Who Says Space Isn’t Important…

There was once a day we soared to the heavens, we commanded the sky! Yet today, our wings clipped we stand on Terra Firma and watch as the world passes us by...

There is a race going and we are not part of it and we all know if you’re not in a race, you can’t be a winner and that is on many fronts.  As Asia’s current space race could also turn into an arms race akin to what we saw in the days of the Cold War.  Well that is I guess according to James Clay Moltz, who is a professor in the Department of National Security Affairs at the Naval Postgraduate School.

As he writes that the major Asian nations, namely China, Japan, India, and South Korea, are all investing monies to expand their space programs [are we? No] with little-to-no cooperation. While these efforts appear to be driven by want of national prestige there also exist geopolitical rivalries, similar to the ones faced by the US and Soviet’s in the space race of the 1960s. The thing is and what most westerners forget is that during the period of the “space race” it stimulated technological advancements which made us who we are today [and thus missing out on for the future].

While competing agendas in Asia are leading to a duplication of work and mistrust among the countries involved.  Where is also the waste of resources while even worse [for us], is this “competition” if you will is also undermining recent cooperation which has been built up between the US, Russia, and Europe.

As unlike here in the west, Asia doesn’t have any type of regional security organization such as NATO.  So when you add this fact with the long-standing feuds seen between  nations such as China & India, India & Pakistan, to of course  North Korea & South Korea, and on and on and on, well you get the idea as cant we all just get along? Means a civilian space race could turn into an arms race as what other good use of could there be for a big rocket, let see [insert thinking time here].  Aah yes, an ICBM and guess what, yes a big rocket makes for bad bomb building techniques.  As thermo nuclear bombs are easy to build, however it’s hard to make them small, so the issue has been one of “delivery”, whereas have big [rocket] then can deliver.

On the other front, each of these nations has performed separate lunar-mapping missions since 2007, with planned follow ups which will include the deployment of rovers, landers, and lunar bases.  Again without any cooperation, even though a lot of the work will be redundant.   Even our friends in Japan are climbing fast with the most human spaceflight experience in the region.  As with 15 manned flights since 1992 along with a paid membership in the International Space Station.  However it has always had to  hitchhike a ride with either us or Russia.

Here China on the other hand as launched its first astronaut in only 2003  along with many follow-up flights since.  To its most recent accomplishment of launching a Tiangong-1 orbital test module for a planned 2020 space station all on its own!  While not to be out done, India who feels a little earth bound has announced  a planned manned flight to take place in 2016. Have to wonder if they are interested in buying a fleet of slightly used space shuttles?

Worth noting is they don’t also plan to stop with manned  spaceflight efforts either, as the three major nations also have plans to deploy their own solutions to the US-maintained Global Positioning System (GPS) satellite network.  In fact, China has already deployed over one third of its planned 35-satellite “BeiDou” network in orbit  Note worthy too is ours are old, theirs are new.

The long story short is we the west are being left behind, we have retired our only good manned way to space and depend now upon others for rides aloft.  We have forgotten how to go to the moon as well as “this that and the other thing”, god speed John Glenn…

China’s Greatest Export…

The new promise land...

What does one do with 1.3 billion people when you have that many with not enough resources to go around?  Well this is the position China is finding itself in these days, as their population clearly out numbers their available natural resources for becoming a self supporting country.  As here both its population and resources fail to match its gross domestic product.

So given this, what is the Red Giant to do?  Well it turns out the answer is simple; you make your largest export not consumer electronics, but people.  Thats right, China’s largest export isn’t the stock on the shelves of the Wall-Mart stores, but the potential folks who stock them.  So to deal with this, the Chinese are setting up shop in other parts of the world. The biggest beneficiary of this migration if you will is Africa.  As it’s here on the Dark Continent where China has been rapidly deploying its presence over the last decade, to countries such as Nigeria, Angola, and many more. During this period, more than 750,000 Chinese have relocated to Africa and at this pace. Some contend this number could easily increase to the hundreds of millions, which would go a long way to hammer a dent into China’s natural resource challenges by taking advantage of Africa’s abundant resources.

Here logistic services via both air and sea routes are building between the two nations as massive deals are struck for commodities, trade, labor and not to mention, yes military cooperation. If one looks, they will find Chinese private schools, and cultural centers popping up in what once was considered out of the way places such as Rwanda, and Nairobi.

Africa on the other hand in this barter gets a willing trade partner that brings with it not only social assistance, however weaponry for its military factions. Additionally, Africa also reaps the “supposed” benefit of jobs and infrastructure building to meet the needs of their new visitors.  Yet is Africa really just getting the short end of the stick, as what is the true value of importing cheap Chinese toys and goods, while they export away their valuable commodities like oil and timber?

As many estimate that upwards of 70 percent of all African timber ends up in Chinese ports, which one can easily see as being part of a massive deforestation process taking place.  Even worse is there are assertions that Chinese mining operations in Africa are staffing their workforces with African laborers who earn less than one Yuan per day, which converts to about 14 cents.  Then there are the weapons which are sent many times as payment to Africa which do no more than simply help fuel the continents many civil wars. As hey if they are spending their time fighting each other, no one is watching what’s leaving the ports are they.

Least one thinks this exodus is limited only to Africa, China has also been reaching out to south of the boarder in Latin America as well.  As they have now bypassed the United States as Brazil’s No. 1 trading partner, and now in second place to the United States in Argentina, Costa Rica, Chile, Peru and Venezuela.

As With a building reach, and a young population ringing the bell at well over a billion people, it’s clear the global financial focus will be on China as its poised to become a true economic superpower…

The World Without A Rudder…

The new rudder? (P.S. Germany I propose a trade, Obama for Merkel and we will even toss in some government bonds to sweeten the deal)

Milk poisoning scandals in China, rioting in London, country defaults in Greece and the list just seems to go on and on doesn’t it?  On top of all of this the lead economic player [America] is no longer suffering only a bad “hangover” from a night out with the boys as in the past, however a full blown case of sclerosis of the liver from many years of over spending to the likes of which will surely lead them to India for a transplant because it’s cheaper and no one will loan them money any more.

As think of it this way, the top nations of the world are all fighting their own battles either internally as we see happening in the UK as well as in the former Soviet Union, to other outward battles as in Afghanistan, Iraq, Libya and this list too keeps going on much as does the famed Energizer Bunny.  So in all of this where is the Stalwart Rudder of the world today as it sure isn’t the players of old as only ones on global scene who seem to have their act together and speaking of a “stalwart nation” is Germany.  As under Merkel’s watch they have kept their spending (somewhat) in check and while they do feel the pressures of their social programs financially, they still appear to be making ends meet.

In fact their biggest threat is they appear to depend too much on those (countries) who are failing thus run the risk of going down the drain with them too.  However being in this damned if you do and damned if you don’t position, Merkel has kept her cool, tackling these hard problems head on and without emotion.  Also keep in mind this is all after the reunification of her country only a little over two decades ago.

Yet one has to find interesting the fact that you don’t see the press labeling her as “The Iron Maiden” as they did Margret Thatcher when she ruled the commonwealth with an iron grip.  Instead her quiet clam and steely coldness seem to add to her rote ability to deliver the goods rather than flaunt “charisma” and provide lip service to the masses (as seems to be the case here in the States).

Could it be that we find the world’s new rudder, set in the world’s fourth largest economy neatly tucked away in the Black Forest.  While it might be too early to call this one, the Hand writing appears to be forming on the wall…

Germany to the Rescue…

Angela how do you feel about the Euro?

As the euro crises races forward with Greece hitting the economic wall and spinning out of control, we see the country of Portugal closely on their tail now caught up in the mayhem of a classic Formula 1 crash!  However to make matters even worse for our friends on that side of the pond is this doesn’t appear to be the end as it’s clear that the killer wall of “economic over indulgence” now has its sights set on Spain and possibly even our French friends which leads me to ask two questions.

The first is why “Germany” as they have similar social systems as their European brethren and especially their comrades in euro (currency) arms who are in trouble today.  While they sport the world’s fourth largest economy (America, China, Japan and Germany) there has to be limits as too how much money they can dole out before the economic reaper shows up in Bonn to collect his due.

Also how much are the working German people going to stand for becoming the central bank (lender) to a bunch of countries who for one refuse to acknowledge their spending indiscretions and two have done nothing really to change their ways either.  Seems to me that this is simply a kin to another Fukushima Daiichi waiting to happen all over again as the economic tsunami will strike further inland this time.

However in fact we might find part of the answer to the second (question) in the first as the second is “why“, why are our Germanic friends bailing out all of these folks, is it simply the goodness in Angela Merkels heart as she says with a frown she is 100 percent behind supporting the euro at basically all costs.  However what is the cost and back to question and answer to say how is that Germany the world’s fourth largest economy anyway?

The answer is simple as with the US and China, who are buying products from the one bailing them out. Say for example if the cash stayed inside of say Greece would there be this issue?  The answer is no as the cash would have recycled itself, however in an unbalanced economy, open economic systems spell doom.

Now this isn’t protection talk either as it’s the application of common sense that budget being “budgets” must be balanced by nature otherwise you start to fund at least in essence your countries GDP with debentures meaning bonds which are loans, and “loans” are intended to be paid back.  As GDP (Gross Domestic Product) is the output of a country, basically it’s sales if you will.  So the out flow (spending) of a government is an under pinning part of that GDP, therefore when a government borrows money to fund its debt.  It is in fact creating a false GDP when its borrowings cross from being simple operating  efficiency as there are good reasons for governments to borrow somewhat.

However the issue arises when borrowing turns from providing an operating advantage, to being a strategic necessity to support countries GDP.  This is not only true on the euro side of the pond however this side of the Atlantic too as the American debt is pushing 10% of GDP meaning we are 20 percent short as we owe 10% and have a gap of 10% meaning my friends we too are looking at a deep hole if you what I mean, wonder if the Germans will bail us out too once the Chinese grow wry of contained currency devaluation…

Life with $5 Dollar Gas…

Your Consuming Competition...

The reality of sustained $5 dollar (USD) gasoline is fast approaching as it’s so close we could safely add it to the list of perpetual eventualities such as death and taxes.  As one can argue and moan about life being unfair, it is a reality of a capitalistic life style that the knife cuts both ways as what is given, can also be raised in price when driven by opportunity.  While still the best economic system out there, it does suffer one major flaw and that is education as even when growing up, my “public school” education only taught me that “capitalism” was all about competition driving prices down and it favored the consumer.

To insure these capitalistic truths there  was born the FTC (Federal Trade Commission) to ensure the likes of no one company dominated a market to a point we they could “fix a price” or create an artificial economy.  Then there is the “Justice” depart to guard against and punish companies for winking one too many times at each other in a loving way to insure to “set prices” in a non-competitive manor.  In essence the list goes on to the likes of the SEC (Securities Exchange Commission) who protects us from the false hoods and wrong doings of those that make the market, so on and on.

Yet what that public school teachers forgot to explain is that the “consumer” is also a “competitor” for products and services as capitalism is a “zero sum” game in that there is only so much gasoline, money, cars, etc to go around so distributions will not be static as they live in a semi-chaotic system thus they just cannot.  As if I’m willing to pay more for a product, why shouldn’t the company sell it to me and not you?

As written in prior posts, China in 2011 & 2012 as the foreseeable future will be the new kings of automotive purchasing and what will all those cars need?  Oil changes and new tires, yes however more importantly they will need gas and lots of it as there will be lots of them to burn it.  In addition, unlike the United States where the fixed base of cars is relatively steady meaning when a new car is purchased, typically somewhere down the chain one is  removed from the road to be retired to the scrap yard to rest in pieces.  So in essence [fuel] consumption is steady and actually since the retired vehicles are older models and less fuel efficient then the newer ones, the overall average improves.

Yet in China, there is an important difference as not only is their burgeoning middle class buying gasoline powered cars, these are additional units in the greater scheme “adding” to the existing world demand for oil rather than just holding the  party line on existing capacity.  Also since the price of gasoline will be high to them also they will buy more fuel efficient cars and the math would seem to favor economy that would be false as this will simply drive up usage on an individual basis because it will be “more affordable”.  However when you do the math and multiply the “effect” across all the units (cars) we will find our ole friends the power laws kick in to yet drive aggregated consumption even higher, faster.  Its as the old wives-tale goes, if all the butterflies in China flap their wings at once, you will get a hurricane…

Gendercide, the New Dirty Truth…

Where are the Girls?

A recent article in the Economist caught my personal attention as it shared current census data from India which exposed a scary trend if you will.  As the statistics documented that the numbers of female births are on the decline in reference to what would be expected in a normal distribution of this nature.  While on the surface one might say this is simply a statistical aberration of the numbers and not worthy of anyone’s concern.

As if we were to look at India’s neighbor China, we see this has been a trend for sometime as with their one child rule, femicide has become a common practice along with various forms of abandonment.  In fact one of the most haunting moments of my life occurred while standing on the street in the PuShi Province (China) waiting for a cab one evening.  As out of the shrubbery at the side of the road ran a young girl toward me with a small bundle in her arms which she deposited into mine while crying a cry the likes I’ve never seen before.  In this bundle was a small baby girl, who was now looking up at me with her eye shining in the reflection of the street lights over head.

As I stood there trying to get my mind around what had just happened, an old woman too ran from the underbrush toward me snatching the child from my arms.  Soon a very loud argument ensued with the younger girl who was now broken down weeping in the shadows along the road side.  My in country host who had witnessed the event from a distance rushed me away instructing me to keep my hands behind my back as if the police came, well you get the idea.  However in retrospect, China is still a communist country, thus dictatorial and the concept of sons being valued more socially than daughters explain the actions which I had experienced that evening.

However India unlike China is a democracy and as such these rules are not in place, in fact because of this a greater amount of social affluancy is passed along to the people.  So why are we seeing trends such as this manifesting themselves if there is greater wealth, and no rules?  The answer is what scared me, in fact the wealth itself was creating this trend as it provided the ability for people to afford ultrasounds and gender selection technology.  This in turn provides for advance knowledge of the unborn fetus’s sex allowing for negative selection based upon gender, or fertilization based upon a preferred sex status.

The scarier aspect of all this is if we look to the poverty side of equation, we see gendercide, and then as even when looking in the opposite direction to a country acceptant of democracy and economic growth we see a similar practice in gender selection.  With it a trend of even greater worry emerges from the shadows as it becomes clear that even in the 21st century the world still devalues the female gender sociologically at the “mores” level, in short 50 percent of the human race which is a tragedy. Also, yes I still wonder what happened to that baby girl…

Wow!

China Takes Pole for Car Sales...

China is clearly going to take the driver’s seat in global car purchases, at least per a story in the Economist online edition article titled “China Takes Pole” which shares the details that more vehicles are to be sold in China in 2011 than anywhere else in the world.   As sales are projected to remain soft in the rest of the world as many government sponsored programs like “cash-for-clunkers” now fade to black, and coupled with the Japanese’s triad of disasters (earthquake, tsunami, and nuclear meltdowns) further places China forward as the growth market to be in for years 2011 and into 2012.  However the belief is that even with China stepping up their purchasing some 10 million vehicles per year over its 2007 levels still won’t be enough to fill the gap as India the other big up and coming player is slated for only slight gains over the same period meaning doldrums for the next 24 months.

However this has additional implication outside of the car market itself as cars need fuel, and we all know that fuel comes from oil and there is only so much of it to go around.  Thus as things are zero sum and our life’s lay in the distributions between the two sides we have to understand there is always a cause and effect.  So in essence we can say that in line with Newton’s laws (for every action there is an equal and opposite reaction) that:

Cause = Effect and therefore    Effect = Cause

So the “effect” will be a greater demand for gasoline and therefore this will “cause” a drop in supply which will lead to an increase in costs as the ratio of supply and demand drive costs.  This in turn could impose further negative pressure as the distribution of disposable income shifts to increase fuel cost, this will leave less monies for capital purchases such as cars.  In turn this action will feed the cycle to again push further sales to China, which in turn will drive up fuel cost until a corresponding negative going balancing loop applies cost pressure on the fuel side in China.

This in turn will form a classical sigmoidal formation or in simpler terms an “S” curve where there is a short uprising lead with very fast rise that leads to slowing tail which is the resulting balancing loop in system terms.  In short this will also produce a cascading “cause” and “effect” in the arena of social affluancy as each car which isn’t sold, means one less lunch a restaurant sells, to fewer hamburgers purchased from the food wholesaler all the way down the line.

The combination of these causal trends will come together into counter loops with fuel cost at the crux of both viral engines as one is driven upward and the other downward as the internal distributions shift.  All of this summarizes to yet a further bleak outlook for North American and the United States in particular as its current course of a jobless recovery will continue for the foreseeable future as until there is stabilization in the disposable income which was pushed to fuel cost adjusts, there won’t be a positive reinforcement loop created to promote employment growth …

Starbucks Gets It Right, Well Let’s Hope…

The "A" Game...

A recent USA Today story titled “Starbucks eyes grocery stores, China, digital for growth” caught my attention as in a prior blog post titled “Has Starbucks Lost Its Name or Just Its Mind” which discussed the venerable Seattle based beverage giant dropping its name from the logo.  In the post, we discussed the name would appear as gibberish to the Chinese just as their Mandarin ideograms appear to our English trained eyes, and thus would make sense to  have a straight graphic design if they were to enter that market in force.

Well sure enough, during this year’s shareholders meeting attended by over 2,000 interested parties company CEO Howard Schultz told the audience that China in 2011 and forward would play a large part in the brands growth.  As by 2015 Schultz pointed out the goal is to grow to a foot print of 1,500 locations in the country where currently they have less than a third of that number at only 400 stores.  This folks is a company that gets it, as you will not fight the world economy as it’s here to stay and to profit one has to play the game.  Just like when you were a kid, where things didn’t go your way so you packed up your toys and went home, that was a place of solitude and nothing was accomplished.

Here Starbucks is in the game, matter a fact they are on their “A” game in the perfect market for success too as the establish brand brings to the Chinese market a number of success factors including a western brand, a consumption based product  as its an experience and not ownership which makes it  a repeatable sale (i.e. annuity business).  If this isn’t a recipe for success, not sure what is and we only need to hope the federal government gets the nerve to catch up with the times and revamp the tax codes as other nations have done to incent corporations who do business abroad to be able to repatriate earning s without undue tax burdens.

The other aspect is digital growth, hey wait a minute how does one grow a consumption based product company on line?  Well with 20 million Facebook ™ fans domestically we start to see, however what also grabbed my attention was it only had 1.3 million international fans, wow does that send a message and we can quickly see why they want to head to China as the world will be their oyster with room for some amazing growth opportunities.  In addition Schultz spoke about plans of expansion in the realm of digital media which to quote him “will be dramatic”.

This makes me wonder what Howards plans are, along with what he considers “dramatic” as a lot of people sell coffee and tea especially on that side of the world meaning the brand will be its key success driver.  So it makes sense in concept, however just plastering your logo on a Facebook ™ page isn’t the answer as to be successful.  Mr. Schultz needs to build “connection”, yes a digital connection to the brand as one where the brand brings its network to you.  How does a brand do this, well not quite sure, however in the future a brand will not be based upon its “possession” as in you own a pair of Nike’s or drive a BMW.  It will be in the “connections” it brings

How Many Leaders Does A Company Need…

Without question we as working stiffs, all know the top dog in any company is the CEO (Chief Executive Officer) as they set the direction the rest of us follow right?  So when we look south of the “big chair” are we all a leader in some form or just another bunch of followers?

To answer this question many social & behavioral scientists have looked at the social dynamic of flocking or schooling animals to understand how at a high level, “group think

Shoaling the Future of Work

adds to their efficiency.  Here a recent article in The Economist titled “Follow My Leader” profiles the work of Dr. [Ian] Couzin’s of Princeton University who is studying the actions of shoaling* in schooling* fish by modeling their actions in a virtual setting and comparing this to the real world.

What he has found is interesting in that the larger the “shoal” the more efficient it is and that fewer leaders are needed.  In fact Dr Couzin found that adding leaders actually reduced the efficiency of the “shoal” by inducing confusion into the group.  This in itself is rather interesting as it explains a number of various dynamics, let’s take the explosion of manufacturing in China as a working example.

Here the rapid growth has been fueled by a “top down” culture of “do as I say” rather than that of cross collaboration found in the American and Western European cultures.  However it also fits the closest with Couzin’s model as the goal of the “shoaling” fish are to first “feed” and second “avoid predators” in order to re-feed** with the end goal of replication.  Note in this model there lacks the requirement for collaborative improvement of systems.

While there is likely a sub component of this to be found in the feeding “loop” it is reactive in nature only.  As if the food supply moves, the “shoal” will move as a “reaction” to the lack of food. As the “shoaling” fish are not collaborating to “out think” the food source as that is not their primary goal.

What does this explain about the current manufacturing environment and its future?  In simple terms, manufacturing unlike in the past operates at higher efficiencies if removed from the collaborative aspects of product creation as the flow down of collaborative aspects only serve to add what I refer to as “crowd confusion” as the typical plan, do, check, act is more of a rote hierarchical undertaking much like the reactive nature of the shoaling fish who move with the food rather than in advance of it.  In short, the ROI for collaboration is not returned to the system, when the goals of the system are well defined and not subject to conjecture***.

In retrospect this also matches with (Robin) Dunbar’s work around the “Dunbar Number” being 150 persons in a group means saying only one leader is needed for every “150 persons” as an optimal configuration.  In fact the Gortex ™ company will build a new manufacturing plant rather than expand staff when it reaches 150 persons at a site as this eliminates the need for middle management altogether.

While still in its early stages, Dr Couzin’s work promises to add new insights into the future of organizational efficiencies and without question is worth watching…

*Note: In biology, any group of fish that stay together for social reasons are said to be “shoaling” or a member of a “shoal” and if, in addition, the group is swimming in the same direction in a coordinated manner, they are said to be schooling. While different, these terms are sometimes used rather loosely and interchanged incorrectly.

**Note: The cycle must start with “feeding” as without that there would be no reason to avoid being fed upon and also worth noting a portion of the shoal will not avoid predators and therefore support the “feeding” as the start of the causal loop.

***Note: Fans of Darwin may argue if there is never a change in the system, then the system will likely die off as only the strong survive.  However in its most basic form this argument actually supports the counter as think of primordial man spending the time to “collaborate” the activity of fleeing a predator as the time spent would mean they would be eaten and not re-feed.  As collaboration in this case only has a positive ROI in the “feeding” sub-loop of the overall “feeding” phase.