Gold: The Truth About Gold Fiat Currency: Using the Past to See into the Future Have You Heard of the OTHER Government Backed "Pension Program?"
The Daily Reckoning Weekend Edition
Saturday, October 23, 2010
Punta del Este, Uruguay
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American Nuke Bomb LOST Under Ancient Ice Fields
Way back in 1968, an American B-52 crashed in northwest Greenland...
Unfortunately, the nuclear bombs on board got forever swallowed by an ancient ice sheet...
But there's an unknown penny stock set to rise 2,000% from this sorry situation.
Sound unbelievable? Watch this presentation for proof...
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Joel Bowman, from Punta del Este, Uruguay...
In his 1958 interview with Ayn Rand, a young Mike Wallace asked the following question:
"Suppose, under your system of self-sufficiency, one single corporation were to get a stranglehold on a vital product or a raw material, uranium for instance, which might be vital for the national defense, and then would refuse to sell it to the government, then what?"
To which the original objectivist responded:
"Under a free system, no one could acquire a monopoly on anything. If you look at economics and economic history, you will discover that all monopolies have been established with government help, with the help of franchises, subsidies or any kind of government privileges. In free competition, no one could corner the market on a needed product. History will support me."
The above exchange is pertinent today for multiple reasons.
First and foremost, it calls each and every one of us to ask some very important questions of the society in which we live today...and about where it is heading tomorrow and beyond. What is the proper role of government in economics? Should, as Rand argued, there be separation of economy and state, just as there is of church and state? Should the government be able to use force and compulsion against the will of free men and women, to supersede or suspend the rights of the very individuals it affects to represent? And in what special case, if any, would this be permissible?
Secondly, as readers following the story that China has reportedly banned the export of rare earths will recognize, it addresses the capability of entities (individuals, corporations or, in this case, nations) to corner a given market.
Rare earths, to back up a bit, are a group of little-known but vitally important elements found at the dusty end of the periodic table. They are used in weapons guidance systems as well as a host of other day-to- day applications (think iPhones, TVs, DVDs, etc.).
China controls some 90% of the global production of rare earths and, as such, is beginning to throw its weight around. In a very real way, rare earths are the uranium of Mike Wallace's hypothetical scenario, above. So, what happens next?
Addison provided some detail on the latest geopolitical developments of the rare earth story in Friday's issue of The 5.
"A week ago today," began Addison, "the US complained about 'green energy' subsidies given to Chinese companies, undercutting the US' competitive advantage in that industry. Wednesday, China retaliated by embargoing exports of rare earth minerals to the United States.
"China denies the whole thing," continued Addison, "repeating the official line that reports of another 30% cut in worldwide exports of rare earths next year are 'false.' Germany says they've been inadvertently smeared by the Chinese campaign. The Japanese, having already been cut off, are making plans elsewhere.
Overnight, we saw these new developments:
"Meanwhile," Addison concluded, working his way around to the investment angle of the whole shakedown, "One company far away from the hullabaloo is about to get the 'official' green light to develop a potential $1.3 trillion deposit in the ground. The story has been 42 years in the making - replete with Cold War political machinations and present-day capital cronyism. Our managing editor, Mr. Chris Mayer, uncovers all the intrigue in this presentation...right here."
And here we see the price mechanism doing exactly what it should: standing guard against monopolies. (And this, more than half a century after Rand's "history will support me" statement.) When the price goes up - due to scarcity or even fear/rumor of scarcity in the market - a whole host of projects become economically viable, including the one Chris identifies, above.
Secondly, higher prices drive technological innovation, incentivizing the development of cheaper, better, faster, stronger etc. alternatives. As such, the importance of technology in a free market cannot be overstated, nor underestimated.
In this weekend's guest essay, the newest member of Agora Financial's tech team, Ray Blanco, makes his Daily Reckoning debut to discuss one technological trend making waves today...
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Revealed: The Full Power and Promise of Science's Next Decade...
..Could give your family FIVE generations of HUGE WEALTH!
Expert researcher breaks his silence after 2 years with this shocking new presentation.
Get all the details on the most lucrative science breakthroughs ever published, right here.
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Building Your Own Convergence Fortune
By Ray Blanco
They call it the "Convergence." Sometimes, when researchers get particularly excited, they refer to it as "The Great Convergence." Some think it's still a few years away. Others are convinced it's already happened. So what is it - besides an incredible wealth opportunity for forward-thinkers like you?
The Convergence is the moment when hard scientific research, manufacturing, communications, medicine - just pick a list of industries - all merge together. I'm talking about nano-engineered assembly lines. Cell phones, for example, that take your blood pressure and can email reports to your physician.
Profiting from companies involved in the Convergence is the wealth trend of the next decade. You see, breakthroughs are compounding now. Wealth is piling up faster and faster. Here's just one example...
This past week, the Nobel Prize in physics for 2010 was awarded to Andre Geim and Konstantin Novoselov for the discovery of graphene. Geim and Novoselov were the first to successfully extract graphene from bulk graphite in 2004 using a sophisticated method referred to as the "Scotch tape technique." Where others had failed to get single graphene sheets with more advanced methods, these scientists found success with Scotch tape.
Andre Geim was previously famous for levitating a frog using a strong magnetic field, which won him the Ig Nobel Prize in 2000. The results were published in the European Journal of Physics in a paper titled "Of Flying Frogs and Levitrons."
The discovery of graphene opens doors to revolutionary new materials. Graphene is a sheet of chemically attached carbon atoms a single atom thick. Since carbon can form multiple simultaneous chemical bonds, each carbon atom bonds to three others. The result is a sheet 1 millionth of a millimeter thick in which the hexagonal structure of the carbon bonds takes on a honeycomb appearance with an atom at each vertex.
Along with carbon nanotubes, graphene is the strongest substance ever tested. It could be used to manufacture strong, lightweight products. Think of car bodies or aircraft fuselages. Since carbon is so abundant, the raw materials would be very inexpensive.
Graphene also has unique, useful electrical properties. If commercial graphene manufacturing could be perfected, it has been theorized that graphene could be used to construct many of the components in integrated circuits. In the future, you could be tapping on a smart phone with a graphene touch-screen or reading a book on a graphene monitor.
To give an example, Georgia Institute of Technology researchers have invented a graphene manufacturing technique for nanometer-scale electronics. They found that by etching patterns into silicon carbide, carbon atoms are coaxed into growing ribbons of graphene. With this technique, the researchers can grow an array of 10,000 transistors on a square chip only a quarter centimeter on a side.
Not only could graphene enable extremely small, dense electronic devices, it could also boost clock speeds in computers. UCLA researchers have recently been able to manufacture a 300-gigahertz graphene transistor. This is twice as fast as the best silicon oxide semiconductor transistors and similar in speed to transistors using expensive elements like indium or gallium. Currently, the researchers are trying to push the graphene transistor envelope and hit a speed of 1 terahertz.
Since graphene is an extremely thin honeycomb sheet, it can act as a membrane. The cover story of the Sept. 9 edition of the journal Nature features researchers using graphene sheets with tiny holes drilled in them. Using electrical charges, DNA strands can then be drawn through the holes, called nanopores, and read one base at a time - much how you would read data off of a ticker tape.
If the technology proves viable, it could greatly speed up the time it takes to read the data off of a full DNA molecule. This would make gene sequencing much cheaper. Since reading individual DNA data is important for the advance of personalized medicine, the impact of the technology could end up being huge.
Graphene is just one example of the tech Convergence. From communications to medicine and from computer hardware to bulletproof vests stronger than Kevlar, graphene is a Convergence trend that's making waves TODAY.
Ad lucrum per scientia,
Ray Blanco
For The Daily Reckoning
P.S. To help you profit from high-impact technological breakthroughs, like graphene, my colleague, Patrick Cox, and I recently launched a new tech profits advisory service calledTechnology Profits Confidential.
We've also put together a presentation to help introduce you to some of the exciting trends we're following right now. In this free video, we detail six specific investment themes to help you tap the full power and promise of science's next decade.
Obviously, the potential wealth creation in this space is huge. But even if you're not interested in investing, we invite you to take a look anyway at the events that will likely shape our world in the next few years. You'll be shocked at some of the advancements science has in store for you.
If you're interested, take a look at our full presentation - right here.
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The Food Crisis of 2010
"I think we have a food crisis right now." - Hussein Allidina, head of commodities research, Morgan Stanley
The leaves have turned all shades of red and gold. The air is crisp and cool. The fall beers are tapped. The brats are on the grill. It's autumn. That means it's time to talk about the harvest, in particular for corn.
Brazilian Soil
"The power of its soil always saves Brazil," observes Stefan Zweig in his book, Brazil: The Land of the Future. Brazil's place as an agricultural superpower is secure given its vast amounts of land, ample rainfall and bountiful sunshine. There are many opportunities here for investors in soil remediation, forestry, dairy, livestock, biofuels and more. These are the things that inspired me to organize an embark on an investing field trip to Brazil last month.
"Print, Print and Print"
No matter what central bankers and the cheerleading, mostly useless academics who surround them pronounce in their self-created aura of infinite academic "delicacy and refinement", under the auspices of the Fed they will do precisely one thing: print, print, and print. Sadly, as Mignon McLaughlin observed, "The know-nothings are, unfortunately, seldom the do-nothings."
Brazilian Real Estate is a Buy
Someone once said that if LA threw up on New York, it would resemble São Paulo. That's an imaginative way to describe the sprawling Brazilian metropolis. São Paulo is a bustling, congested city of 11 million people, with another 9 million in the suburbs. Greater São Paulo ranks as the third largest urban area in the world, according to the United Nations, after only Tokyo and Mexico City.
The US Dollar is Doomed
Austerity be damned, at this rate Mr. Bernanke will go down in the history books as one of the greatest money creators ever to have walked this planet!
Never mind sky-high deficits and a crushing debt overhang, at its most recent FOMC meeting, the Federal Reserve all but guaranteed another round of quantitative easing.
--- Important Announcement from 
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The Weekly Endnote: "You should return in the summer," a young waitress kindly advised your editor. "People from all over come to bathe on our beaches and drink at our bars. For three whole months, our town turns into a real city."
"And then will I have to wait for a table at your restaurant?"
"Most certainly."
"And today?"
"Sit wherever you please."
Save for a small group of locals, the place was empty. We took a seat on the deck, facing the water. The afternoon was already growing old and the vista would soon be filled with all the colors of the approaching sunset...a perfect place to do a little reckoning, in other words.
A few tables down from us, the group chatted about this and about that. Having missed the simple pleasure of eavesdropping while living in Taiwan, your editor leaned subtly in their direction so that he might avail himself of some conversational snippets. After a few minutes, we learned that one of the ladies at the table was American, a businesswoman of some description. As the conversation unfolded, it became clear that she was not visiting the seaside town for pleasure, but to oversee the development of a high-end clothing store which, we eventually came to discover, was located right across the street.
The woman was demonstrably displeased by the lack of progress on the site. The shop, so we heard, was to be opened only two weeks from now, just in time to capture the first trickle of beachcombers and would-be models that apparently flock to these parts when the weather warms. Looking across the street at the half refurbished building, with its scaffold casing and as-yet-unpainted façade, we wondered how on earth the tradesman and architects were going to get the thing finished on time.
Frustrated, the woman adjourned the meeting, promising to return to Uruguay before the scheduled date of completion...after a planned trip to Peru and back to - what we assume is - her company's headquarters in New York City.
And, with a huff and a slight shake of her head, she upped and jumped in a rental car, parked out in front of the restaurant, and drove away.
The remaining members of the group - who had, in the woman's presence, made obvious effort to appear busy, scribbling indispensable notes and talking with affected tones of urgency into their cell phones - then began to relax. Their shoulders visibly slouched, the tension having drained from them with the woman's departure. Leisurely, they finished their sparkling water and, as if the sun itself would postpone its setting had they willed it to, meandered casually over the road to the construction site...where the last of the workers were already packing up their tools for the day.
Enjoy your weekend.
Cheers,
Joel Bowman
Managing Editor
The Daily Reckoning
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Here at The Daily Reckoning, we value your questions and comments. If you would like to send us a few thoughts of your own, please address them to your managing editor atjoel@dailyreckoning.com The Daily Reckoning - Special Reports:
Saturday, 23 October 2010
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