The weekly newsletter for everyone interested in barter--the world's most versatile business tool!
December 31, 2002
Written by Bob Meyer, Editor of BarterNews
& Advertising Outlook For New Year...
The National Business Travel Association, a group of 2,400 travel managers, has a message for the marketplace: "Don't expect a big boost in business-travel spending in 2003."
Thirty-four percent said travel budgets would be flat, and another 38% plan to decrease their travel budgets by as much as 8%. Twenty-eight percent expect to increase budgets up to 8%.
Airfares are expected to be increased, to offset the hike 66% of travel managers say they will use more low-fare carriers in 2003 than last year. The report predicted little change in the hotel market.
Looming War Will Affect Advertising
The last war with Iraq saw television and radio ad spending falling 4%, during 1991. Couple the possible war around the corner with the past dreary Christmas shopping season, which portends a slowdown in consumer spending, and the advertising outlooks isn't bright. Additionally, there's no big events this year, i.e. Olympic Games or national elections, in which to stimulate advertising.
Interstate Bartering Of Wine Moving Closer To Reality
The day of being able to freely sell or barter wine interstate is closer at hand after a U.S. District Court judge recently ruled that a New York state law prohibiting out-of-state wineries from shipping to New York consumers is unconstitutional.
The New York law, similar to laws in 29 other states, requires that imported liquors be distributed only through licensed wholesalers and retailers to ensure accountability and responsibility, and that taxes are paid. Judge Richard Berman said the law interferes with interstate commerce.
"That the New York direct shipping ban on out-of-state wine burdens interstate commerce and is discriminatory on its face is clear from the very wording, let along the impact of the exemptions favoring in-state wineries," he said, adding that the law "constitutes a cut and dry example of direct discrimination against interstate commerce."
The judge also found the law discriminatory because New York lets in-state wineries ship directly to New York consumers, and rejected arguments by the state that the law is needed to regulate liquor sales and keep alcohol away from minors.
The decision is similar to rulings this year in Florida, North Carolina and Virginia. In addition, a Justice Department appropriations bill, signed into law Nov. 2 by President Bush, permits people physically visiting an out-of-state winery to have wine shipped to them at home.
Barter. . .The Silent Financier
Audible Inc. sells books you cannot read, thousands of them. They offer downloadable audio versions of books, magazines, radio shows and newspaper summaries that can be listened to at a computer, burned onto a CD, or stored on a portable device for playing later.
Among Audible's 5,900 titles are many of the most popular books, with 12 of the 20 hardcover titles and 17 of the 30 paperbacks on The New York Times' best seller list.
The company's third-quarter sales of content were $3 million, more than double the figure in the same period a year ago. It's just a tiny slice of the U.S. audio book market estimated at $400 million, nearly all of it in tapes.
To get the company started, in addition to securing funding from various investors, the company did a $20 million barter deal, trading a piece of the company to Amazon and Microsoft. Such transactions often go unreported so people don't see the significance of such barter arrangements, but they are very important to new, under capitalized companies.
Public Enemy No. 1, Deflation
For two decades, the Federal Reserve has single-mindedly focused on one thing: whipping inflation. (The U.S. central bank's other responsibilities are promoting growth and full employment.)
But it was obsessed with the threat posed by rising prices. Until last month, as the economy stumbled into what Fed Chairman Alan Greenspan has euphemistically called a "soft spot" that some worried might turn into a reprise of last year's recession, when it changed its focus.
And so the central bank has done an about face, with deflation as the new enemy. As suggested in late November when Ben Bernanke, one of the Federal Reserve's seven governors, raised the prospect that the government could get the Fed's blessing to print money to keep deflation at bay.
"The U.S. government has a technology, called a printing press--or, today, its electronic equivalent--that allows it to produce as many U.S. dollars as it wishes at essentially no cost," Bernanke said.
"By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services. This is equivalent to raising the prices in dollars of those goods and services.
"We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation."
Bottomline strategy of Bernanke's statement: His very declaration of the Fed's power to print money, and willingness to do so, if necessary, actually makes the potential need to do so fall precipitously.
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