Capitalogix

A Look At Trade Blocs

The Global Economy is more complex than I could ever explain in a single blog post. But one of the simplest ideas to understand is that trade and commerce are the foundation for the Global Economy. 

Trade between states, nations, and continents is how you end up with innovation, global increases in prosperity, and resistance to the consequences of famine, natural disasters, and even pandemics. 

But, the wants and power dynamics of these different entities can get complicated. There are many intergovernmental trade barriers.

That's where trade blocs come in ... Two you likely recognize would be NAFTA (now USMCA) and the EU.

Trade blocs are meant to reduce trade barriers between participating entities but are sometimes controversial for their potential consequences. For example, they can result in rival groups, overly benefit certain countries, and potentially place undue pressure on certain exports. 

In late 2020, the Regional Comprehensive Economic Partnership (RCEP) was signed and creates the largest trade bloc in history - accounting for over 30% of global GDP and population. Visual Capitalist put together an infographic about RCEP's formation and likely implications. 

 

via visualcapitalist

The agreement isn't fully ratified (it is set to be fully launched by early 2022). Regardless, it will impact the global stage and create approximately $209B of income increase per year.

Despite all the rules and benefits that RCEP will have for its 15 nations, it doesn't contain any provisions for labor unions, environmental protection, or government subsidies. 

As China continues to race against America to be the largest global superpower, the RCEP is a powerful tool in its arsenal.

Here Are Some Links For Your Weekly Reading - June 13th, 2021

Here are some of the posts that caught my eye recently. Hope you find something interesting.

Lighter Links:

• Blue Origin Auctions Seat on First Spaceflight with Jeff Bezos for $28 Million. (CNBC)
• This is Why There are No Mosquitoes at Disney World. (Hunker)
• There's a Stark Red-Blue Divide When It Comes to States' Vaccination Rates. (NPR)
• Vladimir Putin's Time in Power, Compared to Other World Leaders. (Barrons)
• He's Heckled Shaquille O'Neal and Kobe Bryant. Now He's the First Fan in the NBA Hall of Fame. (Vice)

 

Trading Links:

• G7 Leaders to Announce Plan to Phase Out Gasoline Cars. (Axios)
• UN Says Cost of Food at Highest Level in Over a Decade. (BBC)
• The Perfect Storm Making Everything You Need More Expensive. (CNN)
• Inflation Scare? Look At This Chart Before Freaking Out. (MarketWatch)
• Nvidia CEO: We're Moving Towards a Crypto Metaverse. (Decrypt)

Getting To Next: How Thoughts Become Things

Two weeks ago, I introduced Innovation Activity Centers which are the building blocks for my technology adoption model.

Today, I have a video and a worksheet for you that goes into the overarching Technology Adoption Model Framework. It explains how thoughts become things and how ideas scale with respect to capability, audience, and monetization.

The four base stages of this framework are: Capability –> Prototype –> Product –> Platform. 

It's a great use of 20 minutes. Check it out.

 

 

While the Technology Adoption Model Framework stages are important, the ultimate takeaway is that you don't have to predict what's coming, only how human nature works in response to the capabilities in front of them.

It's a bit cliche, but to paraphrase Wayne Gretzky, you just have to skate to where you think the puck is going to be. 

Desire fuels commerce.  As money fuels progress, desire grows ... and so does the money funding that path. As such, the path forward is relatively easy to imagine.

This isn't about predicting specific technologies, but rather about the capabilities people will want.  I think of it as anticipating the natural path.  It is easier to ride the wave than it is to fight nature.

Each stage is really about the opportunity to scale desire and adoption.

It isn't really about building the technology, rather it is about supporting the desire.

If you understand what is coming, you don't have to build it, but you can figure out where you want to build something that will benefit from it.

This model is fractal.  It works on many levels of magnification or iteration.

What first looks like a product is later seen as a prototype for something bigger.

For example, as a Product transforms into a Platform, it becomes almost like an industry of its own.  Consequently, it becomes the seed for a new set of Capabilities, Prototypes, and Products.

SpaceX's goal to get to Mars feels like their North Star right now ... but once it's achieved, it becomes the foundation for new goals.

This Framework helps you validate capabilities before sinking resources into them. 

In the video, I walk you through several examples of companies, their innovations, and how they fit into each stage. I even used Capitalogix as an example. 

I'm also attaching a fillable PDF of the form we used so that you can run through this with your business as well. 

As I continue to refine and work with this framework, I look forward to improving it and sharing it with you all. 

As the world continues to change faster and more dramatically, this framework will help you anticipate changes, and it will also help you take advantage of them. 

If you have any questions or comments about the idea, or how to implement it, feel free to reach out. 

Onwards! 

Here Are Some Links For Your Weekly Reading - June 6th, 2021

Here are some of the posts that caught my eye recently. Hope you find something interesting.

Lighter Links:

• Benevolent Bots Are Suckers – Why A.I. Should Be Afraid of Us. (NYT)
• Microsoft's First GPT-3 Product Hints at the Commercial Future of OpenAI. (TheNextWeb)
• Netflix Secret Codes: How to Access Hidden TV Shows and Movies on Service. (Independent)
• Physics' Greatest Mystery: Michio Kaku Explains the God Equation. (BigThink)
• Scientists Gene Edit Mice to Live 23 Percent Longer. (Futurism)

 

 

Trading Links:

• Where Did 1.5 Million Cable Customers Go Last Quarter? Here. (MotleyFool)
• Technology Changes - But Fear and Greed Never Do. (HowardLindzon)
• Higher Interest Rates Would Be Good for the Country, Treasury Secretary Yellen Says. (CNBC)
• A Stealthy Growth Correction. (HumbleStudentOfTheMarkets)
• The Future of Money: The Digital Currency Revolution is Here, and May Sweep Away 5,000 Years of Monetary History. (Globe&Mail)

 

 

 

Make News Beautiful Again

My mother watches the news religiously. To her credit, she watches a variety of sources and creates her own takeaways based on them. Regardless, there's a common theme in all the sources she watched – they focus on fear or shock-inducing stories with a negative bias. As you might guess, I hear it when I talk with her.

While I value being informed, I also value things that nourish or make you stronger (as opposed to things that make you weak or less hopeful).

Negativity Sells. 

Sure, news sources throw in the occasional feel-good story as a pattern interrupt ... but their focus skews negative.  History shows that stories about improvement or the things that work simply don't grab eyeballs, attention, or ratings consistently.

The reality is that negativity sells. If everything were great all the time, people wouldn't need to buy as many products, they wouldn't need to watch the news, and this cycle wouldn't continue.

It's worth acknowledging and understanding the perils our society is facing, but it's also worth focusing on the ways humanity is expanding and improving.

As a brief respite from the unending doom and gloom of mainstream media, Information Is Beautiful has a section of their site focused on "Beautiful News".

It's a collection of simple data visualizations for positive trends, it's updated daily, and can be sorted by topic.

 

Beautiful News via Information Is Beautiful

If you're looking for more "good news", here's a list of 10 sources focusing on good news. 

The Law and Flaw of Averages

The law of averages is a principle that supposes most future events are likely to balance any past deviation from a presumed average.

Take, for example, flipping a coin. Should you get 5 "Heads" in a row, you'll assume the next one must be "Tails" despite the fact that each flip has a 50/50 chance of landing on either. 

Even from this example, you can tell it's a flawed law. While there are reasonable mathematical uses of this law, in everyday life, this "law" mostly represents wishful thinking. 

It's also one of the most common fallacies seen in gamblers and traders. 

Perhaps you heard the story about how the U.S. Air Force discovered the 'flaw' of averages by creating cockpits based on very complex mathematics surrounding the average height, width, arm length, etc. of over 4,000 pilots. Despite engineering the cockpit to precise specifications, pilots crashed their planes on a too regular basis. 

The reason?  With the benefit of hindsight, they learned that very few of those 4,000 pilots were actually "average". Ultimately, the Air Force re-engineered the cockpit and fixed the problem. 

It's a good reminder that 'facts' can lie, and assumptions and interpretations are dangerous. It's why I prefer taking decisive action on something known, rather than taking tentative actions about something guessed. 

 

via ReasonTV

 

Innovation Activity Centers

In many of my recent talks, I've been focusing on a technology adoption model for entrepreneurs. It is a framework that explains how thoughts become things and how ideas scale with respect to capability, audience, and monetization.

The four base stages are: Capability –> Prototype –> Product –> Platform. 

You can listen to me talk about it in more detail on my recent podcasts, I'm also working on a separate video about this. 

From a different perspective, each stage of the Framework requires the following Innovation Activity Centers. 

I shot a video going into more detail. Check it out. 

 

 

Understanding the Technology Adoption Framework and the Innovation Activity Centers makes it easier to understand and anticipate the capabilities, constraints, and milestones that define the path forward.

We are making lots of progress refining these models, and they are the basis for our plans to expand our Amplified Intelligence Platform.

Ultimately, frameworks aren't important if you aren't using them. 

If you have questions about this, or how you might use these models, feel free to reach out to me. 

Here Are Some Links For Your Weekly Reading - May 23rd, 2021

Here are some of the posts that caught my eye recently. Hope you find something interesting.

Lighter Links:

• Clearly AI is Going To Win. How People are Going To Adjust is a Fascinating Problem'. (3QuarksDaily)
• How AI-Powered Ships Can Help Us Collect Valuable Data About the Ocean. (ThePrint)
• How the Personal Computer Broke the Human Body. (Vice)
• How Jewish is Leonard Cohen's Hallelujah? A Forward Investigation in 9 Verses. (Forward)
• The 5-Second Rule: Science Debunks Food Myth that Stretches Back to Gengis Khan. (Inverse)

 

Trading Links:

• More Investors Than Ever are Borrowing To Buy Stocks. Here's What this Really Means For the Market. (MarketWatch)
• Governments are Deploying 'Wartime-Like' Efforts to Win the Global Semiconductor Race. (CNBC)
• Space Inc: 10,000 Companies, $4T Value ... and 52% American. (Forbes)
• The Pandemic Changed Where Americans Live. (Wall Street Journal)
• The Billionaire Creator of Ethereum Already Expected the Collapse of Cryptocurrencies. (Entrepreneur)

Powering Bitcoin

In April, I talked about Coinbase's public offering and the top 10 growing cryptocurrencies. 

In the past couple of weeks, many currencies have reached record highs, and then seen a steep drop-off. Some say it was due to Elon Musk's SNL appearance, others say it was due to Tesla stopping support of Bitcoin short term. Still others say it was just due.

In any case, there are growing reasons to be wary of Bitcoin as a viable long-term value store.

On top of the many reasons I've talked about in previous articles, I'm hearing many more people talk about it as if they are crypto experts.  Consequently, it reminds me of the Dot.com bubble. Sure, the Internet continues to boom (but many of the early high-fliers don't exist today).  Meanwhile, it's possible crypto will evolve like the Internet, but at this point, it's hard to discern how much of the success in crypto is luck versus skill.   

There is a ton of demand and interest.  But fear of missing out and enjoying the roller-coaster ride is not the basis of a long-standing Platform. Blockchain is a different story.

Back to Crypto ... Even a blind squirrel finds a nut in a forest during a bull market. 

Governments have a disincentive to allow alternate currencies (not backed by their government).  In addition, another obstacle for cryptocurrency mining is the high cost of energy consumption. 

 

via visualcapitalist

Mining crypto takes a lot of electricity because when people are creating new coins they're really solving complex math puzzles with a 64-digit hexadecimal solution known as a hash. To solve those equations faster than your competitors you need massive data centers which can even overload local infrastructure. 

It's increasingly expensive and energy-taxing to mine new coins. For context, it's estimated that the current annual power consumption for Bitcoin alone (not including other cryptocurrencies) rivaled the state of New York, and beat Norway. 

To compare it to the tech giants, Bitcoin took 129 terawatt-hours of power consumption ... Google took 12, and Facebook only took 5. 

Many are looking for ways to decrease the energy consumption of mining cryptocurrency using methods like renewable resources. 

Biden's $4T Economic Plan Visualized

Biden campaigned heavily on an economic plan centered around bolstering the middle class, taxing the wealthy, and investing in healthcare and green energy infrastructure. There are other aspects of his plan - but those were the focuses.   

Now that he's President and proposing his $4 Trillion economic plan, we can take a better look at where he intends to spend that money. 

The NY Times put together a data visualization to put the plan in context. 

Here's the simplified version: 

via NY Times

And here it is with more detail: 

 

via NY Times

 

Much of the money President Biden intends on using to pay for this plan will come from higher taxes on the wealthy, and 15 years of higher taxes on corporations. With another portion of the money being invested in the IRS to crack down on tax evasion. 

Many people, both Republicans and Democrats alike, have fears about the new plan. 

Time will tell if the benefits outweigh the detriments, and what portion of his plan he actually accomplishes. 

Frankly, I'm not sure how much of what was talked about were trial balloons and negotiation anchor points or his intended outcomes?

Time will tell.  We sure do live in interesting times!