Category: Knowledge

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Google unveils ‘mind-boggling’ quantum computing microchip

Quantum computing power

Google has unveiled a new chip which it claims takes five minutes to solve a problem that would currently take the world’s fastest super computers ten septillion or 10,000,000,000,000,000,000,000,000 years to complete.

Google’s Quantum Leap: The Willow chip

In a groundbreaking achievement, Google has unveiled its latest quantum computing chip, named Willow. This new chip marks a significant milestone in the journey toward realising the full potential of quantum computing, a technology that promises to revolutionise numerous fields through its unparalleled processing power.

Unprecedented speed and efficiency

At the core of Willow’s innovation is its remarkable ability to perform computations at speeds previously deemed impossible. To put this into perspective, Willow can solve a complex problem in just five minutes – a task that would take the world’s most advanced supercomputers an astounding 10 septillion years to complete. This leap in speed and efficiency showcases the potential of quantum computing to tackle problems beyond the reach of classical computers.

This quantum power combined with artificial intelligence will become a formidable force in the world, potentially a foe!

Breakthrough in Quantum error correction

One of the most significant advancements with the Willow chip lies in its approach to quantum error correction. Traditionally, error rates in quantum computations have posed a substantial barrier to practical applications. Willow, however, exhibits an exponential reduction in errors as more qubits (quantum bits) are integrated into the system. This breakthrough in error correction brings the technology closer to practical, large-scale quantum computing, paving the way for more reliable and accurate results.

Potential applications and future prospects

While Willow represents a monumental step forward, experts caution that a fully functional, widely applicable quantum computer is still years away. Nonetheless, the potential applications of quantum computing are vast, ranging from breakthroughs in medicine and drug discovery to advancements in artificial intelligence and energy solutions. With continued investment and research, Willow could be the precursor to a new era of technological innovation, fundamentally altering how we approach complex problems.

Expert insights

Leading experts in the field commend Google’s achievement, highlighting Willow’s significance in the broader context of quantum computing development. While challenges remain, the unveiling of Willow underscores the rapid progress being made and the exciting possibilities that lie ahead. As we stand on the brink of a quantum revolution, Willow serves as a beacon of what the future may hold.

Conclusion

Google’s Willow chip is more than just a technological marvel; it represents the relentless pursuit of innovation and the profound impact that quantum computing can have on our world.

As research continues and technology evolves, Willow stands as a testament to the incredible possibilities that lie within the realm of quantum physics.

Quantum computers operate on a fundamentally different principle than the computer in your phone or laptop. They utilise quantum mechanics, which governs the peculiar behaviour of particles at the smallest scales, to solve problems much more quickly than conventional computers.

The hope is that quantum computers will one day accelerate complex tasks, like the development of new medications. However, there are concerns that this power could be misused, such as breaking certain forms of encryption that safeguard sensitive information.

Google shares climbed 6% after the announcement.

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Are U.S. Stocks Overvalued?

The U.S. stock market has been a topic of much debate among investors and analysts, especially regarding its valuation levels. As of the end of 2024, several indicators suggest that U.S. stocks might be overvalued.

Buffet indicator

One of the most watched metrics is the Buffett Indicator, named after the legendary investor Warren Buffett. This indicator compares the total market capitalisation of U.S. stocks to the country’s gross domestic product (GDP).

Historically, a ratio above 100% is considered overvalued. As of September 30, 2024, this ratio stands at approximately 208%, significantly above the historical average and suggesting that the market is strongly overvalued.

P/E and CAPE

Another important metric is the Price-to-Earnings (P/E) ratio, which measures the price of stocks relative to their earnings. The cyclically adjusted P/E ratio (CAPE), popularised by economist Robert Shiller, provides a long-term view by averaging earnings over ten years.

The CAPE ratio for the S&P 500 is currently around 35, well above the historical average of 16-17. This high level indicates that investors are willing to pay a premium for stocks, which could be a sign of overvaluation.

Several factors contribute to these elevated valuations. Low interest rates have played a significant role, making bonds less attractive and pushing investors toward stocks. Additionally, the rapid technological advancements and growth in sectors like technology, AI, and healthcare have driven up stock prices. Companies in these sectors have experienced significant revenue growth, leading to higher valuations.

High valuations

However, these high valuations come with risks. The market’s current levels are pricing in a lot of optimism about future growth and profitability. Any economic slowdown, policy changes, or unforeseen global events could trigger a market correction. Investors must remain cautious and consider the potential for volatility.

On the other hand, some analysts argue that the current valuation levels can be justified by the robust corporate earnings and strong economic fundamentals. They point out that the U.S. economy has shown resilience in the face of challenges, and many companies have adapted well to the changing environment.

Summary

In conclusion, while U.S. stocks are currently expensive and may be overvalued by historical standards, it’s essential to understand the underlying factors and potential risks.

Investors should stay informed, diversify their portfolios, and be prepared for possible market fluctuations. As always, a balanced approach to investing, considering both the potential rewards and risks, is crucial.

Always do your own and careful – RESEARCH! RESEARCH! RESEARCH!

An seek professional financial advice.

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The mystery surrounding the origin of Bitcoin

Origin of Bitcoin

Bitcoin’s origin is one of the most captivating mysteries of the digital age. The cryptocurrency was created in 2008 by an unknown individual or group under the pseudonym Satoshi Nakamoto.

Despite numerous investigations, the true identity of Nakamoto remains shrouded in secrecy.

Story

The story of Bitcoin begins with the release of a whitepaper titled “Bitcoin: A Peer-to-Peer Electronic Cash System.” This document outlined a new kind of decentralised digital currency, one that relied on cryptographic principles to ensure security and prevent double-spending.

Nakamoto’s revolutionary vision was to create a financial system free from the control of traditional banks and government interference.

Genesis block

In January 2009, Nakamoto mined the first block of the Bitcoin blockchain, known as the ‘genesis block,’ marking the birth of the cryptocurrency. Over the next couple of years, Nakamoto continued to work on the project, communicating with other developers via email and online forums.

The mystery surrounding the origin of Bitcoin

However, by 2011, Nakamoto had largely stepped away from active involvement in the project, leaving behind a legacy that would forever change the financial landscape.

Speculation

Speculation about Nakamoto’s true identity has been rampant. Some believe Nakamoto is a single, exceptionally talented individual, while others theorise that it could be a group of developers working under a collective pseudonym.

Over the years, various names have been proposed as possible candidates, including renowned cryptographers, developers, and even eccentric entrepreneurs. Yet, none of these theories have been definitively proven, and Nakamoto’s identity remains a closely guarded secret.

Intrigue

The intrigue surrounding Nakamoto is not just a matter of curiosity but also of financial significance. As the creator of Bitcoin, Nakamoto is estimated to own around one million Bitcoins. At current market values, this makes Nakamoto one of the wealthiest individuals in the world.

Bitcoin chart from inception as of 7th November 2024 touching $75,000

Bitcoin chart from inception as of 7th November 2024 touching $75,000

However, these Bitcoins have never been moved or spent, adding to the enigma of Nakamoto’s motives and intentions.

Myth?

The myth of Satoshi Nakamoto has taken on a life of its own, becoming a symbol of the power and potential of decentralized technology. The anonymity of Nakamoto also serves as a reminder of the core principles behind Bitcoin: privacy, decentralisation, and freedom from traditional financial systems.

In a world increasingly dominated by surveillance and control, the mystery of Nakamoto provides a compelling counter-narrative, one that continues to inspire and intrigue both technologists and libertarians alike.

In the end, the true identity of Satoshi Nakamoto may never be revealed, and perhaps that is as it should be. The enduring mystery adds to the allure of Bitcoin, ensuring that its origins will forever be a topic of fascination and debate.

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Oops I did it again! Trump wins 2024 U.S. presidential election – emphatically defeating Harris

Trump wins 2024 U.S. election

After losing the re-election to President Joe Biden in 2020, Donald Trump, the 45th president, has now been elected as the 47th.

Trump’s victory sets several historic records. At the age of 78, he becomes the oldest individual to win a U.S. presidential election. He is the first president to serve two nonconsecutive terms since Grover Cleveland 132 years ago, and his win comes from what is likely the costliest presidential race in history.

Also, he is reportedly the first president, whether in office or former, to have been convicted of crimes. He is also the first president to be impeached twice and then reclaim the presidency. Additionally, he is the first to assume office while actively facing criminal charges in both federal and state courts.

This victory for Trump prevents Vice President Harris from achieving what would have been a historic feat: becoming the first female president of the United States.

As Trump secures win stock markets react positively as Dow and S&P 500 futures rise to touch new all-time highs!

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Nvidia promoted to Dow Jones Industrial Average at the expense of Intel

AI power

Nvidia is set to replace its rival chipmaker Intel in the Dow Jones Industrial Average, signifying a significant change in the blue-chip index that highlights the surge in artificial intelligence and a substantial shift within the semiconductor industry.

Intel’s shares fell by 1% in extended trading on Friday 1st November 2024, while Nvidia’s shares increased by 1%. Intel has now lost over half its value.

The update will take place on 8th November 2024. Also, Sherwin Williams will replace Dow Inc. in the index, the S&P and Dow Jones said in a statement.

Nvidia‘s shares have surged over 170% in 2024, following a roughly 240% increase last year, as investors flock to the AI chipmaker. Nvidia’s market capitalisation has expanded to $3.3 trillion, ranking it second only to Apple among publicly traded companies.

Nvidia one-year share price chart

Nvidia one-year share price chart

Major companies such as Microsoft, Meta, Google, and Amazon are acquiring Nvidia’s graphics processing units (GPUs), like the H100, in large quantities to create computer clusters for AI projects. Nvidia’s revenue has more than doubled for five consecutive quarters, with at least a threefold increase in three of those quarters. The company has indicated that the demand for its forthcoming AI GPU, Blackwell, is ‘insane’.

With Nvidia‘s inclusion, four of the six tech companies valued at over a trillion dollars are now part of the index, leaving Alphabet and Meta as the two not listed in the Dow.

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“I have raised up what was in ruins. I have restored that which was destroyed.” – Hatshepsut

Female Pharaoh image

Hatshepsut, the longest-reigning Egyptian female pharaoh, ruled for 20 years in the 15th century BC. “I have raised up what was in ruins. I have restored that which was destroyed,” declared Hatshepsut.

The quote regarding Hatshepsut’s appointment comes from inscriptions and was designed to legitimise her rule, often illustrating the divine will of the Gods or proclamations from her father, Thutmose I.

Hatshepsut was adept at presenting her reign within the context of divine support and royal succession. “This daughter of mine, Hatshepsut… I have named her successor to my throne… She shall guide you… Heed her words and gather under her command.”

Mini history lesson


Hatshepsut, one of the most successful pharaohs of Egypt, ruled during the 18th Dynasty from approximately 1479 to 1458 BCE.

Her tenure is noted not just for its duration but also for the prosperity and tranquility she established in Egypt. As a rare female pharaoh, Hatshepsut had to affirm her power in a patriarchal society. She frequently portrayed herself with pharaonic symbols of authority, like the false beard and headdress, to reinforce her legitimacy. “I have raised up what was in ruins. I have restored that which was destroyed,” she declared, underscoring her role in reviving Egypt’s splendour.

During her rule, Hatshepsut initiated grand construction projects, leaving a heritage of remarkable monuments and temples. Her most famous accomplishment is the mortuary temple at Deir El-Bahari, an architectural wonder that stands as a testament to her foresight and governance. Hatshepsut also rejuvenated Egypt’s economy by developing extensive trade networks. Her notable expedition to Punt, a region thought to be resource-rich, yielded precious items like myrrh, frankincense, and exotic wildlife.

This voyage was eternally captured in the reliefs of her temple, showcasing her achievements and contributions to Egypt’s affluence. In her inscriptions, Hatshepsut stated, “My authority was asserted in this land and to its farthest reaches… My gaze was southward, I explored the edges of the mountains, all my eyes wished to see was accomplished.”

This statement mirrors her broad vision and ambition to expand Egypt’s reach. Despite her accomplishments, Hatshepsut’s memory faced attempts at erasure after her demise. However, contemporary archaeology has revealed her significant influence.

Today, Hatshepsut is celebrated as an innovative ruler whose reign made a lasting impression on ancient Egyptian history.

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Ripple diversifies to launch crypto storage service for banks

XRP Ripple system

Ripple has announced the launch of a range of features designed to assist banks and fintech’s with the storage of digital tokens, marking a significant expansion into the realm of crypto custody.

Crypto custody services, which support clients in managing their crypto assets, represent a new venture for Ripple, now unified under the brand Ripple Custody.

The company is best known for its XRP cryptocurrency and RippleNet, a distributed ledger platform facilitating fast interbank payments.

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October – a notorious month for volatility and for stock market crashes

Stock crash and depression 1929

October has historically been a month of significant stock market volatility, with notable crashes occurring in 1929 and 1987

Now we are already part way through October 2024, investors are understandably cautious, wondering if history might repeat itself.

1929

The Wall Street Crash of 1929, also known as the Great Crash, began on 24th October 1929, with Black Thursday, followed by Black Tuesday on 29th October 1929. The Dow Jones Industrial Average (DJIA) plummeted nearly 13% on Black Monday and an additional 12% on Black Tuesday.

This crash marked the beginning of the Great Depression, a period of severe economic downturn that lasted for over a decade. The 1929 crash was precipitated by a combination of speculative investments, excessive leverage, and a lack of regulatory oversight, leading to a massive sell-off as panic spread among investors.

The 1929 crash marked the beginning of the Great Depression, a period of severe economic downturn that lasted for over a decade

1987

In contrast, the stock market crash of 1987, known as Black Monday, occurred on 19th October 1987, when the DJIA dropped by 22.6% in a single day. Unlike the 1929 crash, the 1987 crash did not lead to a prolonged economic depression. Instead, it was a sharp correction in an otherwise strong bull market. The causes of the 1987 crash included program trading, overvaluation, and market psychology.

The rapid recovery following the crash was aided by swift intervention from the Federal Reserve, which provided liquidity to stabilize the markets.

Comparing these historical crashes to today’s stock market, several differences and similarities emerge. The current market environment is characterized by high valuations, geopolitical tensions, and concerns about inflation and interest rates.

However, today’s markets are also more resilient due to advanced technology, better regulatory frameworks, and more sophisticated risk management practices.

The likelihood of a significant stock market crash in October 2024 is difficult to predict. While some analysts argue that the market is due for a correction, others believe that the underlying economic fundamentals remain strong.

The lessons from 1929 and 1987 highlight the importance of investor psychology and the impact of external shocks on market stability.

Conclusion

In conclusion, while October has a notorious reputation for stock market crashes, the probability of a crash in October 2024 is uncertain. Investors should remain vigilant, diversify their portfolios, and avoid speculative investments to mitigate potential risks.

By learning from past crashes, we can better navigate the uncertainties of the current market environment and prepare for any potential downturns.

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Dividend stocks in the FTSE 100 and FTSE 250 – a basic overview

Passive income from dividend stocks

The FTSE 100 index comprises the 100 largest companies by market capitalisation. These companies are typically well-established and financially stable, making them reliable dividend payers. 

The average dividend yield for the FTSE 100 is around 3.97%.

Here are ten dividend stocks in the FTSE 100

British American Tobacco (BATS) – Known for its high dividend yield, often exceeding 7%. Not an ethical choice.

Rio Tinto (RIO) – A mining giant with a strong dividend history.

Imperial Brands (IMB) – Another tobacco company with a robust dividend yield. Not an ethical choice.

Legal & General Group (LGEN) – A financial services company with a consistent dividend payout.

GlaxoSmithKline (GSK) – A pharmaceutical company with a reliable dividend.

Vodafone Group (VOD) – A telecommunications company with a solid dividend yield.

HSBC Holdings (HSBA) – One of the largest banking institutions with a strong dividend.

BP (BP) – An oil and gas company known for its high dividend yield.

Unilever (ULVR) – A consumer goods company with a consistent dividend payout.

National Grid (NG) – An energy company with a reliable dividend history.

FTSE 250 Dividend Stocks

The FTSE 250 index includes the next 250 largest companies after the FTSE 100. These mid-cap companies often offer higher growth potential and, in some cases, higher dividend yields. The average dividend yield for the FTSE 250 is around 3.30%.

Here are ten dividend stocks in the FTSE 250

Harbour Energy (HBR) – An oil and gas company with a yield of 7.24%.

Tritax Big Box REIT (BBOX) – A real estate investment trust with a yield of 4.76%.

Investec (INVP) – A financial services company with a yield of 6.21%.

Greencoat UK Wind (UKW) – A renewable energy company with a yield of 7.48%.

IG Group Holdings (IGG) – A financial services company with a yield of 5.02%.

ITV (ITV) – A media company with a yield of 6.43%.

Abrdn (ABDN) – An investment company with a yield of 9.45%.

HICL Infrastructure (HICL) – An infrastructure investment company with a yield of 6.37%.

Direct Line Insurance Group (DLG) – An insurance company with a yield of 3.30%.

Drax Group (DRX) – An energy company with a yield of 3.81%.

Passive dividend income

Passive income from dividends
Dividend stocks in the FTSE 100 and FTSE 250 – a basic overview

Buying dividend stocks can offer several benefits to investors – key advantages are…

Regular Income

Dividend stocks provide a steady stream of income through regular dividend payments. This can be particularly appealing for retirees or those seeking passive income.

Potential for Capital Appreciation

In addition to dividends, these stocks can also appreciate in value over time, offering the potential for capital gains. This dual benefit can enhance overall returns.

Reinvestment Opportunities

Dividends can be reinvested to purchase more shares, a strategy known as dividend reinvestment. This can compound returns over time, significantly boosting the value of your investment.

Lower Volatility

Dividend-paying stocks tend to be less volatile than non-dividend-paying stocks. Companies that pay dividends are often more established and financially stable, which can provide a cushion during market downturns.

Tax Advantages

In many jurisdictions, dividends are taxed at a lower rate than regular income. This can make dividend stocks a tax-efficient investment option.

Inflation Hedge

Dividend growth can help protect against inflation. Companies that consistently increase their dividends can provide a rising income stream that keeps pace with or exceeds inflation.

Signal of Financial Health

A company that pays regular dividends is often seen as financially healthy and confident in its future earnings. This can be a positive signal to investors about the company’s stability and profitability.

Diversification

Including dividend stocks in your portfolio can add diversification. They often belong to various sectors, providing exposure to different parts of the economy.

Compounding Effect

The combination of regular dividends and potential capital gains can create a powerful compounding effect over time, significantly enhancing long-term returns.

Psychological Benefits

Receiving regular dividends can provide psychological comfort, especially during market volatility. Knowing that you are earning income regardless of market conditions can help maintain a long-term investment perspective.

Investing in dividend stocks can be a strategic way to build wealth and generate income. However, it’s important to research and choose companies with a strong track record of dividend payments and financial stability. 

Conclusion

Investing in dividend stocks from the FTSE 100 and FTSE 250 can be a strategic way to generate passive income while also benefiting from potential capital gains. These indices offer a diverse range of companies, each with its own strengths and dividend yields, making them attractive options for income-focused investors.

These are NOT recommendations – just observations. Go do your research. Interest rates will/do change quickly – go check. Thanks.

Remember to ALWAYS do your own careful and considered research…

RESEARCH! RESEARCH! RESEARCH!

Prices listed as of 9th October 2024

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The U.S. modern economy is number one in the world by GDP

U.S. economy number one

The U.S. economy, often considered the largest globally, is characterised by a dynamic mix of sectors. It is propelled by strong industrial production and a vibrant service sector, offering a varied economic environment

The United States possesses a highly developed mixed economy. It stands as the world’s largest economy by nominal GDP and the second largest by purchasing power parity (PPP), following China. As of 2024, it holds the sixth highest per capita GDP (nominal) and the eighth highest per capita GDP (PPP) globally.

In 2023, the U.S. constituted 26% of the world’s economy in nominal terms and approximately 15.5% in PPP terms.

The U.S. dollar, the most utilised currency in international transactions, serves as the global reserve currency, supported by the extensive U.S. treasuries market, its pivotal role in the petrodollar system, and its connection to the eurodollar.

It is the official currency of several countries and the de facto currency in many others. Following World War II, the U.S. economy has seen consistent growth, maintained low unemployment and inflation rates, and experienced rapid technological advancements.

Manufacture

Manufacturing, traditionally fundamental, has transformed with technological advancements. While the automotive and aerospace industries continue to be important, there has been a significant shift toward advanced manufacturing, such as semiconductors and renewable technologies. This change mirrors the wider trend of innovation, which is synonymous with the U.S. economy.

Service

The service sector, which includes finance, healthcare, and information technology, is critical. The financial markets, with New York City at their core, are vital to global finance. Silicon Valley remains the hub of tech innovation, pushing the boundaries in artificial intelligence, cybersecurity, and financial technology.

Nonetheless, the U.S. economy faces challenges. Income disparity persists, a situation worsened by the COVID-19 pandemic, which exposed weaknesses in healthcare and social support systems. The pandemic hastened the shift to digital, underscoring the necessity for investments in digital infrastructure and education to close the digital gap.

Policy

Fiscal and monetary policies are key to navigating the economy. The Federal Reserve aims to manage inflation and unemployment through interest rate adjustments and quantitative easing. Government spending and tax policies are also instrumental in ensuring economic stability and expansion.

Future

Looking to the future, the emphasis on sustainability is increasing. Investment in green energy and eco-friendly practices are not only environmental mandates but also avenues for economic growth. As international competition grows, the U.S. economy’s capacity for innovation and adaptation will be vital.

Fundamentally, the U.S. economy is a multifaceted and dynamic system. Its robustness stems from its ability to innovate and adapt, despite facing systemic obstacles and shifts in the global landscape.

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European Union vote to slap tariff charge on Chinese EV imports

EU EV Charge

On Friday 4th October 2024, the European Union voted to implement definitive tariffs on battery electric vehicles (BEVs) made in China

‘The European Commission’s proposal to levy definitive countervailing duties on imports of Chinese battery electric vehicles has garnered the requisite support from EU Member States to proceed with the imposition of tariffs,‘ stated the EU.

Initially, the EU announced in June its intention to impose higher tariffs on imports of Chinese electric vehicles, citing substantial unfair subsidies that threaten economic harm to European electric vehicle manufacturers.

The EU disclosed specific duties for companies based on their level of cooperation and the information provided during the bloc’s investigation into China’s EV production, which commenced last year. Provisional duties have been in effect since early July.

Following the receipt of ‘substantiated comments on the provisional measures‘ from stakeholders, the European Commission updated its tariff strategy in September 2024.

A spokesperson from China’s Ministry of Commerce indicated that Beijing maintains its stance that the EU’s investigation into China’s electric vehicle industry subsidies has led to predetermined outcomes – suggesting that the EU is fostering unfair competition.

China responded by vowing a suitable response.

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Bitwise files for first-ever spot XRP ETF

XRP ETF

Bitwise Asset Management, a prominent player in the cryptocurrency investment space, has recently made headlines with its filing for a spot XRP exchange-traded fund (ETF) with the U.S. Securities and Exchange Commission (SEC).

This move marks a significant milestone as it is the first attempt to create an ETF specifically for XRP, the native token of the XRP Ledger.

The proposed Bitwise XRP ETF aims to provide investors with direct exposure to XRP through traditional brokerage accounts. This will make it easier for both institutional and retail investors to gain access to this digital asset. Bitwise’s decision to pursue an XRP ETF underscores the growing recognition of XRP’s potential and its established presence in the cryptocurrency market.

Bitwise is no stranger to the ETF landscape, having successfully launched Bitcoin and Ethereum ETFs in the past. The company’s experience and reputation in managing crypto assets lend credibility to this new venture. However, the approval process for the XRP ETF is expected to be rigorous, given the SEC’s cautious approach to cryptocurrency-related financial products.

The filing comes at a time when the cryptocurrency market is experiencing increased interest from mainstream investors. XRP, known for its fast transaction speeds and low fees, has been a popular choice for cross-border payments and remittances. If approved, the Bitwise XRP ETF could attract a new wave of investors looking to diversify their portfolios with digital assets.

While the SEC’s decision is still pending, the filing itself is a testament to the evolving landscape of cryptocurrency investments. There is a growing acceptance of digital assets in traditional financial markets. Investors and crypto enthusiasts alike will be watching closely as this development unfolds.

Others will likely follow suit.

XRP 7-day chart from CoinMarketCap

Note the timing of the ETF announcement and the subsequent drop in XRP price.

XRP 7-day chart from CoinMarketCap. Note the timing of the ETF announcement and the subsequent drop in XRP price.

Note: article written by AI

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What is China’s equivalent to Nvidia?

AI microchips

Chinese firms are reportedly intensifying their efforts to develop a competitive alternative to Nvidia’s AI chips, as part of Beijing’s ongoing initiative to reduce its reliance on U.S. technology.

China faces several challenges that are impeding its technological progress, including U.S. export restrictions that limit domestic semiconductor production. The lack of technical expertise is also reported to be a problem.

Analysts have identified companies including Huawei as the principal competitors to Nvidia in China

China’s counterparts to Nvidia, such as Huawei, Alibaba, and Baidu, are actively developing AI chips to compete in the same market. Huawei’s HiSilicon division is known for its Ascend series of data centre processors.

Huawei’s HiSilicon division is known for its Ascend series of data centre processors, and Alibaba’s T-Head has produced the Hanguang 800 AI inference chip. Other significant players include Biren Technology and Cambricon Technologies.

Alibaba’s T-Head has developed the Hanguang 800 AI inference chip. Other significant players include Biren Technology and Cambricon Technologies.

These Chinese firms are intensifying their efforts to create alternatives to Nvidia’s AI-powering chips. This is a big part of Beijing’s broader initiative to reduce its reliance on U.S. technology.

Nvidia’s surge in growth is attributed to the demand from major cloud computing companies for its server products, which incorporate graphics processing units, or GPUs.

These GPUs are crucial for entities like OpenAI, the creator of ChatGPT, which requires substantial computational power to train extensive AI models on large datasets.

AI models are crucial for chatbots and other AI applications

Since 2022, the U.S. has limited the export of Nvidia’s top-tier chips to China, with further restrictions imposed last year.

The U.S. sanctions and Nvidia’s market dominance pose significant obstacles to China’s ambitions, particularly in the short term, according to analysts. The U.S. has curbed the export of Nvidia’s most sophisticated chips to China since 2022, with increased restrictions implemented last year.

China’s GPU designers rely on external manufacturers for chip production. Traditionally, this role was filled by Taiwan Semiconductor Manufacturing Co. (TSMC). However, due to U.S. restrictions, many Chinese firms are now unable to procure chips from TSMC.

As a result, they have shifted to using SMIC, China’s largest chipmaker, which is technologically several generations behind TSMC. This gap is partly due to Washington’s limitations on SMIC’s access to essential machinery from the Dutch company ASML, necessary for producing the most advanced chips.

Huawei is driving the development of more sophisticated chips for its smartphones and AI, which occupies a significant portion of SMIC’s capacity.

Nvidia has achieved success not only through its advanced semiconductors but also via its CUDA software platform. The system enables developers to build applications for Nvidia’s hardware. This has fostered an ecosystem around Nvidia’s designs, which will be challenging for competitors to emulate.

Huawei leading the pack for China

Huawei is at the forefront as a leading force in China for its Ascend series of data centre processors. The current generation, named Ascend 910B, is soon to be succeeded by the Ascend 910C. This new chip may come to rival Nvidia’s H100.

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UK says data centres are critical infrastructure and are designated as important as the power grid and the NHS

Critical data centres UK

UK data centres are set to be classified as critical national infrastructure (CNI), aligning them with sectors such as emergency services, finance, healthcare, and utilities

This classification will ensure they receive additional government support during major incidents like cyber-attacks, IT outages, or severe weather, to reduce disruption.

Data centres, large warehouses filled with extensive computer banks, are the backbone of services like AI applications, data processing, and streaming. Despite facing criticism for their energy and water usage, the new Labour government supports the industry, with Technology Secretary Peter Kyle referring to data centres as ‘the engines of modern life.’

Currently, the UK recognises 13 sectors as critical national infrastructure, a list last revised nine years ago with the addition of space and defence.

The 13 Critical National Infrastructure Sectors

  1. Chemicals
  2. Civil Nuclear
  3. Communications
  4. Defence
  5. Emergency Services
  6. Energy
  7. Finance
  8. Food
  9. Government
  10. Health
  11. Space
  12. Transport
  13. Water

British Technology Minister Peter Kyle announced on Thursday 12th September 2024 that UK data centres will be designated as ‘Critical National Infrastructure’ (CNI). This status, typically reserved for essential national sectors like nuclear power, provides data centre operators with a direct communication channel to the government for threat preparation and response.

Furthermore, the government has expressed support for a proposed £3.75 billion data centre by UK company DC01UK in Hertfordshire, England, which is projected to be the largest in Europe upon completion.

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The AI Race between China and the U.S.

AI development in China and U.S.

Artificial Intelligence (AI) has become a pivotal battleground in the technological race between China and the United States.

“AI is expected to become a crucial component of economic and military power in the near future,” Stanford University’s Artificial Intelligence Index Report 2023 stated.

Both countries are significantly investing in AI research and development, striving to achieve a leading role in this revolutionary sector. This post looks at the major figures in China’s AI scene, their progress, and their comparison with their American counterparts.

China’s AI Landscape

China’s AI aspirations are propelled by a number of significant technology firms, each forging their own AI models and applications.

Baidu: Often referred to as the ‘Google of China,’ Baidu leads in AI development. Its premier AI model, ERNIE (Enhanced Representation through Knowledge Integration), fuels the Ernie Bot, a chatbot aimed to compete with OpenAI’s ChatGPT. Baidu asserts that ERNIE 4.0 matches GPT-4’s capabilities, demonstrating sophisticated understanding and reasoning abilities.

Alibaba: Alibaba’s AI model, Tongyi Qianwen (commonly known as Qwen), is a comprehensive set of foundational models adept at a range of tasks, from generating content to solving mathematical problems. Select versions of Qwen are open-source, enabling developers to utilize and modify them for various uses. Alibaba has announced that Qwen models are in use by over 90,000 enterprise clients.

Tencent: The Hunyuan model from Tencent is a prominent component of China’s AI landscape. Offered through Tencent’s cloud computing division, Hunyuan is tailored to facilitate a broad spectrum of applications, encompassing natural language processing and computer vision.

Huawei: In spite of considerable obstacles stemming from U.S. sanctions, Huawei persists in AI innovation. The firm has created its own AI processors, like the Kunlun series, to diminish dependence on international technology. Huawei’s AI features are incorporated into a diverse array of products, including smartphones and cloud solutions.

Comparison to the U.S.

The U.S. continues to be a dominant force in AI, with leading companies such as OpenAI, Microsoft, Google, Anthropic and Meta spearheading advancements.

Generative AI: U.S. firms have advanced significantly in generative AI, with OpenAI’s GPT-4 and Google’s Gemini at the forefront. These models excel in creating text, images, and videos from user inputs. Although Chinese models like ERNIE and Qwen are strong contenders, the U.S. maintains a slight lead in capabilities and market penetration.

Semiconductor Design: The U.S. leads the semiconductor design industry, vital for AI progress. U.S. companies command an 85% global market share in chip design, crucial for AI model training and system operation. China’s dependence on imported semiconductors is a notable obstacle, but there are ongoing efforts to create homegrown solutions.

Research and Innovation: Both nations boast strong AI research sectors, yet the U.S. edges out slightly in generating state-of-the-art AI products. U.S. tech giants frequently introduce AI breakthroughs to the market, with Chinese firms quickly gaining ground.

Government Support: The Chinese government ardently backs AI advancement, enacting strategies to spur innovation and lessen foreign tech reliance. Such support has spurred China’s AI industry’s rapid expansion, positioning it as a strong rival to the U.S.

Conclusion

The competition in AI development between China and the U.S. is escalating, as both countries achieve significant breakthroughs. Although the U.S. maintains a marginal lead in some respects, China’s swift advancement and state backing indicate that the disparity might keep closing. The quest for AI dominance by these nations is set to influence the worldwide technological and innovative landscape profoundly.

As of September 2024, it is estimated that China’s AI development is approximately nine months behind that of the U.S.

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U.S. AI Safety Institute to evaluate OpenAI and Anthropic new AI models before release to the general public

U.S. AI Safety Inspection

On Thursday 29th August 2024, the U.S. AI Safety Institute announced a testing and evaluation agreement with OpenAI and Anthropic

This agreement reportedly grants the institute access to significant new AI models from each company before and after their public release.

Recently, several AI developers and researchers have voiced concerns regarding safety and ethics within the growing profit-driven AI industry.

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Company says it can cut data centre energy use by 50% as AI boom places increased strain on power grids

Power hungry data centre

Major technology corporations such as Microsoft, Alphabet, and Meta are channelling billions into data centre infrastructures to bolster generative AI, which is causing a spike in energy demand.

Sustainable Metal Cloud has announced that its immersion cooling technology is 28% less expensive to install compared to other liquid-based cooling methods and can cut energy use by up to 50%.

The surge in artificial intelligence has increased the need for more robust processors and the energy to cool data centres.

This presents an opportunity for Sustainable Metal Cloud, which runs ‘sustainable AI factories’ consisting of HyperCubes located in Singapore and Australia.

These HyperCubes house servers equipped with Nvidia processors immersed in a synthetic oil known as polyalphaolefin, which is more effective at dissipating heat than air. The company claims this technology can reduce energy consumption by as much as 50% when compared to the conventional air-cooling systems found in most data centres.

Additionally, the Singapore-based company states that its immersion cooling technology is more cost-effective to install by 28% than other liquid cooling options. The HyperCubes are modular and can be integrated into any data centre, utilising spaces that are currently unoccupied within existing facilities.

What is a Hypercube?

  • Structure: A hypercube topology connects nodes in a way that each node is connected to others in a manner similar to the geometric hypercube. For example, in a 3-dimensional hypercube (a cube), each node is connected to three other nodes.
  • Scalability: This structure allows for efficient scaling. As the number of dimensions increases, the number of nodes that can be connected grows exponentially.
  • Fault Tolerance: Hypercube networks are known for their robustness. If one connection fails, there are multiple alternative paths for data to travel, ensuring reliability.

Benefits in data centres

  • High Performance: The multiple pathways in a hypercube network reduce latency and increase data transfer speeds, which is crucial for big tech companies handling vast amounts of data.
  • Efficient Resource Utilisation: The topology allows for better load balancing and resource allocation, optimising the performance of data centres.
  • Flexibility: Hypercube networks can easily adapt to changes in the network, such as adding or removing nodes, without significant reconfiguration.
  • Big Tech Companies: Companies like Google, Amazon, and Microsoft likely use hypercube topologies in their data centres to ensure high performance and reliability.
  • High-Performance Computing (HPC): Hypercube networks are also used in supercomputers and other HPC environments where efficient data transfer is critical.
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What evidence is there that the U.S. stock market is overvalued right now?

U.S. overvalued stocks

High Price-to-Earnings (P/E) ratio

The P/E ratio of the market is a common measure of valuation. Currently, the P/E ratio is significantly higher than historical averages, indicating that stocks are priced much higher relative to their earnings.

Rapid price increases without corresponding earnings growth

When stock prices rise rapidly without a corresponding increase in earnings, it often signals overvaluation. This has been observed recently, especially with some of the major tech stocks.

Comparison to historical market tops

The current market valuations are almost as high as they were at the peak in January 2022, which was followed by a significant correction.

Buffet valuation metric

Metrics like the Buffett Indicator (market capitalisation to GDP ratio) and Tobin’s Q (market value of assets divided by replacement cost) also suggest that the market is overvalued.

While these indicators point towards overvaluation, it’s important to note that markets can remain overvalued for extended periods, and other factors like strong earnings growth can sustain high valuations for some time

U.S. stock market could be overvalued by as much as 68%

The U.S. stock market, according to some analysts suggests that the current market appears to be overvalued by around 68%.

By comparison, at the peak of the Dot-com bubble, on 24th March 2000, the market was 89.5% overvalued. When the market bottomed out 2.5 years later, it had dropped around 50% from its previous all-time high and was undervalued by nearly 21%.

The fact that the market currently appears overvalued does not necessarily mean it will correct any time soon. The forces pulling the market toward the long-run equilibrium are relatively weak and allow the market to stay over or undervalued for extended periods of time.

From 1954 to 1970, the market stayed continuously overvalued for over some 15 years, and from 1973 until 1987, it stayed undervalued for about 14 years.

The analysis clearly suggests that U.S. stocks are overvalued – but that doesn’t necessarily mean a downturn any time soon – but it will, in time, adjust.

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Second-largest diamond ever recently discovered in Botswana

Rough diamond

One of the largest diamonds ever excavated was recently discovered in Botswana at a mine operated by the Canadian company Lucara Diamond

The discovery of the 2,492-carat diamond marks the world’s second-largest find, over a century since the unearthing of the 3,106-carat diamond in South Africa in 1905.

It was found in a Botswana mine owned by Canadian firm Lucara Diamond.

The 2,492-carat diamond is the world’s second-largest discovery and comes more than a century after a 3,106-carat gem was found in South Africa in 1905. That stone, known as the Cullinan Diamond, was cut into nine large pieces, many of which were incorporated into the British Crown Jewels.

Lucara reported that the diamond was unearthed at the Karowe Diamond Mine in northeastern Botswana, utilizing X-ray technology.

The mining company has not disclosed a value for the newly found stone.

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U.S. and China reportedly reach agreement to cooperate on financial stability

U.S. & China flags

The U.S. and China recently signed an agreement to cooperate on financial stability. This agreement was part of a meeting of the U.S. – China Financial Working Group held in Shanghai. 

The discussions were reportedly described as professional, pragmatic, candid, and constructive.

The agreement includes measures for both countries to collaborate on capital markets, cross-border payments, and monetary policy. Representatives from various financial institutions and regulatory bodies from both nations participated in the meeting.

This cooperation aims to enhance financial stability and address potential financial risks more effectively. It’s a significant step towards fostering economic collaboration between the two largest economies in the world.

See full report here

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China’s rival to Elon Musk’s Starlink internet launches satellites to low Earth orbit

Internet satellites

On Tuesday 6th August 2024, China launched its inaugural batch of internet satellites, which are expected to be part of a constellation designed to compete with SpaceX’s Starlink.

The constellation, named “Thousand Sails,” comprises over 15,000 satellites in low-Earth orbit that are anticipated to provide worldwide internet coverage.

China plans to have 648 satellites in orbit by 2025 as part of the first phase of the constellation’s deployment, aiming to establish a global internet network, as reported by state media CCTV.

The satellite system will be in direct competition with Elon Musk’s Starlink.

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Is it worth investing in gold and if so, what are the many different and best ways to do it?

Gold

Gold has been a popular investment for centuries. The allure of gold endures in today’s varied financial environment. We will delve into the advantages and disadvantages of investing in gold, as well as the different methods by which you can incorporate this valuable metal into your investment portfolio.

Pros of investing in gold

Protection against market downturns

Gold is viewed as a safe-haven asset. In times of market crashes or economic instability, investors tend to turn to gold to protect their savings and investments. For example, during the financial crisis of 2008, the price of gold soared by more than 100%, contrasting sharply with the losses experienced by other assets.

One year gold price chart as of 26th July 2024

One year gold price chart as of 26th July 2024

Inflation hedge

As inflation increases, the purchasing power of the dollar diminishes. During periods of high inflation, gold often appreciates, offering a potential return for investors.

Diversification

Diversifying an investment portfolio across various assets can help in minimizing losses. Gold, which usually has a low correlation with stocks and bonds, can bolster diversification and diminish overall risk.

Cons of investing in gold

No income generation

In contrast to stocks, which distribute dividends, or bonds, which accrue interest and can appreciate (or depreciate) in value, gold does not produce income. It’s worth is dependent entirely on its appreciation in price.

Additional costs

Owning and storing physical gold involves various expenses. These include transportation costs, storage fees, and insurance, especially if the gold is kept at home.

Ways to invest in gold

Physical gold

You can buy gold bars or coins. Owning physical gold provides tangible ownership and is a classic tried and tested way to invest.

Gold Mining Stocks

Investing in shares of gold mining companies can be a strategic move, as these stocks are impacted by gold prices and the operational performance of the mines.

Gold Exchange-Traded Funds (ETFs)

ETFs track the price of gold. They’re an efficient way to invest without holding physical gold.

Gold mutual funds

These funds aggregate investors’ capital to invest in assets related to gold.

Options and futures contracts

For more advanced investors, trading gold options and futures can provide exposure to price movements.

Conclusion

Gold can be a valuable addition to your investment strategy, especially for long-term goals. Consider your risk tolerance, financial objectives, and the role gold plays in diversifying your portfolio. Remember that while gold has held its value over time, it’s not a guaranteed path to wealth. As with any investment, thorough research and a well-thought-out approach are essential. 

Remember: always, always do your research…

RESEARCH! RESEARCH! RESEARCH!

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Fact or Fiction: Diamonds discovered on Mercury

Diamond planet

Mercury, the smallest planet in the solar system and nearest to the sun, conceals an intriguing secret: a diamond mantle approximately 10 miles thick under its surface. This revelation comes from data provided by NASA’s MESSENGER spacecraft.

Diamond mantle

Recent studies indicate that Mercury’s mantle is composed not of graphene, as was previously believed, but of diamond. The extreme pressure at the boundary between the mantle and core is thought to have facilitated the formation of diamond.

Graphite patches

Mercury’s surface is peppered with dark-coloured graphite patches, a form of carbon that has intrigued scientists for many years.

Carbon-rich magma

Researchers believe that in Mercury’s early history, it had a carbon-rich magma ocean. As the ocean of magma rose to the surface, it formed the graphite patches that are visible today.

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OpenAI announces a search engine called SearchGPT

A new powerful search engine

OpenAI on Thursday 25th July 2024 announced a prototype of its search engine, called SearchGPT, which aims to give users “fast and timely answers with clear and relevant sources.”

The company has announced plans to eventually incorporate the tool, presently in testing with a select user group, into its ChatGPT chatbot.

The introduction of ChatGPT could have significant implications for Google’s search engine dominance. Since ChatGPT’s debut in November 2022, there has been growing concern among Alphabet’s investors that OpenAI may capture a portion of Google’s market share by offering consumers innovative methods to obtain information on the internet.

Alphabet three month share price as of 25th July 2024

Alphabet three month share price as of 25th July 2024

OpenAI’s ChatGPT was incorporated into Microsoft’s search engine Bing as Copilot and the companies have kept market dominance with this shrewd AI move. Google, on the other hand, has struggled to keep up in the AI race and may now be suffering the effects.

This announcement could have implications for Microsoft’s Copilot as well.

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UK national debt as a percentage of GDP is now 99.5%

UK Debt to GDP percentage

Highest ratio since the 1960’s and even higher than that reached during the Covid pandemic of 2020.

The UK’s national debt has reached its highest level since 1962.

Official figures from the ONS show that the total government debt amounted to 99.5% of the economy’s value in June 2024, surpassing the peak levels experienced during the coronavirus pandemic.

The current debt level is comparable to that last observed in the early 1960’s.

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UN report suggests the world population to peak at 10.3 billion in 2028 – then decline

World population

According to the organization’s biennial World Population Prospects report, the global population is projected to grow from 8.2 billion in 2024 to peak at around 10.3 billion in the mid-2080’s.

It is then expected to gradually decline to 10.2 billion by 2100, which is 6% lower than anticipated a decade ago.

The UN in 2022 had reportedly estimated the world population would peak at 10.4 billion by the 2080’s. 

Front page of the UN World Population Report

See full report here.