by Bob Meyer, Editor of BarterNews
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From the desk of Bob
Certificates—A $55 Billion-A-Year Industry—Is Expected To
possibilities for barter deals in many areas of the economy
continues to escalate. One example is the gift card and gift
U.S. shoppers, 74% buy at least one gift card or gift
certificate annually...their yearly usage has been growing
11% to 15% since 1993. In effect, few things are more
popular, especially during the holidays, than a gift
it’s from a store you don’t like.
Enter the secondary gift card/certificate market. We
recently talked with Mary Jane and Michael Kelly, who
www.swapagift.com in 2003 to provide a way to redeem
or trade gift cards in an open market. Today they have
Their site offers the consumer an inexpensive, effective
means of bartering unwanted cards for other ones they would
prefer. The site makes use of a proprietary matching
mechanism that automatically identifies matching gift cards,
facilitating the barter process.
Kelly shared how some people use the site:
Contractors obtain their supplies by acquiring Home Depot
and Lowe’s gift cards.
broken engagement saw a man stuck with an engagement ring
putting his Zale’s gift card on the site.
woman who owns a kennel and dog rescue service buys the
PetSmart gift cards.
Sales people who are awarded gift cards can exchange them
for desired cards, or cash out at 70 cents on the dollarCthe
price at which Swapagift will purchase cards.
largest single deal ever made on the site? It was a $10,000
Best Buy gift card won in a cigarette sweepstakes. With a
balance of $6,500 on the card, after several purchases, the
owner cashed in the card.
this huge $55 billion industry will continues to grow, we
can expect the inter-trading of gift certificates/cards to
Here & There. . .
International Monetary Systems (OTCBB:INLM) as officially
changed the name of its operating subsidiary, heretofore
known as Continental Trade Exchange, to IMS Barter. CEO Don
Mardak says the change was made to avoid confusion, and to
further the company’s uniformity and branding efforts.
Further information on IMS can be obtained at their web
Small Business Television Network (SBTV) is using barter
transactions and synergistic marketing to reach the small
business market in a cost effective manner. The company has
barter ad agreements with Fortune Small Business
and Victoria magazine, and is negotiating deals with
both Inc. and Entrepreneur.
are also working on content deals with non-publishing
advertisers such as Cisco Systems, where they would run a
piece on SBTV about them. Cisco can then use the segment on
its web site, which will further publicize the network.
Here’s a great "If Only" story:
2001, Yahoo boss Terry Semel met with Google’s two young
founders, Larry Page and Sergei Brin, for dinner and talk
turned to a possible deal between the two Internet
Semel, the former movie mogul, said he was intrigued by the
possibility, even though the founders confessed they didn’t
have much of a plan about how their company would make
pair said their company, which was just getting off the
ground, was worth $1 billionCbut
added they didn’t want to sell. Semel checked in with them a
week or so later. They told him Google still wasn’t for
sale, and that the price had jumped to $3 billion.
Semel replied, "You still have the same business you had two
weeks ago, right? Which adds up to nothing." From Semel’s
perspective, Yahoo couldn’t and didn’t buy the company.
that encounter, Google has gone public and become the
darling of the investment community. Its current market
valuation is around $115 billion, and its market cap is
approximately $44 billion.
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(Dollars vs. Derivatives - An Open Letter)
Dear Mr. Meyer,
In response to your opening letter of the 6/13/06 Tuesday Report,
wherein you described derivatives as having an "important purpose"
and offering protection from risk, I must say that I bristled in
dismay as you went on to describe small business barter-generated
trade dollars as yet another form of these derivatives.
I have another name for these so-called derivative instruments:
synthetic financial aberrations.
To quote you:
investors use .... derivatives, to hedge risk. Those who don’t
understand derivatives often claim that they are merely speculative
instruments and akin to gambling."
Au contraire mon frere!
Credit derivatives do not truly provide protection against risk and
default because the institutions who issue these instruments are
actually in precarious financial positions themselves, and thus sell
the derivatives because they are desperate for the cash flow.
In truth, in our current economic environment, a credit derivative
is mainly used to provide the "accounting-fiction" that certain
mostly worthless assets on a company's books still have value.
Derivatives, which are therefore nothing but huge side bets,
comprise the exponentially-growing sludge core of a rampant global
casino economy. And resultantly, the most dangerous element is a
huge derivatives "casino-bubble".
At present there exists in excess of $150 trillion in outstanding
derivatives contracts, which is several times the GDP of the entire
world economy. The staggering implication of this, quite simply, is
that the world economy is thoroughly bankrupt!
Thus the derivatives market, overall, is designed to hide the
bankruptcy of the system by providing "virtual assets" with which to
cover-up its gaping holes, as well as garnering cash flow from
selling mafia-like protection to companies ravaged by mafia-like
As Thomas Greco, Bernard Lietaer, Elisabet Sahtouris and other
revolutionary thinkers of this current and most dangerous financial
era have written, alternative currencies -- including small business
trade dollars, local exchange trade systems, time-based currency
schemes, consumer direct-trade Web platforms, and other emerging
signs of a planetary paradigm shift in our relationship to money --
offer a way out of this horrific collapsing monetary trap within
which the world economy currently finds itself enmeshed.
I have been an avid reader of BarterNews and the Tuesday
Report for years, and your well-intentioned comparison between
financial credit derivatives and exchange-managed trade dollars was
not lost upon me, but let us not make the mistake of confusing the
currency of the future with a monstrous mistake from the past.
Seen in the correct light, derivatives are a symptom of the disease
for which barter is the cure!
Lynnea M. Bylund
The Barter Catalyst Initiative
Catalyst House, Inc.
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Bartercard’s Man In New Zealand, CFO Michael Parsons, Doing Bang-Up
the world’s largest trade exchange now doing an estimated $1.2
billion annually, operates in 14 countries around the world. One of
their early expansions occurred in New Zealand, when founding
director Kerry Gordon stepped off a plane from Australia in 1992.
Under his arm
was Bartercard New Zealand in a shoebox of files and four floppy
discs. The following year, Bartercard New Zealand Ltd. was
established as an independent franchise.
In 1997, the
Australian shareholders purchased the company back. Then in 2001,
Tony Falkenstein’s Red Eagle Corporation acquired 90% of the New
Zealand operation, with the remaining 10% held by Bartercard
Bartercard New Zealand turned over $185 million in barter
transactions, involving 5,500 businesses countrywide. Such figures
show that Chief Operating Officer, 32-year-old former Wall Street
trader and expatriate Canadian, Michael Parsons is doing an
to Parsons, more can be done. “One of our biggest challenges, if not
the major hurdle, is the fact that explaining the Bartercard concept
isn’t done in five minutes. We need the time to sit down and talk to
business owners, to help them really understand how Bartercard can
work best within their business.”
his goal is to have every business owner realize and understand that
a structured barter system is a profitable and valuable option for
their business. Case in point, is the immensely varied services
offered through the 540-page Bartercard Directory, which include
individual trade listings as well a display advertising.
area is property exchanges, as Baby Boomers are beginning to plan
for retirement. More than $50 million in real estate sales have
taken place among New Zealand members, with over $15 million of that
figure being paid in Bartercard trade dollars. Currently there are
79 properties listed on
travel is another area where Bartercard excels. From their travel
desk in Tauranga, they moved over $600,000 last year. The main
destinations were Australia, Rarotonga, Fiji, Thailand, Britain and
services available through Bartercard New Zealand range from
accommodations at boutique B&B’s, to five-star international hotels,
car and limousine rentals, restaurants and bars, as well as a host
of other leisure activities.
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Broadway Now Bartering With
Product placement in the movies has been around since 1951 when
Bogart and Hepburn starred in the classic, The African Queen.
Hepburn’s dumping of Gordon’s Dry Gin overboard was the beginning.
Film legend Joan Crawford carried the torch forward in The
Caretakers, when she came head-to-head with a Pepsi trade show
display at a psychiatric-ward picnic.
Now the theater, the oldest form of entertainment, is bartering with
marketers to monetize their unusual draw...affluent attendees.
(Theatergoers’ average annual household income is $96,100.)
the 2005-06 season more than 12 million saw Broadway shows, spending
$862 million on tickets. And millions more see off-Broadway shows,
as well as traveling and regional productions.
Trading Can Help Offset
Broadway producers spend $165 million on expenses for new
productions, as a Broadway musical can run between $10 million and
$15 million to produce.
One way to lessen the cost is product placement, where marketers
barter their products in exchange for exposure. Producers see such
trading efforts as a viable way to offset the costs of play props
and opening-night parties.
Evian, for example, supplies bottles of water for use as props. In
return the firm gets the on-stage exposure as well as credit in
Playbill, the pamphlet that theater ushers give to each audience
Some marketers have provided live commercials. The tourist group
Visit London produced short pre-show skits for theaters that
encourage people to visit the British capital. Participating
theaters were then promoted on its web site.
Sprint tied in with an off-Broadway production about scheming
stockbrokers in a barter agreement, providing cellphones and PDAs as
props. Spirits marketer Jose Cuervo worked with Playwright Neil
Simon wherein a character drink their tequila instead of scotch.
Fruit drink Snapple made its off-Broadway debut with the Snapple
Theater Center in Times Square. Other stage-naming rights include
the American Airlines Theatre and the Cadillac Winter Garden
Novelists Bartering Between The Lines, Too
Product placement popping up in novels? Yes, according to Jane
Smiley, an author of many novels. Her most recent work is titled
Thirteen Ways of Looking at the Novel.
Smiley says writer Sean Stewart and his book packager, Jordan
Weisman, have added a little product placement in the novel for
adolescents they will soon be publishing.
a result of their willingness to alter a few details for Cover Girl
cosmetics, they’re getting advertising and promotion space on a web
site directed at adolescent girls. In addition, the initial
print-run of their book has burgeoned from 30,000 to 100,000.
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Global Economic Boom Driven By
The investment firm of Bridgewater
Associates has been tracking the economies of 60 nations around
the globe and reports that not one of them is in a recession—the
first time that has been true since 1969.
Today’s boom sees the soaring economics of
China, India, Russia and Brazil, and other emerging nations,
increasingly setting the pace and overshadowing the slower growth of
the U.S., Europe, and Japan.
The trend is being driven by free trade which
has created millions of jobs in the emerging nations, fueling their
stunning new wealth.
The simplest yardstick of economic success is
the growth in real gross domestic product, or how fast its total
output of goods and services is rising after inflation. For the
developing world, that growth is expected to be 6.9% this year—more
than double the 3% pace of the developed world, according to the
International Monetary Fund (IMF).
The breakaway growth of the developing world is
why the global economy overall is on track to post its fourth
straight year of 4%-plus expansion, the IMF estimates. The last such
streak was in the early 1970s.
Germany World’s Largest Exporter
No industrial nation has so successfully
harnessed the opportunities offered by an interconnected global
economy as Germany. This country of 80 million has been the
world’s largest exporter of goods every year since it overtook
the U.S. in 2003.
In 2004, the most recent year for which the
Organization for Economic Cooperation and Development provides
comparable data, German companies exported just under 780 billion
euros (about $1 trillion) worth of products, nearly as much as
Britain, France and the Netherlands combined. Germany’s trade
surplus was six times that of China.
Exports have become the main driver of German
growth, with 9 million jobs depending directly on exports which
generate 40% of gross domestic product.
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click through to our Global List
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