February 26, 2013
- “The scientific accident that may change the world”… superbatteries and superhuman abilities uncovered.
- Gold bears gain strength… a Midas metal clash commences with the Fed holding the reins…
- The Italian parliament shake-up… whatever the outcome, the endgame message is clear…
- The Chinese debt bomb… al-Qaida’s top tips for drones… concrete walnuts… a dispatch from paradise… and more!
“The emerging technology of neural prostheses,” reads a recent Technology Review article from MIT we stumbled across this morning, “has the power to change what it means to be human.”
Intrigued by any emerging tech that busts in with a bold statement, we read on.
“The ability to implant electrodes into the eyes, ears, spine or even the brain,” the tech arbiter goes on, “has the potential to overcome degenerative disease, mend broken bodies and even enhance our senses with superhuman abilities.”
According to the article, there’s one stumbling block: “The problem is that most of these devices are based on silicon substrates which are hard, rigid and sharp. Those are not normally qualities that sit well with soft tissue.”
Likewise, hot, wet and salty environments aren’t exactly ideal for silicon, either.
“What’s needed,” MIT writes, “of course, is a flexible substrate that is also biocompatible with human tissue.”
Right. Of course.
Lucas Hess and his colleagues at Technische Universitat Munchen in Germany think they’ve found an ideal substitute: our latest fave, graphene.
MIT cites three reasons: flexibility, stability and its ability to “make transistors that are gated by the solution in which the transistor sits. In other words, the natural body fluids that surround these prostheses will form an integral part of their operation.”
“[Graphene-based] devices,” Hess tells MIT, “far outperform current technologies in terms of their gate sensitivity.”
Graphene is also responsible for what is now being quietly coined as the next “scientific accident that may change the world.”
Researchers at UCLA’s Kaner Lab found that graphene can be used as a “supercapacitor,” a device capable of charging much quicker than conventional chemical batteries. But unlike the standard supercapacitor, KCET explains, “graphene’s structure also offers a high ‘energy density’ — it can hold a lot of electrons,” meaning it has the potential to revolutionize the means and efficiency of storing energy.
This was discovered when, in layman’s terms, Kaner Lab researcher Maher El-Kady “painted a DVD with a liquid carbon solution and stuck it into a standard-issue DVD burner,” KCET writes.
The market potential is enormous: The technology could give us the ability to fully charge smartphones in seconds, “fill up” electric cars in a minute and, even more amazing, help to create national ultraefficient power distribution grids.
“As they can be directly integrated on-chip,” last week’s press release from UCLA reads, “these micro-supercapacitors may help to better extract energy from solar, mechanical and thermal sources and thus make more efficient self-powered systems.”
The “Scientific Accident That Will Revolutionize Battery Power”
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Precious metals are on a run up this morning.
As we write, silver is up 27 cents, to $29.36. Platinum and palladium both added $6, the former to $1,617 and the latter to $745.
And the Midas metal is up $16.40, to $1,611, regaining some of its strength after a slump last week.
To explain the late gold tug of war, we look to CEO and chief investment officer of U.S. Global Investors, Frank Holmes.
“When investing in gold,” Frank writes, “I often say diverse opinions promote critical thinking and a healthy market. I believe elevated groups of buyers and sellers create a competitive tug of war in the bid and ask price of the precious metal.”
Last week, he explains, we saw the gold bear gain strength. SPDR Gold Trust, the largest gold-backed ETF, experienced its largest one-day outpouring since August 2011.
Also, “the Fear Trade fled the sector following the Federal Reserve’s meeting,” where hawkish noises emerged.
“For good reason, too,” Frank goes on.
According to Macquarie Research, he says, “For every $300 billion expansion in the balance sheet of the U.S. government, there was a $100 an ounce increase in the price of gold.”
And with the Fed’s current bond purchases totaling $765 billion over the next nine months, “using the previous ratio,” Macquarie Research reports, “this would compute to a $255 an ounce increase in the gold price.”
Also, the global markets are just as topsy-turvy.
Upon writing, the Dow has jumped 56 points, to 13,840. Nasdaq is down 2 points, to 3,114. And the S&P is on the fence, riding a sideways 1,488.
“Yesterday,” our macro strategist Dan Amoss writes, “the stock market fell out of bed in reaction to Italian election results. Il Messaggero, a newspaper based in Rome, ran the headline: ‘The Winner Is: Ingovernability.’ There was no clear leader, and it will be awhile before another round of elections.
“Once European bureaucrats believe they have things under control, up pops another symptom of the chronic eurozone crisis. The pro-euro solidarity policies of Italian Prime Minister Mario Monti have passed their high-water mark. Italian voters sent a clear message: Monti’s so-called austerity programs must go.
“‘A long recession and growing disillusionment with mainstream parties fed a bitter public mood that saw more than half of Italian voters back parties that rejected the austerity policies pursued by Monti with the backing of Italy’s European partners,’ reported Reuters.
“With government spending accounting for about half of European GDP,” Dan writes, “is anyone surprised that budget cuts led to recession? However Italy’s parliament shakes out, the trend is clear: The voting public in Italy, Spain and Greece will not tolerate austerity-for-bailout deals.”
[Ed. Note: PRO subscribers can read on below as Dan illustrates how to play European stock movements and the Italian political turmoil. Not PRO yet? Sign up here.]
“As I’ve been saying…” reads an email from our own Chris Mayer this morning alluding to an article titled, “China Has Its Own Debt Bomb.”
“Six years ago,” The Wall Street Journal’s Ruchir Sharma writes, “Chinese Premier Wen Jiabao cautioned that China’s economy is ‘unstable, unbalanced, uncoordinated and unsustainable.’ China has since doubled down on the economic model that prompted his concern.
“Then along came the 2008 global financial crisis,” Sharma says. “To keep China’s economy growing, panicked officials launched a half-trillion-dollar stimulus and ordered banks to fund a new wave of investment. Investment has risen as a share of gross domestic product to 48% — a record for any large country — from 43%.”
What’s more startling is China’s credit binge: “Since 2007,” he goes on, “the amount of new credit generated annually has more than quadrupled to $2.75 trillion in the 12 months through January this year.
“Since 2008, China’s total public and private debt has exploded to more than 200% of GDP — an unprecedented level for any developing country. Yet the overwhelming consensus still sees little risk to the financial system or to economic growth in China.”
Despite the consensus, Chris writes, “It will not end well.”
“Most people tend to think of China as not having a debt problem. This view is at odds with the facts.”
Citing China Insider editor Ben Simpfendorfer, “China’s economy became increasingly reliant on debt during the latter half of the 2000s. Moreover, the rise in nonloan debt financing has also grown, making it difficult to pinpoint just how large an increase in debt is needed to sustain growth…”
“What he refers to here,” Chris explains, “is the murky lending done outside the banking system, which makes it harder to track. The end result, though, is a high level of aggregate debt.”
The breakdown: “If China’s growth is mostly due to temporary effects of stimulus spending, then it casts doubt on the ability of the economy to keep at that pace. It means it quickly finds itself in the debt morass that the U.S., EU and Japan face. It means future growth is much slower than in the past.
“And,” Chris concludes, “it means trouble for commodities.”
“This new document,” says 30-year veteran of the CIA and director of the Intelligence Project at the Brookings Institute, “shows we are no longer dealing with an isolated local problem, but with an enemy which is reaching across continents to share advice.”
The document, discovered in a manila envelope by The Associated Press in an undisclosed building in Timbuktu, according The Telegraph, “is believed to have been abandoned as extremists fled a French military intervention last month.”
The document entails al-Qaida’s top 22 tips for drone-dodging.
These include Tip No. 1: Obtain a “sky grabber” device from the Russians, No. 3: Spread reflective glass on cars and buildings, No. 10: Hide under thick trees, No. 18: Set up fake gatherings with dolls, No. 19: Exit any drone-targeted cars immediately and scatter and No. 21: Use smoke as cover by burning tires.
While al-Qaida cooks up clever ways to dodge drones, Obama and John Brennan continue to dodge the big question: Does the president believe he has the authority to execute U.S. citizens on U.S. soil?
During Obama’s recent “Google Hangout,” conservative activist Lee Doren asked, “What will you do to create a legal framework to make American citizens within the United States know that drone strikes cannot be used against American citizens?”
Obama’s response? “There has never been a drone used on an American citizen on American soil.” He also noted that rules will vary domestically, as well as abroad. And oddly enough, he concluded that he was aware that what’s “absolutely true is that it is not sufficient for citizens to just take my word for it that we’re doing the right thing.”
Thankfully, we’re not the only ones taking action.
“Democratic Sen. Daniel Biss,” the Chicago Tribune’s Rafael Guerrero writes, “has introduced legislation that would require police to get a search warrant before using a drone to gather evidence. Along with banning the use of lethal and nonlethal weapons on the drones — except in emergencies — the proposal would require information a drone gathers to be destroyed unless it is part of an investigation.”
That’s just the tip of the iceberg. According to the National Conference of State Legislatures, more than 20 states are pursuing similar legislation, Guerrero explains.
“While some states are trying to regulate unmanned aircraft use, others are trying to impose moratoriums that ban them, Biss said.”
Meanwhile, China has perfected the art of the counterfeit.
Most people are familiar with Chinese knockoffs — handbags, watches, sunglasses, T-shirts, DVDs, you name it. They’re fun to buy.
But now… the Chinese have taken it to a whole new level: They’ve knocked-off the walnut.
Some walnut vendors in China have removed the insides of the walnut, replaced them with pieces of concrete and glued the shell closed. They even have it down to an art, wrapping the concrete in paper so it doesn’t sound any different from a real walnut.
Sometimes it’s a nut and sometimes it ain’t.
Usually, with most kinds of knockoffs, it’s someone who knows the difference but prefers something that’s cheap and close enough. Either way, the person leaves with something useable.
These walnuts are a total loss, though… probably even a detriment in some cases. We’re thinking about the poor guy who doesn’t realize and eats one of them. But not too hard.
“Shouldn’t we connect the dots here,” one of several readers writes, bringing us back to the drone discussion.
“This is all setting us up for something very ‘convenient.’
“Once these killer drones are in operation, they can be used to kill *name your favorite politician, president or banker*, and then it can be blamed on Chinese or Russian hackers. Those drone swarms are going to be controlled by computers, aren’t they?
“By the way, I guess somebody must be working on electronic anteaters and
“And I have some beautiful old caves for rent… any takers?”
“Drones are on the rise,” the next one begins. “All countries (the U.S., China, Russia) can make them. If Agora’s petition stops U.S. drones, Agora succeeds in crippling the U.S. while other countries succeed. Unintended consequences would rule. Fortunately, Agora’s fart is lost in the worldwide drone hurricane.”
The 5: Nice imagery.
“The problem is,” another writes, “most rational people find it difficult to sign a petition about this subject, knowing full well that it will likely ‘mark’ them going forward.
“As a person now subjected to the ‘SSSS’ status when traveling by air, for no reason other than a couple of emails to friends and family exchanging private views about the problems associated with the current administration, I am reluctant to sign.
“Once bitten, twice shy. My heart tells me that I should not give in to this intimidatory behavior that seems to be becoming the norm in the land of the ‘free,’ but my head says that my status as a noncitizen would be subject to some revision if I did.
“The average American does not yet realize that the mechanisms to control their life are already in place, and the politicians will to do it. It’s just around the corner.
“I applaud your efforts. I wish more people were willing to support it.
“I enjoy your publications. Good luck with them in the future.”
The 5: Your well wishes sound ominous.
5 Min. Forecast
“Things are going very well down here on the Chill Weekend down on the Pacific Frontier,” our Rancho Santana proprietor Bruce Robertson dispatched from Nicaragua this morning. “Our crew of AFR members all arrived without any problems after a day of travel from various points in the Midwest and East Coast. Eric Fry joined us last night directly from the Chanos conference in Miami. As usual, our guests are blown away by the beauty and scale of this place when seeing it for the first time.
“Eric and I spent some time today looking at some possible lots to build the ‘Agora Financial Compound’ on. The work crews here have been rebuilding a bunch of the 4×4 roads within the ranch, so getting around is really pretty easy, compared with the ‘old days.’ They have already paved what must be at least 10 miles of road BY HAND, using concrete pavers.
“A steady diet of fresh seafood and Cerveza Tona are keeping our group smiling,” Bruce writes. “Rancho Santana never disappoints. More tomorrow…”
Bruce plans to continue more “Chill Weekends” for our readers in the future as Nicaragua continues to develop and navigation becomes easier. If interested in joining, stay tuned for more information.