Wow.  There have been many “I never thought I would read about that” moments this year, but to read an article on the BBC about the concept that banks could offer negative interest makes me wonder if the apocalypse really is upon us.  Also called demurrage, negative interest is a carrying charge, and one that people might pay if they think their money is really at risk.

From the BBC:

Justin Urquhart Stewart, director of Seven Investment Management, says rates have been negative before.

“It does sound very strange, but it has happened in the past.

“If you go back more than 20 years to Switzerland, people were so worried about the value of currencies that they were running to anything they saw as a safe currency and the Swiss franc was it.

“So overseas investors had to pay for the privilege of holding Swiss francs - a negative interest rate.”

But that’s just the beginning.  Another effect of demurrage is that it encourages spending, because your money will be worth less tomorrow than it is today.  Of course, you ought to be spending money on something that will be of greater value tomorrow than it is today.

What’s the nuance?

In the BBC piece, the “rational” economists and bankers say that it won’t happen, despite the examples to the contrary, but the very fact that the article was not laughed out of the newsroom points to an incredible shift in what’s possible.

As we wrote just last month, innovative money, currency and exchange systems are getting more and more attention these days.   Innovative money systems are not so distant anymore.

Just posted over at the Business Catapult Blog:

It’s no secret that IPOs have been at a near-standstill for the past few years.  In addition to the growing financial crisis and general gloom, the unintended consequences of the demands for more financial regulation in the wake of Enron, WorldCom and other related advantage-taking in the 90s has been a horrific hurdle to companies that want to raise equity on the open markets.

…

As attention shifts in the next administration to fostering the development of more green technologies, a healthy IPO market will be even more critical to inspiring innovation. It should also be noted that the necessary funding and interest in technology based IPOs will have a positive, derivative impact on interest in math and science education in the US, an area in which our deficit is widely acknowledged. While “DEregulation” is typically favored by pro-business constituents, given the severity of the crisis we must pursue short term “REregulation” of this important part of our economy, similar to that seen recently by the banking industry

Lots of tasty links, quotes and data to fill in the gap.

My latest column just ran at Colorado Biz magazine.  It investigates alt.energy investments at any level, from the WalMart shopper to President Obama.   Here’s an excerpt:

Angel-level investing
If you are a bona-fide angel investor, looking to cash in on clean-tech, there are two places where an investment of a couple hundred thousand dollars will actually create a reasonable return in a reasonable amount of time. Service companies are focused in two areas, distributed generation and energy efficiency or conservation.
Average cost: Investments in smaller companies are generally made in no less than $25,000 increments.
Expected return: In a recent study by the Kauffman Foundation, angel capital investments returned 2.6 times the initial investment over 3.5 years, for a 27 percent internal rate of return. Of course, performance here varies heavily, and 52 percent of investors in the survey received less than 100 percent of their money back.

VC-level investing
If you are a venture capitalist with a $100 million fund, you can start to look into the actual technology of the energy revolution. Thin-film solar, new battery technology, improved wind turbines and many other technologies are not quite ready for prime-time, but offer a huge upside if they hit.
Average cost: Expensive, with investment rounds averaging 10 times greater than parallel IT investments. An investment round may be $25 million to $100 million
Expected return: Very few clean-tech investment exits have happened thus far, and the investment horizon could be 10 years or longer. But the long-term potential is incredible.

More opportunities identified over at Colorado Biz.

Who reads TIME and Newsweek anymore?  Not many people I know — except my mom, who brought about three issues of the latter with her for Thanksgiving.  During the perceived junk-out — err, semi-annual research into mainstream media coverage trends — I was pretty surprised to find an article about complementary currencies titled “Small Town Currencies,” in the Crisis Watch section.

Dozens of such systems arose during the Great Depression. In the 1990s, they resurfaced as a way to fight globalization and keep wealth in local hands. Now the idea of homespun cash is back because it keeps people liquid even if they are short on traditional dollars.

The rest of the two-paragraph front-of-the-book micro-mention missed many of the core values and benefits that drive the currency movement, which is to be expected.  Imagine m surprise when I read The Transitioner’s tweet that TIME magazine had covered much the same story.

“Alternative Currencies Grow In Popularity” is a better piece of journalism, covering the history and background of the movement, and highlighting the activities of some of the more well-known systems.

Alternative means of trade often surface during tough economic times. “When money gets dried up and there are still needs to be met in society, people come up with creative ways to meet those needs,” says Peter North, a senior lecturer in geography at the University of Liverpool, author of two books on the subject. He refers to the “scrips” issued in the U.S. and Europe during the Great Depression that kept money flowing, and the massive barter exchanges involving millions of people that emerged amidst runaway inflation in Argentina in 2000.

The article does a good job of explaining the 101 of currencies, tax implications and highlights many leaders in the space, including our friends and co-conspirators Jean-Francois Noubel and Bernard Lietaer, two European thought leaders on the issue.

In recent years, the impetus for alternative currencies in established economies has stemmed in part from localization movements. Periodically ditching the dollar (or the pound, or the yen) in favor of homegrown currency doesn’t merely fortify the local economy, it also builds community: people have a stake in their neighbor’s well-being because that neighbor represents both market and supply chain. Some argue that such transactions are more secure than others because knowing the person you’re dealing with (and his family and friends) serves as a kind of social collateral.

It seems that the author has actually begun to understand the deeper impact of currency, which is where we think the general appreciation has lagged.

What’s the nuance?

Continue Reading »

Over at the Business Catapult Blog, we just published a piece highlighting the research-backed definition and 2009 predictions of the Cleantech sector by Lightspeed Ventures, one of the leading blue-chip-Silicon-Valley-VCs-with-a-new-cleantech-focus.  Check it.

We’ve been talking about location intelligence and geo-analytics for a while now, both here and at the AWhere blog.  As the economy shifts into epochal distress, every point of leverage much be engaged to create or maintain a competitive advantage.  The other choice is the drama felt by every company gracing the front page of the business section of their local newspaper (if that company is still in business).

New tools — like AWhere’s suite of location intelligence software and services — are evolving just in time to keep pace with the increasing complexity of business.  As we face a new turbulence (it turns out the volatility of volatility is increasing) in the markets, it’s going to take the ability to ask — and quickly answer — new questions from your data in order to keep pace.

As I wrote at the AWhere Blog:

AWhere President Jim Pollock has had most of his attention on our CPG Visions, a custom tool produced for category managers and business strategists in consumer packaged goods and retail.  He points out that it would take the average analyst roughly 200 hours of focused analysis to produce a report including the level of complexity of our CPG Visions output, which maps incoming data from WalMart’s Retail Link service, and correlates it to Neilsen demographic data along with National Weather Service weather forecasts (more detail here).  Given the workload of a small (and shrinking) analysis team, it’s the kind of work that cannot necessarily be justified on a weekly basis.

But once it’s only a matter of looking at this information on an interactive map, the ability to ask “what if” scenarios and plan for multiple futures becomes a very real business practice.

Business intelligence dashboards provides a mere fraction of this ability, but the principle is the same.  When you can see your data — over time, and correlated with external info — and then ask it questions and pose scenarios, you gain a new level of understanding about your business, and that competitive advantage to lift your business during this crazy time.

I think we can expect many discussions in the next year about IT as a transformative force for business in these challenging economic times.

I overheard a Mormon (both a political and social conservative) debating climate change and politics with a corporate sustainability strategist at the Angel Capital Summit this week.  He said, “it doesn’t matter what has come before, it’s what we do now that matters,” referencing in the first half of the comment a slightly disagreeable detente on the facts of several matters, but nonetheless acceding to the basic premise and acknowledging it as a systems condistion.

While this comment may be out of context of the larger convsation, it highlights an interesting point that signals the beginning of the end of political conservatism – by which i mean a systematic aversion to change.

In most of history, a slow pace of change enforced the status quo, which was, generally speaking, a known entity.  Now that the global eco-system (ecology and economy) is changing, the risk of doing nothing becomes unacceptable.  Don’t believe me?  Consider the difference in the quality of life between the citizen of two low-lying principalities: Holland and Louisiana.   The Dutch actively address and maintain their defense from the sea, while the US Army Corps of Engineers and a complex political deadlock doomed the citizens of the Gulf Coast to a much less comfortable fate.

Many key aspects of the current system are sinking like the proverbial Titanic.  Many of us will be forced to jump off the ship and start swimming for an island.  The choice of when to jump, which direction to swim and one’s native ability to swim will determine the fate of individuals and many small groups.

So, political conservatives, will, in fact, be faced with a choice: go down with the ship or start swimming.

This is not a criticism, per se, but rather an objective assessment of changing pscyho-poltical dynamics.  I think conservatism will survive in many forms.  Social conservatism will remain for the forseeable future, while a new conservatism will emerge — from those strong swimmers — that starts to look a lot more like a conscious sustainability

Great piece on the bioneers blog today lamenting the fact that important issues get overlooked in favor of the latest news cycle.  They call these important issues “Olds,” in contrast to the “News” in the headlines each day.

And they point out that our Olds are not getting addressed very often in the News — issues like overpopulation, overconsumption of natural resources and decreasing energy supply, among others.  They go on to point out that these are the issues that have led to the collapse of several previously great societies, like the Anazazi, May, Norse and more — a point they adopted from Jared Diamond’s book Collapse.

I can summarize it any better than they could:

His list and the list of things that aren’t in the News are disturbingly similar. The truly disturbing part is that while the civilizations Mr. Diamond described were peak civilizations rivaling any now in existence, they were all relatively contained in their own geographic region. Their collapse was a loss to humanity, but there were plenty of people around to rebuild and continue the species. Now we find a civilization that has become global and that is facing the same kinds of problems the led to the demise of all the great civilizations from the past. These are not new problems, but the situation for humanity is more tenuous. When this civilization collapses who will survive and where will they go?

The yin of entrepreneurism is a steady dose of optimism.  Without it, we’d just take a 40-hour a week executive gig and slowly rot our brains.

This optimism is going to be in full force this week at the Angel Capital Summit.   As I wrote in my Colorado Biz column on angel investing this month,

Some businesses are responding [to the credit crisis] by getting small, reducing risk, laying off staff and hoarding cash. Others are anticipating a better future and ignoring today’s awful financial news in favor of the promise of tomorrow. Technophiles are promising productivity gains from new tools while “free-range” thinkers have gone completely off the reservation, and are designing new currency systems.

So it’s character-building time. A real entrepreneur has the courage and the drive to leap across the proverbial chasm and create a new fortune.  The shifts are happening to allow once-in-a-lifetime wealth creation as the old system dies and a new one is born.

Join us in Denver on Friday to learn how and where the money will flow, which businesses will thrive, and how to spot the previously unseen differentiating factors, a process we are calling evolutionary risk management.

It’s time to choose wheter you are going down with the economic Titanic or hop on a lifeboat and start rowing.

I’ve been reflecting for a while on the connection between truly conservative beliefs and sustainability.

I certainly don’t mean neo-conservatism (oy gevalt), nor conservative politics, which is more about slowing the pace of change (and must ultimately fail in an era of climate change and Peak Everything).  So the intellectual examination becomes a play on language, an examination on the nuance of conservation, a practical conservatism that has more to do with limiting waste and valuing the entirety of something, not just the immediate practical utility that defines grab-n-go consumerism.

I’m already weary of “green” sustainability.  I think we need to be very careful about not replacing petro-chemical-based consumerism with “green”consumerism.  In fact, I believe — as I began writing about Boulder’s Eco-Paradox this summer — that we’ve got to stop buying stuff, and not just because we’re out of money.  It’s time for a new prevailing ethic that considers the long term value of goods and services, not simply its price at the pump.

Sounds kind of conservative, really.  I think some of these values go back to my New England roots.  And although he was not a conservative in his day, much of Thoreau’s thought underpins a style of conservatism that seems to me to be related to the emerging sustainability movement.

At the same time, liberal thinking — accepting that we must find new ways to relate to our world — is an important approach if you accept the production-consumption meme of the past 50 years and the radical financial leverage (and related issues) of the past 20 as the baseline for comparison.  But it can also be argued that liberal thinking includes some intellectual slop and moral relativism that has helped midwife our current crisis.

As much as the innovative minds of our time will be transfixed on how to do things more effectively and efficiently while restoring natural resources, not just using them less quickly, and applying complex technology to things that might be solved by reducing, not adding, I think that there are some elements of conservatism that ought to be reconsidered.

Here’s an interesting piece at “CrunchyCon” (a curious conservative blog) talking about how food system though leader and darling of the sustainability movement, Michael Pollan, is really a “Burkean Conservative,” that lays out a position largely aligned with what I’m talking about.

And I’ve grown quite fond of regular discussions along these lines with Bill Shutkin, who in many ways transports a neo-Walden ideal with him from Cambridge to Boulder as the new Chair of Sustainable Development at University of Colorado.

So amidst all the half-finished metaphors, split infinitives and contradictory logic herein, this point is this: a new meme is forming, and for us to only look forward to a shiny bright green future without considering saving the conservative baby from the neo-con bathwater will perpetuate some of the mistakes we are still learning that we just made.

Today this is all still more of a supposition and inquiry than a strong position.  But in this radical transformation we’re all experiencing, I wanted to share the evolution of my own thought, and contribute somehow to the new synthesis; the chapter we are writing now.