Can Andrew Yang Save The Malls of America?

I don’t know much about JCPenney at all since I don’t shop there. Nonetheless, I couldn’t help but want to talk about it a bit. Recently, we have seen how Sears is struggling with its own survival, and so it is not a surprise for us to see JCPenney may fall into this same situation as Sears. Basically, if JCPenney isn’t able to modernize its own business model to fight against online giants like Amazon, JCPenney may as well eventually be just a memory.

I look at JCPenney’s stock today and I’m seeing it’s being listed around $1.28 a share. This used to be $80 stock back in 1999 and in 2006. So, the question is, what has changed?

Has JCPenney fallen victim to online giants like Amazon? I partly think so but not really 100% convinced that it is 100% the fault of online giants. If you take a look at Walmart, it doesn’t have to beat Amazon on the online platform to stay profitable! So, why Sears and JCPenney look so outdated?

I notice Kohls has done a very good job through its online platform, and so I think JCPenney could learn a thing or two from Kohls. Then again, Walmart still does rather well with its traditional bricks and mortar stores. So, perhaps it’s the combination of well managed both offline and online that could save brands like JCPenney?

Then we also have to look at a bigger picture such as why people don’t go to the mall as often as before! Sure, we can say it’s the online giants that kill off the malls! Nonetheless, the malls do have benefits such as entertainment and so forth. I notice in other countries such as in China, the malls are still very vibrant! Furthermore, Chinese do buy stuff through online platforms a lot. So, why malls in China are vibrant still?

I guess, if the malls are vibrant, stores like JCPenney and Sears could survive since they locate inside most malls! Nonetheless, as malls are closing down or getting empty, I don’t see how JCPenney and Sears and so forth could stay profitable when customers don’t even show up!

Here is the shot in the dark part! Could it be that our economy is doing poorly, people are no longer having a job for life but a job for a gig, and they shop online more — all of these factors come together to form a perfect storm which is killing off malls across America? The bigger issue is of course why are people no longer be able to have a job that they could work without worrying about being replaced by automation? Yes, automation is going to replace more people from their jobs!

Andrew Yang, 2020 presidential candidate for the Democrats, suggests that soon truck drivers, cashiers, burger flippers, lawyers, call center operators and a lot more will be replaced by AI and automation. Sure, things don’t look dramatic now since your neighbor may still have a normal job. Nonetheless, if the trucking business could save $160 some billion of dollars per year to just automate the trucks and get rid all of the truck drivers, why do you think this is not a good idea for them to do so? Perhaps, even Lyft and Uber drivers in the future will be replaced by self-driving, smart AI car too!

So, if it’s true that machines and software will eventually kill more jobs, then people will, of course, have less money to spend at shopping centers and malls. Do you think this will affect online platforms eventually? To me, it’s a common sense that the online platforms will also be affected by a poorer economy! Nonetheless, online platforms like Amazon could survive better since they got convenience on its side. For an example, frequent sales are just a few clicks away!

Sure, we can say that we like to blame the economy for our problems, but the truth is that the advance of technology and the convenience of shopping through online platforms have created a formula in which we are now seeing the decay of our economy. So, if we have a poorer economy, how can we not blame it on the problems that we see, right?

Andrew Yang suggests that through “Freedom Dividend” the government can help prepare the economy for a soft landing when the advance of AI and automation gets worse in the coming years. Of course, you can go on YouTube to watch his videos and see a more fuller explanation of his Universal Basic Income “Freedom Dividend” idea. Here, my shot in the dark is that I think even outdated stores like JCPenney could survive in a good economy! Perhaps, “Freedom Dividend” may offer people more options so they could wander their way into one of the JCPenney stores!

Andrew Yang said that “Freedom Dividend” will not be able to solve the bigger issues that the AI and automation spring forth. So, he also suggests in addition to “Freedom Dividend,” he also wants to see Medicare for all. Furthermore, he wants to abolish the usage of GDP as a measuring stick for how healthy an economy is. Instead, he wants to create a better measuring stick for the economy which measures environment sustainability, nutrition health of children, and so forth to capitalize on human well being instead of capitalizing the market caps, stock prices, and so forth. He thinks as AI and automation spring forth, the GDP number could go to the moon but more people will get fired from their jobs. Think about this, machines produce more things that will be counted toward the GDP number but the humans are not going to be able to participate in producing this number!

In summary, can Andrew Yang save the malls of America? If he can save the malls of America, this means he can save JCPenney and Sears and eventually the economy itself! Can his idea of “Freedom Dividend” provide a soft landing for the future economy where humans won’t be able to participate in producing things that can be counted as a contribution toward the GDP number? I’m very curious about all of this!

I Think China Wants The United States To Impose %25 Tariff on Chinese Goods in March!

I don’t like to get political and hopefully what I’m writing isn’t too political. I’m thinking that even if president Trump is really wanting to have a trade deal with China to avert the upcoming tariff deadline in March on the Chinese goods, China might not want to see a trade deal gets done even the United States concedes something great.

How come? Well, let pretend to put yourself in a Chinese shoe and think about this for a second. So, if you’re Chinese and you know that the Americans will up the tariff on your $200 billion goods in March from 10% to 25% if the trade deal between China and the United States won’t happen, and so the big question is should you concede to the United States in a big way in order for a trade deal to be happening and the tariff to go away? Well, I think if you’re smart you probably would want the United States to impose the 25% tariff on your $200 billion of goods.

I think China knows that the United States economy is not on a solid foundation otherwise the United States won’t have a government shutdown and such. Furthermore, inflation would go through the roof since the interest rates cannot be raised appropriately. To keep the interest rates low the United States has to continue to print more money. Normal people in the United States will continue to see rising inflation which would cost them dearly in acquiring daily things in local grocery stores and so on. A hamburger meal usually costs like $3 but now is like $7 to $8. So, if you’re the Chinese you would think that higher tariff on the $200 billion Chinese goods must be a great thing for China!

Meanwhile, China is weaning off the reliance on American consumers because of the hostility between the United States and China! This could push China to be more aggressive in finding new markets throughout the world such as in Africa, India, Asia, Europe, South America to replace the North American consumer base. Some other regions might see this as a good opportunity to negotiate with China to get a great deal so they could enter China’s huge growing middle-class consumer base. China may pretend to resist this but could end up agreeing to concede something to these players so they could diversify away from the American consumer base.

I think the long term picture is what China is sought after because China wants to better itself in the overall big picture. This means China doesn’t care if the United States is upping the tariff to 25% or even to 75% or to 100%. When the United States is upping the tariff on Chinese goods, the Americans have to pay more for daily things in their lives. This would put even more stress on the Americans and make the Americans go into debts even more. More Americans in debts could mean a weaker market overall for the United States in the long run. This means more Americans will have to be more prudent on what they will spend so they could have money to pay off their debts. This means the American market will soon see a big cut back from spending by the American consumers. Either this or the Americans who are already in too many debts won’t have money to spend anyway!

Meanwhile, China could just sit pretty and wait out to see another financial crisis that will hit North America. So, in a Chinese shoe, do you think you want to have a trade deal done with the United States? Meanwhile, president Trump may not even want a trade deal done with China since president Trump thinks that he will get more votes for the next presidential race if he goes anti-China even more. In summary, I don’t think by the end of February we will see a trade deal between China and the United States. So, if you’re on the side of wanting to see a trade deal done, you should hope that I’m wrong. So, if you’re on the side of not wanting to see a trade deal done between China and the United States, you would probably want that I’m right. In my opinion, a trade war between China and the United States is not a good thing for the long term economic health of the United States.

Basic Income Is Dead. Long Live Basic Equality!

As earth’s population grows larger and automation gains traction each day, how many job categories and niches would dwindle each time before there would be none left for onlookers?  More people mean more jobs are needed to sustain a vibrant society where equality gap could be lessened instead of widening.  More automation means more people will lose jobs.  These two factors are like pouring gasoline onto the fire.

Unethically, such a society could demand people to have fewer children, but such a society needs a strong authoritarian government.  In the West, most governments are democratic, and so such demand would be outrageous.  Furthermore, such a demand is for a weak society, because the society doesn’t have a solution thus resolving into forcing a reduction of population headcount.

A wiser society would not demand a reduction of population headcount — it got a solution for what’s coming!  What solution?  As of now, there is no clear solution for the two detrimental factors I stated in the first paragraph!  By the way, what is a society?  In my opinion, a society is a group of people that stick together for the benefits of the majority.  The two detrimental factors I described earlier would chip away most benefits of the majority in our modern societies.

Few governments and groups are trying out basic income as a testing case for trying to solve the inequality gap between classes of groups of people in our modern societies.  Nonetheless, small-scale basic income test trials most likely won’t yield any good result.  Furthermore, basic income for large countries like the United States and China would be an insane proposition.  No amount of money would be enough to give out to each person in a large country.

I think basic income is kind of screwy too!  For an example, the more money the government prints to give out the more people will spend thus requiring the money printers to print even more money so the government could have enough doughs to give out to even more people.  Get the gist?  Once the government tightens the belt such as stopping giving out money, the basic income scheme would collapse immediately.  A society that is addicted to basic income could also collapse!

By the way, how inflation would work in a basic income society?  I don’t think I know the answer to this as I’ve seen nothing like it has ever applied to a large country like the United States or China.  We all know that if inflation goes north too much everything would become rather pricey because the supply of money is too large — simply put, too many dollars would chase too few demands.

As job loss number increases and automation gains worldwide prominent, the tipping point would become too real when a society becomes desperate and mad.  Nonetheless, as an advanced society could produce just about anything with little effort using automation, the tipping point once again could occur positively as people would no longer require making a living by working the field, factory, office and so forth.

The question is, in the between the transition from a working society to a leisure society, how many people would have to die and how many revolutions would have to occur before the storm could pass and peace could form?  The basic income could work as a dirty solution till the modern society could completely transform into a leisure society!  The question is, will the governments of the world dare to print an unlimited amount of money before inflation hits and destroys the hope and dream of attaining a transformation of a modern society into a leisure one?

Perhaps, basic income is too draconian and would not work.  Perhaps, providing a fair playing field for the newcomers would work?  What do I mean?  Imagine basic income is not basic income but a one-time thing for the poor and the newborns!  What do I mean again?  Well, basic income is too hard to carry out as it requires the governments of the world to continuously print an unlimited amount of money each year.  Instead of basic income, why not basic equality for the poor and the newborns?

What do I mean by basic equality for the poor and the newborns?  Well, let’s say the government would go about to calculate the right amount of money each person needs to have a fulfilling life as long such a person would not do anything too crazy to destroy the money cache quickly such as using drugs, gamble, and whatnot — then a government would give a one-time basic income to all the poor in his/her own country so to provide a fair level of playing field.  Obviously, the rich won’t need any basic income so the government can save money by not giving any to the rich through basic income channel!

Basic equality would save the prudent government a lot of money and yet his/her society would be able to function in a jobless era.  All the newborns could also receive one-time basic income in a form of a trust fund that the government would create for them.  The trust fund would go out to the parents of the newborns for a while till the newborns become adults.  Once the newborns reach adulthood, the government then could give them basic equality (one-time basic income) according to the inflation rate in their time.

Of course, the hope is that the basic equality would buy time for modern societies to transform into leisure societies across the world.  The idea of basic equality, one-time basic income, is to leave nobody behind yet buy time for the governments of the world to see their societies transform into leisure societies where automation would provide everything everyone needs.  When everybody got everything and more, money would become so irrelevant!  In such a society, money won’t buy anything!  In a leisure society, only the smart, funny, easy going, talented ones could become real assets of the world!

 

 

Why China Doesn’t Care About Bad Economy Leads To Color Revolution!

Some China watchers suggest that when China’s economy is going south to the sour, Chinese government would flame the nationalism to shift the blame outward.  Personally, I think it’s wrong to think like that!  I think China is a one-party system government with a lot of policies that are in place to prevent color revolution or any sort of revolution from happening, and so China doesn’t need to point outward to shift the blame of bad economy at home.

Furthermore, China had been there when the former revolutionary leader Mao Zedong, founder of today’s China and the Chinese Communist Party, prescribed the wrong policy “Great Leap Forward” in which famine raped the country to the point of almost no return.  Yet Chinese didn’t demand the Communist party to step down.  Of course, there was the Tiananmen Square revolution, but that didn’t really destroy the Communist Party even though at the time China was still super poor.

Today, China is prosperous and strong, and so I doubt there would be a revolution even if the Chinese economy takes a huge hit to the chin.  I think the Chinese government knows this, and so they probably would not take any action to flame the nationalism unnecessarily as such a flame would be easy to stoke but very hard to put down.

Nonetheless, I think the Chinese government may want to economically restrain potential rivals and enemies from conducting businesses inside China, thus the bad foreigner’s case could come up from time to time to create difficulties for the non-Chinese companies.  I think that is as much as the Chinese government may want to stoke the flame of nationalism.

So, when the outsiders think of utilizing strategies that depend on the outlook of how China would behave nationalistic when the economy goes south could produce little to no effect.  Perhaps, this may irritate the Chinese government enough in which the Chinese government may put up countermeasures that may have undesirable effects in diplomatic and economic relations.  For an example, China may want to make it a lot harder for non-governmental organizations that support or belong to a foreign entity from operating within China.

Weaker Dollar, Stronger Yuan May Hurt The United States And Help China In The Long Run!

I’m no expert in economic matters, but I just want to use my own personal logic to make sense of a few things that are currently happening.  People are seeing that the Dollar is weakening as we speak, and the Yuan is growing stronger as we speak.  Some people say weaker Dollar is a good thing because export will become more profitable.  Furthermore, when export becomes profitable, it also drives up the manufacturing sector at home.  That’s the theory for some people, but I feel that it’s way more complicated than this.

Since the United States isn’t a world manufacture hub — China is holding this title — the United States’ exports won’t matter as much unless the United States becomes the world manufacture hub.  Sure, with weaker Dollar, the United States’ exports will become more competitive than before.  The question is, will a little gain in competitiveness in exports spur the manufacturing sector at home?  Meanwhile, weaker Dollar will make the United States’ imports a lot more expensive.

I think the United States currently imports a lot more than exports.  The United States’ import is at $2.25 trillion and the export is at $1.45 trillion for the year of 2016, according to Wikipedia.  If the United States’ exports continue to slack even with the weak Dollar and the imports continue to grow, the United States could face an even stronger trade deficit.  For an example, manufacturer companies in the United States may have to import more expensive materials from the outside to manufacture products at home for selling across the world and at home.  This may not make the products at home cheaper for homegrown consumers.  Furthermore, this will increase the trade deficit in manufacturing sector if not enough products within the United States get to export to balance out the import costs.

Weak Dollar will increase less buying power for the Americans who go abroad for vacation, business, and so forth.  Weak Dollar can make purchases of products from foreign companies through online websites or offline imports more expensive for the American consumers.  For an example, I could be buying a music plugin from an online website which belongs to a French company, and with a weak Dollar, I could be paying more for this software.

I guess good things and bad things do exist even when the Dollar is weak or strong.  Nonetheless, the most interesting question is can the United States fare better when the Dollar is weaker or stronger.  In my opinion, weaker Dollar can help spur export a bit, but if the United States’ exports don’t carry the whole United States’ overall, long-term economy, then the weaker Dollar will be a very bad thing!

What about China?  If the United States enters a trade war against China, China can increase import tariff costs for the products from the United States.  This could hurt the United States’ export market because weaker Dollar would be neutralized by this move from China.  Furthermore, China can also buy up weak Dollar on the cheap to make Yuan stronger if this would serve China’s agenda.  Of course, stronger Yuan for China could make China’s exports look expensive.  Still, from what I’ve heard, China is trying to spur demands at home to create a bigger home consumer market so China won’t be relying on too much from the export market.  If this is the case, then cheap Dollar would be beneficial for China in a big way!

Stronger Yuan would allow Chinese who are going abroad to get more bang for the buck.  Meanwhile, Chinese imports would become cheaper, and so China won’t have to spend so much money to import stuff.  As China’s export market isn’t doing so bad and the imports get cheaper, stronger Yuan allows China to continue to reform her consumption market.  Foreign companies would love to enter China’s bigger homegrown consumption market because China has 1.4 billion headcounts and growing.  As China becomes an ever more important factor for foreign companies due to the size of Chinese population and market, China can begin to dictate tastes, styles, fashions, and so forth worldwide.  Chinese culture will become ever more influential if Chinese market becomes the most important market in the world.

With a weaker Dollar and stronger Yuan, entering a trade war against China might be very bad for the United States!  China can sanction the United States’ companies, entities, and so much more to crash the United States economy.  Of course, a trade war would be bad for China too, because the United States’ imports from China do matter to China a lot.  Nonetheless, as China doesn’t rely on the export market so much, a trade war between the United States and China won’t deter Chinese economic reform plan.  After all, China wants to grow the homegrown consumption market!  While growing a homegrown consumption market to rely less on the export market, China relies on the cheaper import market to balance out the reduction of Chinese exports.  Weaker Dollar and stronger Yuan will allow China to transit from the export market to a service market, also to move to a higher value-added export market — all in all – making this transition in a smoother fashion.

In conclusion, I think China can make the best out of either weaker or stronger Dollar, and the United States — as long as the country stays less competitive — won’t be able to have the upper hand if a trade war occurs between China and the United States.  Meanwhile, China can use stronger Yuan to buy cheap debts from United States’ weak Dollar to prop up China Yuan’s strength.  This, in turn, will actually help China transits from a manufacturing to a service economy.  As the low value-added market goes away in China, China has to accelerate the reform of the manufacturing sector at home so Chinese future export market will be more about high value-added products.  Anyhow, if the United States isn’t going to be able to use the opportunity of a weaker Dollar to reform her economy somehow to make the United States’ economy more competitive against rivals such as China, in the long run other rivals will use the weaker Dollar as the opportunity to make their own economies a lot stronger.

People’s Bank of China Creates Chinese Digital Currency To Hedge Against Upcoming Collapses of Fiat Currencies

According to various news sources and Simon Dixon, People’s Bank of China has announced China’s own digital currency.  According to Mr. Simon Dixon, China is buying up gold and announcing digital currency to hedge against the upcoming biggest collapse of most fiat currencies in the world.  Near the end of his video, Mr.  Simon Dixon says people may adopt China’s digital currency, but this will encourage many more people to use Bitcoin.  Mr.  Simon Dixon thinks that Bitcoin is more attractive to people since it got no governments’ censures.

In my opinion, any government has the ability to outlaw Bitcoin.  I think Bitcoin might not have such a bright future when China herself is creating a brand new digital currency.  If China is going to be successful in convincing her own people and other peoples to use her digital currency, she can totally outlaw Bitcoin.  Once Bitcoin is being outlawed in China, China’s own digital currency will continue on to be one of the future, central crypto currencies.

Of course, any other government besides Chinese government can follow China’s playbook and come up with another government’s digital currency.  Thus, I don’t think China will be the only country that would create a government sanction digital currency.  I guess it would be fun to see a government sanctions another with outlawing another government digital currency within one’s own territory.

In the video, Mr.  Simon Dixon suggests that China may use the brand new digital currency to implement quantitative easing.  Instead of printing more fiat currency, China may as well create the second tier monetary system such as digital currency to help ease the many debt related bubbles that fiat currency has been creating.  It’s an interesting idea for sure, but I think only China would know what she will do with her brand new digital currency.  I guess time will tell.

Check out Mr.  Simon Dixon’s video on People’s Bank of China creates a Chinese digital currency in the video right after the break.  Enjoy!