Monthly Archives: March 2015

The End of American Money as We Know It

Dr David “Doc” Eifrig (medical doctor but equally important with a phenomenal record when it comes to recommending companies to invest in) wrote an interesting article in February. He explained how the new currency is going to replace credit cards and why they are lot safer. Not only is Doc talking about this trend but so are Forbes. The 6 largest banks have all signed on. (Hmm, not sure that makes me feel better.) But when  220,000 US retailers have already agreed to accept this new payment including all the majors, I decided perhaps it was time for me to understand this.

Doc said digital currency is safer to use than your wallet.  That got my attention because all I’m hearing is the horror stories about the lack of security. Safe and secure sounded like a pipe dream to me. Turns out I was wrong, yet again.

The technology behind digital currency is NFC-Near Field Communication. An NFC chip is a tiny transmitter. The chip is only activated when it receives a signal from another NFC device. The NFC devices have to be within inches of each other. The technology has been around since the 1990’s when it was used by military.

NFC technology means our wallets will be replaced by smart phones. Huge advantage: you can store all your credit and debit cards on a single smart-phone (and all your rewards cards and loyalty points.) No need to remember pin numbers or go to ATM’s.

My first concern was what happens when my smart phone is stolen or lost?

Here’s how it works securely:

-You password protect your smartphone. Thieves can’t use your card if they can’t unlock your phone.
-GPS-enabled smartphones can be tracked and recovered.
-NFC is secure because your phone does not carry your credit card numbers. NFC uses a unique digital representation or “token” for your credit card. (Called tokensization.)    The only party that has your credit card number is the bank or institution that issued the credit card. Yep there is risk, if bank gets tapped like JP Morgan did last year.
-The unique digital code is only used once, so even if thief gets it, the code won’t be valid for another purchase.

Is this really being used? Think Starbucks. Their proprietary version of this generated $1.2 billion in sales in 2014. They are getting 6 million mobile payment transactions per week. Apple Pay also uses NFC. Apple Pay is already tied in with 90% of most used payment cards.

Now major credit card companies are mandating the use of NFC technology by Oct. 2015. (It’s referred to as EMV mandate. They are chip and pin terminals which process credit cards that don’t have traditional magnetic stripe card…the source of lot of security breaches.) “Chip and pin” uses data encryption combined with a 4-digit pin. This technology has been used in Europe and Canada for years. NFC and “Chip and Pin” technologies complement each other.

Are there possible pitfalls in the above? Yep,  like what happens during a rolling brown out or simple power outage where you happen to be. What happens if major bank or credit card company has a breach in security, etc.

But think about that in comparison to having your wallet or purse swiped. You lose all your credit cards, drivers license, insurance cards, and for many their social security numbers. Now think of the mess in reconstructing all of that data and information.

Latest smart phones appear to be way to go.

At same time as we are having major advances in technology, people need to be planning for brown outs and other natural disasters that can disrupt all things that rely on electricityand that’s virtually everything from gas pumps to running a septic system. There is more reason now,  than ever to have food set aside to last a period of time, a source of fresh drinking water and water to use for other needs, have basic household products we use all the time set aside, have cash set aside (in case you can’t access your bank accounts), have first aid supplies, prescriptions, etc. While we all rely more and more on technology, there are many things technology can’t provide…especially if we can’t access that technology.

Why Are Salary Demands Going Up Fast?

Companies are starting to have difficulty with salaries. The larger the company the more difficulty they are having (because adjusting salary ranges for them is very difficult process.)

Average salary increase the last three years has been under 1%. Historically it has been slightly under 3%, That means people are falling behind every year. Maybe not you, or your star employees. Majority of people in the management work force are not keeping up.  Adjusted for cost of living,  US population is making less now than they were 10 years ago. We all know what has happened to prices in those 10 years.

Your employees, and job seekers,  understand their best chance to get back some of the money they lost is when they change jobs. Good people will only accept less than 10% increase:

-if they are unemployed
-it they have personal reasons that requires them to get back to a specific area.

Promises of rapid advancement or future training is rarely accepted. People know these promises are very rarely kept. Your hotel may be the rare exception, but don’t expect job seekers to accept your word for it. If your hotel really does it, introduce job seekers to 3-4 people you have trained and promoted in the last year.

What can your hotel or company  do,  besides taking a long time to fill positions?

Put together practical training program to develop your existing  staff for promotions.

How can companies do that efficiently?

Identify hotels that are training properties for certain positions. Different hotels can be responsible for developing people in different positions. This concentrates training per hotel to reduce training costs. Training improves at the same time. Last it reduces pirating of employees as soon as they get trained.

US hotels have three choices.

-Start doing a much better job of preparing their employees for the next step.
-Or paying much higher salaries when the hotels replace people.
-Or reduce standards, even more, (but that’s dangerous to long term business.)

(If you don’t think your service is mediocre, odds are 99% that you are badly out of touch. Observe how your employees interact with guests  and respond to questions. DON’T interact with the employees yourself. You represent their paycheck, of course they are going to give you great service.)

Currency Wars-Does It Matter?

We hear lot of talk about all the currency wars with many countries throughout the world using quantitive easing. Why do they do it? It’s an attempt by countries to make exporting their products easier .

Who are some of the countries that are debasing their currencies?

India, Poland,  Romania, Australia, Israel, Canada, China, Switzerland, Peru, Egypt, Turkey,  etc.  Countries representing all sections of the world.  Many counties have social programs their tax base can no longer support. Sure seems like everyone is doing it.

Debasing the currency adversely affects people on fixed incomes the most. Also people who heavily invest in government bonds. When countries print additional money, there is always the likelihood that value of their bonds will drop.

US started quantitative easing,  then EU joined in, followed quickly by other countries.

Right now the world is balancing between inflationary and deflationary forces. The world historically likes inflation in the 2-4% range. Then when a countries economy gets in trouble they can print money which drives down inflation. Last several years, attempts by countries to inflate their currencies have not worked. Now that quantitative easing has driven interest rates to almost zero, one of the main ways countries can balance their economies has been taken away from them.

Talent Metrics

Dr. John Sullivan had good article on Predictive Analytics in Mar 9th issue of

Here’s very brief synopsis.

Initial efforts in predictive analytics concentrated on:

  • Identifying employees likely to leave.
  • Identifying  which factors predict on-the-job performance.
  • Forecasting when employee survey scores will begin to impact productivity.
    What’s Needed Next?
  • Identifying how talent actions impact profits.
  • Identifying ways to identify and project ways to improve revenue per employee.
  • Developing an easy-to-compare index to measure performance.
  • Developing a metric that identifies the replacement cost on individual employees and positions.
  • Predicting coming productivity issues.
  • Coming up with a metric to identify employee behavioral issues.
  • Plotting career trajectory of new hires and existing employees.
  • Identifying factors that impact manager success.
  • Likewise the factors that identify leaders and leadership capabilities.
  • Metric identifying factors that predict an innovator.
  • Plus several others.

You get the idea, industry, unions, schools, and all levels of government need to do a much better job of identifying the characteristics needed to hire and then keep good employees. Many companies have identified the above for select positions. There’s a need to step back and identify trends that impact more than a single position or job classification.


Very few companies have real training programs. At the same time the educational level of public school students in US continues to drop. (Last I saw US was ranked 12th in the world. Wasn’t too many years ago we were ranked first.) World is becoming much more technology reliant and that is going to require different skill sets and different ways to measure productivity.

Unless industry, government, schools and unions develop better metrics and then apply them to ALL employees we will have fewer and fewer people available to do the jobs necessary. That in turn will:

-drive wages up fast,
-further the spread between classes
-Increase the percentage of permanently unemployed and under-employed.

Result will be reduced  innovation and profit margins.