- Analytical Commentary -

September 10, 2010 (FinancialWire) (Investrend Forums Syndicate) (By Gary Vassalotti, LIFA) — Last week I briefly touched upon the topic of reviewing economic trends by analyzing government industrial statistics. And as I mentioned last week, this is a very involved process — perhaps too much to discuss in a blog — but I do want to give you the means to access this data yourself, as well as look briefly into how to find the relevant information, as we continue our analysis of International Monetary Systems (OTCBB: ITNM).

One of the primary, initial resources I typically use in my research is economic data from U.S. government agencies, particularly the Federal Reserve and the Census Bureau. In this case, the more applicable source is the Census Bureau, as the Bureau compiles sales statistics and trends in individual business segments. By the same token, Census data is generated and released in 5-year intervals, so we must keep in mind that Census information is a bit behind the curve, and further compare it to recent sales announcements and current news, in order to adjust for the present day.

Our starting point for this portion of our research is the U.S. Census Bureau’s 2007 Economic Census webpage (at http://www.census.gov/econ/census07/index.html). Next, from the Economic Census page, click on the “Get Data” menu item, which will take you to the 2007 Data Sets webpage (at http://factfinder.census.gov/servlet/DatasetMainPageServlet?_program=ECN&_tabId=ECN1&_submenuId=datasets_4&_lang=en&_ts=246366688395). Now scroll down the Data Sets page to the “Detailed Statistics from 2007 Economic Census and Surveys” section and find the “Economic Census data sets by sector” sub-section. Within that sub-section, select “#44: Retail Trade” (at http://factfinder.census.gov/servlet/EconSectorServlet?caller=dataset&sv_name=*&_SectorId=44&ds_name=EC0700A1&_lang=en&_ts=302175982742).

Recall that International Monetary is a “barter exchange” company that manages an extensive network of goods and services providers, utilizing proprietary transaction clearing software that enables businesses and individuals to trade those goods and services online using “trade dollars” in a similar fashion to the WIR Dollar (read more at http://www.financialwire.net/2010/07/26/trade-dollars/). Retail trade statistics are relevant to ITNM because barter trade does better when retailers have a hard time selling their goods to the general public. However, this is not a directly corrolated relationship. Extremely bad retail trade does not mean a stellar market for the barter industry, but a slower retail trade may indicate some demand for alternative sales avenues (e.g. barter trade).

On the Retail Trade statistic page, click on the section that compares sales in the current survey to sales in the prior survey, under the heading “Geographic Area Series”, entitled "EC0744A2 Comparative Statistics for the US 2002 NAICS basis 2007 and 2002” (at http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-ds_name=EC0744A2&-_lang=en). The first two lines in the resulting table show total retail sales for 2002 and 2007 as $3,917,663,456 (2007) vs. $ 3,056,421,997 (2002). That represents a gain of 28.8% over a five year period, roughly 5.6% per year, which is a decent growth rate, and which we will use this to compare other economic data.

While there is a great deal more data available from the Census Bureau, for the purposes of our current example I now want to take our 2007 vs. 2002 growth figures and compare that to data that has been compiled already (and is easier to review) from the Department of Commerce’s Bureau of Economic Analysis (at http://www.bea.gov/index.htm). From that webpage, select the “U.S. Economy at a Glance” link (at the top-left of the page, taking you to http://www.bea.gov/newsreleases/glance.htm). From there, scroll down to “Industry Economic Accounts”, then, select “Highlights”, beneath that heading.

Clicking on the Highlights link opens a 1-page PDF document, showing different tables for different broad areas of the economy, as well as statistics on growth rates for some periods. The figures we found at the Census Bureau were specifically for total retail sales, while the numbers shown here are more generalized GDP figures. Our objective at this point is to contrasting the two sets of numbers and look for trends.

Looking at the BEA document, we can see there was growth in Real GDP for various sectors, and that it differs from the trends for annual pricing in those sectors. This is an indication that, although absolute retails sales did increase from 2002-2007 at around 5.6% annually from the Census data, the growth was a combination of more goods sold and slightly higher pricing.

Continuing with the BEA document, now look at the final bar graph for 2009. Real GDP shows a decline of 5.3%, and under the Annual Growth Rate shows a decline of 4.4%. So, manufacturers have dropped prices and sales have continued to decline at a faster clip than the price drops. That is an indication that retailers (and/or  their customers) may have some built-up inventory available for barter.

Economics is never cut-and-dried; however this is certainly useful background information we’ve found here. This information should influence our estimates and evaluations of future revenue prospects for ITNM, and we will keep this data in mind as we continue to further analyze the company.

In the next installment we will look at INTM's revenue data to determine if we can discern trends in that area, as well as how that data compares to the general economic trend rate data we found today.

Source: Investrend Weblogs (http://www.investrendweblogs.net/vassalotti/).

Other FinancialWire(tm) news about International Monetary is accessible via The FinancialWire(tm) search function (at http://www.financialwire.net/?s=itnmtcb), additional information and independent research on International Monetary is available via Investrend Syndications (at http://www.investrend.com/synd0006), and official information and company filings from International Monetary are accessible via the SEC website (at http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001097430).

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