Advancing Time: Businesses Closing, The Impact Has Yet To Be Felt

Advancing Time: Businesses Closing, The Impact Has Yet To Be Felt: If your area is anything like mine, a large number of stores and small businesses have closed in recent months. Generally, there is a lag or...

Businesses Closing, The Impact Has Yet To Be Felt

If your area is anything like mine, a large number of stores and small businesses have closed in recent months. Generally, there is a lag or delay before the full negative effect of businesses closing is felt. Mass layoffs, and dropping retail sales are a glaring sign that the possibility of a recession is on the rise. Yes, we must add flagging retail sales to the growing list of signs of economic problems ahead.

The Reality Of Businesses Closing Has Yet To Be Felt!

The bailout of the auto industry following the 2008 financial crisis was based on the fact we simply had the ability and were producing too many vehicles. It was a thinning of the herd. Sadly, we are again in that situation. The oversupply of new trucks and cars has not brought down prices but instead created auto companies that face falling profits and a difficult future.

This situation of oversupply is not limited to the auto industry. After the sun had set on Sunday, as I drove the two miles from my office to home, I saw two Amazon trucks doing deliveries. This is problematic for local brick-and-mortar businesses, especially retailers. Much of this appears to be from a fundamental shift propelled forward from people being forced to stay home during Covid. This coupled with the internet has altered the retail landscape. 

It does not help that stores forced to put many products behind locked glass to halt shoplifting has made shopping a distasteful experience. Many people decided a semi-covid lifestyle is preferable to going to and working in an office or leaving home. It is difficult to say how much this has hurt productivity but many business owners will tell you, it is a lot. Covid was a discipline killer resulting in many people losing the discipline to work without a supervisor looking over their shoulder.

Also, there is the issue of government office space cutbacks from the work DOGE is doing to reduce wasted spending. Coupled with the work-from-home movement this is also impacting communities. This does not bode well for landlords dependent on keeping space leased in order to pay their mortgages. Yes, we want to cut government spending but it is a double-edged sword in that it will impact economic growth in the short term. Sadly, that short term may last far longer than many people think. 

The Trump administration has published a list of more than 400 federal properties that could be closed or sold, including the FBI headquarters and the main Department of Education. The Department of Government Efficiency (DOGE) has also terminated leases for more than 2.3 million square feet of office space, contributing to an estimated $60 billion in savings.

The ripple effect that empty buildings have on communities tend to come across as a cancer or long term economic rot. Supply and demand for space in an area determines rental rates and when rates drop to low, facilitate and building maintenance often take it on the chin. With this in mind, prepare for Retail Apocalypse Part II. While this could be considered a continuation of a trend that started years ago the number of closures about to occur will take things to a whole new level.

While inflation may be dropping quickly, other concerning trends, including mass layoffs, have developed. QI Research founder Danielle DiMartino Booth has been calling attention to these often underreported recession signals. She highlights rising store closures and job losses saying, “There is no greater drag on inflation than job loss.” Her concerns about a recession have been rising daily as auto loan delinquencies soar. Booth points out the number of major employers laying off workers now includes Chevron, BlackRock, Boeing, Southwest Airlines, Hewlett-Packard, Kohl’s, Meta, and Starbucks. 

If consumer prices take a minor fall due to slake demand, do not expect it to help most businesses. Instead, such weakness tends to squeeze margins. Fundamentally businesses face a difficult road ahead and will not see much or any drop in overall operational costs. The removal of costly regulations coupled with gains in productivity remains their main hope. Only time will tell how large the toll of a slowing economy will be but the potential for a lot of pain does exist. 

 

(Republishing this article is permitted with reference to Bruce Wilds/AdvancingTime Blog)

Advancing Time: Gold, They Make Diamonds, Is Gold Next?

Advancing Time: Gold, They Make Diamonds, Is Gold Next?:     Never forget the power of disruptive technology. Near the end of January, the emergence of DeepSeek as an inexpensive alternative to Ch...

Gold, They Make Diamonds, Is Gold Next?

 

 

Never forget the power of disruptive technology. Near the end of January, the emergence of DeepSeek as an inexpensive alternative to ChatGPT made headlines across the world. DeepSeek is a Chinese artificial intelligence (AI) startup. Its latest model, DeepSeek R1, is said to be better than its rival's technology in its capabilities and cost far less to create. This underlines how markets can be disrupted by new technology.

Considering how the announcement of DeepSeek roiled markets, imagine what would happen if someone came up with a way to create gold. For years they have made a substitute for natural diamonds, what if they develop a way to make Gold? History is full of people who have tried this with no success.

Years ago, improvements in what are known as synthetic or laboratory-grown diamonds (LGD) started to greatly impact the diamond market. This is one of the reasons today you rarely hear that diamonds are a great investment. Jewelers who are trained gemologists may be able to tell whether a diamond is lab-grown with the aid of a powerful microscope but the only way to be certain is to send it to a gemological laboratory.

While natural diamonds form deep in the Earth and are obtained by mining. Chemically, physically, and optically, lab diamonds are identical to natural diamonds. A synthetic diamond or lab-grown diamond (LGD), also known as a man-made, artisan-created, artificial, synthetic, or cultured diamond, is produced in a controlled technological process. Both have the same hardness, brilliance, and fire.

This brings us to the question of whether lab-grown diamonds are real. Yes, lab-grown diamonds are as real as natural diamonds are. Their only difference is their origin. These are not "imitation diamonds" made of superficially similar non-diamond materials. Synthetic diamonds are composed of the same pure carbon crystallized material as naturally formed diamonds.

This takes us to the crux of this post, It is important to understand that we are in the midst of a technological revolution where barriers are falling and our limits to manipulate atoms is accelerating. Just 26 minutes into this recent panel discussion, Dr. Pippa Malmgren takes off on the remarkable and unlimited changes that are about to take place and she claims they will be happening far sooner than most people think.

Please join me in a peek down a rabbit hole and imagine tomorrow waking up to find that at a fraction of the cost of mining gold, the world could now produce large quantities of gold for very little. We are seeing the boundaries of possibility rolled back by technology and innovation. Whether you call it making, creating, or printing, the idea gold could be cheaply produced would have huge ramifications for its value and the whole economic system. This is especially true if it could be produced rapidly in large quantities at a cost substantially cheaper than it can currently be mined. 

For years gold has been considered the only "real money" by economists distinguishing it from tokens produced by governments to be used in commerce. They point to how unlike fiat currency no sovereign states cannot simply print more gold. Thus we have sayings like "as good as gold." To say the ability to produce huge amounts of gold at a low cost would be a game-changer is an understatement. It would turn global banking upside down and result in a huge transfer of wealth.  

The one thing you can count on is that the ability to cheaply produce a product indistinguishable from gold would give a whole new meaning to the term false gold. Another is that it would have profound implications for those holding their wealth in this precious metal. I'm not predicting this will happen, in fact, I don't see it likely. Still, the message here is we should never underestimate how technological advancements can result in watershed change.

 

(Republishing this article is permitted with reference to Bruce Wilds/AdvancingTime Blog)

Advancing Time: Penny Moves Closer To The Dustbin Of History

Advancing Time: Penny Moves Closer To The Dustbin Of History: A few weeks ago, on the floor of the Senate, Senator Joni Ernst (R-IA) outlined the goals of the DOGE Caucus. She brought up the cost of mak...

Penny Moves Closer To The Dustbin Of History

A few weeks ago, on the floor of the Senate, Senator Joni Ernst (R-IA) outlined the goals of the DOGE Caucus. She brought up the cost of making both the penny and the nickel. The cost of producing the penny has now soared to three cents and producing the nickel is eleven cents. The penny is a great example of government waste. Coins are meant to be a simple and efficient medium for the exchange of goods and services. The argument for discontinuing the penny is overwhelming, anyone still supporting its production most likely has not given the subject much thought or is resistant to change.

The Penny No Longer Makes Sense

The waste DOGE is bringing to our attention is backed up by the folks at Retire The Penny. Org. Adding to the argument that the penny should go is the number of hours wasted every year handling pennies or waiting for people to go through several penny-handling-related events. These events include waiting for people to dig through their pockets or purses to find that last cent so they can pay for something with exact change. They probably do this, so they don't get stuck with more pennies.

Halting the production of the penny is not a new subject here on AdvancingTime. Over the years I have written several articles attacking the insanity of producing a coin so low in value that it cost businesses money to handle. It has become very clear that faced with the increasing costs for handling, storing and transporting pennies, the penny has become a burden to the economy. The logic of discontinuing  producing the penny has massively increased post-Covid with fewer people using cash and the inflation we have experienced during the last few years. 

 

Currency should be designed by the government as a simple and efficient medium for exchanging goods and services. In March of 2012, Canada decided to do away with its puny penny coin. Loved by some but an annoyance to many, it was withdrawn from circulation because it costs too much to make and had become a pecuniary pest. Ottawa said the penny retained only one-twentieth of its original purchasing power and discontinuing the penny was expected to save around $11 million a year.

Other nations have either ceased to produce or have removed low denomination coins the list includes Australia, Brazil, Finland, Israel, the Netherlands, New Zealand, Norway, Sweden, Switzerland, Britain, and as stated above Canada. By the time it was discontinued many Canadians considered the penny more of a nuisance than a useful coin.

Using Pennies For A Bathroom Floor

Today, the cost and numbers to produce the American penny blow the Canadian numbers out the water. It costs our country billions of dollars,  year after year, this amount of waste adds up. Simply put, the American penny doesn't make sense! When weighed and measured is found lacking. Too many people, the penny has become a horrible little thing with no redeeming value.

 

The penny is costly to produce, no friend to the environment, wasting America’s resources and  sapping our productivity. To make matters worse,  not only does the government continue making the penny but over the years it has even made new versions of the penny. Our government has forgotten that it is not the job of the well-paid employees of the treasury to create collectibles or to pander to small segments of the population by designing coins commemorating or recognizing minor events.
  
For many years there have been discussions about discontinuing the penny which has become obsolete because of its minuscule purchasing value. The penny is a perfect example of our government's inefficiency and waste, and the cost is a burden carried by businesses. Businesses lose profit when paying an employee to count pennies, the cost of the labor exceeds their value. If an employee is paid $12.00 an hour they receive twenty cents per minute. As far back as 2018, the “Citizens to Retire the Penny” claimed it cost America one hundred million dollars a year to produce the penny, and more than 15 billion dollars annually is wasted in handling it.
 

Also, from an environmental standpoint, the penny is a disaster when you consider all the energy used to make, transport, and distribute this useless coin. There is no doubt the penny is destined for the dustbin of history, it is only a question of when. Ditching the penny would cost nothing and with a flourish of the executive pen create huge annual savings for business but such a move remains fiercely opposed by metal alloy industries.

 

This article dovetails with an AdvancingTime post from the fall of 2021 titled; The War On Cash, Is It A Real Thing? The Answer Is Yes. It delves into how cash reflects "options for the people" and it appears those in charge of such things want it gone. This may be why you have not been hearing about the penny being dropped or a new dollar coin being introduced. Today it is all about Central Bank Digital Currencies. These are digital versions of a country’s physical currency issued by central banks.

 

While CBDC will replace much of the physical currency we use today, the premise of why this is being done deserves to be scrutinized. We should not underestimate the need for coinage and cash in society. Small businesses often rely more on small cash transactions, it is the banks, big businesses, and companies like Amazon that flourish when cash is removed. Simply put, in general, the small businesses and retailers on Main Street are left worse off. 

 

A few years ago, it was pointed out that if we just got rid of the penny, the U.S. Mint would cut its work in half. This figure does not include the time, fuel, expense, and hassle of carting all of those pennies around to the banks, merchants, etc. Small things matter, if our politicians can’t get this right how can they ever deal with the more important issues facing our nation? The time to ditch the penny has arrived so we can focus on more important matters.

 

(Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog) 

Advancing Time: DOGE, Its Goals, Its Caucus, And The Hope It Will ...

Advancing Time: DOGE, Its Goals, Its Caucus, And The Hope It Will ...: The formation of the Department Of Government Efficiency (DOGE) has been hailed by many people as a game changer. When its formation was an...