For those of you that think business circulates in your little niche and the world’s news does not bear fortune nor failure, you’re likely right. For those of you that are intrigued by the world of private equity and the affect it’s been having on business in the United States and abroad, read on. For those of you that have absolutely no comprehension of what I just said, please leave.

Some very interesting news broke today: China is making a $3bb investment in Blackstone, for a just-under 10% stake in the one of the most politically influential investment funds in the United States.

Here are some facts:

* China recently announced that it is forming the State Investment Co., with assets that may reach $300bb.

* China announced that it is diversifying its dollar based investments beyond U.S. Treasuries.

* Private Equity firms like Kohlberg Kravis have said that they are concerned with investment in China because of political risk (such as China’s unwillingness to allow foreign control of domestic businesses, information flow, etc…).

* The U.S. environment is becoming increasingly risky for private equity firms, as politicians are bringing Private Equity & Hedge Funds under increased scrutiny (due to the fear of the unknown, and the tax consequences of private equity).

* The 2006 U.S. China trade deficit set a record of $233bb.

* Carlyle, another private equity firm, recently had troubles when trying to take a majority stake in a company in China.

* Steve Shwarzman is the former dorm mate of President Bush, and has significant political connections.

Translation:

There are tremendous inflows moving into China today. Not just from the U.S., but from other parts of the world as well. When somebody buys goods from China, they must pay in Yuan. This means that there is demand to buy Yuan and sell Dollars. This also means that there is demand to increase the value of the Yuan and decrease the value of the Dollar. If a dramatic move were to occur, it would cool the Chinese economy and most likely send it into a severe depression.

Instead, China is going to handle this via its own method. It’s going to continue to buy U.S. Treasuries to reverse this natural process. However, it needs to diversify into other channels to control the dollar.

What does it do?

It picks a politically connected channel, ala Blackstone, and takes a majority investment in a U.S. denominated security. It pays with dollars and it does a few things. It tries to allay the fears that have arisen with the announcement of the $300bb super-fund, it finds an invesment that will likely achieve greater returns than U.S. Treasuries, and it allows a private equity fund to take majority control in a state-owned enterprise (I’m calling this one now).

What really happens?

1. Politicians become even more circumspect and they continue to raise the decibel level of their mantra that China MUST devalue its currency (with the structural changes in our economy, that boat has already floated). In fact, we’ll now have greater scrutiny regarding private equity and hedge funds.

2. The diversification strategy for Chinese dollar investments eventually backfires because Blackstone makes some tremendous purchases in China (buying Yuan and selling dollars).

3. American business does not feel the brunt of this because there is now an increased likelihood that the U.S. will institute laws barring a communist country from making a direct investment in a U.S. firm.

4. India continues to be overlooked as the huge success story that it is. After all, political intrigue plays a heck of a lot better than a sedate and friendly rise of one of the fastest-growing and soon-to-be-most-powerful economies in the world!

5. The average American continues to argue that ignorance is bliss…

Let me tell you a secret: An idea isn’t worth the paper it’s written on (or in this case, the electric power it consumed). It’s all about the execution.

With that said, I’m going to tell you about a great idea. Take it if you wish. Just execute on it. Please!

If you know someone, somewhere that’s tackled this idea and won, let me know!

This is a mobile cell phone idea. The operative word being mobile. I have the distinct luck of sitting through numerous meetings where we discuss mobile applications and mobile content and mobile gadgetry.

You know what I would love?

A cell phone “presentation” solution. Instead of a hifalutin built-in projector solution, can someone come up with some sort of cord adaptor, bluetooth thingamajig, etc…?

I’d be able to say that I’ve sat through a presentation where 6 grown overweight adults squeezed into a square meter and stared at a tiny screen (like the one below), for the LAST TIME.

It would be annoying even on the “g-dly” iPhone!

What happened to the old comfy PowerPoint and live computer presentations? We need a slingbox for the cell phone.

Bring it on!

It looks like I wrote way too much this week. Here’s a list of some of the more interesting posts, to save you search agitation.

Please forward this to your friends. If this thing is going to survive, it needs more readers.

1. capitalAI with a take on the Forever Stamp, Wal-Mart, and Ben Stein. Three incredibly interconnected topics.

2. Some interesting Personal Finance tools available on the web. Make sure to check out the sites that crowdsource stock market advice.

3. Engadget decides that its disturbed the technology markets more than enough. Time to play with the traders!

4. capitalAI decides to offer its most popular ideas for business idea generation. Believe me, they ALL work…

Everyone always complains, “it’s so hard to come up with great ideas.”

I disagree.

Here are five ways to think of something great.

1. Spend an extra five minutes in the shower while your kids scream in the background. It will do wonders for your mind.

2. Jump in front of an oncoming car, where it has just enough time to skid to a halt. Your life will flash in front of your eyes, and you’ll see what really motivates people.

3. Spend 24 hours surfing the web. Do not take a break, do not eat, and do not sleep. The hallucination will set in and every idea will be a great business idea.

4. Join a social network, and take full stock of all the garbage that goes on there. That’s only a sliver of what’s going on in their weird and crazy minds.

5. Go to your local supermarket (or Wal-Mart, if it put your supermarket out of business) and approach every old lady that walks out the doors. “Can I take a survey?” That’s sure to waste a while.

BTW, I’ve done none of these. Except for the shower bit.

All web-watchers beware: The search landscape just changed and Google has decided to compete with itself. In typical Google fashion, its decided to redesign its entire home page and allow for what it calls “universal search” across all different areas like web, blogs, news, pictures, videos, maps, etc…

Donna Bogatin at ZDNet has compared this fiasco to New Coke, a total failure. I agree. Google changed the search experience yesterday and I find it annoying and confusing. I liked the simplifed “Top 10″ and it made my life easier (even if it wasn’t better). Even this librarian dislikes it.

My prediction: Google decides to be extremely stubborn (in typical Google fashion) and does not change it’s Google Universal Search until it sees sentiment and market share slip.

Then it offers the option to revert to simplified search.

Then it reverts to simplified Google search. (Or at least gives you a very easy and prominent way of doing so. Remember, Google is the arrogant kid with a watermelon ego.)

There are so many business ideas out there and it’s difficult to say which ones will work and which ones won’t. Conventional wisdom says it’s all about the management and not about the idea. For obvious reasons, it’s pretty difficult to test this hypothesis. Once the business fails, the next iteration’s circumstances don’t necessarily match the circumstances of the first attempt. Likewise, if the business succeeds, there won’t be another iteration. There’s been a grand success!

So don’t get discouraged just because someone else is doing it. You can do it better, of course

1. Fring Makes Twitter Free - For those hooked on twitter, it looks like the free VoIP provider, Fring, has figured out how to make it free. While it’s not entirely free as you’ll still need a data plan on your cell phone, you save on SMS. Nice…

2. Joost - Watch a whole assortment of channels on your computer. Unless you have a super-fast computer, expect extreme aggravation by the resulting computer slowdown.

3. Sell your band - When all else fails, sell your band. It looks like this pop band is for sale. I don’t know about the veracity of this, but it was posted at Entrepreneur.

4. Short Sell Apple - and then delay the launch of all of its major product lines. TechCrunch posted an update in what Michael Arrington now calls Applegate.

5. Keyword Search - John Chow is in the process of performing one of the greatest linkbaits of all time. That’s right, he’s gaming the Google system, but doing it legally. Smart move. Why not do the same thing for your business? Focus on a search term, or group of search terms and make sure people link to you using that anchor text.

6. Niche Marketing - If the 80%-20% rule holds true, focus on the 20% and achieve 80% of your revenues. Good luck trying.

More to come…

In the world of the Internet, it’s important that you rapidly grow your product, achieve “network effect” barriers to entry, and saturate the market. Then move into adjacent verticals.

Skype just announced the launch of the Skype Game Channel. I’ve always been a huge fan of Skype and believe that the price Ebay paid for it was justified. Period.

It was clear at the time that Skype was the market leader and would remain the market leader. It has. (Nearly 200mm users)

It was clear that Skype was able to monetize its users. It has. ($320mm in annualized revenues and growing)

It wasn’t so clear that Skype would be able to open its platform for ancillary services. It has. (Skype Extras has 18mm downloads, and see my post on Wal-Mart offering Skype Certified Hardware)

It wasn’t clear that Skype would be able to move into additional verticals. With the launch of the Skype Game Channel, it’s pretty clear that… It has.

Now, Skype is moving into a new market and a pretty large one at that: Two-way and multi-player games. Sure, there are other services that let you do something similar, but none of them have 200mm registered users. Nor do any of them have the massive third party developer contingent looking to ride the Skype wave.

I’d be interested to see where Skype goes with this. Look at Zedge and its ability to launch 500 mobile games. They’ve been pretty successful and those are only one-way games, lacking any two-way or multi-player communication. Of course, the cell phone is the next frontier when it comes to mobile community oriented games.

I look forward to that Really.

I’m sure you had the one nostalgic relative (mother, father, grandfather, etc…) who would always talk about the way things used to be. “In my days, the subway cost a nickel.”

Yes, and it’s now 2 bucks.

We now have this wonderful invention called the Internet, democratizing information and investment; leveling the masses to an educational playing field that has really never been experienced before.

1. The spread of information has been pretty rapid and as I noted yesterday, can cause serious consequences in extremely short periods (the Apple Engadget saga).

2. In more current news, it seems that the Bloomberg Administration in New York City has decided to make another attempt to develop the Manhattan property known as the Hudson Yards. Now, instead of a stadium, it wants to create another hub for business, similar to Midtown and Downtown. So again, we’re seeing the great democratization of the bidding process and while Bloomberg has his preferences, there will be an open and prolonged bidding process around this property.

Why?

Because the developers want to make extensive use of the financial leverage available in a real estate transaction. You should be using the same principles: Look for investment in property where you can put as little down, yet generate positive cash flow once the property is developed and/or purchased. Over the long run, rent increases and your mortgage dissappears, leaving you with an expensive asset that you can sell for a tidy profit. The real estate moguls use these principles. Why shouldn’t you?

3. The New York Times reports that the Ivy League Crunch Brings New Cachet to Next Tier. Again, as information becomes more readily available to the masses, standards become tougher. More students apply for top tier so demand increases. Supply remains tight because the Ivy League consider themselves exclusive and the bastion of arrogance. The result is a column like this.