Patent Studies: An Alexandrian Innovation of High Net Worth

China has recently surpassed the United States in patent production, and not by a little.  They now outrun us annually at about a 5 to 1 ratio.  Let the reader recall that patents represent brand new technologies and, potentially, offer a great source of revenue in terms of ramped up productivity.  These facts have often not figured into the bottom line of the otherwise quite profitable corners of the markets.  On my view of things — recall my first axiom that innovation drives free market capitalism — this omission remains a very expensive oversight as an “opportunity cost” (the cost of lost opportunities).

So I have this constructive (did I mention highly profitable?) suggestion to offer.  The Alexandrians of old almost specialized in experimentation and innovation because of the wide range of studies in which they engaged, because of a healthy subsidy from the Ptolemies, and because of the high degree of the freedom of thought governing the environment in which they lived and moved and had their being.   I which to recommend that we do what I believe they would have — create a new discipline that dwells experimentally on the many new technologies (patents) that emerge now so quickly that we can hardly keep up.

Enter the world of “patent studies.”  Here, we hire a research team to study systematically all the latest patents that seem most relevant and important to the development of new innovations.  Recombination, trying several different new features together in a new combination — now this way, now that — should guide our efforts.  This calls for labeling the most important features of each new patent studied, and the kind of technology that each represents, along with a system of classifying each according to its salient features as a “typology” (particular KIND of new tech).

By comparing, contrasting and recombining the best and brightest features and new patents one with another, we can create even more successful, and even more “cutting edge” innovations — or if you will “meta-innovations” (new innovations that depend upon other new innovations).  This new science (patent studies) would tend to yield a radical increase in revenue production — and overall productivity — across the entire spectrum of industries and sectors in the marketplace.

How do I know this? Simply put, it follows the tried-and-true axiom: Nothing succeeds like success.  One cannot receive a patent without demonstrating in advance a very reasonable expectation of the likelihood of success or actual success already.  The careful selection of these, placed in new (strategic and experimental) combinations could only serve to yield far more success.  Here, success means increased profitability (because the bottom line IS the bottom line).

Given the unlimited resources of imagination that stand behind the recombining of multiple technologies (in novel ways) to turn out the profit, the net worth increase likely to result from this nascent discipline cannot be estimated with any reasonable certitude.  This could easily be another trillion dollar winner for the global economy, especially since the synergy (mutually reinforcing support) that links one technology’s success to that of another over time is well-known. Consider how the advent of computers has increased the rate at which we develop (and speed along the growth of) still other new technologies.  That is synergy at work. Although it is not easy to identify, it is easy enough to create. And it generates untold new capital.

The upshot? The bottom line is the bottom line.  And nothing succeeds like success.  These are two excellent reasons to begin working to create new value through patent studies.  Innovation is not futile.  It is Alexandrian, centrally “capitalistic,” and extremely profitable.


The Charity Machine: Alexandrian Innovations in Strategic Charity Studies

When King Solomon asked of the Lord heavenly wisdom, the narrative of 1 Kings 4 indicates the divine answer as “The Lord gave Solomon a large heart, like the stars of the sky and the sands of the seashore.”  This illustrates the biblical fact that the leading edge of wisdom consists in charity, especially to those most needy of essentials (called “mercy”).  Likewise, the NT has it that Jesus taught the reciprocal truth that “blessed are the merciful, for they shall obtain mercy.”

A financial instrument exists in our day, and many others similar to it, that can be used as a way of creating a brand new way to accomplish strategic, that is “leveraged,” charity.  This method, or something much like it, should enable the most significant innovation in the history of philanthropy, a systematic interdependent network of trusts that together empower extra-ordinary charity over a very long period of time.

An irrevocable (ir REV uhk uh bull) trust can be used like a workhorse to produce large sums of money — by way of diversified investments in the global marketplace (This yields an average of 10% per year) — whose principal is protected, while each year 50% of its earnings then gets reinvested back into the fund.  This causes the principal to “snowball” over time, and it means that one can begin such a trust with as little as 20, 000 clams. For the sake of illustration here, I will use 50k as my starting point.

The “Rule of 72” imparts the truth that, when you divide the interest rate you earn into the number 72, it yields a number representing just how many years it will take to double your money at that rate of return.  At ten percent then, our money in the irrevocable trust will double every 7.2 years.  But since we are only reinvesting half of the return back into the trust, we must double the length of time to 14.4 years.  This gives us 7 doublings in 100 years. Now this trust is created ideally to last indefinitely, while we know, of course, actual mileage may vary.

This means that the trust will must needs be placed under the authority of a trustee most likely to last for the longest possible duration of time.  The terms of the trust should be set so that the trust only begins to pay out once it becomes large enough to make its payout of a worthwhile size.  The project calls for the eventual creation of  a single network of 1, 000 charities, either carefully chosen, or else created (or both — it is relatively easy to create a 501c3 charity), which will include medical centers, universities, libraries, hospitals, a small business-creating fund (like the US gov’ts SBA), and others that promote the values and infra-structure (institutions) of Solomonic deism — i.e. free market capitalism, vegetarianism, medical mercy abroad, education, science, world peace, etc.

The idea works this way:  the charities are set up as a kind of “catcher’s mit” — set in place in advance, and then a single “feeder trust” gets funding, and its payouts “pitch” to all the charities, equally, at the same time, in single (annual) payout sums.  These are spread out across the globe to ensure maximum likelihood of long-term survival.

How the funding works.  Over 200 years, the feeder trust fund would double 14 times.  If we begin it with 50, 000 dollars, the doubling process would look like this — 100k, 200k, 400k, 800k, 1.6m, 3.2m, 6.4m, 12.8m, 25.6m, 51.2m, 102.4m, 204.8m, 409.6m, 819.2m.  This ends the first two centuries of reinvestment, and (falsely) assumes no contributions will be added to speed its growth rate.

Over the next two hundred years, its growth would look like this: 1.6b (rounded down), 3.2b, 6.4b, 12.8b, 25.6b, 51.2b, 102.4b, 204.8b, 409.6b, 819.2b, 1.6 trillion (rounded down), 3.2t, 6.4t, 12.8t, etc.  Continued long enough, one can see that eventually the fund would reach its maximal value — the total amount of money in existence.  And in principle, it wouldn’t take that long — say 500 years.  Great Britain has been around for twice that long. Ancient Egypt lasted some 3100 years.

Albert Einstein once averred, “There is no such thing as magic in the real world.  But the closest thing to it is compound interest.”   These numbers are designed to highlight that magic.  We must put this recursive leverage to use to empower the Charity Machine by employing time like a lever.  Solomon wrote: “A patient man has great understanding.”  He was the richest man in the world.  This fund begins with only 50k, or an even smaller sum is possible. Time makes the difference.

A trustee has to be paid, so this will add a slight drain to the potential growth of the fund, but only as long as it remains relatively small.  But this cost can easily be offset by accruing contributions to the fund as a second stream of income that causes its accelerated growth.  Why would someone wish to donate to this fund and who would do it?

1. every dollar donated feeds 1,000 diverse and excellent charities worldwide. No other charity fund can do this.  So corporate donors will prefer yours at the years end when they donate typically to find a tax deduction.

2.  every dollar donated grows and is fed by other contributions, and by your reinvestment strategy, until it becomes worth, say, 1 million dollars.  No other fund will cause someone’s donation to grow with this kind of telescoping power, the power of time and compounding interest.  Corporations and other large-scale donors will find these unique and remarkable features irresistible. Everyone wants his/ her dollar to have maximal impact on those whom the gift is intended to bless.  And remember, each gift will also collapse the time frame necessary to grow the fund, calibrated as it was (above) without such gifts figured into the equation.

Now, the “network of charities” (charity machine) would probably need to begin its size more modestly, starting with perhaps 20 to 50 charities in its “target array,” and with a research team causing their number to grow organically.  But such a team would have plenty of time to accomplish this since the fund only pays out one time each year.  And it does have other logistical considerations that will have to receive attention of course.  Large-scale administrative projects always do.  But the research team is up to the task, and will learn as they go sufficiently.

Summary: the charity machine amounts to the creation of 1. a charity-donor fund (with 1000 components worldwide), and

2. A mutual fund, where the mutual fund reinvests in itself half its earnings, and then diverts the rest to the charity-donor fund.

The new innovation of the charity machine promises to promote and effect the most advanced and powerful kind of strategic charity ever witnessed on this planet thus far, having made good use, as it has, of advice from the collective testimony of Solomon’s Proverbs, and from the advice of Doctor Einstein implied in the quote provided above.

Hundreds of Billions For the Global Economy: The South American MOJO Plan

This plan shows how “Many opportunities justify others” – hence the MOJO plan. The following recipe for the economic development of South America aims as a mere (quite adjustable) template to bless not only our Southern friends with “quite emerging” markets – an upgrade from merely “emerging markets” – but also the other economies to which it will connect across the Pan-American landscape.

Trans-national legal and Infrastructural, developmental progress is the key to what we want — stability, efficiency and predictability – the main geo-political and economic ingredients of long-term profitability.

These lessons come from the US colonies in their early stages of development. Today’s hint? Guide up.  Here is the list of recommendations.

1. SA should do what Europe did in formulating a single currency, this time across the South American national borders – creating a new “Euro” for SA. This provides a redundancy (safety measure) in the economic system emerging across the continent. Retain the currencies in use at present, but add the new American currency – ESA (Euro De Sudamerica). I would name it after the Euro, which would lend a kind of instant credibility to it, increasing the liquidity of SA markets, goods and services going forward.

2. Create an international body, like the ICC (International Commerce Commission) in the United States, a trans-border referee that seeks a uniform legal code for the following at minimum:

a. The transfers of good and services across borders, including tax rates – one sales tax rate only please. Simpler is better – Mind Ockham’s razor.

b. Airspace regulations must be uniform so that cargo pilots have the same rules to follow in every country – more or less.

c. Uniform inspection codes are needed at cargo stops and ports to provide security.

d. Some of the sales taxes collected must be placed into an irrevocable trust, which in turn invests in the global markets, and reinvests in the trust (50%). The trust should be used to help pay for all international infrastructure development projects from roads to airports, etc

e. Shipping laws must be uniform throughout SA. Although shipping – meaning transportation of goods and services by ships along the coastlines – should play a relatively minor role compared with other forms of shipping, it is still worth billions in the long run.

3. The national railways should connect into One SA railway system and then connect to the NA railway system through Mexico, with corporations binding together to build profitable cities along that railway – excellent cities from cheap land (buy low, sell high) – and with cargo airports built along important stops that bring the crops and other goods to the global markets — across longer distances.

4. Some of the irrevocable trust money should be used to collateralize the SA Euro at least with a 20% collateralization rate (see Switzerland’s recent attempts) – using shares of a mutual fund held in the SA trust, which fund is comprised of best-of-breed diversified commonstock shares from the global markets. This will insure its long-term integrity and give it immediate credibility world-wide, as well as significant PPP, or “comparative buying power” on the foreign exchange market.

5.  The Power Grid.  The best way to develop a power-grid is not to develop a power grid.  Each city can and should have its own self-contained power-generation and (ethanol) back up unit.  The power station — hydro-electric or solar-panel field generated power is best — can be housed inside a large “Geodesic Dome.”  This housing unit was developed in 1951 by R. Buckminster Fuller.  It can withstand hurricane winds to 200 mph, has a super-low center of gravity, making it earthquake and “seismic proof,” and can be constructed cheaply with great durability from a wide variety of materials.  It easily conforms to all environmental topographies also.  If each city has its own local grid, no enemy or insurgent can wipe out the power grid, or cause cascading or rolling black out problems.  Decentralized power-generation is by far the wisest, so long a back-up redundancies are built into the system at the local level.  This also allows any one city to replace its grid part independently of the others, so as to cause very little disruption of service for maintenance or repair work.

These steps would both create the highly efficient, smooth and profitable movement of goods and services across national borders in SA, enabling all these countries to have more efficient access to global markets. Trans-national uniformity and simplicity (as opposed to entangling complexity) are the keys here. And one should always try to develop redundant fail-safety features when possible — without adding “complicating overlap” problems.

Alexandrian Economics 102: Another Trillion Dollars For the Global Economy

I owe the basis for the following insight to Science News magazine, which featured an article in summer of 2006 about the U.S. gasoline supply and its worldwide implications.  I studied out some of these implications over the next few years and pondered them at some length.  Here are some of the more startlingly profitable conclusions of that deliberation process.

First, the U.S. consumes some 317 million gallons of gasoline every DAY.  This amounts to over 100 Billion gallons each year. Because of the way that the supply-demand curve actually works — where the first 10% of demand amounts to a smaller fraction of the price of gas, and the last 10% accounts for a much larger portion of its price — if we were to eliminate merely Friday-driving (for all but necessary traffic and 18-wheelers, which have special licenses and training), this would cause about a 40% drop in the price of oil per barrel. Science News reported this correctly.  Savings would diminish rapidly after that point.

Thus, if the President issued a moratorium on Friday-driving, we could expect the following savings:

1. A significant drop in gas prices at the pump.

2. Falling prices for medical insurance, since most of the accidents, etc transpire at the end of the demand curve as well (Friday being the end of the 5-day work week).

3. Lower life insurance prices

4.  Much lower prices on everything that is hauled to market in the 18-wheelers when they pay less for gas.  This includes something like a 10% drop in prices of all manufactured goods across the board — everything from twinkies (known to some as the death sponge) to small electronics.

5.  Many other lowered residual costs hard to estimate, since they fall out from the lower gas and insurance prices as “down the supply chain” costs, like automobile maintenance costs.

6. The carbon footprint of our nation would drop dramatically, lowering the costs of EPA regulatory needs and environmental clean-up costs associated with a more prolific carbon footprint.

Now let us go on to consider the next question.  What if the rest of the world followed the lead of the U.S. with each nation imposing its own Friday-driving moratorium?  First, the cost of gas worldwide would likely plummet something like another 30-40%.  This would lower the related residual costs like those above even more, or at least in like manner.

I estimate that this would save the world economy very easily 1 Trillion dollars each year.  My best guess without more specific data (I intend to update this post with corrections and more specifics later) aims at 2.5 trillion dollars could be saved annually when you try to figure in the worldwide effects of the lowered residual costs, including less parking fees paid, and a myriad other fees and hidden costs, such as the more slight depreciation in value that results in the first two or three years of a car’s life, due to reduced driving. Whatever this number is, you would have to multiply it by the number of new cars on the road — purchased worldwide in the last three years. Others would include health and mental care costs associated with reduced stress worldwide — no Friday commute at all.

How could employers adapt to the new demand for everyone to either omit going to work on Fridays or else simply take public transportation once a week?  Very easily. They could opt for any one or more of the following:

1.  they could opt for the 4-10 work week for all employees (Monday to Thursday work week, 10 hours a day)

2. No change in work schedule at all — simply have employees take the bus or train one day a week, and allow a grace period of being late now and again for the adjustment period of a new schedule on Friday.  Friday is a tongue-in-cheek work day for many anyway — called a half-day.

3. They could opt for a “Monday – Thursday + Saturday” (or Sunday) work week.

4. Some could allow employees to tele-commute on Fridays

The simple truth of the matter is this:  For almost no real inconvenience or real cost, we could make a slight modification of our work and driving habits — in favor of the environment to the tune of some 5% reduction of the whole world’s carbon footprint — and, at the same, time, we could save some 2 Trillion dollars to world economy, which could be reinvested worldwide to make yet more money from this wise choice.  It is the only reasonable course of action, given our environmental and market needs.

But someone will ask wisely, “Given the numbers you have presented and/ or implied, won’t this severely harm the value of stock shares (i.e. the market capitalization) of the larger and smaller oil and gas companies?” What about their shareholders, including people trying to get ahead by holding these shares in their 401k’s and Roth IRA’s (Middle class)?

It would in fact exert significant downward pressure on the price action of the oil and gas company commonstock shares, especially harming them IF AND ONLY IF we do not take a corrective action to reverse this at the same time that we impose the moratorium on the Friday driving.  But if you will recall, supply and demand on the purchase of stocks is not the same as the supply and demand forces acting upon the commodity underlying the companies in question.  If the nations form a staggered entry (with their own portfolios held in trust as mentioned in yesterday’s post), the national and international purchasing of a set of diverse national portfolios would include very large purchases of energy company stock shares, offsetting with great efficacy the downward pressure just mentioned — perhaps “in a Herculean kind of way” — ensuring significant gains in those stock prices, entirely despite the lower demand for the underlying commodities that these companies represent, and by which they profit.

In fact, if you put these two trends together — plunging oil prices and surging energy-company stock purchases — if properly timed, this would mean that nations would buy very cheap oil stock, and probably in larger quantities just because of their lower prices expected by the proposed Friday-driving moratorium. Buy low (or more if very low), sell high.

My advice?  Trade up on the short squeeze.  Sorry, hedge funds.  At the end of the day, it’s all good.  If the powers that be decide to go this route — I would wait for oil and gas to bottom here and get ready to dollar-cost average your gas and oil stock purchases.  These are no falling knife.   Buy, buy, buy.

Alexandrian Economics: Trillions of Dollars for the Global Economy, A How-to Idea

Suppose we wished to create (literally) trillions of dollars for the global economy without too much drama. What could we do?  My suggestion for a new Alexandrian paradigm for global value accretion looks like this.  First, we get the United Nations to play referee, setting perhaps some of their smarter economists over the matter as a council.  Then they coordinate a new kind of investment program, which (of course) has never been attempted before.  Innovation is what drives free markets, and innovation is positively Alexandrian.

The idea is to have nations use some of the tax money they collect for investment in a global, national co-op, with a staggered entry into the worldwide stock market — carefully calibrated to create “a rising tide” that floats all economic boats.  Consider the large amount of (total) money collected by nations in taxes each year.  Suppose they collectively pooled their resources (but not purchasing the same assets so as to avoid collusion) by each using, say 20% to invest diversely and broadly in the global economy (stock market with other investment instruments like REITS).

This large amount of money entering the markets would (of course) cause speculation or added momentum, giving rise to a bit of volatility — but all in the upward direction, with some “ringing of the register” (selling some shares to procure sound profits) going on at the same time.  Each nation entering the investment market would help all the others who had already done likewise, and would create the momentum for the next entrants as well.  This is called “synergy,” the mutually reinforcing support of all the component parts (Yogi once said “It’s like a vicious cycle, only without all the vice”).

This is, I believe, the closest thing to sure money, with almost zero risk.   The velocity of the rising tide is also carefully managed by the referee (like the Fed in the US economy with the FOMC sets the overnight and prime lending rates, or “price of money” to slow or accelerate the rate of growth here).  The mutually reinforcing nature of the staggered investments creates a momentum that can be perpetuated almost indefinitely.   Here’s how to do that.

Each nation, or set of smaller nations, invests its money at an appointed time to ensure a relatively smooth rising tide, playing against the speculators that jump in (which is good).  They then put their money into an irrevocable (national) trust, which is used to pay down the amount of taxes citizens of each nation must pay.  Lower taxes over time draws foreign investment, since businesses are future-oriented entities.  In subsequent years, after the year of entry into the markets, each nation takes (say) 5% of its collected taxes and buys more of the same securities or derivatives (or what have you — warrants are a must-have under these conditions) or adds a new best-of-breed purchase to its holdings.

This continues the “rising tide” effect indefinitely.  This is why the trusts so held by each nation MUST MUST MUST remain irrevocable by international law — with help from the ref (U.N.).  This drives the markets upward indefinitely in principle, but perhaps with diminishing returns at some point — who knows where or when I cannot say. Perhaps the rate of return will not diminish. But it would rise nevertheless.

There is no good reason not to do this, and it would in fact create trillions of dollars for the global economy and probably indefinitely, given the fidelity of the participants to maintain the inviolability of the trusts. This would create an enormous number of jobs worldwide, with an economic boom, and with near zero risk, given the sound coordination and management of entry by the nations and speculators. Only the short-sellers would get crushed, but the volatility factor they represent is best removed from the markets (as a liability) anyway.  Sorry hedge funds.

Finally, the nations should set apart a small percent of their gains to create a single (again irrevocable) charity trust to use to fund the medical and other basic needs worldwide — as a kind of charity machine like the one described earlier on this blog.  These could create universities or medical research centers, support nations under unique economic burdens. etc

This recipe can and would win — cause worldwide success for everyone — most probably like no economic program ever has. The calibrated and staggered entry of nations into the markets would insure stability as well as general prosperity.  Score ten trillion (plus) for the Alexandrians — give or take.

How Current Animal Abuse laws Forbid the Execution of All Animals

The argument from the lesser to the greater is a famous one. It has been enshrined in the halls of justice in just about every judicatory from here to Hong Kong, including the U.S. Supreme Court.  The lesser forms of abuse against animals strictly forbidden under current law — and there are many — thus necessarily imply that the ultimate abuse against animals is strictly forbidden by law — a fortiori.

That means that today, when anyone of us eats fish, chicken or cheeseburgers, we are aiding and abetting a crime after the fact as an accessory to the crime (ex post facto) of extreme animal abuse.  We must consider than when we do this, we are not only causing the poor animals extreme agony by encouraging the repetition of the barbarism responsible for the production of this meat — the slaughter of innocent animals who committed no crimes and do not deserve that punishment — but we offend the Lord who gave them life in the first place by repealing his decision to give them their lives.

We must be a voice for those who cannot speak for themselves.  These are God’s pets.  Consider a parallel analogy, that it is not okay to hurt a human, but it is okay to slay one.  This is madness.  It hardly matters what the reason given for the action is, excepting retaliation mediated by a lawful court — if the person in question also killed innocent people.

As a consequence of our holocaust practices, and meat-eating frenzy in this country, 40% of all Americans are scheduled to become medically obese by the year’s end of 2030. This is dangerous to all those people, and it drives up both the cost of food and medical expenses greatly.   Current stats at Wikipedia for the entry “Obesity in America” indicate that “The obesity percentages for the overall US population are higher, reaching 19.4% in 1997, 24.5% in 2004, 26.6% in 2007, and 33.8% (adults) and 17% (children) in 2008.”