to control their respective subjects or citizens, individuals will increasingly run the contrary course of building and seeking trust.

WHAT IS "EQUITY," ANYWAY? AND WHAT IS/ARE/WERE SAVINGS?

A hypothetical discussion overheard in a bar:

If I can have the use of something without having to own it, isn't that just as good as owning it? If I can make small monthly payments to obtain the use of a car or a home which I could never afford to purchase outright...if I can live like a multimillionaire on a peasant's salary, why shouldn't I? Why wait for years and years to enjoy a life of luxury if I can get it now? If a financial institution offers me credit, doesn't it mean that I'm worthy?...after all, bankers and financial experts would never offer me a loan or a credit line if they weren't certain that I was a good risk, right? Right? Hey! Why is everybody giving me dirty looks? What'd I say? And why is Douglas Castle italicizing all of my words?

We are suffering from a deeply encultured INSTANT GRATIFICATION habit, fueled by the excessive availability of credit. I am calling it "credit" because nobody likes to use the "D - Word." <debt>

Sadly, most Americans are slaves to credit. An increasing portion of personal post-tax income goes to paying off high monthly loan and lease payments. Wages are used to service these payments when savings accounts are nonexistent. When wages disappear, debts go unpaid. When debts go unpaid, repossessions, foreclosures and other undignified and uncomfortable things happen.

As of the date of this writing, the majority of US citizens are so enslaved by debt that they are from between four to six paychecks away from being completely dispossessed? The term "dispossessed" is a politically correct euphemism for "out in the street." We should all feel mighty insecure.

Ironically, while our government can and does print money to pay its debts (although this practice tends to devalue our currency and to fuel inflation), individuals are not permitted to avail themselves of this printshop panacea for fear of incarceration, which can be every bit as unpleasant as poverty, except for the "advantages" of "government-subsidized housing" and "gourmet government dining."

Credit availability drives prices skyward, too. It's human nature: When I know that I can scrape up enough money to make the monthly payment, why should I care about the cost of "buying" the damned thing? Why, if I earn 50,000 USD per year, I can drive out of the auto-dealer's showroom with a 34,000 USD car! Why shouldn't I?

Americans tend to dis-save (e.g., spend more than they actually earn), whereas many Europeans and Asians customarily save and accumulate wealth to provide for the future, and for future generations. This is as responsible as it is romantic and charming.

Relatively speaking, as inflation skyrockets, the Dollar plummets, and jobs are being exported, Americans are getting poorer and poorer than their European and Chinese counterparts.

America's assets are either owned by massive financial institutions (many of which are now failing), or by foreign interests. Our precipitous loss is everyone else's gain. During the course of the next several years, the United States will be a bargain basement for the greater Global Community. The Middle Class, upon whose collective back the greatness of this country was built, is evaporating. Americans are poor, but we don't quite see it yet...we're like the fellow in the movies who is walking about, yelling and screaming, but no one hears him (think "The Sixth Sense" or "Ghost"), and he can't seem to get anybody's attention. That's because he is DEAD but DOESN'T KNOW IT.

THE FINAL FRONTIER FOR VALUE-ADDED.

Americans will not be inventing too much that is new during these next few years, with the exception of advancements in Nanotechnology, Stem Cell viability, Technological Convergence, Artificial Intelligence and nuclear energy provided through Thorium-based reactors. In fact, I would rather be invested in thorium claims than in a portfolio of exchange- traded stocks. Thorium Energy, Inc. is a company with no operations, no management, and with all of its money invested underground. Literally. A share of stock is only as valuable as the competency of the company's management multiplied by the brazenness of its public relations firm -- but thorium, rare earth elements, and other non-precious (a misnomer) resources lying beneath this planet's surface are not subject to the human frailties and the frequent revelations that shock the stock market.

Americans will, however, make product advances in terms of the bundling and re-packaging of existing information and communications technologies. We are still a nation of ingenious marketeers and tinkers, and that is our greatest remaining gift. The irony here is that while we will be comming up with these ceaseless innovations here at home, the manufacturing and servicing will most likely be outsourced to China and India, and the largest global markets will be Asia, the European Union, some of the Slavic countries and some of the Latin-American countries, as well.

Thank you for joining me. It was a pleasure to take a break from the Oil Crisis for a short while.

Faithfully,

Douglas Castle

A RADICAL SHIFT IN THE GLOBAL BALANCE

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Dear Friends:

History, like a poorly-prepared meal, tends to repeat itself. The only non-technological factors within the context of history that change are 1) the length of the socioeconomic cycle, and 2) the amplitude (e.g., the magnitude) of the highs and the lows. I have heard no end of metaphors for history... a sine wave; a pendulum; a coiled spring... just to name several.

This systematic repetition will likely be the case until such time as the deeply ingrained nature of the Human psyche actually evolves.

We tend, as a group, to have a short span of memory, a limited temporal focus, and an "all or nothing" response pattern to things happening around us. We have lived through numerous holocausts, bouts of xenophobia, periods of induced paranoia, civil wars that turn into protracted zero-sum games, lies (and careers) that have come unravelled, and economic depressions. We have a foolish proclivity to think that whatever social or economic circumstances we find ourselves in have never occurred before.

Our persistent failure to analogize (have I invented a word?) keeps us running into to same tree, over and over again. Nobody ever moves the tree -- we just keep forgetting that it's there.

Before I continue this post, I bring you a timely advertisement from Ex-Im Bank regarding an upcoming International Trade Conference in California. After this brief commercial, we can discuss the Future.

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"This conference will bring together small to mid-sized enterprises and trade promotion service organizations in both the public and private sectors with experts from across the state to dialog on the current issues, challenges and opportunities facing California's global trade and investment community. This year's conference will feature panels and presentations on using web based solutions for qualified information, marketing, trade finance, interpretation/translation, collaboration and security.
AgendaOnline RegistrationMail-in RegistrationSponsors-ExhibitorsConference History
Event Info
April 25, 20088:00a.m.-4:00 p.m.California Chamber of Commerce1215 K STREET, 14TH FLOOR (At the corner of 13th and K Street ESQUIRE BUILDING)SACRAMENTO, CA 95814

More Info
Monterey Bay International Trade Association (MBITA)P.O. Box 523Santa Cruz, CA 95061 Tel. 831-335-4780Fax 831-335-4822http://www.mbita.org/ http://us.f559.mail.yahoo.com/ym/Compose?To=tlivoti@mbita.org
SUPPORTING ORGANIZATIONS...."


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It is a comfort to know that Ex-Im is still in the business of fostering and assisting in solidifying trade opportunities for the benefit of U.S. exporters, for the Balance Of Payments, for the Balance Of Trade and for other things patriotic and fiscally salubrious.

The sad irony is that the U.S. does not have many things that it can export. Most every manufactured item is outsourced to enterprises in foreign nations. Most U.S. consumers purchase durable goods that were either imported, produced by multinationals, or which are merely packaged in the United States, but with the bulk of the value being added overseas.

The U.S. has several things that it can and does export:

• Jobs and employment opportunities;
• Dollars (in the purchase of goods and services provided by other countries);
• Agricultural commodities;
• Weaponry;
• Natural resources (metals, minerals, and mined commodities).

Let's take a quick look at each of these, and the associated benefits and costs:

JOBS AND EMPLOYMENT OPPORTUNITIES

Domestic companies can increase their profit margins in the shorter-term by outsourcing and offshoring. But the aggregate costs include rising permanent unemployment; loss of the value-added components of profits, and increased dependence upon foreign labor. The longer-run costs include the loss of management skills and the exodus or loss of technical talent; the loss of entire businesses and industries; the loss of income and wealth to the extent that we become weaker consumers, as well as weakened producers...

DOLLARS

The U.S. spends dollars on foreign goods and labor...they seem less expensive. But in the longer-run, this causes a devaluation of the dollar, and an exodus of dollar-denominated wealth from the United States. In addition, a great deal of the instruments representing the National Debt are in the hands of non-U.S. holders. As the U.S. borrows increasing sums from outside of its own citizenry and domestic institutions, the U.S. becomes enslaved by its indebtedness owed to parties offshore, and becomes perceived as a poorer international credit risk; this further devalues the U.S. dollar, and all instruments denominated in U.S. dollars. This effect is rapidly being heightened by the rise in the value of the Euro versus the U.S. dollar. The U.S.' most fundamental weakness -- we are utterly dependent on OPEC nations to give us the bulk of our fuel. As oil prices rise (as of the day of this writing oil was selling at an average of $105.32 per barrel!), the U.S. dollar declines, as well as virtually all of the other indices of prosperity.

Nightmare: The OPEC nations (and other nations in the course of ordinary commerce) insist on payment in Euros instead of U.S. dollars for virtually everything that they supply. Dollars become useless scrip. The wealth of a nation is wiped out immediately. The U.S. is vulnerable, and doesn't hold much leverage (as a non-supplier of too many things made and obtainable elsewhere) except in terms of its formidable military. But a military needs funds to pay for manpower and materiel. A trained mercenary goes to the highest bidder. What's a soldier to do when patriotism does not pay his/her family's living expenses?

AGRICULTURAL COMMODITIES

The U.S. is blessed with fertile soil and sophisticated agricultural technologies. It is one of the few arrows left in the national quiver. The U.S. has the capacity to feed many of the world's hungry. It is also unlikely that we'll experience any serious blowback from this: if I were a betting type of fellow, I would bet that there are very few emerging nations who are turning our carrots into dangerous projectiles, or weaponizing wheat for the launch of a stealthy moonlight Triscuit attack on the United States, its territories or possessions. I am only slightly concerned about brussells sprouts being used as warheads aimed toward key cities and national monuments.

WEAPONRY

Someone famous once said "If you give a person power, he will be compelled to use it." I tend to agree. The reality of U.S. troops being killed by U.S.-made weapons has already arrived. This blowback continues, and dates back to the arming, by the United States, of Afghanistan in the latter's conflict with the former Soviet Union. Combine this with the problem that much U.S. weapons production and actual soldiering has been, well, outsourced. Hmmm. Human nature, as evidenced by history, would indicate that weapons will invariably be turned on the seller. This is only a matter of who, when and to what extent.

There is also that quirky aspect of Humanity that somehow compels friends of convenience (individuals, as well as nations) to become enemies.

NATURAL RESOURCES

The United States is rich in metals and minerals. These metals and minerals, mostly considered industrial or "non-precious" are becoming increasingly important. Thorium will likely come into common use as a fuel for atomic reactors as many non oil-producing nations accept a safer variation on atomic power theme. And the United States has quite a bit of thorium, as well as Rare Earth Elements (reference, THORIUM ENERGY, INC., which can be located at: http://thoriumenergyinc.blogspot.com ), which are absolutely essential to virtually all modern technology, and which are continually finding increased applicability. Thinking about it, having valuable natural resources and reserves in the U.S., coupled with a steadily-increasing demand for the these materials in all of the technology-producing nations should give the U.S. a big stick with which to negotiate. Right? Maybe not.

With a declining dollar and little else to sell to other nations, the United States' exporting of these increasing precious non-precious resources and reserves is similar to tearing down the walls of your home and throwing them into the fireplace to heat the living room. This is the economic version of a Black Hole.

Yes, there will be a radical shift in the world's balance of power, and it has already begun, with momentum increasing daily. But the media and other forces within the United States are trying to defer admitting the inevitable.

The United States should be careful that it doesn't sell itself completely into slavery.

Faithfully,

Douglas Castle