Friday, May 23, 2014

Limiting Demand: Slim's Paradigm



In my article “Mr. Putin’s Economic Theatre of Operation, I cited “limiting demand” to explain a Russian Iranian Oil Deal.


For most people, supply and demand is the simple concept of economics:


If more sellers (supply) show up than buyers (demand), the sellers must drop their prices to sell their goods.  They are competing with other sellers.  The more perishable the product, the faster they must sell it, the more willing they are to drop their prices.

If more buyers show up than sellers, the price goes up because buyers to not want to go home empty handing. Specially if the product is in great demand.  That is the premise.


Now on to limiting demand.



Slim’s Paradigm


“Limit supply and drive up prices. Limit demand, bypass the market, stablise the economy.”  ~ Slim Fairview

Look at what is happening from the standpoint of the two articles I wrote on the subject:



In addition:



What is happening? 

Russia and China: Nat Gas Deal

Russia and Iran:  Oil Deal

Russia and Germany: Nat Gas Deal

China and Germany:  Have we forgotten that China and Germany are trading partners?


If Slim’s Paradigm becomes the new normal, all the forecast numbers will have to be recast
.

A few years ago I wrote an article “Energy Independence” (Then What?)  In that article I said that the Middle East must find new customers to protect oil revenue.  China was the obvious choice.

I also wrote, “It is a universal condition. We refuse to accept that all alliances and enmities are transitory.” The Quotations of Slim Fairview © 2014.

The Global Economic Landscape is shifting. Please allow me to present a soupçon of evidence:


NAFTA

OPEC

APEC

EEU

Eurasian Economic Union

And, soon…

A Union of Emerging Nations Economic Unions. 

And, an 

E-20


The world is fragmenting into economic (not military) power zones.  Asia, Middle East, Africa, Europe, Eurasia, Latin America, North America.


One important factor of the new paradigm and the recalculating of the numbers:  it will replace the following, specially regarding China.

“When the numbers are bad, the Wall Street experts gloat.  When the numbers are good, the Wall Street Experts doubt the numbers.” ~ Slim Fairview.


The concept of limiting demand will enable long term economic planning with a reasonable degree of stability by rendering market forces irrelevant.

In addition, we seldom see ourselves as others see us.  Look at us from the perspective of emerging nations.

  • ·       Chinese People have suffered poverty and hunger.

  • ·       Russian People have suffered poverty and hunger.

  • ·       Americans are rolling in dough.



Remember! The perspective of people starving to death in emerging nations.


I will explain what I mean by limiting demand using golf as a metaphor.  

This is a lesson about Economics.  Golf is a metaphor.  The takeaway is: Economics!


Golf Course # 1.

Public (municipal)
Fees: $50, per round in groups of four.
Anyone can play.
The demand exceeds supply.
Many are turned away.


Golf Course # 2.
For Profit.
Anyone can play.
Demand often exceeds supply.
Fees: $50, per round base rate plus extra fees with high demand.
If few people want to play, the fee is $50. As the demand rises, the fees may rise to $100 or $150 per round.  Many can’t afford the higher fees.  Many are turned away.


Golf Course # 3.
Private
Fees: $50, per round.
Demand limited to 500 members.
Not exclusive, not for the rich, not restricted.  Simply Private.
Demand is limited, the fees are always $50, and everyone gets to play.


It should be obvious to all that price increases are more sever among those who can least afford it.  As this applies to food, in many industrialised nations there is a fixed or limited demand and a stable supply, and a marketplace that can blunt the negative impact on the less fortunate.


In the US and other industrialised nations there is certainly poverty and hunger. 


In Emerging Nations:

·       A Flood
·       A Drought
·       A Crop Failure
·       A Migration of Starving Refugees
·       Widespread Famine
·       Global Food Aid (Marginally helpful)
·       Population Displacement
·       Starvation and Death

People lying on stretchers, skin and bones, unable to stand or even sit up because their bones are too fragile to support their weight, mothers clutching to the bodies of their dead babies, do not care if we've had 5 servings of vegetables, the unfairness of golf, and never want to hear, “Childhood obesity in America is caused by poverty.”


As the world moves into Economic Power Zones, survival will come from “limiting demand”.  This is to insure that economic stability will prevail.



Regards,

Slim


Copyright © 2014 Robert Asken Slim Fairview

All rights reserved.



Monday, May 12, 2014

Mr. Putin's ETO

Mr. Putin’s Economic Theatre of Operation.

In WW II we had the Pacific Theatre of Operation and the European Theatre of Operation.  Germany had the Russian Front. That was the military Option.  That was then, this is now.
Globally, the Military Option is no longer viable.  It has disappeared into the delusional mist of nuclear deterrence taking the Cold War Propaganda War with it.

What we have now are two, new, wars.

1.  The “Nuclear Free” safe wars of skirmishes and atrocities that keep us glued to the television set, freeing us to vent and lament from our safety blanket of nuclear deterrence and enabling us to feel good about ourselves because we show we care. And,

2.  The Real War.  The war I call the Economic Theatre of Operation.

The revelation came amid news reports that the EuroUnion was looking to attract Ukraine and that President Putin announced intentions to form a Eurasian Economic Union.

A simplistic interpretation is that Mr. Putin is attempting to defend the Russian and the Eastern European economies from the European Economic Union. However, on slightly closer examination, we see that the EuroUnion Economy is weak.  A better conclusion?  Using some basic B-School analysis, we see that Mr. Putin is taking advantage of a competitor’s weakness to increase market share and to enhance revenue.  However, there is more to it than that alone.

FLASHBACK

The world saw the pictures.
Ronald Reagan at the Berlin Wall, “Mr. Gorbachev, tear down that wall.”
The Wall coming down.
Lech Walesa at the Gdansk Shipyard Rebellion.
Mr. Gorbachev seated atop a tank in Red Square—Fall of the Soviet Government.
America’s unbridled economic success on programmes like, “Lifestyles of the Rich and Famous” and “Dynasty”.

The Promise?  Free Market Wealth and Military Support and Protection.
The Reality?    Far from it.

Nature abhors a vacuum. Mr. Putin is stepping into the breach.

What is Mr. Putin’s Strategy?

1. Move Russia into the 21st Century
2. Shift focus from inward to outward
3. Build Economic and Military Alliances

·       Iran
·       Crimea
·       Syria 

4. Build Foreign Policy Credibility
5. Restore cultural pride in Eastern Europe and Russia
6. Build on the shared histories and hardships with Eastern Europe.


REMEMBER:

Both Eastern Europe and Russia were ground beneath Soviet Military Occupation.

Both Eastern Europe and Russia were ground beneath German Military Occupation.


Mr. Putin is in the process of or already has cemented an oil deal with Iran.  This is a new focus on the Economic Law of Supply and Demand.

You may call it restricting or limiting access. I call it restricting or limiting demand.  Either way, it is counter intuitive to Freshman Economics.  I will explain what this means in another article.  For now, a deal with Iran stabilizing oil prices and oil revenue is important if not crucial to all parties concerned.

However, we should also consider this:  With the oil deal with Iran, what will be the change in the dynamics with

·       The Eurasian Economic Union?
·       Iran’s relations with Arab Nations?
·       The Relations between Arab Nations and Russia?


NB I did point out that it will become important for the Gulf Oil Producing Nations to act to protect future oil revenues!

Now there are some who can see nothing but RED and are attempting to create a Panic.  However, a closer examination will reveal that Russia has embraced the Chinese Model.

I twice pointed out the difference between Soviet Style Communism and Chinese Style Communism.

Soviet 5-year Plan
Soviet 10-year Plan
Soviet 20-year Plan

CHINA

Hydro Electric Power dam Project
High Speed Computer Project
High Speed Rail Project.

In addition, I pointed out:

China: Rising middle class, rising economy.
India: Rising middle class, rising economy.
USSR: No middle class, no USSR.
USA: Declining middle class, follow the path of the trajectory.

Finally, I am suggesting the Mr. Putin may be the only person reading my blog, because he seems to be alert to the changes in the Global Economic Paradigm.



CHINA

I pointed out that
China has shifted from looking inward to looking outward.
China is establishing economic and political alliances globally.
China is moving into Western Asia.
China will succeed because China will do as we did and not as we say

RUSSIA

Russia has shifted from looking inward to looking outward.
Russia is establishing economic and political alliances globally.
Russia is moving into Eastern Europe.
Russia will succeed because Russia will do as we did and not as we say.


EUROUNION

The European Economic Union does not have a strong offer.

Thus far, President Obama has done a fine job on Foreign Policy.  Egypt and Libya are two examples.  And he had strong allies in each situation. And he was a strong ally in each situation. However, Eurasia is neither a political theatre of operation nor a military theatre of operation.  This is the Economic Theatre of Operation.  Here President Obama’s allies (The EuroUnion) have little economic strength.  And, Chancellor Merkel has little or nothing to offer Eastern Europe.

Eastern Europe saw what happened to Southern Europe
Eastern Europe knows how and why it happened.
Eastern Europe knows that Southern Europe fueled the German economy.
And, they know much, much more.

When I wrote, “Merkel Invades Russia, I wrote about the assault on the Banks of Cyprus where Russia had sizeable sums on deposit.

When I wrote about Merkel’s Ponzi scheme, I wrote about Merkel’s attempt to send Madame Lagarde around the world, “Begging for coppers” Seeking a series of bailouts from a series of sources.

Eastern Europe can easily see that the Chancellor wants Eastern Europe to feed her Economic War Machine at the expense of Eastern Europe.

Merkel’s strategy is too obvious.  Keep the German economy strung until the global economy has its turn round, and then declare victory for her policies and their tenure.

Also, when I wrote “Merkel’s Big Lies", I listed the 10 Propaganda tricks being used by Merkel in her assault on Southern Europe.  This is analogous to the tricks used by industrialised nations to exploit emerging economies.

The only thing left to mention is this:

In addition to the fact that the Military Option is no longer viable, the economic zero sum game doesn't work anymore either.

You can heed my admonition now or wiat 50 years for a global depression.  Not a statistical one—a real one.

Warmest regards,

Slim

If you find anything here to be helpful, please don't hesitate to send me a really tricked out Mac Book and to tuck a few dollars into the envelope along with the thank you note. Slim.

Bob Asken
Box 33
Pen Argyl, PA 18072
Etas Unis


Copyright © 2014 Robert Asken 
All rights reserved.







Wednesday, April 16, 2014

Putin's Overture in EurAsia Minor

Putin’s Overture in EurasiaAsia Minor

There appears to be many opinions about what is going on in The Crimea. Most of it appears to be wrong, confused, or misdirected.

As this is not about knowledge but rather about understanding, I will use no graphs, pie charts, names of great leaders past, present, or future, and no list if historical dates.  Again, this is about understanding.

“If you want to know something, Google it; If you want to understand something, ask an old person.”

I have but two skills: an analytical mind and the ability to speak in metaphors.  However, if you don’t want to hear it from me, hear it from Einstein. “You can’t solve the problem using the same kind of thinking that caused the problem.”

The article has several parts and does rely on metaphors.  When you’ve finished the article, you will have a better insight into Russia’s actions.


Our Hypocrisy

Respect means different things to different people.  In some countries, people shake hands. In other countries, people bow.

Now, people in the US who believe in treating others with respect simply do not understand the concept.

He does not understand that other people do not want to be treated the way he wants to be treated.  He counters with all people wanting to be treated with respect.  He does not understand that respect means different things to different people.   Case in point:

A pat on the back, a pulled pork sandwich, and a bottle of beer.  “Sit down, put your feet up, and relax.”  That may be okay for me, however:

  • ·         You don’t touch people in Muslim countries.
  • ·         Muslims do not eat pork.
  • ·         Muslims do not drink alcohol.
  • ·         Don’t put your feet up!


First he is rude. Then he gets upset when other people don’t feel respected because he treated other people the way he wants to be treated, and in less obvious situations, he accuses other people of being snobs, elitists, or falls back on the old canard, “Who’s to say what’s right or wrong?”


“Circumstances, if not consequences, will prove who is right and who is wrong; too often when it is too late to benefit from the answer.” The quotations of Slim Fairview.


Now we go further.


The Fallacy of Win-Win Negotiations.

As form follows function (Bauhaus), I am using a metaphor to enlighten. Also, there is an economics lesson thrown in for good measure.

You and your husband both work. You share the household chores. Your husband asks you to do the dinner dishes for a week so he can watch some protracted sports event. You negotiate. You make an offer.

You will do the dinner dishes every night except Thursday if he gives up golf on Saturday to mow the lawn, trim the shrubs, and mulch the garden. As a sweetener, you tell him he does not have to go with you to dinner at your parents’ house on Saturday night.

He counters with what he calls a win-win offer. He will do the dishes on Wednesday, he will do all the yard work, but on Sunday, and he will go with you to your parents’ house for dinner on Saturday—to please you.  Sounds like a fair offer, doesn't it?

If you get caught up in the paradigm too quickly you will agree.  And, you made an agreement and you keep your bargains. Your husband made immediate concessions.  You accept the deal.  Now let’s look at the details, because actually, you lose on every point. Here is why.


  • There is no game on Wednesday night.
  • You want the TV Thursday to watch a programme on Economics
  • Your Dad dislikes your husband, but your husband loves your Mom’s Pot-Roast with gravy and mashed potatoes. 
  • However, the most important aspect is that you wanted the lawn work done on Saturday because you invited the women from the Economics Club at work to an al fresco luncheon ot your house on Sunday.


Now, the Economics Lesson.  Time, place, form utility.


You want to watch the Economics programme on Thursday because that will be the topic of discussion in your Economics Club meeting on Friday.  Time Utility.  The Rerun on Sunday night has no value.

Also, the yard work has time-form utility.  In economics, the yard work is a “product or a service.”  On Saturday, the yard work is very valuable.  On Sunday, the yard work is worthless.  The condition of the yard also has utility.  In its present form, it has no value.  Once cleaned up and made presentable, the yard has form utility
.
Your husband gives up nothing.

Now, this is not about respect v. disrespect; nor is this about chauvinism v. liberation; nor is it about how to have a happy marriage, empowerment, or conflict resolution.  This is about economics.  Why?  Because, in global matters, the military option is no longer viable—period!   To understand this, let’s look at the hidden agendas.

Your husband does not want the Economics Club meeting at your house.

You don’t want him golfing with his Saturday buddies; you want him to go golfing with his Sunday buddies.

Also, you want your husband out of the house all day Sunday. (Form utility)  Your husband is a good provider, a great Dad, and helps out around the house without being told. However, he does not “show well” at al fresco luncheons with the women from the Economics Club. 

There are also: deliverables and supply-chain considerations.  You want to show the other women that you can handle deliverables.  The condition of the yard—form utility and the locations of the husband—place utility.  You can deliver.


Now on to the US v. Russia Understanding.

The Military Option is over.  Ronald Reagan and his “Star Wars” build-up was not a military campaign but rather an economic one.

The Nuclear Deterrent is nothing more than Diplomatic Legerdemain.


Before Nuclear Deterrence:

The USSR sends troops into Germany.  German soldiers shoot back. The Headlines Read:  Germany and Russia at War.

After Nuclear Deterrence:

The USSR sends troops into Germany. The German soldiers do not shoot back. The Headlines Read:  Nuclear Deterrence Works.


Russia and Syria

I pointed out while back that the negotiations over Syria are not about Syria. They are about something else. When we find out what that something else is, then we can negotiate that and that will resolve the Syrian situation. We now know what that something else is.  However, we don’t understand it.

The fight for the Crimea is about a warm-water port. (Time, Place. Form Utility) In addition, this is not for military purposes. This is for economic purposes.


President Putin is attempting to form a Eurasian Economic Union; ostensibly, as a counterweight to the EuroUnion. Not quite true.  With the condition of the EuroUnion Economy, President Putin is merely seizing an opportunity, not land.

President Putin has been a witness to China’s Economic Success and Diplomatic successes in Africa and in Latin America.

President Putin sees America’s lagging economy.


Indeed, we must also view Russia’s humiliations since the collapse of Ivan Grozny’s Empirical Aspirations.

However, there is still more. 


Insight into Human Nature

Remember, Putin is seizing the opportunity presented by Europe’s weak economy. Europe is too weak to rebuff Russia’s economic overtures to Eastern Europe with Ukraine as a linchpin. And, Putin does not want to be Jimmy Carter to Eastern Europe.


The Bloc shift to the west was due to:

  • ·         The Strength of Reagan v. Gorbachev.
  • ·         The Runaway Success of the US Economy
  • ·         The Seduction of Perceived Freedom
  • ·         The Promise of Unbridled Economic Wealth.



That was then, this is now.
  • ·         The EuroCrisis
  • ·         US Economic Crisis
  • ·         Emerging Economies Slowdown


Now the Bloc Nations will be moving East.


The strict v. the weak.

Over 55 years, I’ve seen this scenario play out so many times that I can’t remember them all. Here are a few for illustration.


Mrs. Reardon, Mrs. Burke, and Smitty.

The first two were 1st and 6th grade teachers, respectively.

Each was known to be a terror. Very strict. Their students complained about the constantly.  However, if other students said anything against the teachers, their students would rebuff the criticisms with a vehement defence.  

Almost the Stockholm Syndrome, but not quite. And, I’ve been party to it, myself.

We had a boss named Smitty.  Not disliked, or held in contempt, but generally ridiculed by his "people".  His people, too, defended him against criticism.  (I personally, had no substantive opinion of him or his abilities.)

Then, one night, delivering "paperwork" to the local HQ, I encountered two upper middle-management Jackasses. After finding out where I was from, and that that was where Smitty had been transferred to, tey began to make snide, sarcastic, belittling remarks about Smitty.  

In response, I painted a glowing picture of Smitty’s success at our Office.  

Not because I liked Smitty, but because I didn’t like the two middle-school smart-asses. or their attitude. 
The difference? I knew I was doing it.


50 years ago, then comedian Bill Cosby, now Dr. William H. Cosby, did a monologue on an album about a shop teacher who used psychology to get students to confess to any wrong doing.

“Yep. Somebody must have a really rotten mother to put a bullet in the furnace.”

“Listen, I didn't put the bullet in the furnace and stop talking about my mother.”



The psychology of it all seems to be universal and universally understood.

After more than a half a century of watching the scenarios played out, I don’t understand why people are confused about what is going on in The Crimea.



The Bloc Nations Flirting East.

  • ·         Disillusioned by the failed promises of Western Economic Success.
  • ·         The Tendency of People to Forget


“It is a Universal Condition. We refuse to accept that all alliances and enmities are transitory.” The Quotations of Slim Fairview.


  • ·         The Excess of US Successes
  • ·         The Witnessing to China’s Successes both Domestic and Global
  • ·         The Display of Western Excessive Military Power & Might & little to show for it.
  • ·         That the Global Military Option is no longer Viable.
  • ·         Economics is the new Weapon of Choice
  • ·         The Fallacy of Nuclear Deterrence



Remember the Quotation of Slim Fairview

“China will succeed because China will do as we did and not as we way.”


Russia will do the same thing with the offer of strong Military Support and Protection and the Promise of Economic Well Being.


Surprise!

Warmest regards,

Slim


Slimviews and Sidestreetjournal are Unfunded, Unsupported, Non-Profit web logs by Robert Asken writing as the blogger known as Slim Fairview

Copyright © 2014 Robert Asken Slim Fairview

All rights reserved.


Thursday, April 3, 2014

Lehigh Valley Economic Opportunities



Surprise!  Bethlehem, PA has become an under-rated and recently recognised economic development opportunity.


Recently, the latest supercharged dynamo of Economic Development, Alicia Karner, has been put in charge of Bethlehem’s Economic Development Office.


The City Council has yet to approve funding for the two additional staff members, but don’t let that discourage you.  You know you have to spend money to make money (even if they don’t) and there are still “ground floor” opportunities available in Bethlehem—before the economy [picks up speed.


·         Sands Casino has primed the pump.


·         ArtsQuest is attracting the Artsy Crowd (read culture) and


·         Downtown is the target of CRIZ, KIZ, and BEDCO.



Do not be fooled into looking elsewhere.


CRIZ: The City Revitalisation Improvement Zone (I would have thought investment zone).  Still, don’t be discouraged.  Investments are improvements. You make the investment and the politicians will share credit for the improvements.


KIZ: Keystone Innovation Zone.


BEDCO:  Bethlehem Economic Development Corporation.


The last one surprised me.  12 years ago I tried floating the idea of the Slate Belt Economic Development Corporation, but the idea went over like a lead balloon.  Still I do have a nodding acquaintance with the Lehigh Valley.  Please see my CV on my LinkedIn Profile with the list of my activities:  www.linkedin.com/in/slimfairview




Another asset is Tony Iannelli, the CEO of the Greater Lehigh Valley Chamber of Commerce.  Recently, Mr. Iannelli told me he just returned from a business trip to China.  Need I say more?


Next, we have State Senator Lisa Boscola.  Senator Boscola got her foot in the door because her Dad worked for Bethlehem Steel. (Read: street-cred and massive local support). However, Senator Boscola’s staying power comes from her ability to keep up with the increasingly faster changing world of business, economics, and technology.  Also, the Senator outlasted the impediments in Harrisburg.  Things are moving along at a brisk pace.


Thought Bethlehem Steel is gone, the SteelStacks Project appears to be operating in full vigor.


But wait, there’s more…



Restaurants, Bars, and Cigars—Oh my!



In addition to economic development you have restaurants such as the Melting Pot, Blue Moon, and The Twisted Olive. For those who need a more specific point of reference, you have The Bethlehem Brew Works where President Obama stopped for a beer during a trip to Pennsylvania.


Aside from eateries there are two “Cigar Bar” businesses in the area.  And they are not just for those Cigar Chomping Party Bosses in smoke-filled back rooms and Derby hats cutting deals. You can enjoy a Pleiades or a Macanudo Prince Philip Café with a coffee or a Calvados. Derby hat optional.


Housing is moving along at a cheerful pace.  And you won’t have to bear the shame of living in a McMansion.  While they may be called Millennial Mansions by some, there is abundant land for development and the homes are situated on ample-sized lots routinely adjacent to or near one or more of the areas many country clubs. Conversely, there are many historic homes both in and out of historic districts, with the original wide plank floors and beamed ceilings just like the homes we used to see on This Old House. Horse and buggy upgrades are available—don’t ya know.



Sports!  It is my understanding that there are may sports venues offering a variety of athletic events.  However, I am not a sporty sor of person, so you'




The key people in the area, as I said, are


Alicia Karner, I would give you her phone number but I’m not sure if the Council voted to provide funding for a telephone.  


Tony Iannelli, and Senator Lisa Boscola are in the book. 



And don’t let the Big Investors scare you away. The Shoo-fly pie is big enough for SMEs and B2Bs to enjoy a slice.    




Disclosure:


Any references to products or services are at my discretion and no offer of remuneration or compensations was solicited, offered, or accepted.  Also, they are for information purposes and do not constitute an endorsement.  You’ve been informed. You are on your own.


However, if you are an investor, and you find any of this information to be helpful, please do not hesitate to send me a really tricked out MacPro and to tuck a few dollars into the envelope along with the thank you note.


Warmest regards and best of luck,


Slim






Slimviews and Sidestreetjournal are unfunded, unsupported, non-profit weblogs written by the Blogger known as Slim Fairview.


Copyright © 2014 Slim Fairview Robert Asken

All rights reserved.