Written by Bob Meyer, Editor of BarterNews

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Happenings In The Trade Exchange Industry. . .

• ITEX Corporation (OTCBB:ITEX) has announced the results of their January 10 annual meeting, in which re-election of Board members was the only order of business. Steven White was re-appointed Chairman, CEO and President, and continues as interim CFO. John Wade was re-appointed Secretary and Treasurer. Eric Best of Seattle was also reelected to the Board. (Wade is CFO of Aptimus Corporation, and Best is CEO of Mercent Corporation.)

According to CEO Steven White, the company “earned more than $2.6 million in net income in fiscal 2004, including over $1 million in operating income for the first full year of operational profits in ITEX’s history. Corporate overhead was reduced by 42%, all long-term debt was retired, and outstanding stock options and expensed equity-based compensation were eliminated.”

White noted the company’s goal in 2005 is to increase market share by working with new businesses that haven’t experienced “the rewards of cashless transactions.”

• TeleTrade reported that 2004 was a stellar year for its online technologies. Overall combined transactional volume for all web sites using TTi was $75,767,122...an increase of 131% over 2003’s volume of $57.7 million. For more information: www.evalues.net.

• International Monetary Systems (OTCBB:INLM) with more than 7,000 customers in 25 U.S. markets, has added another one...the greater Los Angeles market. Executive VP John Strabley elaborated, “Our new client enrollments in Los Angeles have surpassed 150 members in just three months of operation. Attaining this critical mass has been accomplished much quicker than anticipated, and we are now concentrating on expanding this base in all product and service categories.”

“What we have here is a failure to communicate!”

Years ago, one of the most visible people in the barter industry said the #1 reason why the industry wasn’t farther along in its development was due to a “failure to communicate” by those in the business.

This realization was the genesis of The Competitive Edge newsletter, now into its 18th year of publication. Trade exchange owners who use this powerful marketing and promotional tool are never guilty of “failing to communicate.”

As the owner of a trade exchange you must stay in front of your clients. Informing, educating, and inspiring them, because your clients’ bartering is a relatively small percentage of their overall business. So if you don’t keep their interest and enthusiasm for trade at a high level, you lose.

Your primary aim, like all other businesses, is to get your clients coming back for more. Every extraordinary business (and every trade exchange owner who wants to be extraordinary) knows that the customer you have, is a lot less expensive to sell than the customer you don’t yet have!

Want to take your exchange to a higher level? Use The Competitive Edge newsletter in your operation—it promotes the many benefits of working through your trade exchange like nothing else!

To learn more about The Competitive Edge newsletter and how it can help build your trade exchange, click here.

Warren Buffett Suggests Quid Pro Quo Type Exchange Policy Will Solve Our Nation’s Trade Deficit

Berkshire Hathaway’s famed investor Warren Buffett, the world’s second richest man, cautions that our country’s trade deficit cannot be fixed with a rise in interest rates or an upward revaluation of the Chinese currency. Plus Buffett is skeptical about any major changes coming out of Washington, which is why he has been making major bets in favor of the euro, the pound, and six other foreign currencies.

But he does see a solution to the problem. In a Forbes interview (January 10, 2005) Buffett says it’s absolutely necessary to bolster the dollar through a public policy that brings imports and exports into perfect balance. The key, as he sees it, is to demand “that each dollar of imports be accompanied by a certificate having been bought from an exporter, who moved a dollar the other way.”

Editor’s Note: Obviously, these certificates would become a very valuable form of “currency” which could be sold or traded among companies wishing to sell into the United States.

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Desert Glitter Started By Bono’s Barter Deal Continues On Today

The Palm Springs International Film Festival that was held this past weekend, has been re-energized...celebrating both film and the city itself. Fifteen years ago, as the mayor of Palm Springs, Sonny Bono (of Sonny and Cher fame) came up with the idea of the festival. It was in answer to the town’s deficit, not it’s desperate need for foreign film.

Because the economy of Palm Springs runs on its transient occupancy tax, Bono wanted to fill the hotels and restaurants, showing the world that the city was once a place of old Hollywood glamour for a reason. Back then Bono proved to be a real trader. He convinced the Los Angeles Times to provide multiple pages in the paper for the city to promote and advertise the festival, in exchange for being named a major sponsor of the event.

Now, more than a decade later, the event is getting a makeover by the newly named festival chairman-emeritus Harold Matzner and current festival chairman Earl Greenburg. (Greenburg, a lawyer and former programmer for daytime television at NBC, made the rounds in L.A. beating the bushes for the big stars’ appearances. He says the film festival now ranks as the second largest film festival in the country.)

Greenburg and Matzner, knowing that product branding is an act of will, not chance, brought in high profile sponsors, including Tiffany, Mercedes, “Entertainment Tonight,” and the city of Indian Wells. And, as usual, barter played its part in the overall success of the effort.

The newly renovated Parker Palm Meridian hosted the honorees and many of the high-profile guests. And Tiffany, which signed on for a three-year commitment to the festival, provided thank-you watches to honorees and presenters. In return, Tiffany was a very clear presence at the gala—from the live models flanking the final turn of the red carpet to a montage of clips paying homage to the jewelers.

And, according to chairman emeritus Matzner, the film festival accomplished its goal. “We wanted people to see what a wonderful place this valley is and what a wonderful town Palm Springs is. Many residents believe the new sheen of the festival reflects how Palm Springs is growing and changing. The population of the valley is projected to double in the next 10 years and Palm Springs has grown considerably in the last five, recapturing some of the movieland magic of the Brat Pack days.”

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Creative Thinkers Solve Challenges, Making Future Look Bright

In another 20 years will nearly all construction be done by robots? A California scientist thinks so. With federal funding Behrokh Khoshnevis, a professor of industrial and systems engineering at the University of Southern California, has devised a machine that takes its instructions from an architect’s computerized drawings and then squirts successive layers of concrete, one on top of the other, to build vertical walls and domed roofs.

The computer-guided nozzle squeezes out a line of wet concrete like toothpaste being deposited on a toothbrush, repeating the pouring as many times as is necessary to achieve the programmed height.

Khoshnevis’ “contour crafter” can work around the clock, with no need for breaks. His first “house” planned for construction in late 2005 will be a shell, but later efforts would include plumbing and electrical systems.

Initially, such robot-built structures would be used as emergency housing and as low-cost homes for inner cities and emerging nations. However, the federal government is interested in them for military housing and possible space applications.

Khoshnevis predicts robots will one day build houses for a quarter of today’s cost.

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Here & There...

• According to Greg Sheridan, foreign editor of The Australian, the giant tsunami which rolled its wave of destruction across the Indian Ocean, from Indonesia to Sri Lanka and India and even Africa, could redefine the geopolitics of Southeast Asia. Sheridan says lesson No.1 is that it is the U.S. and its alliance system which counts for most in Asia. And the tsunami shows that the angst in Western foreign policy circles in recent years, about China being the most powerful force in Asia, is wildly premature at best.

  Sheridan says China has played a kind of brilliant confidence trick by getting the world to evaluate it today at its own estimation of its potential position in two or three decades. However, the tsunami shows the limits of China’s influence. They came forward constructively, but with a modest aid package because China doesn’t have the money, the allies, or the adaptable and deployable military. Nor, Sheridan contends, does it have the confidence of neighbors, the culture of compassion, or the diplomatic clout to lead a relief effort in the way the U.S. has done.

• Have you signed up to receive a summary via e-mail of the Tuesday Report every week? If not, go to the top of this issue (right hand corner) and sign up!

• A record number of Japanese companies provided shareholders with special treats in 2004, aside from the typical dividend payment. Some 868 companies, or 24% of all listed companies on the Tokyo stock exchange, presented shareholders with food items, prepaid cards, and such. The most popular perks were coupons for free or discounted meals.

• Private-equity buyout firms with investment funds totaling $1 billion or more now number 170, up from only 4 in 1990, according to Thomson Venture Economics and Morgan Stanley.

• India had a 24% rise in foreign tourist arrivals last year, totaling 3.37 million. The popularity as a tourist destination is a trend expected to continue despite the tsunami that devastated the country’s southern coast recently.

• Delta’s recent radical restructuring of its fares is being viewed as the democratization of air travel, with price differences between one way coach fares and first-class fares now $100 (one way). AirTran, Delta’s arch-rival in its Atlanta home base, only charges $35 or $75 to move up to the front...depending on the length of the flight.

• Negativity may cost American businesses $250 billion to $300 billion annually in lost productivity, according to Michael Lednovich, President of True North Executive Development. He points to a recent Gallup Organization report that says 22 million U.S. workers are extremely negative about or actively disengaged from their jobs.

  The report found that workers who regularly receive recognition and praise at work increased their individual productivity, received higher loyalty and satisfaction scores from customers, had fewer on-the-job accidents, and were more likely to remain at the company. However, few companies give praise and recognition regularly, Lednovich said. (Note: To company management, “Hello!!”)

• Venture capitalists are still playing it safe. VC investments peaked nationally at $28.6 billion in the first quarter of 2000, and by the third quarter of 2004 had dropped to $4.3 billion.

• China has taken another step forward...opening its doors to the world’s retailers. Wal-Mart, Carrefour and the rest of the largest retailers can open outlets anywhere in China without having to shop first for joint-venture partners. Even so, Wal-Mart said they will continue to pursue joint-ventures because of the advantage of obtaining local knowledge.