The estimated 29.6 million small businesses in the United States:
* Employ just over half of the country’s private sector workforce
* Hire 40 percent of high tech workers, such as scientists, engineers and computer workers
* Include 52 percent home-based businesses and two percent franchises
* Represent 97.3 percent of all the exporters of goods
* Represent 99.7 percent of all employer firms
* Generate a majority of the innovations that come from United States companies
Source: U.S. Small Business Administration Office of Advocacy, September 2009
Small Business Survival Rates
Small Business Openings & Closings in 2008:
* There were 627,200 new businesses, 595,600 business closures and 43,546 bankruptcies.
* Seven out of 10 new employer firms survive at least two years, and about half survive five years.
* Findings do not differ greatly across industry sectors.
Sources: U.S. Small Business Administration Office of Advocacy, September 2009
Down With Big Business - Paul Ryan, 12.11.09,
How the government is smothering dreams and stifling growth.
The Anti-Corporate GOP?
What happened to the party of business interests? - By Peter Suderman
Newsweek Web Exclusive - Oct 28, 2009
The Hound believes that small business is the backbone of America, yet we have created all of these barriers to entry that are making it harder and harder for small business entrepreneurs to initiate a business and secondarily to survive.
A frequent cause of small business bankruptcies is undercapitalization. There are a lot of great entrepreneurs out there with fabulous, innovative ideas; but we are regulating these people to death. Whether as primary or secondary costs, expressed or hidden, these regulations cost money. Think of all of the great businesses that have been started in a garage, basement, or backyard workshop. Is that even possible today? can you start a business on a shoestring budget?
Corporatism is a big problem in many aspects. A corporation is an institution that is granted a charter recognizing it as a separate legal entity having its own rights, privileges, and liabilities distinct from those of its members. These entities allow individuals to operate in a manner that small businesses cannot. It allows individuals to take more risks in the name of the corporate entity, that they will not be liable for in the event of business failure.
The largest companies can afford the lobbyists, the legal teams, and political contributions that allow them to massage legislation and manipulate the system in their favor. In many cases this has been done at the expense of small business and it has inhibited their ability to compete, grow, and prosper.
I certainly don't want to kick big business in the teeth. Businesses that have been around and have a history deserve to enjoy what they have worked hard to build. But, we have seen too many times where big business will step outside of their realm to squash businesses that might compete with them in the future.
Look at how the Big Oil companies lobbied legislative bodies for years to keep alternative energy companies from developing. These companies would not have been directly competing against Big Oil, but they may have competed for energy dollars in the future. Now Big Oil has turned into Big Energy and they are lobbying to get legislation passed that they were against 20 years ago. That is 20 years of wasted time, where entrepreneurial growth lost out to the marriage of Politics and Big Corporations. Folks, that limits the growth of our nation, that keeps our country from developing and transitioning into what it potentially can be.
I am not however saying that we need to protect Mom and Pop to give them a leg up either. We see it all the time on the local level, where Small Business people are peddling influence with their buddies to obtain special favors for their personal business at the expense of others. No, what I am talking about is a fair shake and equal protection under the law for all citizens.
As the citizens of this nation, we need to demand the end of lobbying and influence peddling in our governmental bodies. This is the root cause of the lack of leadership and bad legislation coming from the government. It is wasting money that matriculates through every part of our financial system and is passed on to consumers and the citizenry. We also need to put a stop to the revolving door between government and the private sector. I talked about it in this article Goldman Sachs' Treasury - The Biggest Conflict of Interest Ever from October 2008. Tell me, what has changed?
I personally believe in globalization and foreign trade. And if what was promised would have been delivered, then we would be in a much different situation today. Instead, we saw the vote buying and influence peddling create Least Common Denominator deals that helped the Corporateers and Washingtonians loot the treasury and fleece the American people. We need to have people who will demand fair trade or no trade. We need capital to foster creative endeavors to move forward, but where is the money that was supposed to facilitate that path? It's padding the pockets of the Wall Streeters.
Today, people either think the average government official is a lying scoundrel or is telling acceptable distortions of the truth; and that is all based upon their personal Republican-Democrat ideological paradigm. Hardly anyone feels they are being told the truth straight up. Everything has to be spun. We are at the proverbial fork in the road. We have built a system that lacks credibility and integrity. It is time to get back to basics or meet our demise. Which path will we take?
Wednesday, December 30, 2009
Monday, December 28, 2009
Heroes of the Future
I follow this gentleman, Warren E. Pollock, on youtube and on his blog, because I enjoy his in-depth philosophical discussions of history and current events, especially economic and finance issues.
The video above is excellent. He talks about the "Future Heroes," the younger generation born between 1982 and 2004.
He talks about a principle called something gained, something earned.
1) Remain true to yourself.
2) Find personal solutions.
3) Responsibility to yourself
4) Responsibility to others
5) Be your own leader - people follow the wrong leader. Relying on yourself keeps you from being lead astray.
6) Look far off in the distance
In being a leader and getting the message out about where humanity stands economically and socially.
1) Have endurance on telling the story
2) No such thing as truth just perception
3) Too few people have woken up
4) 2010 will be a year of "Social Consequences."
The Old World Order and Near Term U.S. politics
1) Be your own leader - We are electing people, because they are not the other guy and we are hoping for change. What we find out is that there is no change or they may be even worse.
2) Social differences don't matter in crises - the context of this era is that the Empire is in decline and our system is collapsing.
Personal Solutions - People of the past were able to scratch out an existence against amazing odds. They were a lot more independent than we are. They were less interdependent than we are.
1984-2005 - Culture wars (Unraveling Era) -
1) Unraveling of Societal direction after World War II - No direction at all
2) Maximum acceptance of individual rights
3) Angry moral arguments based on individual groups
4) Increasingly paralyzed government, public trust failing
5) Public mood changes after 9/11 and Katrina
2005 - ??? - Clash of civilization -
1) Totally paralyzed government
2) Real Estate and Credit bubbles
3) Public increasingly anxious over finances and world affairs
4) The rest is to be determined
Counting on the Hero Generation
1) Worried about trivialities like texting. They don't have much to say. They want money based on old assumptions and expect it to be handed to them.
2) We have to protect them as much as we can even if we have to give up our own perceptions and biases. We need to determine (be participants in) history and effect change. If we are passive, then we will end up being victims of history.
3) It can be very costly to play the "Hero."
Too great a sacrifice for our children - Repeating the history of the WWII generation
1) They will do great things (like the WWII generation was forced to do).
2) They will give their children peace and a higher standard of living (through sacrifice).
3) They could end up in war and pay for it with their lives.
4) Should we not be willing to make the sacrifice and not force it upon them? Drop the hotpoint issues, ideologies, isms, and misconceptions. Starve the beast (big government) and start asking questions. Be our own best leaders and heroes.
The Hound agrees with what Warren states above. We are setting the current younger generation up for failure. They are going to be forced to pick up the pieces of bad policies that they did not conceive.
Look at all of the third rails that politicians have chosen not to deal with, because they have chosen their career paths over leadership. I don't think the people of today can fathom the mindset of our forefathers, who conceived an idea of public servitude over aristocracy. What do we have today, other than an elected aristocracy, who in many cases feel like they do not have to represent the will of the public.
Look at the healthcare system. Everyone other than insurance companies, lawyers, and pharmaceutical companies are looking to lose on this deal, as it stands. Yet, the older generations only seem to be looking at the effects on medicare. What about the effects on 20 and 30-somethings, who don't go to the doctor much, but are expected to foot the bill for older generations. Is that fair?
Look at Social Security, the world's grandest Ponzi Scheme. Who amongst us feels that future generations are going to receive benefits commensurate with what they are expected to put into the system. There seems to be a pattern here. We have built our social and economic foundation around the model of a used car lot. Go ahead and take it home today and we'll worry about the details tomorrow.
The Current Economic Realities we as a country face are the greatest since its inception. It is ridiculous that no one cares about the ramifications of what has been done. When you start talking about the numbers people get this blank stare and then they intellectually shut down. To me that is where I start questioning my thoughts on an issue. If I don't understand the issue, then I start digging into it until I can resolve it somehow, otherwise I am unsettled. People you must wake up. You have been sold a bill of goods.
The debt that this country faces is not fair to future generations, who will not reap the benefits. This has become a matter of national security. We owe these foreign nations all of this money and one day they are going to come to collect. The future generations will have to be brave to maneuver through this elaborate mess left behind by decades of mismanagement and gluttony. They will be forced to make courageous decisions in foreign relations, while not having a position of strength to fall back on.
So it is time that we start getting our country back on the right track. I think much of what we are going through is what Dr. Elizabeth Kubler-Ross labeled the five stages of grief - denial. anger, bargaining, depression, and acceptance. I think our country has entered the anger stage and by the end of 2010, we will have met that phase full-on. In the next year and a half it will start sinking in and we will realize that elections aren't a quick-fix and no matter what we do, there will be a tough road ahead and by the Spring of 2011 we will enter into the bargaining phase.
I have been two steps ahead of the public on this. I am in the depression phase when it comes to our economy. I don't think people will wake up until its too late. People do not understand or care about economics and finance. That is what has allowed them to be fleeced. Look at all of the athletes who have been fleeced. It is the exact same thing.
If you do care, please spread the word, please speak up. All we can do is try to affect one person or a couple people at a time. If you want to take the first step towards what Warren Pollock is addressing, then it is time to step forward and speak up about what is happening with our economy and it is important that you lead by example in taking care of your own personal finances. Get out of Debt. We can't change things over night, but we have to start somewhere.
Friday, December 25, 2009
Merry Christmas 2009
Let me tell you about how I am blessed. We had our annual extended family get together for Christmas Eve. My sister Angie made potato soup and spinach dip. I made Sub Sandwiches with Roast Beef, Salami, Turkey, Pepperoni. Provolone, Parmesan, Olive Oil, Vinegar, Italian Spices, on Toasted Cobblestone sub rolls. Then others brought stuffed cheesy mini potatoes, stuffed mushrooms, I made fresh salsa with my tomatoes from summer, we had nacho cheese dip, a Rotel & sausage cheese dip, banana bread, pound cake, and a stuffed raspberry pastry.Tomorrow, I will be roasting a Standing Rib Roast, baking cheese souffle mashed potatoes, sauteing asparagus, my mother is bring the shrimp cocktail, fresh salad, homemade bleu cheese dressing, and my sister is bringing something else and we are having cheesecake for dessert.
You know, I might not have much, but at least I get to eat some of the best food in the world. My family doesn't care about the eating part, we love good food... Perfect Food... and that goes for both sides of the family. That is truly something I get to be thankful for. That I have gotten to savor excellent food for the greatest majority of my life. In that manner, I can truly say that I am blessed. And anyone who knows and has been touched by my family will admit to that.
That is one thing that I can truly be thankful that God has provided me in this life -- Great Food. And it is always nice to have family and friends at my house on Christmas Eve. It would be nice if every day could have a touch of Christmas.
Have a Merry Christmas and we'll see you soon,
James Thomas Shell
Monday, December 21, 2009
The Thermodynamic Economy and the Era of Peak Oil
Fiat Currency - Fiat money is money declared by a government to be legal tender. The term derives from the Latin fiat, meaning "let it be done". Fiat money achieves value because a government demands it in payment of taxes and says it should be used within the country as a tender (offering) to pay all debts. In effect, this validates it to be used to buy and sell goods and services and mandates it to pay tax. Where fiat money is used as currency, the term fiat currency is used. Today, most national currencies, including the major reserve currencies, i.e. US dollar, euro, and pound sterling, are fiat currencies.
Fractional Reserve Banking - Fractional-reserve banking is the banking practice in which banks keep only a fraction of their deposits in reserve (as cash and other highly liquid assets) and lend out the remainder, while maintaining the simultaneous obligation to redeem all these deposits upon demand. Fractional reserve banking necessarily occurs when banks lend out any fraction of the funds received from deposit accounts. This practice is universal in modern banking, as opposed to full-reserve banking.
By its nature, the practice of fractional reserve banking expands money supply (cash and demand deposits) beyond what it would otherwise be. Because of the prevalence of fractional reserve banking, the broad money supply of most countries is a multiple larger than the amount of base money created by the country's central bank. That multiple (called the money multiplier) is determined by the reserve requirement or other financial ratio requirements imposed by financial regulators, and by commercial decisions by bank on whether to lend out reserves (creating money) or not lend out the reserves (creating excess reserves).
Central banks generally mandate reserve requirements that require banks to keep a minimum fraction of their demand deposits as cash reserves. This both limits the amount of money creation that occurs in the commercial banking system, and ensures that banks have enough ready cash to meet normal demand for withdrawals. Problems can arise, however, when a large number of depositors seek withdrawal of their deposits; this can cause a bank run or, when problems are extreme and widespread, a systemic crisis. To mitigate these problems, central banks (or other government institutions) generally regulate and oversee commercial banks, act as lender of last resort to commercial banks, and also insure the deposits of the commercial banks' customers.
Compound Interest - Compound interest arises when interest is added to the principal, so that from that moment on, the interest that has been added also itself earns interest. This addition of interest to the principal is called compounding (i.e. the interest is compounded). A loan, for example, may have its interest compounded every month: in this case, a loan with $100 initial principal and 1% interest per month would have a balance of $101 at the end of the first month, $102.01 at the end of the second month, and so on.
Pyramid Scheme - A pyramid scheme is a non-sustainable business model that involves the exchange of money primarily for enrolling other people into the scheme, often without any product or service being delivered. Pyramid Schemes are based on an Infinite Growth paradigm, which is impossible to achieve. The Pyramid Scheme depends on a constant supply of investors on the back end to pay dividends to initial and subsequent investors. Once the investors on the back end dry up or initial investors begin taking out more capital than is being produced on the back end, by latter investors, then the pool of assets begins its rapid decline and collapse.
This permits the issuing country to purchase the commodities at a marginally lower rate than other nations, which must exchange their currency with each purchase and pay a transaction cost. (For major currencies, this transaction cost is negligible with respect to the price of the commodity.) It also permits the government issuing the currency to borrow money at a better rate, as there will always be a larger market for that currency than others.
The United States dollar is the most widely held reserve currency in the world today. Throughout the last decade, an average of two thirds of the total allocated foreign exchange reserves of countries have been in U.S. dollars. For this reason, the U.S. dollar is said to have "reserve-currency status," making it somewhat easier for the United States to run higher trade deficits with greatly postponed economic impact (see currency crisis). Central bank reserves held in dollar-denominated debt, however, are small compared to private holdings of such debt. In the event that non-United States holders of dollar-denominated assets decided to shift holdings to assets denominated in other currencies, there could be serious consequences for the U.S. economy. Changes of this kind are rare, and typically change takes place gradually over time; the markets involved adjust accordingly.
Petrodollar - A petrodollar is a United States dollar earned by a country through the sale of petroleum. The term was coined by Ibrahim Oweiss, a professor of economics at Georgetown University, in 1973. Oweiss felt there was a need for a word to describe the situation then occurring in oil producing, OPEC countries which were earning large amounts of money, in dollars, from oil production.
Thermodynamics - In physics, thermodynamics is the study of the conversion of energy into work and heat and its relation to macroscopic variables such as temperature, volume and pressure. Its progenitor, based on statistical predictions of the collective motion of particles from their microscopic behavior, is the field of statistical thermodynamics (or statistical mechanics), a branch of statistical physics. Historically, thermodynamics developed out of need to increase the efficiency of early steam engines.
The Hound ties it together- We have already seen the dilemma of Peak Oil in the United States. It is cheaper to pay the Middle East for their oil (low hanging fruit), than it is to explore and develop our own resources. The Oil bought with these Petrodollars are what established the United States Dollar as the World's Reserve Currency and empowered autocratic authorities throughout the Middle East.
There in lies the dilemma of the low hanging fruit. At what cost to our society has this been done. How much hidden cost has been accumulated due to these wars we are waging half way around the world in the Middle East, because of our addiction to that oil? We all know if there was nothing but desert there, then we would not be there. The upfront cost seems to be a bargain to those who look at the simple equation of what is paid at the pump, but the ancillary hidden costs are never entered into the equation. Look at the dealings in the Middle East, look at the strategic race to lock up control of the reserves around the globe, look at the complex costs of exploration, and then get deep in your mind and think of the multitude of ancillary costs involved.
I don't want to hear the blame game, gotcha, or I told you so; because that pettiness isn't going to save us. I'm not saying Oil is bad. I don't think we can stop utilizing fossil fuels over night and trying to do so will mire us further into a deeper, prolonged economic contraction. This isn't some kind of Peter Pan dream. What I am trying to convey to you, is it is time to start the transition. It is time to start getting serious about this issue of building a bridge to the future and I am not talking about doing this through the usual methods of Authoritarian Hyperbole that has the dogs chasing their tails. What I am talking about is waking people up to reality.
We aren't going to run out of oil tomorrow, but with the growth of population on the planet and the demand for energy, in my opinion we are definitely at the top of the bell curve when it comes to the "Age of Oil." We are headed straight towards diminishing returns, which means that energy and everything that is a derivative of Oil will become more expensive. Easy Oil is what led to the population growth that we have seen over the last 100 years. Explosive growth has not taken place in the first world, because we have used resources to bring our society out of poverty and educate people and as a result lower the birthrate. The population explosion has continued in the third world where poverty and lack of education thrive.
Reference - Population Today - A publication of the Population Reference Bureau Volume 30, Number 8 November/December 2002 - page 7
Oil has been the cheapest, most plentiful, safest, and efficient Thermodynamic Energy resource in the history of humanity. There is corollary evidence that proves Oil as energy allowed the human race to grow at an exponential rate over the last 110 years. As of July 1, 2008 World population has grown to 6.7 Billion people, that is more than a 4-fold increase since 1900 and a 2 3/4-fold increase since 1950. It took 1,850 years (from 1 AD to 1850 AD) to increase the population 4-fold and only 160 years to increase the population 5 1/4 fold. This has all been done at a time when the worldwide birthrate has been cut in half.
What does this signify? That we are living in an era that should be treated seriously, but instead we are living in a societal era of moral and intellectual ambivalence at best and decay at worst. It seems that very few of us care, when we are living in a time of the most extraordinary growth in Human History. How many people today even realize how far we have come? This growth should not be taken for granted. It will not necessarily go on forever. It may even come to a standstill.
When I point to the negative consequences of today's economic numbers, I am treated like a pariah. I'm sorry that I can't live on ignorance and/or blind faith. If Oil producing nations decide to refuse our currency and it no longer garners reserve status, then we have to convert the currency into one that they will accept. There are fees that are attached to such conversions and thus oil is that much more expensive to purchase. If dollars come flowing back into the U.S., because foreign nations and people don't want them, then like having more stock shares available, supply and demand, the dollar will devalue further and thus oil will be even more expensive. Are you getting the point?
When it finally hits the fan, who will be panicking? I believe it will be the blissfully ignorant, those who refuse to prepare, and those who refuse to think.
I am not saying that you should not enjoy your life. You should, but life is about more than pleasure and instant gratification. We are morally obligated to leave this planet in better shape than it is left to us. We need balance and I am not talking about stifling growth until there is no growth. We need to be investing this country's assets towards building the infrastructure of the future. The fact that Oil will not last forever must be entered into the equation. We need to start utilizing our minds, our skills, our energy, and our collective soul to dig our way out of this hole we have created for ourselves. It is time.
We need to educate ourselves about the realities we face as a society. We really do need more people to spread the word about these challenges and we must restore accountability in the process. We need more problem solvers, instead of problem causers and we need to get away from silly political gamesmanship and self-aggrandizement.
What we are seeing today in our economy is the result of ignoring the signals. Our whole economy has been tied to Oil and the Oil Age is heading over the hill. There is an old saying, "Live by the sword and die by the sword." Oil is our sword. We conquered the World because of it and now we may lose our Empire if we don't adapt to the next energy source(s), whatever those may be, and a world with dwindling Oil supplies.
The signals have been there for quite some time and crazy amounts of resources, including but not limited to human capital, time, and money have been used to obfuscate the energy issue. Ignoring the signals is leading to a time of reckoning. Please join the cause and spread the word before its too late. History has proven that if Americans work together, they can do anything.
Fractional Reserve Banking - Fractional-reserve banking is the banking practice in which banks keep only a fraction of their deposits in reserve (as cash and other highly liquid assets) and lend out the remainder, while maintaining the simultaneous obligation to redeem all these deposits upon demand. Fractional reserve banking necessarily occurs when banks lend out any fraction of the funds received from deposit accounts. This practice is universal in modern banking, as opposed to full-reserve banking.
By its nature, the practice of fractional reserve banking expands money supply (cash and demand deposits) beyond what it would otherwise be. Because of the prevalence of fractional reserve banking, the broad money supply of most countries is a multiple larger than the amount of base money created by the country's central bank. That multiple (called the money multiplier) is determined by the reserve requirement or other financial ratio requirements imposed by financial regulators, and by commercial decisions by bank on whether to lend out reserves (creating money) or not lend out the reserves (creating excess reserves).
Central banks generally mandate reserve requirements that require banks to keep a minimum fraction of their demand deposits as cash reserves. This both limits the amount of money creation that occurs in the commercial banking system, and ensures that banks have enough ready cash to meet normal demand for withdrawals. Problems can arise, however, when a large number of depositors seek withdrawal of their deposits; this can cause a bank run or, when problems are extreme and widespread, a systemic crisis. To mitigate these problems, central banks (or other government institutions) generally regulate and oversee commercial banks, act as lender of last resort to commercial banks, and also insure the deposits of the commercial banks' customers.
Compound Interest - Compound interest arises when interest is added to the principal, so that from that moment on, the interest that has been added also itself earns interest. This addition of interest to the principal is called compounding (i.e. the interest is compounded). A loan, for example, may have its interest compounded every month: in this case, a loan with $100 initial principal and 1% interest per month would have a balance of $101 at the end of the first month, $102.01 at the end of the second month, and so on.
Pyramid Scheme - A pyramid scheme is a non-sustainable business model that involves the exchange of money primarily for enrolling other people into the scheme, often without any product or service being delivered. Pyramid Schemes are based on an Infinite Growth paradigm, which is impossible to achieve. The Pyramid Scheme depends on a constant supply of investors on the back end to pay dividends to initial and subsequent investors. Once the investors on the back end dry up or initial investors begin taking out more capital than is being produced on the back end, by latter investors, then the pool of assets begins its rapid decline and collapse.
Infinite Growth Paradigm - Is a philosophy that growth of a commodity or tangible asset can continue forever at an constantly increasing rate.Reserve Currency - A reserve currency (or anchor currency) is a currency which is held in significant quantities by many governments and institutions as part of their foreign exchange reserves. It also tends to be the international pricing currency for products traded on a global market, such as oil, gold, etc.
This permits the issuing country to purchase the commodities at a marginally lower rate than other nations, which must exchange their currency with each purchase and pay a transaction cost. (For major currencies, this transaction cost is negligible with respect to the price of the commodity.) It also permits the government issuing the currency to borrow money at a better rate, as there will always be a larger market for that currency than others.
The United States dollar is the most widely held reserve currency in the world today. Throughout the last decade, an average of two thirds of the total allocated foreign exchange reserves of countries have been in U.S. dollars. For this reason, the U.S. dollar is said to have "reserve-currency status," making it somewhat easier for the United States to run higher trade deficits with greatly postponed economic impact (see currency crisis). Central bank reserves held in dollar-denominated debt, however, are small compared to private holdings of such debt. In the event that non-United States holders of dollar-denominated assets decided to shift holdings to assets denominated in other currencies, there could be serious consequences for the U.S. economy. Changes of this kind are rare, and typically change takes place gradually over time; the markets involved adjust accordingly.
Petrodollar - A petrodollar is a United States dollar earned by a country through the sale of petroleum. The term was coined by Ibrahim Oweiss, a professor of economics at Georgetown University, in 1973. Oweiss felt there was a need for a word to describe the situation then occurring in oil producing, OPEC countries which were earning large amounts of money, in dollars, from oil production.Thermodynamics - In physics, thermodynamics is the study of the conversion of energy into work and heat and its relation to macroscopic variables such as temperature, volume and pressure. Its progenitor, based on statistical predictions of the collective motion of particles from their microscopic behavior, is the field of statistical thermodynamics (or statistical mechanics), a branch of statistical physics. Historically, thermodynamics developed out of need to increase the efficiency of early steam engines.
* First law of thermodynamics, about the conservation of energy: The change in the internal energy of a closed thermodynamic system is equal to the sum of the amount of heat energy supplied to or removed from the system and the work done on or by the system or we can say " In an isolated system the heat is constant".
* Second law of thermodynamics, about entropy: The total entropy of any isolated thermodynamic system always increases over time, approaching a maximum value or we can say " in an isolated system, the entropy never decreases". Heat energy cannot be transferred from a material of lesser to a material of greater.
* Third law of thermodynamics, about the absolute zero of temperature: As a system asymptotically approaches absolute zero of temperature all processes virtually cease and the entropy of the system asymptotically approaches a minimum value; also stated as: "the entropy of all systems and of all states of a system is zero at absolute zero" or equivalently "it is impossible to reach the absolute zero of temperature by any finite number of processes."
Entropy - a function of thermodynamic variables, such as temperature, pressure, or composition, that is a measure of the energy that is not available for work during a thermodynamic process. *** What this is stating in layman's terms is that energy is not 100% efficient in it's process and as the process moves along the time variable more of the mass becomes inert until it produces no energy.Peak Oil - Peak oil is the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline. The concept is based on the observed production rates of individual oil wells, and the combined production rate of a field of related oil wells. The aggregate production rate from an oil field over time usually grows exponentially until the rate peaks and then declines—sometimes rapidly—until the field is depleted.
Finite Commodity Supply vs Infinite Growth Demands - No matter how anyone presents the facts, there are a finite amount of resources on this earth. When we figure out ways to use these resources, we create value and these resources become tangible assets (commodities).
Initially, when we develop these resources, it is easy to produce the commodity -- what many call low hanging fruit. But, with all finite resources as we begin utilizing the resources more and more to an exponential degree they become harder to find and it becomes a more costly process to develop these resources. Eventually the cost of exploration and development of these resources will be more costly than the value of the commodity itself.
The five phases of the Organizational Life Cycle are birth, growth, maturation, decline, and death. If you boil it all down, then you see that this is true of every entity on this earth. Nothing of this Earth lasts forever.
The Hound ties it together- We have already seen the dilemma of Peak Oil in the United States. It is cheaper to pay the Middle East for their oil (low hanging fruit), than it is to explore and develop our own resources. The Oil bought with these Petrodollars are what established the United States Dollar as the World's Reserve Currency and empowered autocratic authorities throughout the Middle East. There in lies the dilemma of the low hanging fruit. At what cost to our society has this been done. How much hidden cost has been accumulated due to these wars we are waging half way around the world in the Middle East, because of our addiction to that oil? We all know if there was nothing but desert there, then we would not be there. The upfront cost seems to be a bargain to those who look at the simple equation of what is paid at the pump, but the ancillary hidden costs are never entered into the equation. Look at the dealings in the Middle East, look at the strategic race to lock up control of the reserves around the globe, look at the complex costs of exploration, and then get deep in your mind and think of the multitude of ancillary costs involved.
I don't want to hear the blame game, gotcha, or I told you so; because that pettiness isn't going to save us. I'm not saying Oil is bad. I don't think we can stop utilizing fossil fuels over night and trying to do so will mire us further into a deeper, prolonged economic contraction. This isn't some kind of Peter Pan dream. What I am trying to convey to you, is it is time to start the transition. It is time to start getting serious about this issue of building a bridge to the future and I am not talking about doing this through the usual methods of Authoritarian Hyperbole that has the dogs chasing their tails. What I am talking about is waking people up to reality.
We aren't going to run out of oil tomorrow, but with the growth of population on the planet and the demand for energy, in my opinion we are definitely at the top of the bell curve when it comes to the "Age of Oil." We are headed straight towards diminishing returns, which means that energy and everything that is a derivative of Oil will become more expensive. Easy Oil is what led to the population growth that we have seen over the last 100 years. Explosive growth has not taken place in the first world, because we have used resources to bring our society out of poverty and educate people and as a result lower the birthrate. The population explosion has continued in the third world where poverty and lack of education thrive.
Reference - Population Today - A publication of the Population Reference Bureau Volume 30, Number 8 November/December 2002 - page 7Oil has been the cheapest, most plentiful, safest, and efficient Thermodynamic Energy resource in the history of humanity. There is corollary evidence that proves Oil as energy allowed the human race to grow at an exponential rate over the last 110 years. As of July 1, 2008 World population has grown to 6.7 Billion people, that is more than a 4-fold increase since 1900 and a 2 3/4-fold increase since 1950. It took 1,850 years (from 1 AD to 1850 AD) to increase the population 4-fold and only 160 years to increase the population 5 1/4 fold. This has all been done at a time when the worldwide birthrate has been cut in half.
What does this signify? That we are living in an era that should be treated seriously, but instead we are living in a societal era of moral and intellectual ambivalence at best and decay at worst. It seems that very few of us care, when we are living in a time of the most extraordinary growth in Human History. How many people today even realize how far we have come? This growth should not be taken for granted. It will not necessarily go on forever. It may even come to a standstill.
When I point to the negative consequences of today's economic numbers, I am treated like a pariah. I'm sorry that I can't live on ignorance and/or blind faith. If Oil producing nations decide to refuse our currency and it no longer garners reserve status, then we have to convert the currency into one that they will accept. There are fees that are attached to such conversions and thus oil is that much more expensive to purchase. If dollars come flowing back into the U.S., because foreign nations and people don't want them, then like having more stock shares available, supply and demand, the dollar will devalue further and thus oil will be even more expensive. Are you getting the point?
When it finally hits the fan, who will be panicking? I believe it will be the blissfully ignorant, those who refuse to prepare, and those who refuse to think.
I am not saying that you should not enjoy your life. You should, but life is about more than pleasure and instant gratification. We are morally obligated to leave this planet in better shape than it is left to us. We need balance and I am not talking about stifling growth until there is no growth. We need to be investing this country's assets towards building the infrastructure of the future. The fact that Oil will not last forever must be entered into the equation. We need to start utilizing our minds, our skills, our energy, and our collective soul to dig our way out of this hole we have created for ourselves. It is time.
We need to educate ourselves about the realities we face as a society. We really do need more people to spread the word about these challenges and we must restore accountability in the process. We need more problem solvers, instead of problem causers and we need to get away from silly political gamesmanship and self-aggrandizement.
What we are seeing today in our economy is the result of ignoring the signals. Our whole economy has been tied to Oil and the Oil Age is heading over the hill. There is an old saying, "Live by the sword and die by the sword." Oil is our sword. We conquered the World because of it and now we may lose our Empire if we don't adapt to the next energy source(s), whatever those may be, and a world with dwindling Oil supplies.
The signals have been there for quite some time and crazy amounts of resources, including but not limited to human capital, time, and money have been used to obfuscate the energy issue. Ignoring the signals is leading to a time of reckoning. Please join the cause and spread the word before its too late. History has proven that if Americans work together, they can do anything.
Friday, December 18, 2009
The Future Economy Council, Houston Harris, The Granary
The following FEC meeting was held at The Granary on November 19, 2009, which is Houston Harris's building that houses his businesses Pixel Space and InterOpsis. There are also other businesses located within this structure. The building is on Main Avenue across from Lenoir-Rhyne University.This is a beautifully restructured building. It is a wonderful metaphor for what Hickory was and what it can be transformed into.
Below I give a brief summary of what direction the meeting took. For specific details you will need to download the audio and listen. These are excellent, and in many ways, cutting edge discussions. I think that when we look back at these times, in the future, that we will see that many seeds were sown during these discussions and that these discussions bore the fruit of the future. But in the end, time will tell and it is our task to carry these ideas to fruition.
Part 1 - audio
Introductions were made. Terry Bledsoe had some opening comments. He talked about the Master Capacity Builder program. He stated that he believed the FEC has begun to mature and gave examples how. He talked about being at the Economic Development Corporation's meeting the previous week. At that meeting it was stated that 41.8% of all private investment in North Carolina in 2009 has come to Catawba County this year. He also had some information about business closings in Catawba County, in which he stated 6 businesses have closed in the last two years -- some people were stating that these were not valid statistics. Nathan Huret stated that the numbers show that businesses have reduced (employment), but not left. Steve Ivester stated that people are concerned, but not defeated. Terry stated that the EDC is focused on industry, but they are looking for other opportunities for development. Nathan stated that the EDC is looking for emerging trends and they would like for people to contact them with/about interesting opportunities and/or articles.
Part 2 - audio
Dr. John Brzorad talked about Agriburbia and introduces the topic. Rick Smyre addresses the positives of local food production. Doug Rongo and myself (Thom Shell) talk about the economic and capital infusion of foreign investment into the local area. Harry Hipps talks about new energy investment in our local area. Terry Bledsoe speaks about the Agricultural resource Center and saving local farms. Dr. Brzorad talks about building a relationship with the farmers in the area. Steve Ivester says we will have to change local zoning and tax policy. Houston Harris asks how do we support this? Harry Hipps talks about what is being done in Polk county and Nathan states that Rutherford county is doing the same thing.
Part 3 - audio
Houston Harris started talking about his businesses Pixel Space and InterOpsis. He stated that it is very difficult to say what they are. They touch IT, Marketing, sales, Infrastructure/Workflow deliverable engagements... He spoke about how he deals with part-timers and free-lancers to do the job. He needs networks of people who have certain skills. They touch people and projects everywhere. He explains the global nature of his business.
Pixelspace is about interaction architechture. They create brochures, create IT projects consisting of measurables, create web pages, resource mode. Houston's businesses operate in a 24-hour environment. They use traditional and new media channels to get messages out and create interaction points. Ultimately they have to identify who they are talking to, how are they going to attract them, how are they going to inform them... Once they identify prospects, then they turn to sales.
Part 4 - audio
InterOpsis is about what a company's web operations should be doing. How to increase web presence, increase conversions, generate leads, improve visitor experience, are you setting the right tone, are you communicating with your customer properly. Houston stated that they use many analytical software tools for measurables to find the "sweet spot." You need high level stakeholders to buy into this in order for it to be effective. InterOpsis does not require you to use Pixelspace.
Houston talks about how his building "the Granary" works. He wants to fill the gap for people who need a a professional space, but don't want to break the bank (affordable). He states that it is not an incubator, because they aren't subsidizing businesses. They are a communal (shared space) arrangement. This building allows people to have a personal space to have meetings, without having a huge expense.
Part 5 - audio
The Granary - The goal is 3 phases. Number one is to get the exterior up-fitted and get more parking. Houston's companies are an anomaly, because only about 10% of his clientele are from Hickory. The Granary will be home to multiple diverse businesses, but he currently has space available and will be further developing the building as needed. Houston also talked about his dealings with the city on grants and on license fees. He stated that Entrepreneurs work in the gray area and the city operates in a process of black and white.
Part 6 - audio
Steve Ivester spoke about the semantics of manufacturing and Value Added Goods. Value Added Services are as valuable as anything else. Danny Hearn stated that we want to identify and create more Houston Harris's and Michael McNeely's. How do we go about that? Houston spoke of mentoring and stated how important it is to be around people with experience. He talked about collaboration and connections and developing skills, being open and sharing. He wants to be able go see people face-to-face and sometimes that is hard to do in a global operation, such as his.
He had some excellent ideas about the bandwidth of personal communication and relationships and chemistry. I stated that there is a lot of fear around here, because the new world is not built around structure, so people feel a sense of loss. Houston agreed, but also stated that creative people don't like structure and they need to have someone with structure around them to keep them focused. I stated that I believe that the (regimented) structure is going to have to be broken down. Houston says that he believes that it is going to break down automatically, life does that. It's about learning to adapt and being willing to adapt. Terry stated that what Houston stated about face-to-face interaction and the global world seem to be conflicts, how does he do this? Houston stated he just does it. He does what he has to do. I asked about the effectiveness of teleconferencing. Jay Adams talked about learning to listen and choose your words carefully. You figure it out as you go and it's hard to capture what the techniques are. Houston said a lot of it has to do with the age of who you are communicating with. The younger person trusts the new system and the older guy wants to look you in the eye and see if you are full of it.
Houston talked about "Free Range Chicken thinking." He says he wants to be the oldest rooster in the yard. Their life is different from a coup raised chicken, they want to survive. They are lean, they have to move fast, they've got to find some food, they've got to run from that ax, eventually they will get caught, but the free range chicken has an attitude about survival. They adapt and try new things. Thinking is about finding those things and keeping your brain in this mode of what's new -- I can't be afraid of this.
Rick Smyre close - audio
What Houston has expressed is the Creative Molecular Economy. How does Catawba County develop a brand as cutting edge to the rest of the country? We need to seed the concepts. Rick discusses this and ties in what we have said into the principles of developing connections, collaborative efforts, the creative molecular economy, and Master Capacity Building.
Project3P Blog
Below I give a brief summary of what direction the meeting took. For specific details you will need to download the audio and listen. These are excellent, and in many ways, cutting edge discussions. I think that when we look back at these times, in the future, that we will see that many seeds were sown during these discussions and that these discussions bore the fruit of the future. But in the end, time will tell and it is our task to carry these ideas to fruition.
Part 1 - audio
Introductions were made. Terry Bledsoe had some opening comments. He talked about the Master Capacity Builder program. He stated that he believed the FEC has begun to mature and gave examples how. He talked about being at the Economic Development Corporation's meeting the previous week. At that meeting it was stated that 41.8% of all private investment in North Carolina in 2009 has come to Catawba County this year. He also had some information about business closings in Catawba County, in which he stated 6 businesses have closed in the last two years -- some people were stating that these were not valid statistics. Nathan Huret stated that the numbers show that businesses have reduced (employment), but not left. Steve Ivester stated that people are concerned, but not defeated. Terry stated that the EDC is focused on industry, but they are looking for other opportunities for development. Nathan stated that the EDC is looking for emerging trends and they would like for people to contact them with/about interesting opportunities and/or articles.
Part 2 - audio
Dr. John Brzorad talked about Agriburbia and introduces the topic. Rick Smyre addresses the positives of local food production. Doug Rongo and myself (Thom Shell) talk about the economic and capital infusion of foreign investment into the local area. Harry Hipps talks about new energy investment in our local area. Terry Bledsoe speaks about the Agricultural resource Center and saving local farms. Dr. Brzorad talks about building a relationship with the farmers in the area. Steve Ivester says we will have to change local zoning and tax policy. Houston Harris asks how do we support this? Harry Hipps talks about what is being done in Polk county and Nathan states that Rutherford county is doing the same thing.
Part 3 - audio
Houston Harris started talking about his businesses Pixel Space and InterOpsis. He stated that it is very difficult to say what they are. They touch IT, Marketing, sales, Infrastructure/Workflow deliverable engagements... He spoke about how he deals with part-timers and free-lancers to do the job. He needs networks of people who have certain skills. They touch people and projects everywhere. He explains the global nature of his business.
Pixelspace is about interaction architechture. They create brochures, create IT projects consisting of measurables, create web pages, resource mode. Houston's businesses operate in a 24-hour environment. They use traditional and new media channels to get messages out and create interaction points. Ultimately they have to identify who they are talking to, how are they going to attract them, how are they going to inform them... Once they identify prospects, then they turn to sales.
Part 4 - audio
InterOpsis is about what a company's web operations should be doing. How to increase web presence, increase conversions, generate leads, improve visitor experience, are you setting the right tone, are you communicating with your customer properly. Houston stated that they use many analytical software tools for measurables to find the "sweet spot." You need high level stakeholders to buy into this in order for it to be effective. InterOpsis does not require you to use Pixelspace.
Houston talks about how his building "the Granary" works. He wants to fill the gap for people who need a a professional space, but don't want to break the bank (affordable). He states that it is not an incubator, because they aren't subsidizing businesses. They are a communal (shared space) arrangement. This building allows people to have a personal space to have meetings, without having a huge expense.
Part 5 - audio
The Granary - The goal is 3 phases. Number one is to get the exterior up-fitted and get more parking. Houston's companies are an anomaly, because only about 10% of his clientele are from Hickory. The Granary will be home to multiple diverse businesses, but he currently has space available and will be further developing the building as needed. Houston also talked about his dealings with the city on grants and on license fees. He stated that Entrepreneurs work in the gray area and the city operates in a process of black and white.
Part 6 - audio
Steve Ivester spoke about the semantics of manufacturing and Value Added Goods. Value Added Services are as valuable as anything else. Danny Hearn stated that we want to identify and create more Houston Harris's and Michael McNeely's. How do we go about that? Houston spoke of mentoring and stated how important it is to be around people with experience. He talked about collaboration and connections and developing skills, being open and sharing. He wants to be able go see people face-to-face and sometimes that is hard to do in a global operation, such as his.
He had some excellent ideas about the bandwidth of personal communication and relationships and chemistry. I stated that there is a lot of fear around here, because the new world is not built around structure, so people feel a sense of loss. Houston agreed, but also stated that creative people don't like structure and they need to have someone with structure around them to keep them focused. I stated that I believe that the (regimented) structure is going to have to be broken down. Houston says that he believes that it is going to break down automatically, life does that. It's about learning to adapt and being willing to adapt. Terry stated that what Houston stated about face-to-face interaction and the global world seem to be conflicts, how does he do this? Houston stated he just does it. He does what he has to do. I asked about the effectiveness of teleconferencing. Jay Adams talked about learning to listen and choose your words carefully. You figure it out as you go and it's hard to capture what the techniques are. Houston said a lot of it has to do with the age of who you are communicating with. The younger person trusts the new system and the older guy wants to look you in the eye and see if you are full of it.
Houston talked about "Free Range Chicken thinking." He says he wants to be the oldest rooster in the yard. Their life is different from a coup raised chicken, they want to survive. They are lean, they have to move fast, they've got to find some food, they've got to run from that ax, eventually they will get caught, but the free range chicken has an attitude about survival. They adapt and try new things. Thinking is about finding those things and keeping your brain in this mode of what's new -- I can't be afraid of this.
Rick Smyre close - audio
What Houston has expressed is the Creative Molecular Economy. How does Catawba County develop a brand as cutting edge to the rest of the country? We need to seed the concepts. Rick discusses this and ties in what we have said into the principles of developing connections, collaborative efforts, the creative molecular economy, and Master Capacity Building.
Project3P Blog
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