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| Fridays with Dr. Joe: - E-Paper Advances are Underreported - Dr. Joe’s Inbox: Still a Cluttered Mess!
We will have a breakfast event on Tuesday, September 13, at 8:30am, at McCormick Place. Location and registration details for the event, sponsored by MAN Roland, will be announced soon. Alan Greenspan assured Congress that the Fed is still being vigilant about inflation and would be staying on a path of increasing interest rates. Beware. The Fed has a tendency to overtighten to be sure it’s done, and then wait too long to re-loosen. This may be an accident waiting to happen. They meet again in August. Watch out. The big story this past week was that China has decided to let the yuan float, and to do so gradually. This had been rumored for some time, with some scuttlebutt that they were intending for full floating to be completely accomplished by the time of the 2008 Olympics in Beijing. The move made on Thursday, July 21, was therefore not a big surprise to many “big picture” investors.
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There are a few interesting things that are not being written or talked about at play here. First, China has many dollars that eventually need to be repatriated to the U.S., and they were meeting resistance whenever they made an attempt to make a direct investment, such as the purchase of Unocal or Maytag. It’s likely that they would like to stop compiling those dollars and start to diversify into other currencies. Second, the move to float potentially makes them able to offer yet more money for U.S. companies, since it increased the value of the yuan by 2% on the day of the announcement, which should have been a reminder that no one knows the true value of the yuan, and that assumptions that they were keeping it undervalued may be just that: assumptions. It will take years to find its true value, and no one should be shocked if it goes up. Historically, letting currencies float in developing economies does not always work as planned, especially when their banking systems are not well-established. Argentina is a good example of a high growth economy, pressured by the U.S. to end pegging their currency to the dollar in the mid-1990s. Following that move, Argentina then sunk into economic malaise and high inflation. Even the U.S., when it abandoned its tie to gold in 1973, would years later lose its economic growth and enter a period of high inflation. So here we have a burgeoning economy in China with an untested, poorly developed banking system now letting its currency float just to delight non-Chinese bureaucrats and politicians with a goal of reducing the likelihood of protectionist legislation worldwide. This creates greater risk in trade with the Chinese, and the way to mitigate the risk is to, paradoxically, invest in yet more new facilities in China. It is not likely that this will have the desired effect protectionists crave and will yield just the opposite result. China’s internal growth is very strong, and its markets have the potential to grow at rates far greater than most developing economies. Remember, if the U.S. grows +3.5% in real terms and the Chinese economy grows +6-8%, in 20 years China will have the world’s largest economy, even though the per capita GDP will still be only one quarter that of the U.S. What does this mean to the supposed “ China threat” for those vexed by “offshore printing?” Virtually nothing. Labor is the biggest difference in cost, and until China has internal competition for its labor among many diverse industries, wage rates will not raise anywhere near the amount that would make it equivalent to other countries. For China, developing a strong service sector would be helpful, as all modern economies have vibrant service sectors that pay at higher rates than manufacturing once hospitality industries are excepted. Print competition from China is here to stay and will get yet bigger, little by little, every day. Ignoring growth opportunities in China is what should really be feared. The consumer market in China is tiny. The strangest story I have heard is that 500 million citizens, mainly in rural areas, have never brushed their teeth. If I was the Crest product manager, I’d be dancing in my cubicle at the prospects... On the Web:
E-Paper Advances are Underreported Is WhatTheyThink the only graphic arts information source reporting advances in e-paper? Fujitsu had its big announcement last week, and now there is news of another breakthrough from Scotland. I had thought the e-paper era would be about a decade away. It's probably closer. When we see the first products in this category commercialized, they probably won't be called e-paper, but rather “light-weight screens” or “thin screens” or something like that. On the Web:
I got around to cleaning up my desk and found the pile of things I wanted to write about but never got around to, including a well-done direct mail piece from a direct marketing organization promoting its new seminar. It minimized the number of items that are varied, which is a good thing, and had a nice tie-in to the Internet where I could register on a personalized web page. The printing quality was good, but clearly digital. One problem: it was addressed to me at the business I sold more than four years ago. My incorrect company is plastered throughout the piece, reminding me that they have an out-of-date data base. Was it worth it? Could the marketers have annoyed their target using a static piece for less money? Does the extra cost of personalization get paid for by increased response, or when it doesn’t work does it annoy the recipients more? I don't know if anyone has the definitive answer to these questions. Though I wonder; if the results of personalized printing were as good as people claim, I would see more of these kinds of mailings, and more of the equipment capable of doing it would be being sold. I’m still waiting for the day when a digital printing vendor can stand up in front of a trade group and say “we use 1:1 marketing and just look at how it increased our financial performance.” I have never received a 1:1 piece other than a credit card statement or affinity program statement that has been accurate, ever. Those credit card companies: they know where you live, and they know how to spell your name. That’s a good start. Unless you owe them money. Dr. Joe’s Inbox: Still a Cluttered Mess!
The number of area codes has expanded beyond comprehension. Need to figure out where someone is? This site lists all of the area codes, and for the new ones, explains what area code each originated from. Some new software I’ve found is C-Cleaner, which when you visit their site you learn is actually called “Crap Cleaner.” It does what my long-favorite Internet History Eraser does, but this is free. A colleague of mine eliminated 200 megabytes of unnecessary litter upon first use. The web site is www.ccleaner.com. Tired of Real Player and all of its spam-like messages and constant upsells? I tired of them a long time ago, and have always avoided using it. There are times that you run into files that Windows Media Player for some reason just can’t open, and you’re forced to use QuickTime (that gets annoying too; it is strange that Microsoft has the less annoying product, isn’t it?), and then, of course, nothing opens Real files except Real, and... Try Real Media Alternative! This software works very well and save you from Real annoyances. Give it a try. Avant Browser just keeps getting better and better. It sits on top of Internet Explorer and yields a far better web-surfing experience, with built-in ad-blockers and many other features. It’s at www.avantbrowser.com . On a Personal Note… Ed Merkel, longtime Heidelberg executive, died at 85 on July 5th. Ed was instrumental and very supportive in the development of my career. If anyone would like to contact his family to express condolences, please send me an e-mail. Ed was a mainstay of GAMIS and NPES market research and statistics committees, but was known for his upbeat and supportive nature, and especially his encouragement of all of us. His laughter was from the heart and was infectious to all who worked alongside him. He will be missed. Next Week We will have a detailed economic roundup with ISM reports as well as printing shipments, and other data or importance. It promises to be an interesting week.
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